<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) November 20, 1997
PROTECTIVE LIFE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-12332 95-2492236
(State or other jurisdiction (Commission (IRS Employer
of incorporation File Number) Identification No.)
2801 Highway 280 South, Birmingham, Alabama 35223
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (205) 879-9230
N/A
(Former name or former address, if changed since last report)
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
The following exhibits are filed with reference to the
Registration Statements on Form S-3 (Registration Nos.
333-30905 and 33-39899) of Protective Life Corporation
and PLC Capital Trust II, PLC Capital Trust III and PLC
Capital Trust IV:
4(m) Supplemental Indenture No. 4 dated as of November 20,
1997 to the Subordinated Indenture, between Protective
Life Corporation and AmSouth Bank.
4(s) Form of Subordinated Debt Security (included as Exhibit
A to Exhibit 4(m).
4(p) Form of Preferred Security (included as Exhibit A to
Exhibit 4(gg).
4(v) Preferred Securities Guarantee Agreement, dated as of
November 26, 1997, between Protective Life Corporation
and Wilmington Trust Company.
4(y) Purchase Contract Agreement, dated as of November 26,
1997, between Protective Life Corporation and The Bank
of New York, as Purchase Contract Agent.
4(y)(1) Form of Income PRIDES Certificate (included as Exhibit
A to Exhibit 4(y)).
4(y)(2) Form of Growth PRIDES Certificate (included as Exhibit
B to Exhibit 4(y)).
4(z) Pledge Agreement, dated as of November 26, 1997, among
Protective Life Corporation, The Bank of New York, as
Purchase Contract Agent, and The Chase Manhattan Bank,
as Collateral Agent.
4(gg) Amended and Restated Declaration of Trust, dated as of
November 20, 1997, amongst Protective Life Corporation,
Richard J. Bielen and Jerry W. DeFoor, as Trustees of
PLC Capital Trust II, Wilmington Trust Company, as
Trustee of PLC Capital Trust II, and by the holders,
from time to time, of undivided beneficial interests
in the assets of PLC Capital Trust II.
8 Opinion of Debevoise & Plimpton, as to certain tax
matters.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PROTECTIVE LIFE CORPORATION
Date: December 4, 1997 By: /s/ Deborah J. Long
-------------------------------------
Name: Deborah J. Long
Title: Senior Vice President, Secretary
and General Counsel
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INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
4(m) Supplemental Indenture No. 4 dated as of November 20,
1997 to the Subordinated Indenture, between Protective
Life Corporation and AmSouth Bank.
4(s) Form of Subordinated Debt Security (included as Exhibit
A to Exhibit 4(m).
4(p) Form of Preferred Security (included as Exhibit A to
Exhibit 4(gg).
4(v) Preferred Securities Guarantee Agreement, dated as of
November 26, 1997, between Protective Life Corporation
and Wilmington Trust Company.
4(y) Purchase Contract Agreement, dated as of November 26,
1997, between Protective Life Corporation and The Bank
of New York, as Purchase Contract Agent.
4(y)(1) Form of Income PRIDES Certificate (included as Exhibit
A to Exhibit 4(y)).
4(y)(2) Form of Growth PRIDES Certificate (included as Exhibit
B to Exhibit 4(y)).
4(z) Pledge Agreement, dated as of November 26, 1997, among
Protective Life Corporation, The Bank of New York, as
Purchase Contract Agent, and The Chase Manhattan Bank,
as Collateral Agent.
4(gg) Amended and Restated Declaration of Trust, dated as of
November 20, 1997, amongst Protective Life Corporation,
Richard J. Bielen and Jerry W. DeFoor, as Trustees of
PLC Capital Trust II, Wilmington Trust Company, as
Trustee of PLC Capital Trust II, and by the holders,
from time to time, of undivided beneficial interests
in the assets of PLC Capital Trust II.
8 Opinion of Debevoise & Plimpton, as to certain tax
matters.
<PAGE>
EXHIBIT 4(m)
PROTECTIVE LIFE CORPORATION
to
AMSOUTH BANK
(as successor by merger to AmSouth Bank
of Alabama, successor by conversion of charter
to AmSouth Bank N.A.), as Trustee
-------------------
SUPPLEMENTAL INDENTURE No. 4
Dated as of November 20, 1997
-------------------
6 1/2% Subordinated Debentures
Due 2003, Series C
$118,556,750
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PROTECTIVE LIFE CORPORATION
SUPPLEMENTAL INDENTURE No. 4
$ 118,556,750
61/2% Subordinated Debentures
Due 2003, Series C
SUPPLEMENTAL INDENTURE No. 4, dated as of November 20, 1997 from
PROTECTIVE LIFE CORPORATION, a Delaware corporation (the "Company"), to AMSOUTH
BANK (as successor by merger to AmSouth Bank of Alabama, 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, Supplemental Indenture
No. 2, dated as of August 1, 1994 and Supplemental Indenture No. 3, dated as of
April 29, 1997 (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:
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ARTICLE 1
Relation to Indenture; Definitions
Section 1.1. This Supplemental Indenture No. 4 constitutes an
integral part of the Indenture.
Section 1.2. For all purposes of this Supplemental Indenture No. 4:
(1) Capitalized terms used herein without definition shall have the
meanings specified in the Indenture;
(2) Capitalized terms used herein without definition herein or in the
Indenture shall have the meanings specified in the Declaration (as defined
in Section 2.5 hereof);
(3) All references herein to Articles and Sections, unless otherwise
specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture No. 4; and
(4) The terms "herein", "hereof", "hereunder" and other words of
similar import refer to this Supplemental Indenture No. 4.
ARTICLE 2
The Series of Securities
Section 2.1. Title of the Securities. There shall be a series of
Securities designated the " 6 1/2% Subordinated Debentures Due 2003, Series C"
(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 $118,556,750. 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 February
16, 2003.
Section 2.4. Interest and Interest Rates.
(1) The rate of interest on each Security initially shall be 61/2%
per annum, accruing from November 26, 1997 through and including February
15,
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2001, and the Reset Rate thereafter, 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
December 31, 1997. 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. 4, shall be the Business Day preceding such
Interest Payment Date; provided, that in the event the Securities shall not
continue to remain in book-entry only form, the record dates shall be the
March 15, June 15, September 15 and December 15 prior to the applicable
Interest Payment Date; provided, however, that in the event that the Income
PRIDES or Growth PRIDES shall continue to remain in book entry only form,
interest payable on any Security 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. 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.
(2) The interest rate on the Securities will be reset on February 16,
2001 to the Reset Rate. On the fifth (5) Business Day immediately
preceding the Purchase Contract Settlement Date (the "Reset Announcement
Date"), the Reset Spread and the relevant Two-Year Benchmark Treasury will
be announced by the Company. On the Business Day immediately following the
Reset Announcement Date, the Holders of Securities will be notified of such
Reset Spread and the Two-Year Benchmark Treasury by the Company. Such
notice shall be sufficiently given to such Holders of Securities if
published in an Authorized Newspaper.
(3) Not later than 7 calendar days nor more than 15 calendar days
immediately preceding the Reset Announcement Date the Company will request
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DTC or its nominee (or any Successor Clearing Agency or its nominee) or the
Institutional Trustee, to notify the Holders of Securities of such Reset
Announcement Date and the procedures to be followed by such Holders of
Securities who do not intend to exercise their Put Option.
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 (each
such period, an "Extension Period"), but no such Extension Period may extend
beyond the Stated Maturity. 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 of 6 1/2% through and including February 15, 2001, and at
the Reset Rate thereafter, 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 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 (together
with any successor Rights Agreement, the "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 November 26, 1997 of the
Company (the "Guarantee") with respect to the 6 1/2% Trust Originated Preferred
Securities (the "Preferred Securities") issued by PLC Capital Trust II ("PLC
Capital"), the Common Securities Guarantee, dated as of November 26, 1997 of the
Company (the "Common Guarantee," and together with the Guarantee, the
"Guarantees") with respect to the 6 1/2% Trust Originated Common Securities (the
"Common Securities," and together with the Preferred Securities, the "Trust
Securities") issued by PLC Capital, the Preferred Securities Guarantee
Agreement, dated as of April 29, 1997, of the Company, with respect to the
8 1/4% Trust Originated Preferred Securities of PLC Capital Trust I and the
Common Securities Guarantee Agreement dated as of April 29, 1997, of the
<PAGE>
Company with respect to the 8 1/4% Trust Originated Common Securities of
PLC Capital Trust I (together the "81/4% TOPrS Guarantees"), 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 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
November 20, 1997 (the "Declaration")) or the Collateral Agent, as the case
may be, shall be the sole holder of the Securities, the Company shall give
the Regular Trustees (as defined in the Declaration) and the Institutional
Trustee (as defined in the Declaration), 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, or the Collateral Agent, as the case may
be, 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.
Section 2.6. 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.
<PAGE>
Section 2.7. Distribution of Securities. Subject to the terms and
conditions of Article 10 of the Indenture:
(1) 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.
(2) The Securities are not entitled to the benefit of any sinking
fund.
(3) 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, if any, as the Preferred Securities are then listed, and (ii)
the Indenture, this Supplemental Indenture No. 4 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, or reduce the
principal amount thereof or reduce the rate or extend the time of payment
of interest thereon (other than as provided in Section 2.5 of this
Supplemental Indenture No. 4) of or reduce any amount payable on redemption
thereof or change the currency in which the principal thereof or interest
thereon is payable or impair the right to institute suit for the
enforcement of any payment on any Security when due or (b) reduce the
aforesaid principal amount of Securities, the consent of the Holders of
which is required for any such modification.
Section 2.8. Option to Put Securities.
(1) Each holder of Securities, including the Institutional Trustee
and the Collateral Agent, if applicable, shall have the right to require
the Company to repurchase such holder's Securities on the Purchase Contract
Settlement Date (the "Put Option"), either in whole or in part, at an
amount per Security equal to $50, plus accrued and unpaid interest, if any,
thereon to the Purchase Contract Settlement Date (the "Security Repurchase
Price").
(2) On the Business Day immediately preceding the Purchase Contract
Settlement Date, each holder of Securities that are then pledged with the
Collateral Agent to secure such holder's obligations under the Purchase
Contracts forming a part of such holder's Income PRIDES, or which relate to
Preferred Securities that are so pledged, that has not settled the related
Purchase Contracts with cash on or prior to the Business Day immediately
preceding the Purchase Contract Settlement Date or in respect of which the
holder of the related Preferred Securities has not settled the related
Purchase Contracts on or
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prior to the Business Day immediately preceding the Purchase Contract
Settlement Date or in respect of which the holder of the related
Preferred Securities has not settled the related Purchase Contracts with
cash on such Business Day, will be deemed to have requested the
Collateral Agent or Institutional Trustee, as applicable, to put the
aggregate principal amount of such Securities to the Company for an amount
equal to the Securities Repurchase Price.
Section 2.9. Repurchase Procedure for Securities.
(1) In order for the Securities to be repurchased on the Purchase
Contract Settlement Date, the Company must receive at the Corporate Trust
Office in the City of Wilmington, Delaware, not later than 11:00 a.m. on
the third Business Day prior to the Purchase Contract Settlement Date, the
Securities to be repurchased with the form entitled "Option to Elect
Repurchase" on the reverse of or otherwise accompanying such Securities
duly completed. All questions as to the validity, eligibility (including
time of receipt) and acceptance of the Securities for repayment shall be
determined by the Company, whose determination shall be final and binding.
Notwithstanding the foregoing, so long as the holder is the Institutional
Trustee (with respect to Securities being purchased pursuant to 2.8(2)
hereof) or the Collateral Agent, such Securities may be received at the
Corporate Trust Office at any time prior to 11:00 a.m., New York City time,
on the Purchase Contract Settlement Date, in the form and manner as may be
designated by the Institutional Trustee or the Collateral Agent, as
applicable, and acceptable to the Trustee.
(2) Payment of the Securities Repurchase Price to holders of
Securities shall be made through the Trustee, subject to the Trustee's
receipt of payment from the Company in accordance with the terms of the
Indenture. Notwithstanding the foregoing, so long as the Holder of any
Securities presented for repurchase is the Institutional Trustee or the
Collateral Agent, the payment of the Securities Repurchase Price in respect
of such Securities shall be made, either through the Trustee or the Company
acting as Paying Agent, no later than 12:00 noon, New York City time on the
Purchase Contract Settlement Date, and to such account as may be designated
by the Institutional Trustee or the Collateral Agent, as the case may be.
If the Trustee holds immediately available funds sufficient to pay the
Securities Repurchase Price of the Securities presented for repurchase (or,
if the Company is acting as Paying Agent or the Institutional Trustee has
received the Securities Repurchase Price), then, immediately prior to the
close of business on the Purchase Contract Settlement Date, such Securities
will cease to be outstanding and interest thereon will cease to accrue,
whether or not such Securities have been received by the Company, and all
other rights of the holder in respect of the Securities, including the
holder's right to require the Company to repurchase such
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Securities, shall terminate and lapse (other than the right to receive
the Securities Repurchase Price upon delivery of such Securities but
without interest on such Securities Repurchase Price). Neither the
Institutional Trustee nor the Company will be required to register the
transfer of any Securities for which repurchase has been elected.
Section 2.10. Holders' Rights. If an Event of Default constituting
the failure to pay interest or principal on the Securities on the date such
interest or principal is otherwise payable has occurred and is continuing, then
a holder of Trust 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 Trust Securities of such holder on or after the respective due
date specified in the Securities. The holders of Trust Securities will not be
able to exercise directly any other remedy available to the holders of the
Securities under this Supplemental Indenture No. 4 or under the Indenture unless
the Institutional Trustee fails to do so.
Section 2.11. 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 Preferred Securities 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. 4 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 the
Company's capital 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 obligations pursuant to any contract or security requiring the
Company to purchase shares of its capital 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 the Company's 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 securities being
converted or exchanged, and (iv) dividends or distributions in capital stock of
the Company and (v) redemptions or purchases pursuant to the Rights Agreement,
(b) the Company shall not make any payments of interest principal or premium, if
any, 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, the 81/4% TOPrS Guarantees or
the Series A Guarantee).
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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 Trust Securities in liquidation of PLC Capital (including the
Collateral Agent prior to the Purchase Contract Settlement Date), or (b) in
connection with certain mergers, consolidations or amalgamations permitted by
the Declaration and (iii) to use its reasonable efforts, consistent with the
terms and provisions of the Declaration, 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 2.12. Denomination. The Securities shall be issuable in
denominations of $50 and integral multiples thereof.
Section 2.13. Currency. Principal and interest on the Securities
shall be payable in Dollars.
Section 2.14. Registered Securities; Form. Except as provided in
Section 2.15, the Securities shall be issued as Registered Securities, without
coupons and shall be registered in the name of Wilmington Trust Company, as
Institutional Trustee, and its permitted registered assigns. The Securities
shall be substantially in the form attached as Exhibit A hereto.
Section 2.15. Global Securities Upon Liquidation of Trust.
(a) If, in accordance with the Declaration, PLC Capital is to be
dissolved and the Securities held by the Institutional Trustee are to be
distributed to the holders of the Trust Securities:
(i) the Securities in certificated form shall be presented to the
Trustee by the Institutional Trustee in exchange for a global Security in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Securities (a "Global Security") to be registered in the name of the
Depository (as defined in the Declaration), 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). 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. 4. Payments on Securities issued as Global
Securities will be made to the Depository; and
<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 Securities Certificate
(as defined in the Declaration) which represents Preferred Securities other than
Preferred Securities held by the Clearing Agency (as defined in the Declaration)
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
canceled 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 canceled,
will be executed by the Company and delivered to the Trustee for authentication
and delivery in accordance with the Indenture and this Supplemental Indenture
No. 4. 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 canceled.
(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 3.3 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 without coupons, in authorized denominations, and in an
aggregate principal amount equal to the principal amount of the Global Security
in exchange for such Global Security. Upon the exchange of the Global Security
for such Securities in definitive registered form without coupons, in authorized
denominations, the Global Security
<PAGE>
shall be canceled 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 2.16. Defeasance and Covenant Defeasance. The provisions of
Sections 4.4 and 4.5 of the Indenture shall apply to the Securities.
Section 2.17. Registrar and Paying Agent. The Trustee shall
initially serve as Registrar and Paying Agent.
Section 2.18. Additional Provisions Regarding Amendments. So long as
the Holder of the Securities is PLC Capital, the terms of the Securities may be
amended by mutual consent of the Company and PLC Capital in the manner they
shall agree; provided, however, that, so long as any of the Preferred Securities
remain outstanding, no such amendment shall be made that adversely affects the
holders of the Trust 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 Trust Securities then outstanding, in
writing or at a duly constituted meeting of such holders.
Section 2.19. 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.
Section 2.20. Miscellaneous Expenses.
(a) In connection with the offering, sale and issuance of the
Securities to the Institutional Trustee and in connection with the sale of the
Trust Securities by PLC Capital, the Company, in its capacity as borrower with
respect to the Securities, shall pay (i) all costs and expenses relating to the
offering, sale and issuance of the Trust Securities and the Securities,
including commissions to the underwriters payable
<PAGE>
pursuant to the Underwriting 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 PLC Capital, 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 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 taxing authority,
then, in any such case, the Company in its capacity as borrower with respect to
the Securities 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, will be not less than
the amounts PLC Capital would have received had no such taxes, duties,
assessments or other governmental charges been imposed.
ARTICLE 3
Miscellaneous Provisions
Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 4, is in all respects hereby adopted, ratified and
confirmed.
Section 3.2. This Supplemental Indenture No. 4 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. 4 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
<PAGE>
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 4 to be duly executed, as of the day and year first written above.
PROTECTIVE LIFE CORPORATION
By: /s/ Deborah J. Long
-----------------------------------------
Name: Deborah J. Long
Title: Senior Vice President,
Secretary and General Counsel
By: /s/ Jerry W. DeFoor
-----------------------------------------
Name: Jerry W. DeFoor
Title: Vice President,
Controller and
Chief Accounting Officer
[Seal]
Attest: /s/ Kathy B. Polk
----------------------------------------
Name: Kathy B. Polk
Title: Assistant Secretary
AMSOUTH BANK, Trustee
By: /s/ Charles S. Northen IV
---------------------------------------------------
Name: Charles S. Northen IV
Title: Vice President
[Seal]
Attest: /s/ T. Franklin Caley
-----------------------------------------
Name: T. Franklin Caley
Title: Vice President
<PAGE>
Exhibit A
FORM OF FACE OF SERIES C SUBORDINATED DEBENTURE
THIS SERIES C SUBORDINATED DEBENTURE IS REGISTERED IN THE NAME OF
WILMINGTON TRUST COMPANY, AS INSTITUTIONAL TRUSTEE, AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF OTHER THAN AS PERMITTED IN THE
SUPPLEMENTAL INDENTURE NO. 4 DATED AS NOVEMBER 20, 1997, A COPY OF WHICH
IS ON FILE WITH THE SECRETARY OF THE COMPANY.
ARTICLE VIII
FORM OF DEBENTURE
[IF THE DEBENTURE IS TO BE A GLOBAL SECURITY INSERT - This
Subordinated Debenture is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of the Depository or a
nominee of the Depository. This Subordinated Debenture is exchangeable for
Subordinated Debentures registered in the name of a person other than the
Depository or its nominee only in the limited circumstances described in the
Indenture, and no transfer of this Subordinated Debenture (other than a transfer
of this Subordinated Debenture as a whole by the Depository to a nominee of the
Depository or by a nominee of the Depository to the Depository or another
nominee of the Depository) may be registered except in limited circumstances.
Unless this Subordinated Debenture is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the issuer or its agent for registration of transfer, exchange or
payment, and any Subordinated Debenture issued is registered in 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.]
<PAGE>
Exhibit A
PROTECTIVE LIFE CORPORATION
6 1/2% Subordinated Debentures
Due February 16, 2003, Series C
No.
$__________
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 for PLC Capital
Trust II, the principal sum of $_________ on February 16, 2003 (such date is
hereinafter referred to as the "Stated Maturity") 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 December 31, 1997, initially at the rate
of 6 1/2% per annum through and including February 15, 2001, and at the Reset
Rate thereafter, until the principal hereof is paid or made available for
payment; provided that any such installment of interest, which is overdue
shall bear interest at the rate of 6 1/2% per annum through and including
February 15, 2001, and at the Reset Rate thereafter, (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. 4 (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
Subordinated Debenture to defer payments of interest by extending the
interest payment period to the next Interest Payment Date by one or more
quarterly periods (each such period, an "Extension Period"), but no such
Extension Period may extend beyond the Stated Maturity. 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 of 6 1/2% through and
including February 15, 2001, and at the reset rate thereafter, to the extent
permitted by applicable law; provided, that during any such Extension Period,
(a) the Company 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 the Company's capital 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 obligations pursuant to any
contract or security requiring the Company to purchase shares of its capital
stock, (ii) as a result of a reclassification of
<PAGE>
the Company's stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's
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 securities being converted
or exchanged, (iv) dividends or distributions in capital stock of the Company
and (v) redemptions or purchases pursuant to the Company's Rights Agreement
(together with any successor thereto, the "Rights Agreement"), dated as of
August 7, 1995, between Protective Life and AmSouth Bank (as successor by
merger to AmSouth Bank of Alabama, successor by conversion of charter to
AmSouth Bank, N.A.) ("AmSouth Bank"), 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 that rank pari passu with or junior to the Debentures 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
November 26, 1997 of the Company (the "Guarantee") with respect to the 61/2%
Trust Originated Preferred Securities (the "Preferred Securities") issued by
PLC Capital Trust II ("PLC Capital"), the Common Securities Guarantee, dated
as of November 26, 1997 of the Company (the "Common Guarantee," and together
with the Guarantee, the "Guarantees") with respect to the 61/2% Trust
Originated Common Securities (the "Common Securities," and together with the
Preferred Securities, the "Trust Securities") issued by PLC Capital, the
Preferred Securities Guarantee Agreement, dated April 29, 1997, of the
Company, with respect to the 81/4% Trust Originated Preferred Securities of
PLC Capital Trust I, the Common Securities Guarantee Agreement, dated as of
April 29, 1997, of the Company with respect to the 81/4% Trust Originated
Common Securities of PLC Capital Trust I (together the "81/4% TOPrS
Guarantees") 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 beyond the Stated Maturity. Upon the termination
of any Extension Period and the payment of all amounts then due, the Company
may commence a new Extension Period, subject to the terms set forth below.
No interest shall be due and payable during any Extension Period, except at
the end thereof, but the Company may prepay at any time all or any portion of
the interest accrued during any Extension Period. If the Institutional
Trustee (as defined in the Amended and Restated Declaration of PLC Capital
(the "Declaration") shall be the sole holder of the Securities, the Company
shall give the Regular Trustees (as defined in the Declaration) and the
Institutional Trustee (as defined in the Declaration), 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
<PAGE>
Securities, but in any event at least one Business Day before such record
date. If the Institutional Trustee shall not be the sole holder of the
Securities, the Company shall give the holders of the Securities notice of
its selection of such Extension Period at least 10 Business Days prior to the
earlier of (i) the Interest Payment Date or (ii) the date upon which the
Company is required to give notice of the record or payment date of such
interest payment to the New York Stock Exchange (or other applicable
self-regulatory organization) or to holders of the Securities.
The interest rate will be reset on February 16, 2001 to the Reset Rate
(as determined by the Reset Agent). 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 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; provided, that in the event the Subordinated Debentures
shall not continue to remain book-entry form, the record dates shall be the
March 15, June 15, September 15 and December 15 prior to the applicable Interest
Payment Date; provided, however, that in the event the Income PRIDES or Growth
PRIDES shall continue to remain in book-entry only form, interest payable on any
Subordinated Debenture shall be paid to the Person in whose name such
Subordinated Debenture is registered at the close of business on the Regular
Record Date for 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. 4 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
<PAGE>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. 4 referred to on the reverse hereof or be valid
or obligatory for any purpose.
<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, as Trustee
By __________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SERIES C 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, Supplemental Indenture No. 3, dated April 29,
1997, and Supplemental Indenture No. 4, dated November 20, 1997, called the
"Indenture"), from the Company to AmSouth Bank (as successor by merger 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. 4, dated as of
November 20, 1997 from the Company to the Trustee, relating to the Securities of
this series (herein called "Supplemental Indenture No. 4").
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 holder of this Security, including the Institutional Trustee and the
Collateral Agent, if applicable, shall have the right to require the Company to
repurchase this Security on the Purchase Contract Settlement Date (the "Put
Option"), either in whole or in part, at an amount per Security equal to $50,
plus accrued and unpaid interest, if any, thereon to the Purchase Contract
Settlement Date (the "Securities Repurchase Price"). On the Business Day
immediately preceding the Purchase Contract Settlement Date, each holder of
Securities that are then pledged with the Collateral Agent to secure such
holder's obligations under the Purchase Contracts forming a part of such
holder's Income PRIDES, or which relates to Preferred Securities which are so
pledged, that has not settled such Purchase Contracts with cash on or prior to
the
<PAGE>
Business Day immediately proceeding the Purchase Contract Settlement Date or
in respect of which the holder of the related Preferred Securities, has not
settled the related Purchase Contracts with cash on such Business Day, will be
deemed to have requested the Collateral Agent or the Institutional Trustee, as
applicable, to put the aggregate principal amount of such Securities to the
Company for an amount equal to the Securities Repurchase Price. In order for
the Securities to be repurchased on the Purchase Contract Settlement Date, the
Company must receive at the corporate Trust Office in the City of Wilmington,
Delaware, not later than 11:00 a.m. on the third Business Day prior to the
Purchase Contract Settlement Date, the Securities to be repurchased with the
form entitled "Option to Elect Repurchase" on the reverse of or otherwise
accompanying such Securities duly completed. All questions as to the validity,
eligibility (including time of receipt) and acceptance of the Securities for
repurchase shall be determined by the Company, whose determination shall be
final and binding. Notwithstanding the foregoing, so long as the holder is the
Institutional Trustee (with respect to Securities being repurchased pursuant to
Section 2.8(2) of the Supplemental Indenture No. 4) or the Collateral Agent,
this Security may be received at the Corporate Trust Office of the Institutional
Trustee at any time prior to 11:00 a.m., New York city time, on the Purchase
Contract Settlement Date in the form and manner as may be designated by the
Institutional Trustee or the Collateral Agent, as applicable, and acceptable to
the Trustee. So long as the Holder of any Securities presented for repayment is
the Institutional Trustee or the Collateral Agent, the payment of the Securities
Repurchase Price in respect of such Securities shall be made, either through the
Trustee or the Company acting as Paying Agent, no later than 12:00 noon, New
York City time, on the Purchase Contract Settlement Date.
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
<PAGE>
or waiver by the Holder of the Securities 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.
4 and no provision of this Security or of the Indenture or of Supplemental
Indenture No. 4 shall alter or impair the obligation of the Company, which is
absolute and 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 $50 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
<PAGE>
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.
<PAGE>
Exhibit 4(v)
- ------------------------------------------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
PLC CAPITAL TRUST II
Dated as of November 26, 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.................. 5
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....................................... 6
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............... 8
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee....... 10
ARTICLE IV.
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1. Preferred Guarantee Trustee; Eligibility.................... 11
SECTION 4.2. Appointment, Removal and Resignation of
Preferred Guarantee Trustees................................ 11
ARTICLE V.
GUARANTEE
SECTION 5.1. Guarantee................................................... 12
SECTION 5.2. Waiver of Notice and Demand................................. 12
SECTION 5.3. Obligations Not Affected.................................... 12
SECTION 5.4. Rights of Holders........................................... 13
i
<PAGE>
Page
----
SECTION 5.5. Guarantee of Payment........................................ 14
SECTION 5.6. Subrogation................................................. 14
SECTION 5.7. Independent Obligations..................................... 14
ARTICLE VI.
LIMITATION OF TRANSACTIONS; RANKING
SECTION 6.1. Limitation of Transactions.................................. 14
SECTION 6.2. Ranking..................................................... 15
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination................................................. 16
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.1. Exculpation................................................. 16
SECTION 8.2. Indemnification............................................. 16
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. Successors and Assigns...................................... 17
SECTION 9.2. Amendments.................................................. 17
SECTION 9.3. Notices..................................................... 17
SECTION 9.4. Benefit..................................................... 18
SECTION 9.5. Governing Law............................................... 18
ii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated
as of November 26, 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 II, a Delaware statutory business trust
(the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of November 20, 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 2,300,000 preferred securities, having an aggregate
liquidation amount of $115,000,000, designated the 6 1/2% 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.
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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.
"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
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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 6 1/2% Subordinated Debentures due 2003,
Series C 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 accumulated 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 "Repayment 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.
"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.
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"Indenture" means the Indenture dated as of June 1, 1994, among the
Guarantor (the "Debenture Issuer") and AmSouth Bank (as successor by merger to
AmSouth Bank of Alabama, 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.
"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
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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 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.
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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 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.
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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 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:
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(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;
(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.
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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.
(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
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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.
(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.
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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:
(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.
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(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 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
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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 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, Repayment 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, Repayment 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.
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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.
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.
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<PAGE>
ARTICLE VI.
LIMITATION OF TRANSACTIONS; RANKING
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, or make a liquidation
payment with respect to, any of its capital stock (other than (i) purchases
or acquisitions of shares of its capital 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
capital 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 an
acquisition or the conversion or exchange provisions of such capital stock or
the securities being converted or exchanged, (iv) dividends or distributions
in capital stock of the Company and (v) 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, the
Preferred Securities Guarantee Agreement, dated April 29, 1997 of the
Guarantor with respect to the 8-1/4% Trust Originated Preferred Securities of
PLC Capital Trust I, the Common Securities Guarantee Agreement, dated as of
April 29, 1997 of the Guarantor with respect to the 8-1/4% Trust Originated
Common Securities of PLC Capital Truust I and thhe 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 Contract
Adjustment Payments, the Debentures, the Common Securities Guarantee, the
Guarantor's Guarantee of PLC Capital L.L.C.'s 9% Cumulative Monthly Income
Preferred Securities, Series A, having an aggregate liquidation amount of $55
million, the Company's 9% Subordinated Debentures, due 2024, Series A, having
an aggregate liquidation amount of $69.6 million, the Company's Guarantee of
PLC Capital Trust I's 8-1/4% Trust Originated Preferred Securities, having an
aggregate liquidation amount of $75 million, the Company's Guarantee of PLC
Capital Trust I's 8-1/4% Trust Originated Common Securities, having an
aggregate liquidation amount of $2.3 million and the Company's 8-1/4%
Subordinated Debentures, due 2027, Series B, having an aggregate liquidation
amount of $77.3 million, and
15
<PAGE>
with all unsecured trade creditors of the Company 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, from time to time, if any, by the Guarantor and to any
guarantee now or hereafter entered into by the Guarantor in respect of any
preferred or preference stock of any affiliate of the Guarantor. The terms of
the Preferred Securities provide that each holder of Preferred Securities issued
by the Trust by acceptance thereof agrees to the subordination provisions and
other terms of the Preferred Securities Guarantee.
ARTICLE VII.
TERMINATION
SECTION 7.1. Termination. This Preferred Securities Guarantee shall
terminate upon (i) full payment of the Repayment 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,
16
<PAGE>
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 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.
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<PAGE>
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:
(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: Secretary
(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.
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<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
PROTECTIVE LIFE CORPORATION, as Guarantor
By: /s/ Deborah J. Long
-----------------------------------------
Name: Deborah J. Long
Title: Senior Vice President, Secretary
and General Counsel
WILMINGTON TRUST COMPANY, as Preferred
Guarantee Trustee
By: /s/ Emmett R. Harmon
-----------------------------------------
Name: Emmett R. Harmon
Title: Vice President
19
<PAGE>
Exhibit 4(y)
------------------------------------------------------
------------------------------------------------------
PROTECTIVE LIFE CORPORATION
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
--------------------------
PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF NOVEMBER 26, 1997
-----------------------------------------------------
-----------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS........................................................... 1
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions......................................... 1
Section 1.2. Compliance Certificates and Opinions................ 13
Section 1.3. Form of Documents Delivered to Agent................ 14
Section 1.4. Acts of Holders; Record Dates....................... 14
Section 1.5. Notices............................................. 16
Section 1.6. Notice to Holders; Waiver........................... 18
Section 1.7. Effect of Headings and Table of
Contents........................................ 18
Section 1.8. Successors and Assigns.............................. 18
Section 1.9. Separability Clause................................. 19
Section 1.10. Benefits of Agreement............................... 19
Section 1.11. Governing Law....................................... 19
Section 1.12. Legal Holidays...................................... 19
Section 1.13. Counterparts........................................ 20
Section 1.14. Inspection of Agreement............................. 20
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally..................... 20
Section 2.2. Form of Agent's Certificate of
Authentication................................... 21
i
<PAGE>
Page
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations...................... 22
Section 3.2. Rights and Obligations Evidenced by
the Certificates................................ 22
Section 3.3. Execution, Authentication, Delivery
and Dating...................................... 23
Section 3.4. Temporary Certificates.............................. 25
Section 3.5. Registration; Registration of
Transfer and Exchange........................... 25
Section 3.6. Book-Entry Interests................................ 27
Section 3.7. Notices to Holders.................................. 28
Section 3.8. Appointment of Successor Clearing
Agency.......................................... 29
Section 3.9. Definitive Certificates............................. 29
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.................................... 29
Section 3.11. Persons Deemed Owners............................... 31
Section 3.12. Cancellation........................................ 32
Section 3.13. Substitution of Securities.......................... 32
Section 3.14. Reestablishment of Income PRIDES.................... 34
Section 3.15. Transfer of Collateral upon
Occurrence of Termination Event................. 35
Section 3.16. No Consent to Assumption............................ 36
ii
<PAGE>
Page
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distributions; Rights to
Distributions Preserved;
Distribution Rate Reset; Notice................. 37
Section 4.2. Notice and Voting................................... 39
Section 4.3. Liquidation of the Trust............................ 40
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.................. 40
Section 5.2. Contract Adjustment Payments........................ 43
Section 5.3. Deferral of Payment Dates for Contract
Adjustment Payments............................. 44
Section 5.4. Payment of Purchase Price........................... 46
Section 5.5. Issuance of Shares of Common Stock.................. 49
Section 5.6. Adjustment of Settlement Rate....................... 50
Section 5.7. Notice of Adjustments and Certain
Other Events.................................... 58
Section 5.8. Termination Event; Notice........................... 59
Section 5.9. Early Settlement.................................... 59
Section 5.10. No Fractional Shares................................ 62
Section 5.11. Charges and Taxes................................... 62
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to
Receive Contract Adjustment
Payments and to Purchase
Common Stock.................................... 63
iii
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Page
Section 6.2. Restoration of Rights and Remedies.................. 63
Section 6.3. Rights and Remedies Cumulative...................... 64
Section 6.4. Delay or Omission Not Waiver........................ 64
Section 6.5. Undertaking for Costs............................... 64
Section 6.6. Waiver of Stay or Extension Laws.................... 65
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities................. 65
Section 7.2. Notice of Default................................... 66
Section 7.3. Certain Rights of Agent............................. 66
Section 7.4. Not Responsible for Recitals or
Issuance of Securities.......................... 68
Section 7.5. May Hold Securities................................. 68
Section 7.6. Money Held in Custody............................... 68
Section 7.7. Compensation and Reimbursement...................... 68
Section 7.8. Corporate Agent Required; Eligibility............... 69
Section 7.9. Resignation and Removal; Appointment
of Successor.................................... 69
Section 7.10. Acceptance of Appointment by
Successor....................................... 71
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business.......................... 72
Section 7.12. Preservation of Information;
Communications to Holders....................... 72
Section 7.13. No Obligations of Agent............................. 73
iv
<PAGE>
Page
Section 7.14. Tax Compliance...................................... 73
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without
Consent of Holders.............................. 74
Section 8.2. Supplemental Agreements with Consent
of Holders...................................... 75
Section 8.3. Execution of Supplemental Agreements................ 76
Section 8.4. Effect of Supplemental Agreements................... 76
Section 8.5. Reference to Supplemental Agreements................ 77
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions........................ 77
Section 9.2. Rights and Duties of Successor
Corporation..................................... 78
Section 9.3. Opinion of Counsel to Agent......................... 78
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts................ 79
Section 10.2. Maintenance of Office or Agency..................... 79
Section 10.3. Company to Reserve Common Stock..................... 80
Section 10.4. Covenants as to Common Stock........................ 80
Section 10.5. Statements of Officers of the Company
as to Default................................... 80
v
<PAGE>
Page
EXHIBIT A Form of Income PRIDES Certificate...................A-1
EXHIBIT B Form of Growth PRIDES Certificate...................B-1
EXHIBIT C Instruction to Collateral Agent.....................C-1
EXHIBIT D Instruction to Purchase Contract Agent..............D-1
vi
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PURCHASE CONTRACT AGREEMENT, dated as of November 26, 1997, between
Protective Life Corporation, a Delaware corporation (the "Company"), and The
Bank of New York, a New York banking corporation, acting as purchase contract
agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms, have
been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
<PAGE>
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Authorized Newspaper; (ii) Coupon Rate; (iii) Indenture,
(iv) Liquidation Distribution; (v) Reset Agent; (vi) Reset Announcement Date;
(vii) Reset Rate; (viii) Reset Spread; and (ix) Two-Year Benchmark Treasury;
and
(e) the following terms have the meanings given to them in this Section
1.1(e).
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall
mean such Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
2
<PAGE>
"Applicable Market Value" has the meaning specified in Section 5.1.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"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).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such
certification and delivered to the Agent.
"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 3.6.
"Business Day" means any day which is not a Saturday or Sunday or a day
on which banking institutions in New York City (in the State of New York) are
permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name or in the name of a nominee
3
<PAGE>
of that organization, shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the 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 Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement,
and thereafter "Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, par value $.50 per share, of the
Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean
such successor.
"Contract Adjustment Payments", if any, means the fee payable by the
Company in respect of each Purchase Contract, equal to 0% per annum of the
Stated Amount (provided that if such percentage is 0%, then no such payment
shall be payable by the Company), computed on the basis of a 360 day year of
twelve 30 day months, plus any Deferred Contract Adjustment Payments accrued
pursuant to Section 5.3.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business
shall be adminis-
4
<PAGE>
tered, which office at the date hereof is located at 101 Barclay Street, 12E,
New York, New York 10286, Attention: Corporate Trust Administration,
Derivative Products Unit, except that for purposes of Section 10.2, such term
shall mean the office or agency of the Agent in the Borough of Manhattan, the
City of New York, which office at the date hereof is located at 101 Barclay
Street, 12E, New York, NY 10286.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the 6 1/2% Debentures due February 16, 2003, Series C to be issued under the
Indenture.
"Declaration" means the Amended and Restated Declaration of Trust of PLC
Capital Trust II, dated November 20, 1997, among the Company, as the sponsor,
the trustees named therein and the holders from time to time of individual
beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency becomes
its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules
and regulations promulgated thereunder.
5
<PAGE>
"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Clearing Agency or a
nominee thereof.
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name
of a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities as collateral to secure a
Holder's obligations under a Purchase Contract, the collective rights and
obligations of a Holder of a Growth PRIDES Certificate in respect of such
Treasury Securities, subject to the Pledge thereof, and the related Purchase
Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES
specified on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Preferred Security, subject
to the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in
6
<PAGE>
respect of the number of Income PRIDES specified on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the Declaration.
"Indenture Trustee" means AmSouth Bank (as successor by merger to
AmSouth Bank of Alabama, successor by conversion of Charter to AmSouth Bank
N.A.), as trustee under the Indenture, or any successor thereto.
"Institutional Trustee" means Wilmington Trust Company, as institutional
trustee under the Declaration, or any successor thereto that is a financial
institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chief Executive Officer, Chief
Financial Officer, its President, any Executive Vice President, any Senior
Vice President, any Vice President, its Treasurer, any Assistant Treasurer,
or its Secretary and delivered to the Agent.
"Liquidation Distribution" has the meaning set forth in Annex I of the
Declaration.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chief
Executive Officer, the Chief Financial Officer, the President, any Executive
Vice President, any Senior Vice President, any Vice President, the Treasurer,
any Assistant Treasurer, or the Secretary of the Company and delivered to the
Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company and who shall be
reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES and/or
Growth PRIDES, means, as of the date of
7
<PAGE>
determination, all Income PRIDES and/or Growth PRIDES evidenced by
Certificates theretofore authenticated, executed and delivered under this
Agreement, except:
(i) If a Termination Event has occurred, (A) Growth
PRIDES and (B) Income PRIDES for which the Stated Amount of
the related Preferred Security or a Liquidation Distribution
in respect of such Preferred Security has been theretofore
deposited with the Agent in trust for the Holders of such
Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered
to the Agent for cancellation or deemed cancelled pursuant
to the provisions of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates issued in exchange for or in lieu of which
other Certificates have been authenticated, executed on
behalf of the Holder and delivered pursuant to this
Agreement, other than any such Certificate in respect of
which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona
fide purchaser in whose hands the Income PRIDES or Growth
PRIDES evidenced by such Certificate are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES
or Growth PRIDES owned by the Company or any Affiliate of the Company shall
be disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Income
PRIDES or Growth PRIDES which a Responsible Officer of the Agent knows to be
so owned shall be so disregarded. Income PRIDES or Growth PRIDES so owned
which have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the satisfaction of the Agent the
pledgee's right so to act with respect to such Income
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PRIDES or Growth PRIDES and that the pledgee is not the Company or any
Affiliate of the Company.
"Payment Date" means each March 31, June 30, September 30, and December
31, commencing December 31, 1997.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity or government or any agency or
political subdivision thereof.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities (or the Debentures in the event of a Liquidation Distribution) or
the Treasury Securities, as the case may be, in each case constituting a part
of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its
own behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or
a portion of the rights and obligations of the Company and the Holder under
the Growth PRIDES evidenced thereby; and, for the purposes of this
definition, any Growth PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Growth PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed,
lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or
a portion of
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the rights and obligations of the Company and the Holder under the Income
PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income
PRIDES Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Income PRIDES Certificate.
"Preferred Securities" means the 6 1/2% Trust Originated Preferred
Securities of the Trust, each having a stated liquidation amount of $50,
representing preferred undivided beneficial interests in the assets of the
Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract obligating the Company to (i) sell and the Holder of such Security
to purchase Common Stock and (ii) pay the Holder Contract Adjustment
Payments, if any, in each case, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means February 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in Section
5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution of Contract Adjustment Payments, if
any, payable on any Payment Date means, as to any Global Certificate, the
Business Day next preceding such Payment Date, and as to any other
Certificate, the 15th day of the month in which such Payment Date occurs.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
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"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Repayment Price" means, with respect to a Preferred Security, the
liquidation amount plus any accumulated and unpaid distributions thereon to
the date of repayment (subject to the rights of holders of record on the
relevant record date to receive distributions due on the related Payment
Date).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Rights Agreement" has the meaning specified in Section 5.3.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" has the meaning specified in the Indenture.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving
as properly filed a petition seeking reorganization or liquidation of the
Company under the Bankruptcy Code or any other similar applicable Federal or
State law, and, unless such judgment, decree or order shall have been entered
within 60 days prior to the Purchase Contract Settlement Date, such decree or
order shall have continued undischarged and unstayed for a period of 60 days;
or (ii) a judgment, decree or court
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order for the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding up or liquidation of its affairs, shall have been entered, and,
unless such judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree or
order shall have continued undischarged and unstayed for a period of 60 days;
or (iii) at any time on or prior to the Purchase Contract Settlement Date,
the Company shall file a petition for relief under the Bankruptcy Code, or
shall consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization or liquidation of
the Company under the Bankruptcy Code or any other similar applicable Federal
or State law, or shall consent to the filing of any such petition, or shall
consent to the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors.
"Threshold Appreciation Price" has the meaning specified in Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means a zero-coupon U.S. Treasury Security due
February 15, 2001 (Cusip Number 912820 A20) which is the principal strip of
the 7 3/4% U.S. Treasury Security which matures on February 15, 2001.
"Trust" means PLC Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware.
"Underwriting Agreement" means the Underwriting Agreement dated November
20, 1997 between the Company and the Trust, on the one hand, and Merrill
Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs & Co., Fox-Pitt,
Kelton Inc., and The Robinson-Humphrey Company, LLC, as representatives of
the several Underwriters named therein, on the other hand.
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"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Agent shall at its request, be entitled
to receive an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Except as otherwise provided by this Agreement, every certificate or
opinion with respect to compliance with a condition or covenant provided for
in this Agreement shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
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Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of any Person may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Person knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company unless the Person executing such certificate or
such counsel knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
deliv-
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ered to the Agent and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and (subject to Section 7.1) conclusive in
favor of the Agent and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made or
taken by Holders of Securities. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to give, make or take the relevant request,
demand, authorization, direction, notice, consent, waiver or other action,
whether or not such Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior to
the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a
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<PAGE>
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any
Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite
number of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed request,
demand, authorization, direction, notice, consent, waiver or other action by
Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section
1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in
the manner set forth in Section 1.6, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date
as provided in this paragraph. Notwithstanding the foregoing, no Expiration
Date shall be later than the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement
to be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Agent at 101 Barclay
Street, 12E, New York, New York 10286, Attention: Corporate
Trust
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<PAGE>
Administration, Derivative Products Unit or at any other address
previously furnished in writing by the Agent to the Holders and
the Company, or
(2) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to
the Company at 2801 Highway 280 South, Birmingham, Alabama 35223,
Attention: General Counsel, or at any other address previously
furnished in writing to the Agent by the Company.
(3) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or filed in
writing and personally delivered or mailed, first-class postage
prepaid, addressed to the Collateral Agent at The Chase Manhattan
Bank, 450 W. 33rd Street, 15th Floor, New York, New York 10001,
Attention: Corporate Trustee Administration, or at any other address
previously furnished in writing by the Collateral Agent to the Agent,
the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid,
addressed to the Institutional Trustee at 1100 N. Market Street,
Rodney Square North, Wilmington, DE 19890, Attention: Corporate
Trust Office, or at any other address previously furnished in writing
by the Institutional Trustee to the Company; or
(5) the Indenture Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at AmSouth Bank, AmSouth Harbert Plaza, Suite 730,
1901 Sixth Avenue North, Birmingham, Alabama 35203, Attention:
Corpo-
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<PAGE>
rate Trust Department, or at any other address previously furnished
in writing by the Indenture Trustee to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it appears in the applicable
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Agent, but such filing shall not
be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
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Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions hereof and thereof shall not in any way be
affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefits or any legal or equitable right,
remedy or claim under this Agreement. The Holders from time to time shall be
beneficiaries of this Agreement and shall be bound by all of the terms and
conditions hereof and of the Securities evidenced by their Certificates by
their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such
payments shall be made on the next succeeding Business Day with the same
force and effect as if made on such Payment Date, provided that no interest
shall accrue or be payable by the Company or any Holder for the period from
and after any such Payment Date, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day with the same force and effect
as if made on such Payment Date.
In any case where the Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement,
the Income PRIDES Certificates or the Growth PRIDES Certificates), the Pur-
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<PAGE>
chase Contracts shall not be performed on such date, but the Purchase
Contracts shall be performed on the immediately preceding Business Day with
the same force and effect as if performed on the Purchase Contract Settlement
Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by
any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Income PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company executing such Income PRIDES Certificates, as
evidenced by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Income PRIDES
evidenced by such Income PRIDES Certificates,
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<PAGE>
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
The Growth PRIDES Certificates (including the form of Purchase Contract
forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Growth PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company executing such Growth PRIDES Certificates, as
evidenced by their execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Growth PRIDES
evidenced by such Growth PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED)
AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
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The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 2,300,000 except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the
Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred
Security with a stated liquidation amount equal to the Stated Amount, subject
to the Pledge of such Preferred Security by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof and
the Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, each Holder of Income PRIDES shall pledge, pursuant to the
Pledge Agreement, each Preferred Security relating to such Holder's Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Preferred
Security, for the benefit of the Company, to secure the obligation of the
Holder under the related Purchase Contract to purchase Common Stock. Prior
to the purchase of shares of
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<PAGE>
Common Stock under a Purchase Contract, such Purchase Contract shall not
entitle the Holder of the related Income PRIDES Certificate to any of the
rights of a holder of shares of Common Stock, including, without limitation,
the right to vote or receive any dividends or other payments or to consent or
to receive notice as stockholders in respect of the meetings of stockholders
or for the election of directors of the Company or for any other matter, or
any other rights whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Agent as attorney-in-fact for, and
on behalf of, each Holder of Growth PRIDES shall pledge, pursuant to the
Pledge Agreement, each Treasury Security related to such Holder's Growth
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title and interest of such Holder in such Treasury
Security, for the benefit of the Company, to secure the obligation of such
Holder under the related Purchase Contract to purchase Common Stock. Prior
to the purchase, if any, of shares of Common Stock under a Purchase Contract,
such Purchase Contract shall not entitle the Holder of the related Growth
PRIDES Certificate to any of the rights of a holder of shares of Common
Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election
of directors of the Company or for any other matter, or any other rights
whatsoever as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Upon the execution and delivery of this Agreement, and at any time and
from time to time thereafter, the Company may deliver Certificates executed
by the Company to the Agent for authentication, execution on behalf of
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<PAGE>
the Holders and delivery, together with its Issuer Order for authentication
of such Certificates, and the Agent in accordance with such Issuer Order
shall authenticate, execute on behalf of the applicable Holders and deliver
such Certificates, provided, that the Company shall not be required to
deliver an Issuer Order for authentication of Certificates issued pursuant to
the second paragraph of Section 3.4 or Section 3.5, 3.10, 3.13, 3.14, 5.9 or
8.5.
The Certificates shall be executed on behalf of the Company by its Chief
Executive Officer, its Chief Financial Officer, its President, any of its
Executive Vice Presidents, any of its Senior Vice Presidents, any of its Vice
Presidents, its Treasurer, any Assistant Treasurer or its Secretary. The
signature of any of these officers on the Certificates may be manual or
facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent
shall be conclusive evidence that the Holder of such Certificate has entered
into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.
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Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES
may be listed, or as may, consistently herewith, be determined by
the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable
delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without
charge to the Holder. Upon surrender for cancellation of any one
or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute
on behalf of the Holder, and deliver in exchange therefor, one or
more definitive Certificates of like tenor, in authorized
denominations and evidencing a like number of Income PRIDES or
Growth PRIDES, as the case may be, as the temporary Certificate
or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Income
PRIDES or Growth PRIDES, as the case may be, evidenced thereby as
definitive Certificates.
Section 3.5. Registration; Registration of Transfer and
Exchange.
The Agent, as agent for the Company, shall keep at the
Corporate Trust Office a register (the "Income PRIDES Register")
in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of Income
PRIDES Certificates and of
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transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the
"Growth PRIDES Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of the Growth PRIDES Certificates following
Collateral Substitutions and transfers of Growth PRIDES
Certificates (the Agent, in such capacity, the "Growth PRIDES
Registrar").
Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like
number of Income PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged
for other Certificates, of any authorized denominations and
evidencing a like number of Income PRIDES or Growth PRIDES, as
the case may be, upon surrender of the Certificates to be
exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled to
receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the
same number of Income PRIDES or Growth PRIDES, as the case may
be, and be entitled to the same benefits and subject to the same
obligations, under this Agreement as the Income PRIDES or Growth
PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Agent duly
executed, by the Holder thereof or his attorney duly authorized
in writing.
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No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the
Agent may require payment from the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of
Certificates, other than any exchanges pursuant to Sections 3.6,
5.9 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder and deliver any Certificate presented or surrendered for
registration of transfer or for exchange on or after the Early
Settlement Date, if any, with respect to the Securities evidenced
by such Certificate, the Business Day immediately preceding the
Purchase Contract Settlement Date or the Termination Date. In
lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt
of appropriate registration or transfer instructions from such
Holder, the Agent shall (i) if the Early Settlement Date or the
Purchase Contract Settlement Date, as applicable, has occurred,
deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by
such Certificate, (ii) in the case of Income PRIDES, if a
Termination Event shall have occurred prior to the Early
Settlement Date or the Purchase Contract Settlement Date, as
applicable, transfer the stated liquidation amount of the
Preferred Securities related thereto, or (iii) in the case of
Growth PRIDES, if a Termination Event shall have occurred prior
to the Early Settlement Date or the Purchase Contract Settlement
Date, as applicable, transfer the Treasury Securities related
thereto, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
Section 3.6. Book-Entry Interests.
One or more of the Certificates, on or after their original
issuance, may be issued in the form of one or more, fully
registered Global Certificates, to be delivered to the
Depositary. Each such Global Certificate shall initially be
registered on the Income PRIDES Register or the Growth PRIDES
Register, as the case may be, in
27
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the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate
representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.9. The Agent shall
enter into an agreement with the Clearing Agency if so requested
by the Company. With respect to each Certificate issued in the
form of one or more Global Certificates, unless and until
definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in
full force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the
payment of Contract Adjustment Payments, if any, and receiving
approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the
provisions of this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such
Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and
transmit payments of Contract Adjustment Payments to such
Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company, the
Company's agent or the Agent shall give such notices and
communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency, the nominee of a
Clearing Agency, the Company or the Company's agent and the Agent
shall,
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except as set forth herein, have no obligations to the Beneficial
Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to all or a portion of the
Securities, the Company may, in its sole discretion, appoint a
successor Clearing Agency with respect to all or a portion of the
Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to all or a portion of the
Securities and a successor Clearing Agency is not appointed
within 90 days after such discontinuance pursuant to Section 3.8,
(ii) the Company elects to terminate the book-entry system
through the Clearing Agency with respect to all or a portion of
the Securities, or (iii) there shall have occurred and be
continuing a default by the Company in respect of its obligations
under one or more Purchase Contracts, then upon surrender by the
Clearing Agency of the Global Certificates representing the
Book-Entry Interests with respect to the applicable Securities,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in
accordance with the instructions of the Clearing Agency. The
Company shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected
in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent,
the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver
to the Holder in exchange therefor, a new Certificate, of like
tenor and evidencing the same number of Income PRIDES or Growth
PRIDES, as the case may be, and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruc-
29
<PAGE>
tion, loss or theft of any Certificate, and (ii) such security or
indemnity as may be required by them to hold each of them and any
agent of any of them harmless, then, in the absence of notice to
the Company or the Agent that such Certificate has been acquired
by a bona fide purchaser, the Company shall execute and deliver
to the Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, of like
tenor and evidencing the same number of Income PRIDES or Growth
PRIDES, as the case may be, and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder, and deliver to the Holder, a Certificate on or after the
Early Settlement Date, if any, with respect to the Securities
evidenced by the applicable Certificate, the Business Day
immediately preceding the Purchase Contract Settlement Date or
the Termination Date. In lieu of delivery of a new Certificate,
upon satisfaction of the applicable conditions specified above in
this Section, the Agent shall (i) if the Early Settlement Date or
the Purchase Contract Settlement Date, as applicable, has
occurred, deliver the shares of Common Stock issuable in respect
of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate, or (ii) if a Termination Event
shall have occurred prior to the Early Settlement Date or the
Purchase Contract Settlement Date, as applicable, transfer the
Preferred Securities or the Treasury Securities, as the case may
be, related thereto, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the
Company and of the Holder in respect of
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the Security evidenced thereby, whether or not the destroyed,
lost or stolen Certificate (and the Securities evidenced thereby)
shall be at any time enforceable by anyone, and shall be entitled
to all the benefits and be subject to all the obligations of this
Agreement equally and proportionately with any and all other
Certificates delivered hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Income PRIDES or
Growth PRIDES evidenced thereby, for the purpose of receiving
distributions on the related Preferred Securities, receiving
payments of Contract Adjustment Payments, if any, performance of
the related Purchase Contracts and for all other purposes
whatsoever, whether or not any distributions on such Preferred
Securities or the Contract Adjustment Payments, if any, payable
in respect of the Purchase Contracts forming a part of the Income
PRIDES or Growth PRIDES evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent
or any agent of the Company or the Agent, from giving effect to
any written certification, proxy or other authorization furnished
by any Clearing Agency (or its nominee), as a Holder, with
respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global
Certificate, the operation of customary practices governing the
exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.
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Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of
Common Stock on or after the Purchase Contract Settlement Date,
upon the transfer of Preferred Securities or Treasury Securities,
as the case may be, in connection with a Collateral Substitution
or the re-establishment of an Income PRIDES after the occurrence
of a Termination Event or pursuant to an Early Settlement, or
upon the registration of a transfer or exchange of a Security,
shall, if surrendered to any Person other than the Agent, be
delivered to the Agent and, if not already cancelled, shall be
promptly cancelled by it. The Company may at any time deliver to
the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Certificates
so delivered shall, upon delivery of cancellation instructions by
the Company, be promptly cancelled by the Agent. No Certificates
shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly
permitted or required by this Agreement. All cancelled
Certificates held by the Agent shall be destroyed by the Agent
unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such
Certificate is delivered to the Agent for cancellation or is
cancelled.
Section 3.13. Substitution of Securities.
A Holder may separate Preferred Securities from the related
Purchase Contracts in respect of one or more Income PRIDES by
substituting for such Preferred Securities, Treasury Securities
in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities (a "Collateral
Substitution") at any time from and after the date of this
Agreement and on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date by (a) depositing
with the Collateral Agent Treasury Securities having an aggregate
principal amount equal to the aggregate stated liquidation amount
of the Preferred
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Securities relating to such Income PRIDES (and in any event
having an aggregate principal amount in an integral multiple of
$1,000) and (b) transferring the related Income PRIDES to the
Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred
the relevant amount of Treasury Securities to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent
to release to such Holder the Preferred Securities relating to
such Income PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Upon receipt of the Treasury Securities
described in clause (a) above and the instruction described in
clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, Preferred Securities having a corresponding
aggregate stated liquidation amount from the Pledge, free and
clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer such Preferred Securities to the Holder;
and
(iii) authenticate, execute on behalf of such Holder
and deliver a Growth PRIDES Certificate executed by the
Company in accordance with Section 3.3 evidencing the same
number of Purchase Contracts as were evidenced by the
cancelled Income PRIDES Certificates.
Holders who elect to separate Preferred Securities from the
related Purchase Contracts and to substitute Treasury Securities
for such Preferred Securities shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions only in integral
multiples of 20 Income PRIDES.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the applicable Income PRIDES or
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<PAGE>
fails to deliver the requisite number Income PRIDES Certificates
to the Agent after depositing Treasury Securities with the
Collateral Agent, the Preferred Securities relating to such
Income PRIDES, and any distributions on such Preferred
Securities, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES
are so transferred or such Income PRIDES Certificates are so
delivered, as the case may be, or, with respect to an Income
PRIDES Certificate, such Holder provides satisfactory evidence
that such Income PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the
Agent and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract forming a part of an Income PRIDES remains in
effect, such Income PRIDES shall not be separable into its
constituent parts, and the rights and obligations of the Holder
of such Income PRIDES in respect of the related Preferred
Security and Purchase Contract forming a part of such Income
PRIDES may be acquired, and may be transferred and exchanged,
only as an Income PRIDES.
Section 3.14. Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may at any time on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, recreate Income PRIDES by (a)
depositing with the Collateral Agent Preferred Securities having
an aggregate stated liquidation amount equal to the aggregate
principal amount of the Treasury Securities relating to the
Growth PRIDES (and in any event having an aggregate stated
liquidation amount in an integral multiple of $1,000) and (b)
transferring the related Growth PRIDES to the Agent accompanied
by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has deposited the relevant amount
of Preferred Securities with the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the
Treasury Securities relating to such Growth PRIDES to such
Holder, whereupon the Agent shall promptly give such instruction
with the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Preferred Securities described in
clause (a) above and the instruction described in clause (b)
above, in accordance with the terms of the Pledge
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<PAGE>
Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, the Treasury Securities having a
corresponding aggregate principal amount from the Pledge, free
and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii)transfer such Treasury Securities to the Holder;
and
(iii)authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company
in accordance with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Growth
PRIDES.
Holders who elect to recreate Income PRIDES and to
substitute Preferred Securities for the related Treasury
Securities shall be responsible for any fees or expenses payable
in connection with such substitution, including any fees or
expenses payable to the Collateral Agent in respect of such
substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders of Growth PRIDES may reestablish Income PRIDES only
in integral multiples of 20 Growth PRIDES for 20 Income PRIDES.
Except as provided in this Section 3.14, for so long as the
Purchase Contract forming a part of a Growth PRIDES remains in
effect, such Growth PRIDES shall not be separable into its
constituent parts and the rights and obligations of the Holder of
such Growth PRIDES in respect of the related Treasury Security
and the Purchase Contract forming a part of such Growth PRIDES
may be acquired, and may be transferred and exchanged only as a
Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer
to the Agent of the Preferred Securities or the Treasury
Securities, as the case may be, relating to the Income PRIDES and
the Growth PRIDES, respectively, pursu-
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<PAGE>
ant to the terms of the Pledge Agreement, the Agent shall request
transfer instructions with respect to such Preferred Securities
and/or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it
appears in the Income PRIDES Register or the Growth PRIDES
Register, as the case may be. Upon book-entry transfer of the
Income PRIDES or Growth PRIDES or delivery of an Income PRIDES
Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Preferred
Securities or Treasury Securities relating to such Income PRIDES
or Growth PRIDES, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of
Income PRIDES or Growth PRIDES fails to effect such transfer or
delivery, or to deliver such transfer instructions to the Agent,
the Preferred Securities or Treasury Securities relating to such
Income PRIDES or Growth PRIDES, as the case may be, and any
distributions thereon, shall be held in the name of the Agent or
its nominee in trust for the benefit of such Holder until such
transfer instructions are so delivered and until such Income
PRIDES or Growth PRIDES are transferred or the Income PRIDES
Certificate or Growth PRIDES Certificate is surrendered or such
Holder provides satisfactory evidence that such Income PRIDES
Certificate or Growth PRIDES Certificate has been destroyed, lost
or stolen, together with any indemnity that may be required by
the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption
under Section 365 of the Bankruptcy Code or otherwise, of the
Purchase Contract by the Company, a receiver, liquidator or a
Person performing similar functions, or its trustee in the event
that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or federal law providing for
reorganization or liquidation.
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ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distributions; Rights to Distributions
Preserved; Distribution Rate Reset; Notice.
A distribution on any Preferred Security which is paid on
any Payment Date shall, subject to receipt thereof by the Agent
from the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES
Certificates) to which such Preferred Security relates is
registered at the close of business on the Record Date for such
Payment Date.
Each Income PRIDES Certificate relating to Preferred
Securities delivered under this Agreement, upon registration of,
transfer of or in exchange for or in lieu of any other Income
PRIDES Certificate, shall carry the rights to distributions
accumulated and unpaid, and to accumulate distributions, which
were carried by the Preferred Securities relating to such other
Income PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash
Settlement of the related Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract
Settlement Date, or with respect to which Early Settlement of the
related Purchase Contract is effected on an Early Settlement
Date, or with respect to which a Collateral Substitution is
effected on any date, after any Record Date and on or prior to
the next succeeding Payment Date, distributions on the Preferred
Securities relating to such Income PRIDES otherwise payable on
such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or
Collateral Substitution, and such distributions shall, subject to
receipt thereof by the Agent, be paid to the Person in whose name
the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) was registered at the close of business on
the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any
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Income PRIDES with respect to which Cash Settlement or Early
Settlement of the related Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be,
or with respect to which a Collateral Substitution has been
effected, distributions on the related Preferred Securities that
would otherwise be payable after the Purchase Contract Settlement
Date, the Early Settlement Date or the date on which such
Collateral Substitution is effected, as applicable shall not be
payable hereunder to the Holder of such Income PRIDES; provided,
however, that to the extent that such Holder continues to hold
the separated Preferred Securities that formerly related to such
Holder's Income PRIDES, such Holder shall be entitled to receive
the distributions on such separated Preferred Securities.
The Coupon Rate on the Preferred Securities will be reset on
the Purchase Contract Settlement Date to the Reset Rate. On the
Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Company. On the Business Day immediately
following the Reset Announcement Date, the Preferred Securities
Holders will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Preferred Securities if
published in an Authorized Newspaper in The City of New York.
If any of the Certificates are then issued in the form of a
Global Certificate, not later than 7 calendar days nor more than
15 calendar days prior to the Reset Announcement Date, the
Company will request DTC or its nominee (or any successor
Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Income PRIDES or Growth PRIDES, of such
Reset Announcement Date and the procedures to be followed by such
Holders of Income PRIDES or Growth PRIDES who intend to settle
their obligations under the related Purchase Contracts with
separate cash on the Purchase Contract Settlement Date.
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<PAGE>
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Preferred Securities pledged with the
Collateral Agent but only to the extent instructed by the Holders
as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or
upon any solicitation of consents, waivers or proxies of holders
of Preferred Securities, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Income PRIDES a notice (a)
containing such information as is contained in such notice of a
meeting or such solicitation, (b) stating that each Holder on the
record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Preferred Securities entitled to vote
at such meeting or to act in respect to such solicitation) shall
be entitled to instruct the Agent as to the exercise of the
voting or other rights pertaining to the Preferred Securities
relating to their Income PRIDES and (c) stating the manner in
which such instructions may be given. Upon the written request
of the Holders on such record date, the Agent shall endeavor
insofar as practicable to vote or cause to be voted or to act or
to cause such action to be taken, in accordance with the
instructions set forth in such requests, the maximum number of
Preferred Securities as to which any particular voting
instructions are received. In the absence of specific
instructions from the Holder of an Income PRIDES, the Agent shall
abstain from voting the Preferred Security relating to such
Income PRIDES or from taking or causing to be taken any action in
respect thereof, as the case may be. The Company hereby agrees,
if applicable, to solicit Holders to timely instruct the Agent in
order to enable the Agent to vote such Preferred Securities or to
cause such Preferred Securities to be voted, or to take or cause
to be taken such action in respect of such Preferred Securities
as may be the subject of any such solicitation, and the Trust
shall covenant in the Declaration to take all reasonable actions
which may be deemed necessary by the Agent in order to enable the
Agent to vote such Preferred Securities or to cause such
Preferred Securities to be voted.
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Section 4.3. Liquidation of the Trust.
Upon the occurrence of a liquidation of the Trust in
accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and relating to the
Preferred Securities equal to the aggregate stated liquidation
amount of the Pledged Preferred Securities shall be delivered to
the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, the Debentures will be held by the
Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligations of each Holder of an Income
PRIDES to purchase Common Stock under the related Purchase
Contract forming a part of such Income PRIDES. Following the
occurrence of a liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and
obligations with respect to such Debentures as the Holders and
the Collateral Agent had in respect of the Preferred Securities
subject to the Pledge thereof as provided in Articles II, III,
IV, V and VI of the Pledge Agreement, and any reference herein to
the Preferred Securities shall be deemed to be a reference to
such Debentures. The Company may cause to be made in any Income
PRIDES Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate
to reflect the liquidation of the Trust and the substitution of
Debentures for Preferred Securities as Collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall obligate the Holder of the
related Security to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated
Amount (the "Purchase Price"), a number of newly issued shares of
Common Stock equal to the Settlement Rate unless, on or prior to
the Purchase Contract Settlement Date, there shall have occurred
a Termination Event with respect to the Security of which such
Purchase Contract is a part. The "Settlement Rate" is equal to
(a) if the Applicable Market Value (as de-
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fined below) is equal to or greater than $65.04 (the "Threshold
Appreciation Price"), .769 shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $53 5/16, the
number of shares of Common Stock equal to the Stated Amount
divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $53 5/16, .938 shares of
Common Stock per Purchase Contract, in each case subject to
adjustment as provided in Section 5.6 (and in each case rounded
upward or downward to the nearest 1/10,000th of a share). As
provided in Section 5.10, no fractional shares of Common Stock
will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the
Closing Prices per share of Common Stock on each of the 30
consecutive Trading Days ending on the second Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, as reported by
The Nasdaq Stock Market, or, if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company. A
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close
of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common
Stock.
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Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, irrevocably authorizes the Agent to enter
into and perform the related Purchase Contract on its behalf as
its attorney-in-fact, agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its
obligations under such Purchase Contract, and consents to the
provisions hereof, irrevocably authorizes the Agent as its
attorney-in-fact to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to and agrees
to be bound by the Pledge of the related Preferred Securities or
Treasury Securities pursuant to the Pledge Agreement; provided
that upon a Termination Event, the rights of the Holder of such
Security under such Purchase Contract may be enforced without
regard to any other rights or obligations. Each Holder of an
Income PRIDES or a Growth PRIDES, by its acceptance thereof,
further covenants and agrees, that, to the extent and in the
manner provided in Section 5.4 and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the stated
liquidation amount of the related Preferred Securities or the
Proceeds of the related Treasury Securities shall be paid by the
Collateral Agent to the Company on the Purchase Contract
Settlement Date in satisfaction of such Holder's obligations
under the related Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.
Each Holder of an Income PRIDES or a Growth PRIDES and each
Beneficial Owner thereof, by its acceptance thereof or of its
interest therein, further agrees to treat (i) itself as the owner
of the related Preferred Securities or Treasury Securities, as
the case may be, and (ii) the Debentures as indebtedness of the
Company, in each case, for United States federal, state and local
income and franchise tax purposes.
Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other
action on the part of such transferee), under the terms of this
Agreement, the Purchase Contracts forming a part of such
Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase
Contracts forming a part of the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each
Holder of a Certificate, by its acceptance thereof, likewise
cove-
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nants and agrees, to be bound by the provisions of this
paragraph.
Section 5.2. Contract Adjustment Payments.
In the event that the Contract Adjustment Payments
constitute a component of Income PRIDES or Growth PRIDES, subject
to Section 5.3, the Company shall pay, on each Payment Date, the
Contract Adjustment Payments payable in respect of each Purchase
Contract to the Person in whose name the related Certificate (or
one or more Predecessor Certificates) is registered at the close
of business on the Record Date next preceding such Payment Date.
The Contract Adjustment Payments, if any, will be payable at the
office of the Agent in The City of New York maintained for that
purpose or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address
as it appears on the Income PRIDES Register or Growth PRIDES
Register.
Upon the occurrence of a Termination Event, Contract
Adjustment Payments, if any, shall cease to accrue in respect of
any period from and after the date of such Termination Event
(unless the Company defaults in the payment of accrued Contract
Adjustment Payments). The Company's obligations to pay any
accrued Contract Adjustment Payments shall be deemed to be
fulfilled if the Company deposits with the Agent funds necessary
to pay accrued Contract Adjustment Payments, in trust with
irrevocable instructions and authorization that such funds shall
be delivered to the Holders.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of
(including as a result of a Collateral Substitution or the
re-establishment of an Income PRIDES) any other Certificate shall
carry the rights to Contract Adjustment Payments, if any, accrued
and unpaid, and to accrue Contract Adjustment Payments, if any,
which were carried by the Purchase Contracts forming a part of
such other Certificate.
In the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, occurring after any Record Date and on or
prior to the next succeeding Payment Date, Contract Adjustment
Payments, if any, other-
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wise payable in respect of such Purchase Contract on such Payment
Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall be
paid to the Person in whose name the Certificate evidencing such
Security (or one or more Predecessor Certificates) is registered
at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Contract Adjustment Payments, if any, that
would otherwise be payable after the Early Settlement Date with
respect to such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract
Adjustment Payments, the Preferred Securities Guarantee and
Subordinated Debt Securities, rank (i) subordinate and junior in
right of payment to all Senior Indebtedness, (ii) pari passu with
respect to the Company's guarantee of the Common Securities (the
"Common Securities Guarantee"), the Company's guarantee of PLC
Capital L.L.C.'s 9% Cumulative Monthly Income Preferred
Securities, Series A (the "Series A Guarantee"), the Company's 9%
Subordinated Debentures, due 2024, Series A (the "Series A
Subordinated Debentures"), the Company's guarantee of PLC Capital
Trust I's 81/4% Trust Originated Preferred Securities (the
"81/4% Preferred Securities Guarantee"), the Company's guarantee
of PLC Capital Trust I's 81/4% Trust Originated Common
Securities, (the "81/4% Common Securities Guarantee" and together
with the 81/4% Preferred Securities Guarantee, the "81/4% TOPrS
Guarantees") and the Company's 81/4% Subordinated Debentures due
2027, Series B (the "Series B Subordinated Debentures"), and with
all unsecured trade creditors of the Company and any other
liabilities or obligations that may be pari passu by their terms
and to any guarantee now or hereafter entered into by the Company
in respect of any preferred or preference stock of any affiliate
of the Company.
Section 5.3. Deferral of Payment Dates for Contract Adjustment
Payments.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the
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payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date, but only if the Company
shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be
deferred) at least ten Business Days prior to the earlier of (i)
the next succeeding Payment Date or (ii) the date the Company is
required to give notice of the Record Date or Payment Date with
respect to payment of such Contract Adjustment Payments to the
NYSE or other applicable self-regulatory organization or to
Holders of the Securities, but in any event not less than two
Business Days prior to such Record Date. Any Contract Adjustment
Payments so deferred shall bear additional Contract Adjustment
Payments thereon at the rate of 61/2% per annum (computed on the
basis of 360 day year of twelve 30 day months), compounding on
each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, being
referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments shall be due
on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section. No Contract
Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date. If the Purchase Contracts are
terminated upon the occurrence of a Termination Event, the
Holder's right to receive Contract Adjustment Payments (other
than any accrued but unpaid Contract Adjustment Payments that
have not been deferred) and Deferred Contract Adjustment
Payments, if any, will terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments, if any, on the Purchase Contracts
until the Purchase Contract Settlement Date, each Holder will
receive on the Purchase Contract Settlement Date in respect of
Deferred Contract Adjustment Payments, in lieu of a cash payment,
a number of shares of Common Stock equal to (x) the aggregate
amount of Deferred Contract Adjustment Payments payable to such
Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract
Adjustment Payments, if any, on the Purchase Contract Settlement
Date. In lieu of fractional shares
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otherwise issuable (calculated on an aggregate basis after taking
into account all of the Securities held by
the applicable Holder) with respect to such payment of Deferred
Contract Adjustment Payments, the Holder will be entitled to
receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred
Contract Adjustment Payments have been paid, the Company 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 or make
guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of Protective Life's capital
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 capital 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
securities being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company and (v) redemptions
of purchases pursuant to Protective Life's Rights Agreement
(together with any successor thereto the "Rights Agreement"),
dated as of August 7, 1995, between Protective Life and Amsouth
Bank (as successor by merger to AmSouth Bank of Alabama successor
by conversion of charter to AmSouth Bank N.A.) ("AmSouth Bank")
as Rights Agent).
Section 5.4. Payment of Purchase Price.
(a) Unless a Holder settles the related Purchase Contract
through the early delivery of cash to the Agent in the manner
described in Section 5.9 or otherwise, the Purchase Price for the
shares of Common Stock purchased pursuant to such Purchase
Contract shall be paid by application of payments received by the
Company on the Purchase Contract Settlement Date from the
Collateral
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Agent pursuant to the Pledge Agreement, payable at the office of
the Collateral Agent in the City of New York maintained for such
purpose, as follows:
(i) A Holder may effect a "Cash Settlement" of a
Purchase Contract by (A) providing the Agent with notice of
its election to effect a Cash Settlement on or prior to 5:00
p.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date
and (B) making a payment of the Purchase Price to the
Collateral Agent prior to 12:00 p.m., New York City time, on
the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately
available funds payable to or upon the order of the Company.
Upon receipt of notice from a Holder electing a Cash
Settlement, the Agent promptly shall notify the Collateral
Agent of such Holder's election. Any cash received by the
Collateral Agent will be invested promptly by the Collateral
Agent in overnight Permitted Investments and an amount equal
to the Purchase Price will be paid to the Company on the
Purchase Contract Settlement Date in settlement of the
Purchase Contract in accordance with the terms of the Pledge
Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in
such Permitted Investments, will be distributed to the Agent
when received for payment to the Holder.
(ii) A Holder of Income PRIDES who does not make an
effective Cash Settlement or an Early Settlement under
Section 5.9 hereof shall be deemed to have instructed the
Purchase Contract Agent, without any further instruction
from the Holder of the Income PRIDES: (a) to the extent that
the Trust is still the holder of the Debentures, to direct
the Institutional Trustee to exercise the Trust's right as a
holder to put the Debentures to the Company on the Purchase
Contract Settlement Date in accordance with Section 2.8(2)
of the Indenture or (b) to the extent that the Purchase
Contract Agent has become the holder of the Debentures (as a
result of the termination of the Trust or otherwise), to
exercise the Purchase Contract Agent's right as a holder to
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put the Debentures to the Company on the Purchase Contract
Settlement Date in accordance with Section 2.8(2) of the
Indenture. The consideration received with respect to the
put of the Debentures shall be considered to be proceeds of the
Preferred Securities and as such will be paid to the Collateral
Agent as secured party with respect to the Preferred Securities
and shall be automatically applied by the Collateral Agent to pay
the Purchase Price for the Purchase Contract to the Company on
the Purchase Contract Settlement Date as provided in subparagraph
(a)(i) above; and
(iii) A Holder of Growth PRIDES who does not make an
effective Cash Settlement or an Early Settlement under
Section 5.9 hereof shall pay for the shares of Common Stock
to be issued under the related Purchase Contract from the
Proceeds of the related Pledged Treasury Securities (as
defined in Section 2.1 of the Pledge Agreement) held by the
Collateral Agent, which will be applied automatically by the
Collateral Agent to pay the Purchase Price for the Purchase
Contract to the Company on the Purchase Contract Settlement
Date without receiving any instruction from the Holder.
Upon the maturity of the Pledged Treasury Securities (as
defined in Section 2.1 of the Pledge Agreement) held by the
Collateral Agent on the Business Day immediately preceding
the Purchase Contract Settlement Date, the principal amount
of such Treasury Securities received by the Collateral Agent
will be invested promptly in overnight Permitted
Investments. In the event the sum of the proceeds from the
related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent will distribute such
excess to the Agent when received for payment to the Holder
of the related Growth PRIDES.
Any distribution to Holders of excess funds and interest
described in subparagraph (i), (ii) or (iii) above, shall be
payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Holder, by
check mailed to the address of
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the Person entitled thereto at such address as it appears on the
Register.
(b) The Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or
deliver any certificate therefor to the Holder unless it shall
have received payment in full of the Purchase Price for the
shares of Common Stock to be purchased thereunder in the manner
herein set forth.
(c) Upon Cash Settlement of any Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Preferred Securities or the
Pledged Treasury Securities relating to the relevant Security to
be released from the Pledge by the Collateral Agent free and
clear of any security interest of the Company and transferred to
the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from
the Collateral Agent, the Agent shall, by book-entry transfer, or
other appropriate procedures, in accordance with instructions
provided by the Holder thereof, transfer such Pledged Preferred
Securities or such Pledged Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent
shall hold such Pledged Preferred Securities or such Pledged
Treasury Securities, and any distributions thereon, in the name
of the Agent or its nominee in trust for the benefit of such
Holder).
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior
to the Purchase Contract Settlement Date, on the Purchase
Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by
the Holders pursuant to the foregoing provisions of this Article,
and in payment of Deferred Contract Adjustment Payments, if any,
owed by the Company to the Holders and subject to Section 5.6(b),
the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more
certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian
for such Holders (such certificates for shares of Common Stock,
together with any dividends or distributions with respect
thereto,
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<PAGE>
being hereinafter referred to as the "Purchase Contract
Settlement Fund") to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together
with settlement instructions thereon duly completed and executed,
the Holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive
pursuant to the provisions of this Article Five (after taking
into account all Securities then held by such Holder) together
with cash in lieu of fractional shares as provided in Section
5.10 and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement
Fund, but without any interest thereon, and the Certificate so
surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder
to the Agent. If any shares of Common Stock issued in respect of
a Purchase Contract and in payment of any Deferred Contract
Adjustment Payments are to be registered to a Person other than
the Person in whose name the Certificate evidencing such Purchase
Contract is registered, no such registration shall be made unless
the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name
other than that of the registered Holder of the Certificate
evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or
is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on any class of Common Stock of the Company in
Common Stock, the Settlement Rate in effect at the opening of
business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend
or other distribution shall be increased by dividing such
Settlement Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of
business on the
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date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase
to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common
Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available
on an equivalent basis to Holders of the Securities upon
settlement of the related Purchase Contracts) entitling them, for
a period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights,
options or warrants, to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market
Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening
of business on the day following the date fixed for such
determination shall be increased by dividing such Settlement Rate
by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for
subscription or purchase would purchase at such Current Market
Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day
following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of Common
Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall
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include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company
shall not issue any such rights, options or warrants in respect
of shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common
Stock, the Settlement Rate in effect at the opening of business
on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as
the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any
rights, options or warrants referred to in paragraph (2) of this
Section, any dividend or distribution paid exclusively in cash
and any dividend or distribution referred to in paragraph (1) of
this Section), the Settlement Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator
shall be the Current Market Price per share of the Common Stock
on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution filed with the Agent) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share
of Common Stock and the denominator shall be such Current Market
Price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders
entitled to receive such distribution. In any case in
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<PAGE>
which this paragraph (4) is applicable, paragraph (2) of this
Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any
cash that is distributed in a Reorganization Event to which
Section 5.6(b) applies or as part of a distribution referred to
in paragraph (4) of this Section) in an aggregate amount that,
combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock (excluding any
cash that is distributed in a Reorganization Event to which
Section 5.6(6) applies or as part of a distribution referred to
in paragraph (4) of this Section) made exclusively in cash within
the 12 months preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to this paragraph
(5) or paragraph (6) of this Section has been made and (III) the
aggregate of any cash plus the fair market value (as determined
by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by the Company
or any of its subsidiaries for all or any portion of the Common
Stock (excluding any cash that is distributed in a Reorganization
Event to which Section 5.6(6) applies or as part of a
distribution referred to in paragraph (4) of this Section)
concluded within the 12 months preceding the date of payment of
the distribution described in clause (I) above and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph
(6) of this Section has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock on the
date for the determination of holders of shares of Common Stock
entitled to receive such distribution times the number of shares
of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to
receive such distribution by a fraction (i) the numerator of
which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the combined amount
distributed or payable in the trans-
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actions described in clauses (I), (II) and (III) above and (y)
the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to
the Current Market Price per share of the Common Stock on such
date for determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion
of the Common Stock shall expire and such tender or exchange
offer (as amended upon the expiration thereof) shall require the
payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer)
of Purchased Shares) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described
in a Board Resolution), as of the expiration of such tender or
exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock (excluding any
cash that is distributed in a Reorganization Event to which
Section 5.6(b) applies or as part of a distribution referred to
in paragraph (4) of this Section) concluded within the 12 months
preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to paragraph (5) of this
Section or this paragraph (6) has been made and (III) the
aggregate amount of any distributions to all holders of the
Company's Common Stock (excluding any cash that is distributed in
a Reorganization Event to which Section 5.6(b) applies or as part
of a distribution referred to in paragraph (4) of this Section)
made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or
this paragraph (6) has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock as of the
last time (the "Expiration Time") tenders could have been made
pursuant to such tender or exchange offer (as it may be amended)
times the number of shares of Common Stock outstanding (including
any tendered shares) on the Expiration Time, then, and in each
such case, immediately prior to the opening of business
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on the day after the date of the Expiration Time, the Settlement
Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately
prior to the close of business on the date of the Expiration Time
by a fraction (i) the numerator of which shall be equal to (A)
the product of (I) the Current Market Price per share of the
Common Stock on the date of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of
cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
transactions described in clauses (I), (II) and (III) above
(assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer,
of Purchased Shares), and (ii) the denominator of which shall be
equal to the product of (A) the Current Market Price per share of
the Common Stock as of the Expiration Time and (B) the number of
shares of Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred
to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section
5.6(b) applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution" and the "date
fixed for such determination" within the meaning of paragraph (4)
of this Section), and (b) a subdivision, split or combination, as
the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision or split
becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which
such subdivision, split or combination becomes
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effective" within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5
consecutive Trading Days selected by the Company commencing not
more than 30 Trading Days before, and ending not later than, the
earlier of the day in question and the day before the "ex date"
with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date",
when used with respect to any issuance or distribution, shall
mean the first date on which the Common Stock trades regular way
on such exchange or in such market without the right to receive
such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be
calculated to the nearest 1/10,000th of a share of Common Stock
(or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Settlement
Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. If an
adjustment is made to the Settlement Rate pursuant to paragraph
(1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value
solely to determine which of clauses (a), (b) or (c) of the
definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made
by multiplying the Applicable Market Value by a fraction of which
the numerator shall be the Settlement Rate immediately after such
adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6),
(7) or (10) of this Section 5.6(a) and the denominator shall be
the Settlement Rate immediately before such adjustment.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any
income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights,
options or warrants to purchase or subscribe for stock or from
any event
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treated as such for income tax purposes or for any other reasons.
(b)Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any consolidation or
merger of the Company, with or into another Person (other than a
merger or consolidation in which the Company is the continuing
corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another Person),
(ii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the
Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or
winding up of the Company other than as a result of or after the
occurrence of a Termination Event (any such event, a
"Reorganization Event"), the Settlement Rate will be adjusted to
provide that each Holder of Securities will receive on the
Purchase Contract Settlement Date with respect to each Purchase
Contract forming a part thereof, the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event by a Holder of the number of shares of
Common Stock issuable on account of such Purchase Contract if the
Purchase Contract Settlement Date had occurred immediately prior
to such Reorganization Event, assuming such Holder of Common
Stock is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to
which such sale or transfer was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person,
and failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of
Common Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this
Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each
non-electing share shall be deemed to be the kind and amount so
receivable per share
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by a plurality of the non-electing shares). In the event of such
a Reorganization Event, the Person formed by such consolidation,
merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section.
The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i)forthwith compute the adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the
Agent an Officer's Certificate setting forth the
Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment
and upon which such adjustment is based; and
(ii)within 10 Business Days following the occurrence of
an event that permits or requires an adjustment to the
Settlement Rate pursuant to Section 5.6 (or if the Company
is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the
Holders of the Securities of the occurrence of such event
and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate was
determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether
any facts exist which may require any adjustment of the
Settlement Rate, or with respect to the
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nature or extent or calculation of any such adjustment when made,
or with respect to the method employed in making the same. The
Agent shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract; and the Agent
makes no representation with respect thereto. The Agent shall
not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this
Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and the obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment
Payments, if the Company shall have such obligation, shall
immediately and automatically terminate, without the necessity of
any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Preferred
Securities forming a part of such Securities in the case of
Income PRIDES, or Treasury Securities in the case of Growth
PRIDES, in accordance with the provisions of Section 4.3 of the
Pledge Agreement. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of
this Section 5.9, at the option of the Holder thereof, Purchase
Contracts underlying Securities, having an aggregate Stated
Amount equal to $1,000 or an integral multiple thereof, may be
settled early ("Early Settlement") as provided herein. In order
to exercise the right to effect Early Settlement with respect to
any
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Purchase Contracts, the Holder of the Certificate evidencing such
Purchase Contracts shall deliver such Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early on
the reverse thereof duly completed and accompanied by payment in
the form of a certified or cashier's check or wire transfer in
immediately available funds payable to or upon the order of the
Company in an amount (the "Early Settlement Amount") equal to (i)
the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected
to effect Early Settlement plus (ii) if such delivery is made
with respect to any Purchase Contracts during the period from the
close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount
equal to the sum of (x) the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase
Contracts plus (y) in the case of an Income PRIDES Certificate,
the distributions on the related Preferred Securities payable on
such Payment Date. Except as provided in the immediately
preceding sentence and subject to the second to last paragraph of
Section 5.2, no payment or adjustment shall be made upon Early
Settlement of any Purchase Contract on account of any Contract
Adjustment Payments accrued on such Purchase Contract or on
account of any dividends on the Common Stock issued upon such
Early Settlement. If the foregoing requirements are first
satisfied with respect to Purchase Contracts underlying any
Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with
respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement
Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Company shall issue, and the
Holder shall be entitled to receive, .769 newly issued shares of
Common Stock on account of each Purchase Contract as to which
Early Settlement is effected (the "Early Settlement Rate");
provided, however, that upon the Early Settlement of such
Purchase Contracts, the Holder of such related Securities will
forfeit the right to receive any Deferred Contract Adjustment
Payments.
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The Early Settlement Rate shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted. As
promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 5.9,
the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early
Settlement together with payment in lieu of any fraction of a
share, as provided in Section 5.10.
(c) The Company shall cause the shares of Common Stock
issuable upon Early Settlement of Purchase Contracts, and the
related Preferred Securities, in the case of Income PRIDES, or
the related Treasury Securities, in the case of Growth PRIDES,
deliverable, to be issued and delivered, in the case of such
shares of Common Stock, and released from the Pledge by the
Collateral Agent and transferred, in the case of such Preferred
Securities or Treasury Securities, to the Agent, for delivery to
the Holder thereof or its designee, no later than the third
Business Day after the applicable Early Settlement Date.
(d) Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and
the related Preferred Securities or Treasury Securities, as the
case may be, from the Collateral Agent, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder such Preferred Securities or Treasury
Securities, as the case may be, and (ii) deliver to the Holder a
certificate or certificates for the full number of shares of
Common Stock issuable upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in
Section 5.10.
(e) In the event that Early Settlement is effected with
respect to Purchase Contracts underlying less than all the
Securities evidenced by a Certificate, upon such Early Settlement
the Company shall execute and the Agent shall authenticate,
execute on behalf of the Holder and deliver to the Holder
thereof, at the expense of the Company, a Certificate evidencing
the Securities as to which Early Settlement was not effected.
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(f) Holders may settle Securities early only in integral
multiples of 20 Income PRIDES or 20 Growth PRIDES.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares
of Common Stock shall be issued or delivered upon settlement on
the Purchase Contract Settlement Date or upon Early Settlement of
any Purchase Contracts or with respect to the payment of Deferred
Contract Adjustment Payments, if any, on the Purchase Contract
Settlement Date. If Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time
by the same Holder, the number of full shares of Common Stock
which shall be delivered upon settlement shall be computed on the
basis of the aggregate number of Purchase Contracts evidenced by
the Certificates so surrendered. Instead of any fractional share
of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Purchase Contract
Settlement Date or upon Early Settlement or with respect to the
payment of any Deferred Contract Adjustment Payments, if any, the
Company, through the Agent, shall make a cash payment in respect
of such fractional interest in an amount equal to the value of
such fractional shares times the Applicable Market Value. The
Company shall provide the Agent from time to time with sufficient
funds to permit the Agent to make all cash payments required by
this Section 5.10 in a timely manner.
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares
of Common Stock pursuant to the Purchase Contracts and in payment
of any Deferred Contract Adjustment Payments; provided, however,
that the Company shall not be required to pay any such tax or
taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Purchase Contract or
any issuance of a share of Common Stock in a name other than that
of the registered Holder of the Certificate surrendered in
respect of the Purchase Contracts evidenced thereby or of the
Agent, as custodian for such Holder, and the Company shall not be
required to issue or deliver such share certificates or
Certificates unless or until the
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Person or Persons requesting the transfer or issuance thereof
shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax
has been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall
constitute a component of Income PRIDES or Growth PRIDES, the
Holder of any Income PRIDES or Growth PRIDES shall have the
right, which is absolute and unconditional (subject to the right
of the Company to defer payment thereof pursuant to Section 5.3
and subject to the forfeiture of any Deferred Contract Adjustment
Payments, if any, upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive
payment of each installment of the Contract Adjustment Payments,
if any, with respect to the Purchase Contract forming a part of
such Security payable on the respective Payment Date for such
Security and to purchase Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the
enforcement of any such payment and right to purchase Common
Stock, and such rights shall not be impaired without the consent
of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined
adversely to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company and such Holder
shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of
such Holder shall continue as though no such proceeding had been
instituted.
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Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates
in the last paragraph of Section 3.10, no right or remedy herein
conferred upon or reserved to the Holders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or
constitute a waiver of any such right. Every right and remedy
given by this Article or by law to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by
such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of
Income PRIDES or Growth PRIDES, by its acceptance of such Income
PRIDES or Growth PRIDES shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or
omitted by it as Agent, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent,
to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% of the Outstanding
Securities, or to any suit instituted by any Holder for the
enforcement of distributions on any Preferred Securities
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or Contract Adjustment Payments, if any, on any Purchase Contract
after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a)(1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically
set forth in this Agreement and the Pledge Agreement, and no
implied covenants or obligations shall be read into this
Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its
part, the Agent may, with respect to the Securities,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the
case of any certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Agent, the Agent shall be under a duty to exam-
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ine the same to determine whether or not they conform to the
requirements of this Agreement.
(b) No provision of this Agreement shall be construed to
relieve the Agent from liability for its own negligent action,
its own negligent failure to act, or its own wilful misconduct,
except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Agent was negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or
powers, if adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Agent shall be
subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder, of which a Responsible Officer of the Agent
has actual knowledge, the Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and
addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
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(a) the Agent may rely and shall be 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 or presented by the proper party
or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by an Officer's
Certificate, Issuer Order or Issuer Request, and any resolution
of the Board of Directors of the Company shall be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the
Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written
advice of such counsel or any Opinion of Counsel 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 reliance thereon;
(e) the Agent 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 Agent, in its
discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if
the Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records
and premises of the Company, personally or by agent or attorney
during normal business hours and upon reasonable notice; and
(f) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the
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Agent shall not be responsible for any misconduct or negligence
on the part of any agent or attorney or an Affiliate appointed
with due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Certificates shall
be taken as the statements of the Company and the Agent assumes
no responsibility for their accuracy. The Agent makes no
representations as to the validity or sufficiency of either this
Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the
Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the
Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company, the Collateral Agent or any
other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by
law. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances
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incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs
and expenses of defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall
be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District
of Columbia, authorized under such laws to exercise corporate
trust powers, having (or being a member of a bank holding company
having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State
authority and having a Corporate Trust Office in the Borough of
Manhattan, The City of New York, if there be such a corporation
in the Borough of Manhattan, The City of New York qualified and
eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, 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. If at
any time the Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this
Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
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(a) No resignation or removal of the Agent and no
appointment of a successor Agent pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date
of such resignation. If the instrument of acceptance by a
successor Agent required by Section 7.10 shall not have been
delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor
Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities
delivered to the Agent and the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of
the TIA, as if the Agent were an indenture trustee under an
indenture qualified under the TIA, after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section
7.8 and shall fail to resign after written request therefor
by the Company or by any such Holder, or
(3) the Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the
Agent or of its property shall be appointed or any public
officer shall take charge or control of the Agent or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Agent, or (ii) any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction
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for the removal of the Agent and the appointment of a successor
Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Agent
shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder
who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the
Agent and each appointment of a successor Agent by mailing
written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in
the applicable Register. Each notice shall include the name of
the successor Agent and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Agent
an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of
the Company or the successor Agent, such retiring Agent shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and
deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such
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successor Agent all such rights, powers and agencies referred to
in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless
at the time of such acceptance such successor Agent shall be
qualified and eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Agent, shall be the successor of the Agent
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. In case any Certificates shall have been authenticated
and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or
consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and
executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the
Agent reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date
of such application, and such application states that the
applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and
is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
Agent
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shall, within five Business Days after the receipt of such
application, afford such applicants access to the information
preserved at the time by the Agent in accordance with Section
7.12(a).
(c) Every Holder agrees with the Company and the Agent that
none of the Company, the Agent nor any agent of any of them shall
be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in
accordance with Section 7.12(b), regardless of the source from
which such information was derived.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement,
the Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any
Purchase Contract in respect of the obligations of the Holder of
any Security thereunder. The Company agrees, and each Holder of a
Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf
of the Holders shall be solely as agent and attorney-in-fact for
the Holders, and that the Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification,
information reporting and withholding (including "backup"
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of
rights under the Securities. Such compliance shall include,
without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated
agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the appli-
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cation of such requirements to particular payments or Holders or
in other particular circumstances, and may for purposes of this
Agreement rely on any such direction in accordance with the
provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make
such records available, on written request, to the Company or its
authorized representative within a reasonable period of time
after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the
Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the
Company and the Agent, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company, and the assumption by any such successor of the
covenants of the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, to cure any
ambiguity, to correct or supplement any provisions herein
which may be mistaken or incon-
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sistent with any other provisions herein, or to make any other
provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not materially
adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of
the outstanding Purchase Contracts voting together as one class,
by Act of said Holders delivered to the Company and the Agent,
the Company, and the Agent may enter into an agreement or
agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the Pledge
Agent provisions of this Agreement or the rights of the Holders
in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's obligations
under the applicable Purchase Contract, impair the right of
the Holder of any Security to receive distributions on the
related Collateral (except for the rights of Holders of
Income PRIDES to substitute Treasury Securities for the
Pledged Preferred Securities or the rights of holders of
Growth PRIDES to substitute Preferred Securities for the
Pledged Treasury Securities) or otherwise adversely affect
the Holder's rights in or to such Collateral or adversely
alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any
Deferred Contract Adjustment Payments, or change any place
where, or the coin or currency in which, any Contract
Adjustment Payment is payable;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the
price to purchase shares of Common
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Stock upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect
the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any
such supplemental agreement;
provided, that if any amendment or proposal referred to above
would adversely affect only the Income PRIDES or the Growth
PRIDES, then only the affected class of Holder will be entitled
to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the consent of
Holders of not less than 66 2/3% of such class.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act
shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created
by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement,
the Agent shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but
shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of
this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
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Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental
agreement pursuant to this Article may, and shall if required by
the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the
Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate
with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any
Person or group of affiliated Persons in one transaction or a
series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other
than the Company) shall be a corporation organized and existing
under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly
assume all the obligations of the Company under the Purchase
Contracts, this Agreement and the Pledge Agreement by one or more
supplemental agreements in form satisfactory to the Agent and the
Collateral Agent, executed and delivered to the Agent and the
Collateral Agent by such corporation, and (ii) the Company or
such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale,
assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
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Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by the
successor corporation in accordance with Section 9.1, such
successor corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as
the Company. Such successor corporation thereupon may cause to
be signed, and may issue either in its own name or in the name of
Protective Life Corporation, any or all of the Certificates
evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent;
and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Agent shall authenticate and
execute on behalf of the Holders and deliver any Certificates
which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and
execution, and any Certificate evidencing Securities which such
successor corporation thereafter shall cause to be signed and
delivered to the Agent for that purpose. All the Certificates so
issued shall in all respects have the same legal rank and benefit
under this Agreement as the Certificates theretofore or
thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing
Securities thereafter to be issued as may be appropriate.
Section 9.3. Opinion of Counsel to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, assignment, transfer, lease or
conveyance, and any such assumption, complies with the provisions
of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
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ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Securities that it will duly and
punctually perform its obligations under the Purchase Contracts
in accordance with the terms of the Purchase Contracts and this
Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts or Early
Settlement and for transfer of Collateral upon occurrence of a
Termination Event, where Certificates may be surrendered for
registration of transfer or exchange, for a Collateral
Substitution or re-establishment of an Income PRIDES and where
notices and demands to or upon the Company in respect of the
Securities and this Agreement may be served. The Company will
give prompt written notice to the Agent of the location, and any
change in the location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Agent with the address
thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office, and the Company
hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York for such purposes. The
Company will give prompt written notice to the Agent of any such
designation or rescission and of any change in the loca-
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tion of any such other office or agency. The Company hereby
designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate
Trust Office as paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase
Contract Settlement Date reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common
Stock the full number of shares of Common Stock issuable (x)
against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding
Certificates and (y) in payment of Deferred Contract Adjustment
Payments, if any, owed by the Company to the Holders.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued against tender of payment in respect of any
Purchase Contract constituting a part of the Outstanding
Securities and in payment of any Deferred Contract Adjustment
Payments will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable.
Section 10.5. Statements of Officers of the Company as to
Default.
The Company will deliver to the Agent, within 120 days after
the end of each fiscal year of the Company ending after the date
hereof, an Officer's Certificate, stating whether or not to the
best knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions
and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of
which they may have knowledge.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
PROTECTIVE LIFE CORPORATION
Attested by
/s/ Kathy B. Polk By: /s/ Deborah J. Long
------------------------ -------------------------------
Kathy B. Polk Name: Deborah J. Long
Assistant Secretary Title: Senior Vice President
Secretary and General Council
THE BANK OF NEW YORK
Attested by
/s/ Enrico Reyes By: /s/ Betty A. Cocozza
------------------------ -------------------------------
Enrico Reyes Name: Betty A. Cocozza
Vice President Title: Assistant Vice President
<PAGE>
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND
IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street,
New York, New York) to the Company or its agent for registration
of transfer, exchange or payment, any Certificate 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.
No. _____ Number of Income PRIDES ___ Cusip No. 743674202
Form of Face of Income PRIDES Certificate
6 1/2% Income PRIDES
This Income PRIDES Certificate certifies that Cede & Co. is
the registered Holder of the number of Income PRIDES set forth
above. Each Income PRIDES represents (i) beneficial ownership by
the Holder of one 6 1/2% Trust Originated Preferred Security (the
"Preferred Security") of PLC Capital Trust II, a Delaware
statutory business trust (the "Trust"), having a liquidation
amount of $50, subject to the Pledge of such Preferred Security
by such Holder pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract
with Protective Life Corporation, a Delaware corporation (the
"Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meaning set forth
therein.
A-1
<PAGE>
Pursuant to the Pledge Agreement, the Preferred Securities
relating to each Income PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to
secure the obligations of the Holder under the Purchase Contract
comprising a portion of such Income PRIDES.
The Pledge Agreement provides that all payments of the
liquidation amount of, or cash distributions on, any Pledged
Preferred Securities (as defined in the Pledge Agreement)
relating to an Income PRIDES received by the Collateral Agent
shall be paid by the Collateral Agent by wire transfer in same
day funds (i) in the case of (A) cash distributions with respect
to Pledged Preferred Securities and (B) any payments of the
liquidation amount with respect to any Preferred Securities that
have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent, for the benefit of the Holders of the
related Income PRIDES, to the account designated by the Agent, no
later than 2:00 p.m., New York City time, on the Business Day
such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York
City time, on a Business Day, then such payment shall be made no
later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the liquidation
amount of any Pledged Preferred Securities that have not been
released from the Pledge pursuant to the Pledge Agreement, to the
Company on the Purchase Contract Settlement Date (as defined
herein) in accordance with the terms of the Pledge Agreement, in
full satisfaction of the respective obligations of the Holders of
the Income PRIDES to which such Pledged Preferred Securities
relate under the Purchase Contracts forming a part of such Income
PRIDES. Distributions on any Preferred Security relating to an
Income PRIDES evidenced hereby which are payable quarterly in
arrears on March 31, June 30, September 30 and December 31 each
year, commencing December 31, 1997 (a "Payment Date"), shall,
subject to receipt thereof by the Agent from the Collateral
Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such
Payment Date.
A-2
<PAGE>
Each Purchase Contract evidenced hereby obligates the Holder
of this Income PRIDES Certificate to purchase, and the Company to
sell, on February 16, 2001 (the "Purchase Contract Settlement
Date"), at a price equal to $50 (the "Stated Amount"), a number
of newly issued shares of Common Stock, par value $.50 per share
("Common Stock"), of the Company, equal to the Settlement Rate
unless on or prior to the Purchase Contract Settlement Date there
shall have occurred a Termination Event with respect to the
Income PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the
"Purchase Price") for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date
by application of payment received in respect of the liquidation
amount of the Pledged Preferred Securities pledged to secure the
obligations under such Purchase Contract of the Holder of the
Income PRIDES of which such Purchase Contract is a part. A
Holder may cause the Preferred Security pledged to secure the
obligations under the Purchase Contract of the Holder of the
Income PRIDES of which such Purchase Contract is a part to be
repaid and the proceeds therefrom to be used to pay the Purchase
Price for shares of Common Stock under such Purchase Contract.
The Company shall pay, on each Payment Date, in respect of
each Purchase Contract forming part of an Income PRIDES evidenced
hereby an amount (the "Contract Adjustment Payments", if any,)
equal to 0% per annum of the Stated Amount (provided that if such
percentage is 0%, then no Contract Adjustment Payments will be
payable by the Company), computed on the basis of a 360 day year
of twelve 30 day months, subject to deferral at the option of the
Company as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. Such Contract Adjustment
Payments, if any, shall be payable to the Person in whose name
this Income PRIDES Certificate (or a Predecessor Income PRIDES
Certificate) is registered at the close of business on the Record
Date for such Payment Date.
Distributions on the Preferred Securities and Contract
Adjustment Payments, if any, will be payable at the office of the
Agent in The City of New York or, at the option of the Company,
by check mailed to the address of
A-3
<PAGE>
the Person entitled thereto as such address appears on the Income
PRIDES Register.
Reference is hereby made to the further provisions 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 Agent by manual signature, this Income PRIDES
Certificate shall not be entitled to any benefit under the Pledge
Agreement or the Purchase Contract Agreement or be valid or
obligatory for any purpose.
A-4
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
PROTECTIVE LIFE CORPORATION
By:_________________________________________
Name:
Title:
By:_________________________________________
Name:
Title:
Attest:
______________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK, not individually
but solely as Attorney-in-Fact of such
Holder
By:__________________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to
in the within mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK as Agent
By:__________________________________
Authorized Officer
A-5
<PAGE>
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by
the Purchase Contract Agreement, dated as of November 26, 1997
(as supplemented from time to time, the "Purchase Contract
Agreement"), between the Company and The Bank of New York, as
Purchase Contract Agent (herein called the "Agent"), to which
Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the
respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Company, and the
Holders and of the terms upon which the Income PRIDES
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the
Holder of this Income PRIDES Certificate to purchase, and the
Company to sell, on the Purchase Contract Settlement Date at a
price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock of the Company equal to the
Settlement Rate unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event
with respect to the Security of which such Purchase Contract
is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or
greater than $65.04 (the "Threshold Appreciation Price"), .769
shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $53 5/16, the number of
shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Amount is less than or equal to
$53 5/16, .938 shares of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in the Purchase
Contract Agreement. No fractional shares of Common Stock will
be issued upon settlement of Purchase Contracts, as provided
in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related Income PRIDES to purchase
at the Purchase Price, and the Company to sell, a number of
new shares of Common Stock equal to
A-6
<PAGE>
the Early Settlement Rate or the Settlement Rate, as
applicable.
The "Applicable Market Value" means the average of the
Closing Prices per share of Common Stock on each of the 30
consecutive Trading Days ending on the second Trading Day
immediately preceding the Purchase Contract Settlement Date.
The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing
price is reported, the last reported sale price) of the Common
Stock on the New York Stock Exchange (the "NYSE") on such date
or, if the Common Stock is not listed for trading on the NYSE
on any such date, as reported in the composite transactions
for the principal United States securities exchange on which
the Common Stock is so listed, or if the Common Stock is not
so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for
the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for
this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Income PRIDES Certificate shall
pay the Purchase Price for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby
by effecting a Cash Settlement or an Early Settlement. A
Holder of an Income PRIDES who fails to make an effective Cash
Settlement or an Early Settlement in respect of a Purchase
Contract prior to the Purchase Contract Settlement Date will
be deemed to have elected to have requested the Institutional
Trustee or Collateral Agent, as applicable, to require the
Company to repurchase a principal amount of the Debenture
underlying the related Preferred Security equal to the Stated
A-7
<PAGE>
Amount of such Purchase Contract, for application to the
Purchase Price of the Common Stock.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have
received payment in full of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
Each Purchase Contract evidenced hereby and the
obligations and rights of the Company and the Holder
thereunder shall terminate if a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the
Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Income
PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the
Pledged Preferred Security (as defined in the Pledge
Agreement) relating to each Income PRIDES, or the Liquidation
Distribution received in respect of such Pledged Preferred
Security, from the Pledge in accordance with the provisions of
the Pledge Agreement. An Income PRIDES shall thereafter
represent the right to receive the Preferred Security relating
to such Income PRIDES, or the Liquidation Distribution
received in respect of such Preferred Security, and any
accrued Contract Adjustment Payments on the Purchase Contract
forming a part of such Income PRIDES in accordance with the
terms of the Purchase Contract Agreement and the Pledge
Agreement. Contract Adjustment Payments shall cease to accrue
in respect of any period from and after the date of a
Termination Event.
Under the terms of the Pledge Agreement, the Agent will
be entitled to exercise the voting and any other consensual
rights pertaining to the Pledged Preferred Securities. Upon
receipt of notice of any meeting at which holders of Preferred
Securities are entitled to vote or upon any solicitation of
consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable
thereafter, mail to the Income PRIDES Holders a notice (a)
containing such information as is contained in such notice of
a meeting or such solicitation, (b) stating that each Income
PRIDES Holder on the record date set by the Agent therefor
(which, to the extent possible, shall be the same date as
A-8
<PAGE>
the record date for determining the holders of Preferred
Securities entitled to vote at such meeting or to act in
respect of such solicitation) shall be entitled to instruct
the Agent as to the exercise of the voting or other rights
pertaining to the Preferred Securities relating to such
Holder's Income PRIDES and (c) stating the manner in which
such instructions may be given. Upon the written request of
the Income PRIDES Holders on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted
or to act or to cause such action to be taken, in accordance
with the instructions set forth in such requests, in respect
of the maximum number of Preferred Securities as to which any
particular voting instructions are received. In the absence
of specific instructions from the Holder of an Income PRIDES,
the Agent shall abstain from voting the Preferred Security
relating to such Income PRIDES or from taking or causing to be
taken any actions in respect thereof, as the case may be.
Upon the liquidation of the Trust, a principal amount of
the Debentures constituting the assets of the Trust and
underlying the Preferred Securities equal to the aggregate
liquidation amount of the Pledged Preferred Securities shall
be delivered to the Collateral Agent in exchange for Pledged
Preferred Securities. Thereafter, such Debentures shall be
held by the Collateral Agent to secure the obligations of each
Holder of an Income PRIDES to purchase Common Stock under the
related Purchase Contract forming a part of such Income
PRIDES. Following the liquidation of the Trust, the Holders
and the Collateral Agent shall have such security interests,
rights and obligations with respect to such Debentures as the
Holders and the Collateral Agent had in respect of the Pledged
Preferred Securities, and any reference in the Purchase
Contract Agreement or Pledge Agreement to the Preferred
Securities shall be deemed to be a reference to such
Debentures.
The Income PRIDES Certificates are issuable only in
registered form and only in denominations of a single Income
PRIDES and any integral multiple thereof. The transfer of any
Income PRIDES Certificate will be registered and Income PRIDES
Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Income PRIDES Registrar may require a
Holder, among other things, to furnish appropriate
endorsements and transfer
A-9
<PAGE>
documents permitted by the Purchase Contract Agreement. No
service charge shall be required for any such registration of
transfer or exchange, but the Company and the Agent may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A holder
who elects to substitute a Treasury Security for Preferred
Securities, thereby creating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract forming a part
of an Income PRIDES remains in effect, such Income PRIDES
shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Income PRIDES in
respect of the related Preferred Security and the Purchase
Contract forming a part of such Income PRIDES may be
transferred and exchanged only as an Income PRIDES. The
holder of an Income PRIDES may substitute for the Pledged
Preferred Securities securing its obligation under the related
Purchase Contract Treasury Securities in an aggregate
principal amount equal to the aggregate liquidation amount of
the Pledged Preferred Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement.
From and after such Collateral Substitution, the Security for
which such Pledged Treasury Securities secures the holder's
obligation under the related Purchase Contract shall be
referred to as a "Growth PRIDES." A Holder may make such
Collateral Substitution only in integral multiples of 20
Income PRIDES for 20 Growth PRIDES. Such Collateral
Substitution may cause the Stated Amount of this Certificate
to be increased or decreased; provided, however, the aggregate
Stated Amount outstanding under this Income PRIDES Certificate
shall not exceed $115,000,000. All such adjustments to the
aggregate Stated Amount of this Income PRIDES Certificate
shall be duly recorded by placing an appropriate notation on
the Schedule attached hereto.
A Holder of Growth PRIDES may at any time on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, recreate Income PRIDES by (a)
delivering to the Collateral Agent Preferred Securities having
an aggregate liquidation amount equal to the aggregate
principal amount of the related Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities
in accordance with
A-10
<PAGE>
the terms of the Purchase Contract Agreement and the Pledge
Agreement and (b) transferring the related Growth PRIDES to
the Agent accompanied by a notice to the Agent substantially
in the form of Exhibit D to the Purchase Contract Agreement.
Subject to the next succeeding paragraph, the Company
shall pay, on each Payment Date, the Contract Adjustment
Payments, if any, payable in respect of each Purchase Contract
to the Person in whose name the Income PRIDES Certificate
evidencing such Purchase Contract is registered at the close
of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the
office of the Agent in The City of New York or, at the option
of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Income
PRIDES Register.
The Company shall have the right, at any time prior to
the Purchase Contract Settlement Date, to defer the payment of
any or all of the Contract Adjustment Payments otherwise
payable on any Payment Date, but only if the Company shall
give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred)
as provided in the Purchase Contract Agreement. Any Contract
Adjustment Payments so deferred shall bear additional Contract
Adjustment Payments thereon at the rate of 61/2% per annum
(computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until
paid in full (such deferred installments of Contract
Adjustment Payments, if any, together with the additional
Contract Adjustment Payments, if any, accrued thereon, are
referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any,
shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase
Contract Agreement. No Contract Adjustment Payments may be
deferred to a date that is after the Purchase Contract
Settlement Date.
In the event that the Company elects to defer the payment
of Contract Adjustment Payments, if any, on the Purchase
Contracts until the Purchase Contract Settlement Date, the
Holder of this Income PRIDES Certificate will receive on the
Purchase Contract Settlement Date in re-
A-11
<PAGE>
spect of the Deferred Contract Adjustment Payments, in lieu of
a cash payment, a number of shares of Common Stock equal to
(x) the aggregate amount of Deferred Contract Adjustment
Payments payable to the Holder of this Income PRIDES
Certificate divided by (y) the Applicable Market Value. No
fractional shares of Common Stock will be issued with respect
to the payment of Deferred Contract Adjustment Payments on the
Purchase Contract Settlement Date, as provided in the Purchase
Contract Agreement.
In the event the Company exercises its option to defer
the payment of any Contract Adjustment Payments, then, until
the Deferred Contract Adjustment Payments have been paid, the
Company 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 or make guarantee payments with respect to the
foregoing (other than (i) purchases or acquisitions of shares
of the Company's capital stock in connection with the
satisfaction by the Company's 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 capital 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 the
Company's 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 securities being
converted or exchanged, (iv) dividends or distributions in
capital stock of the Company and (v) redemptions of purchases
pursuant to Protective Life's Rights Agreement (or any
Successor Rights Agreement), dated as of August 7, 1995,
between Protective Life and AmSouth Bank (as successor by
merger to AmSouth Bank of Alabama, successor by conversion of
charter to Amsouth Bank N.A.) as Rights Agent).
The Purchase Contracts and the obligations and rights of
the Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically
A-12
<PAGE>
terminate, without the necessity of any notice or action by
any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall
release the Preferred Securities from the Pledge in accordance
with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement at the option of the Holder
thereof, Purchase Contracts forming a part of Securities
having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early
Settlement") as provided in the Purchase Contract Agreement.
In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES
Certificate shall deliver this Income PRIDES Certificate to
the Agent at the Corporate Trust Office duly endorsed for
transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and accompanied
by payment in the form of a certified or cashier's check or
wire transfer in immediately available funds payable to or
upon the order of the Company in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect
to which the Holder has elected to effect Early Settlement,
plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to
the opening of business on such Payment Date, an amount equal
to the sum of (x) the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase
Contracts plus (y) the distributions with respect to the
related Pledged Preferred Securities payable on such Payment
Date. Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Pledged Preferred Securities
underlying such Securities shall be released from the Pledge
as provided in the Pledge Agreement and the Holder shall be
entitled to receive, a number of shares of
A-13
<PAGE>
Common Stock on account of each Purchase Contract forming part
of an Income PRIDES as to which Early Settlement is effected
equal to the Early Settlement Rate; provided however, that
upon the Early Settlement of the Purchase Contracts, the
Holder thereof will forfeit the right to receive any Deferred
Contract Adjustment Payments, if any, on such Purchase
Contracts. The Early Settlement Rate shall initially be equal
to .769 shares of Common Stock and shall be adjusted in the
same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES
Certificate, the transferee shall be bound (without the
necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby
and the transferor shall be released from the obligations
under the Purchase Contracts evidenced by this Income PRIDES
Certificate. The Company covenants and agrees, and the
Holder, by his acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by his
acceptance hereof, authorizes the Agent to enter into and
perform the related Purchase Contracts forming part of the
Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the
Company or its trustee in such event that the Company becomes
the subject of a case under the Bankruptcy Code, agrees to be
bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract
Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on his behalf as his attorney-in-fact, and
consents to the Pledge of the Preferred Securities underlying
this Income PRIDES Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to
the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect of the Stated Amount of the
related Pledged Preferred Securities on the Purchase Contract
Settlement Date shall be paid by the Col-
A-14
<PAGE>
lateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contracts and such Holder
shall acquire no right, title or interest in such payments.
Each Holder of any Income PRIDES or a Growth PRIDES, and each
Beneficial Owner thereof, by its acceptance thereof or of its
interest therein, further agrees to treat (i) itself as the
owner of the related Preferred Securities or Treasury
Securities, as the case may be, and (ii) the Debentures as
indebtedness of the Company, in each case, for United States
federal, state and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of at least 66 2/3% of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of
New York.
The Company, the Agent and its Affiliates and any agent
of the Company or the Agent may treat the Person in whose name
this Income PRIDES Certificate is registered as the owner of
the Income PRIDES evidenced hereby for the purpose of
receiving payments of distributions payable quarterly on the
Preferred Securities, receiving payments of Contract
Adjustment Payments, if any, and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments
in respect thereof be overdue and notwithstanding any notice
to the contrary, and neither the Company, the Agent nor any
such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder
of shares of Common Stock.
A copy of the Purchase Contract Agreement is available
for inspection at the offices of the Agent.
A-15
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription
on the face of this instrument, shall be construed as though
they were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT --------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TENANT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the
above list.
______________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto_________________________________
_______________________________________________________________
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee_________________________________
_______________________________________________________________
_______________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code
_______________________________________________________________
the within Income PRIDES Certificates and all rights
_______________________________________________________________
thereunder, hereby irrevocably constituting and appointing
_______________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books
of Protective Life Corporation with full power of substitution in
the premises.
Dated: _________________ ______________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Income PRIDES Certificate in
every particular, without alteration or
enlargement or any change whatsoever.
A-16
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the
Purchase Contract Settlement Date of the Purchase Contracts
underlying the number of Income PRIDES evidenced by this Income
PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name
and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer or other tax payable incident
thereto.
Dated:_________________________ __________________________________
Signature
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address
of Registered Holder:
_______________________________ __________________________________
Name Name
_______________________________ __________________________________
Address Address
_______________________________ __________________________________
_______________________________ __________________________________
_______________________________ __________________________________
Social Security or other
Taxpayer Identification
Number, if any __________________________________
A-17
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate
hereby irrevocably exercises the option to effect Early Settlement
in accordance with the terms of the Purchase Contract Agreement
with respect to the Purchase Contracts underlying the number of
Income PRIDES evidenced by this Income PRIDES Certificate
specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying
Income PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that
a certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered,
together with a check in payment for any fractional share and any
Income PRIDES Certificate representing any Income PRIDES evidenced
hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been
indicated below. Pledged Preferred Securities deliverable upon
such Early Settlement will be transferred in accordance with the
transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer or other tax payable incident
thereto.
Dated:_________________ _______________________________
Signature
A-18
<PAGE>
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Income PRIDES Certificates
are to be registered in the name
of and delivered to and Pledged
Preferred Securities are to be
transferred to a Person other
than the Holder, please print
such Person's name and address:
Please print name and address
of Registered Holder:
_______________________________ ______________________________
Name Name
_______________________________ ______________________________
Address Address
_______________________________ ______________________________
_______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any _______________________________
Transfer Instructions for Pledged Preferred Securities
Transferable Upon Early Settlement or a Termination Event:
___________________________________________________________
___________________________________________________________
___________________________________________________________
A-19
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OF DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
- -------------------------------------------------------------------------------
Stated
Amount of Amount of Amount of Signature of
Decrease in Increase in this Global authorized
Stated Stated Certificate officer of
Amount of Amount of following Trustee or
the Global the Global such decrease Securities
Date Certificate Certificate or increase Custodian
- -------------------------------------------------------------------------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
A-20
<PAGE>
EXHIBIT B
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York,
New York) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate 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.
No. ___ Number of Growth PRIDES _____ Cusip No. 743674301
[Form of Face of Growth PRIDES Certificate]
This Growth PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Growth PRIDES set forth above. Each
Growth PRIDES represents (i) a 1/20 undivided beneficial ownership interest
in a Treasury Security having a principal amount at maturity equal to $1,000,
subject to the Pledge of such Treasury Security by such Holder pursuant to
the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Purchase Contract with Protective Life Corporation, a Delaware
Corporation (the "Company"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities relating to
each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the
B-1
<PAGE>
Holder under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on February
16, 2001 (the "Purchase Contract Settlement Date"), at a price equal to $50
(the "Stated Amount"), a number of newly issued shares of Common Stock, par
value $.50 per share ("Common Stock"), of the Company equal to the Settlement
Rate unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event with respect to the Growth PRIDES of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby will be paid by application of the Proceeds from the
Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments")
equal to 0% per annum of the Stated Amount (provided, that, if such
percentage is 0%, then no Contract Adjustment payments will be payable by the
Company), computed on the basis of the actual number of days elapsed in a
year of 360 day year of twelve 30 day months, as the case may be, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name
this Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate)
is registered at the close of business on the Record Date for such Payment
Date.
Contract Adjustment Payments, if any, will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears
on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
B-2
<PAGE>
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PROTECTIVE LIFE CORPORATION
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Attest:
- --------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts
evidenced hereby)
--------------------------------------------
By: THE BANK OF NEW YORK not individually
but solely as Attorney-in-Fact of such
Holder
By:
----------------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE BANK OF NEW YORK, as Agent
By:
-----------------------------------------
Authorized Officer
B-4
<PAGE>
(Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by the Purchase
Contract Agreement, dated as of November 26, 1997 (as supplemented from time
to time, the "Purchase Contract Agreement") between the Company and The Bank
of New York as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the
terms upon which the Growth PRIDES Certificates are, and are to be, executed
and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock of the Company equal to
the Settlement Rate unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event or an Early Settlement
with respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $65.04 (the "Threshold Appreciation
Price"), .769 shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $53 5/16, the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value
and (c) if the Applicable Market Amount is less than or equal to $53 5/16,
.938 shares of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts,
as provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the thirty consecutive Trading Days ending
on the second Trading Day immediately preceding the Purchase Contract
Settlement Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for
B-5
<PAGE>
the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed on a United States
national or regional securities exchange, as reported by The Nasdaq Stock
Market, or, if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is
not available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract
or by applying a principal amount of the Pledged Treasury Securities
underlying such Holder's Growth PRIDES equal to the Stated Amount of such
Purchase Contract to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate
purchase price for the shares of Common Stock to be purchased thereunder in
the manner herein set forth.
Each Purchase Contract evidenced hereby and the obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Growth PRIDES Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged
Treasury Securities (as defined in the Pledge Agreement) relating to each
Growth PRIDES in accordance with the provisions of the Pledge Agreement. A
Growth PRIDES shall thereafter represent the right to receive any accrued
Contract Adjustment Payments on the Purchase Contract relating to such Growth
PRIDES in accordance with the terms of the Purchase Contract Agreement and
the
B-6
<PAGE>
Pledge Agreement. Contract Adjustment Payments, if any, shall cease to
accrue in respect of any period from and after the date of a Termination
Event.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered
and Growth PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Growth PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company
and the Agent may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. A holder who
elects to substitute Preferred Securities for a Treasury Security, thereby
creating Income PRIDES, shall be responsible for any fees or expenses
associated therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract forming a part of a Growth PRIDES
remains in effect, such Growth PRIDES shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such
Growth PRIDES in respect of the related Treasury Security and the Purchase
Contract forming a part of such Growth PRIDES may be transferred and
exchanged only as a Growth PRIDES. The holder of a Growth PRIDES may
substitute for the Pledged Treasury Securities securing its obligations under
the related Purchase Contract Preferred Securities with an aggregate
liquidation amount equal to the aggregate principal amount of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such substitution, the
Holder's Security shall be referred to as an "Income PRIDES." Such
substitution may cause the aggregate Stated Amount of this Certificate to be
increased or decreased; provided, however, the aggregate Stated Amount
outstanding under this Growth PRIDES Certificate shall not exceed
$115,000,000. All such adjustments to the aggregate Stated Amount of this
Growth PRIDES Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of an Income PRIDES may, at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date,
recreate a Growth PRIDES by (a) delivering to the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the related Pledged Preferred Securities in ex-
B-7
<PAGE>
change for the release of such Pledged Preferred Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement
and (b) transferring the related Income PRIDES to the Agent accompanied by a
notice to the Agent, substantially in the form of Exhibit D to the Purchase
Contract Agreement. Any such recreation of a Growth PRIDES may be effected
only in multiples of 20 Income PRIDES for 20 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York
or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Growth PRIDES
Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in
the Purchase Contract Agreement. Any Contract Adjustment Payments so
deferred shall bear additional Contract Adjustment Payments thereon at the
rate of 61/2% per annum (computed on the basis of a 360 day year of twelve 30
day months), compounding on each succeeding Payment Date, until paid in full
(such deferred installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, are referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Purchase
Contract Agreement. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date in respect of any Deferred
Contract Adjustment payments, in lieu of a cash payment, a number of shares
of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of
B-8
<PAGE>
the Growth PRIDES Certificate of Securities divided by (y) the Applicable
Market Value. No fractional shares of Common Stock will be issued with
respect to the payment of Deferred Contract Adjustment Payments, if any, on
the Purchase Contract Settlement Date, as provided in the Purchase Contract
Agreement.
In the event the Company exercises its option to defer the payment of any
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company 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 or make
guarantee payments with respect to the foregoing (other than (i) purchases or
acquisitions of shares of the Company's capital 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 obligations pursuant to any
contract or security requiring the Company to purchase shares of its capital
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 the Company's 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 securities being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company
and (v) redemptions of purchases pursuant to Protective Life's Rights
Agreement, (or any Successor Rights Agreement), dated as of August 7, 1995,
between Protective Life and AmSouth Bank (as successor by merger to AmSouth
Bank of Alabama, successor by conversion of charter to Amsouth Bank N.A.)
("AmSouth Bank"), as Rights Agent.
The Purchase Contracts and the obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon the occurrence of a Termination Event, the Company shall promptly but in
no event later than two Business Days thereafter give written notice to the
Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event,
B-9
<PAGE>
the Collateral Agent shall release the Treasury Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
forming a part of Securities having an aggregate Stated Amount equal to
$1,000 or an integral multiple thereof may be settled early ("Early
Settlement") as provided in the Purchase Contract Agreement. In order to
exercise the right to effect Early Settlement with respect to any Purchase
Contracts evidenced by this Growth PRIDES Certificate, the Holder of this
Growth PRIDES Certificate shall deliver this Growth PRIDES Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of a certified or cashier's
check or wire transfer in immediately available funds payable to or upon the
order of the Company in an amount (the "Early Settlement Amount") equal to
(i) the product of (A) the Stated Amount times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement, plus (ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date
next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments, if any, payable,
if any, on such Payment Date with respect to such Purchase Contracts. Upon
Early Settlement of Purchase Contracts by a Holder of the related Securities,
the Pledged Treasury Securities underlying such Securities shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive, a number of shares of Common Stock on account of each
Purchase Contract forming part of a Growth PRIDES as to which Early
Settlement is effected equal to .769 shares of Common Stock per Purchase
Contract (the "Early Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments on such Purchase
Contracts. The Early Settlement Rate shall initially be equal to .769 shares
of Common Stock per Growth PRIDES and shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee,
B-10
<PAGE>
except as may be required by the Agent pursuant to the Purchase Contract
Agreement), under the terms of the Purchase Contract Agreement and the
Purchase Contracts evidenced hereby and the transferor shall be released from
the obligations under the Purchase Contracts evidenced by this Growth PRIDES
Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of such Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Growth PRIDES Certificate pursuant to the Pledge Agreement.
The Holder further covenants and agrees, that, to the extent and in the
manner provided in the Purchase Contract Agreement and the Pledge Agreement,
but subject to the terms thereof, payments in respect of the Stated Amount of
the related Pledged Treasury Securities on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contracts and such Holder shall
acquire no right, title or interest in such payments. Each Holder of any
Income PRIDES or a Growth PRIDES, and each Beneficial Owner thereof, by its
acceptance thereof or of its interest therein, further agrees to treat (i)
itself as the owner of the related Trust Preferred Securities or Treasury
Securities, as the case may be, and (ii) the Debentures as indebtedness of
the Company, in each case, for United States federal, state and local income
and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least 66 2/3%
of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
B-11
<PAGE>
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the
purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Contract Adjustment Payments, if any, and any Deferred
Contract Adjustment Payments, performance of the Purchase Contracts and for
all other purposes whatsoever, whether or not any payments in respect thereof
be overdue and notwithstanding any notice to the contrary, and neither the
Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
B-12
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TENANT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto: ____________________________________________________________
______________________________________________________________________________
Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee _____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code
______________________________________________________________________________
the within Growth PRIDES Certificates and all rights
______________________________________________________________________________
thereunder, hereby irrevocably constituting and appointing
______________________________________________________________________________
as attorney to transfer said Growth PRIDES Certificates on the books of
Protective Life Corporation with full power of substitution in the premises.
Dated: _____________________ ________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Growth PRIDES Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
B-13
<PAGE>
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Growth
PRIDES evidenced by this Growth PRIDES Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional share,
to the undersigned at the address indicated below unless a different name and
address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer or other tax payable incident thereto.
Dated: ________________________ ________________________________________
Signature
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of
Registered Holder:
- ----------------------------- ----------------------------------------
Name Name
- ----------------------------- ----------------------------------------
Address Address
- ----------------------------- ----------------------------------------
- ----------------------------- ----------------------------------------
- ----------------------------- ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ----------------------------------------
B-14
<PAGE>
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Growth PRIDES evidenced by this
Growth PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement
be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Growth PRIDES Certificate representing any
Growth PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer or other tax payable
incident thereto.
Dated:
--------------------------- ----------------------------------
Signature
B-15
<PAGE>
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Growth PRIDES Certifi-
cates are to be registered
in the name of and delivered
to and Pledged Treasury
Securities are to be
transferred to a Person
other than the Holder, please
print such Person's name and address:
Please print name and address
of Registered Holder:
- ----------------------------- ----------------------------------------
Name Name
- ----------------------------- ----------------------------------------
Address Address
- ----------------------------- ----------------------------------------
- ----------------------------- ----------------------------------------
- ----------------------------- ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ----------------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable
Upon Early Settlement or a Termination Event:
- ----------------------------------------------------------
- ----------------------------------------------------------
- ----------------------------------------------------------
B-16
<PAGE>
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Stated
Amount of Amount of Amount of Signature of
Decrease in Increase in this Global authorized
Stated Stated Certificate officer of
Amount of Amount of following such Trustee or
the Global the Global decrease Securities
Date Certificate Certificate or increase Custodian
---- ------------ ----------- -------------- ------------
B-17
<PAGE>
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Attention:
Re: FELINE PRIDES of Protective Life Corporation (the "Company"),
and PLC Capital Trust II
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of ________ __, 1997, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time
to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate principal amount of Treasury Securities]
[$_______Stated Amount of Preferred Securities] in exchange for an equal
value of the [Pledged Preferred Securities][Pledged Treasury Securities] held
by you in accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury Securities]
[Preferred Securities] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Preferred
Securities], to release the Preferred Securities][Treasury Securities]
related to such [Income PRIDES] [Growth PRIDES] to us in accordance with the
Holder's instructions. Capitalized terms used therein but not defined shall
have the meaning set forth in the Pledge Agreement.
Date:
------------------------------
By:
------------------------------
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities] for the
[Pledged Preferred Securities] [Pledged Treasury Securities]:
- --------------------------- ---------------------------------
Name Social Security or other
Taxpayer Identification
- --------------------------- Number, if any
Address
- ---------------------------
- ---------------------------
C-1
<PAGE>
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Attention:
Re: FELINE PRIDES of PROTECTIVE LIFE CORPORATION (the "Company"),
and PLC Capital Trust II
The undersigned Holder hereby notifies you that it has delivered to
, as Collateral Agent, $_______ aggregate principal
amount [Stated Amount] of [Treasury Securities] [Preferred Securities] in
exchange for an equal value of the [Pledged Preferred Securities]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance
with Section 4.1 of the Pledge Agreement, dated __________ __, 1997, between
you, the Company and the Collateral Agent. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Preferred Securities]
[Pledged Treasury Securities] related to such [Income PRIDES] [Growth PRIDES]
. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Dated:
--------------------------- -------------------------------
Signature
Please print name and address of Registered Holder:
- ---------------------------------- -------------------------------
Name Social Security or other
Taxpayer Identification
- ---------------------------------- Number, if any
Address
- ----------------------------------
- ----------------------------------
- ----------------------------------
D-1
<PAGE>
EXHIBIT 4(z)
PROTECTIVE LIFE CORPORATION,
THE BANK OF NEW YORK
AND
THE CHASE MANHATTAN BANK
PLEDGE AGREEMENT
Dated as of November 26, 1997
<PAGE>
TABLE OF CONTENTS
Page
RECITALS........................................................... 1
Section 1. Definitions........................................ 2
Section 2. Pledge; Control and Perfection...................... 7
Section 2.1. The Pledge.......................................... 7
Section 2.2. Control and Perfection.............................. 9
Section 3. Distributions on Pledged Collateral................. 10
Section 4. Substitution, Release, Repledge and Settle
ment of Preferred Securities................... 11
Section 4.1. Substitution of Preferred Securities and the
Establishment of Growth PRIDES................. 11
Section 4.2. Pledge of Preferred Securities and
Re-establishment of Income PRIDES................... 12
Section 4.3. Termination Event................................... 12
Section 4.4. Cash Settlement..................................... 13
Section 4.5. Early Settlement.................................... 14
Section 4.6. Application of Proceeds Settlement. ............... 15
Section 5. Voting Rights -- Preferred Securities............... 16
Section 6. Rights and Remedies................................. 17
Section 6.1. Rights and Remedies of the Collateral Agent......... 17
Section 6.2. Liquidation of the Trust............................ 18
Section 7. Representation and Warranties; Covenants............ 18
Section 7.1. Representations and Warranties...................... 18
Section 7.2. Covenants........................................... 20
Section 8. The Collateral Agent................................ 20
Section 8.1. Appointment, Powers and Immunities.................. 20
Section 8.2. Instructions of the Company......................... 21
Section 8.3. Reliance by Collateral Agent........................ 22
i
<PAGE>
Page
Section 8.4. Rights in Other Capacities.......................... 22
Section 8.5. Non-Reliance on Collateral Agent.................... 22
Section 8.6. Compensation and Indemnity.......................... 23
Section 8.7. Failure to Act...................................... 23
Section 8.8. Resignation of Collateral Agent..................... 24
Section 8.9. Right to Appoint Agent or Advisor................... 25
Section 8.10. Survival............................................ 25
Section 8.11. Indemnity........................................... 25
Section 9. Amendment........................................... 25
Section 9.1. Amendment Without Consent of Holders................ 25
Section 9.2. Amendment with Consent of Holders................... 26
Section 9.3. Execution of Amendments............................. 27
Section 9.4. Effect of Amendments................................ 27
Section 9.5. Reference to Amendments............................. 27
Section 10. Miscellaneous....................................... 28
Section 10.1. No Waiver........................................... 28
Section 10.2. Governing Law....................................... 28
Section 10.3. Notices............................................. 28
Section 10.4. Successors and Assigns.............................. 29
Section 10.5. Counterparts........................................ 29
Section 10.6. Severability........................................ 29
Section 10.7. Expenses, etc....................................... 29
Section 10.8. Security Interest Absolute.......................... 30
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
EXHIBIT C INSTRUCTION TO TRUST
ii
<PAGE>
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of November 26, 1997 (this
"Agreement"), among Protective Life Corporation, a New Jersey
corporation (the "Company"), The Chase Manhattan Bank, a New
York banking corporation, not individually but solely as
collateral agent (in such capacity, together with its
successors in such capacity, the "Collateral Agent") and in
its capacity as a "securities intermediary" as defined in
Section 8-102(a)(14) of the Code (as defined herein) (in such
capacity, together with its successors in such capacity, the
"Securities Intermediary"), and The Bank of New York, a New
York banking corporation, not individually but solely as
purchase contract agent and as attorney-in-fact of the Holders
(as defined in the Purchase Contract Agreement) from time to
time of the Securities (as hereinafter defined) (in such
capacity, together with its successors in such capacity, the
"Purchase Contract Agent") under the Purchase Contract
Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties
to the Purchase Contract Agreement, dated as of the date
hereof (as modified and supplemented and in effect from time
to time, the "Purchase Contract Agreement"), pursuant to which
there may be issued up to 2,300,000 FELINE PRIDES (the
"Securities").
Each Security, at issuance, consists of a unit (the
"Income PRIDES") comprised of (a) one stock purchase contract
(the "Purchase Contract") under which (i) the Holder will
purchase from the Company on February 16, 2001, for an amount
equal to the Stated Amount, a number of newly issued shares of
Common Stock equal to the Settlement Rate, and (ii) the
Company will pay the Holder Contract Adjustment Payments, if
any, and (b) beneficial ownership of a 61/2% Trust Originated
Preferred Security (a "Preferred Security") issued by PLC
Capital Trust II (the "Trust"), having a liquidation amount
equal to $50 (the "Stated Amount") and maturing on February
16, 2003, unless settled earlier.
Pursuant to the terms of the Purchase Contract Agreement
and the Purchase Contracts, the Holders, from time to time, of
the Securities have irrevocably authorized the Purchase
Contract Agent, as attorney-in-fact of
<PAGE>
such Holders, among other things, to execute and deliver this
Agreement on behalf of such Holders and to grant the pledge
provided hereby of the Preferred Securities and any Treasury
Securities (as defined below) delivered in exchange therefor
to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof.
Upon such pledge the Preferred Securities or the Treasury
Securities, as applicable, will be beneficially owned by the
Holders but will be owned of record by the Purchase Contract
Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent, the
Securities Intermediary and the Purchase Contract Agent, on
its own behalf and as attorney-in-fact of the Holders from
time to time of the Securities, agree as follows:
Section 1. Definitions. For all purposes of this Agreement, except
as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the
meanings assigned to them in this Article and include the
plural as well as the singular;
(b) the words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Agreement as
a whole and not to any particular Article, Section or
other subdivision;
(c) the following terms have the meanings assigned to
them in the Purchase Contract Agreement: (i)Act,(ii)
Agent,(iii) Board Resolution, (iv) Cash Settlement,(v)
Certificate,(vi) Common Stock,(vii) Contract Adjustment
Payments,(viii) Debentures, (ix) Early Settlement,(x)
Early Settlement Amount,(xi) Early Settlement Date,(xii)
Holder, (xiii) Opinion of Counsel,(xiv) Outstanding
Securities,(xv) Purchase Contract,(xvi) Purchase Contract
Settlement Date,(xvii) Purchase Price, (xviii)Repayment
Price,(xix) Settlement Rate,(xx) Termination Event, and
(xxi) Underwriting Agreement;
(d) the following term shall have the meaning
assigned to it in the Declaration: Institutional Trustee.
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"Agreement" means this instrument as originally executed
or as it may from time to time be supplemented or amended by
one or more agreements supplemental hereto entered into
pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States
Code, or any other law of the United States that from time to
time provides a uniform system of bankruptcy laws.
"Business Day" means any day other than a Saturday, a
Sunday or any other day on which banking institutions in The
City of New York (in the State of New York) are permitted or
required by any applicable law to close.
"Cash" means any coin or currency of the United States as
at the time shall be legal tender for payment of public and
private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1
hereof.
"Collateral Account" means the trust account (number
C24967) maintained at The Chase Manhattan Bank in the name
"The Bank of New York", as Purchase Contract Agent on behalf
of the holders of certain securities of PLC Capital Trust II,
Collateral Account subject to the security interest of The
Chase Manhattan Bank, as Collateral Agent, for the benefit of
Protective Life Corporation, as pledgee" and any successor
account.
"Collateral Agent" has the meaning specified in the first
paragraph of this Agreement.
"Company" means the Person named as the "Company" in the
first paragraph of this Agreement until a successor shall have
become such, and thereafter "Company" shall mean such
successor.
"Declaration" means the Amended and Restated Declaration
of Trust of the Trust, dated as of November 20, 1997, among
the Company as sponsor, the trustees named therein and the
holders from time to time of undivided beneficial interests in
the assets of the Trust.
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"Growth PRIDES" means a unit comprised of one Purchase
Contract and a 1/20 undivided beneficial ownership interest in
a Treasury Security that has been substituted for Preferred
Securities as collateral to secure the Holder's obligations
under such Purchase Contract.
"Intermediary" means any entity that in the ordinary
course of its business maintains securities accounts for
others and is acting in that capacity.
"Permitted Investments" means any one of the following
which shall mature on the next succeeding Business Day (i) any
evidence of indebtedness with an original maturity of 365 days
or less issued, or directly and fully guaranteed or insured,
by the United States of America or any agency or
instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support
thereof or such indebtedness constitutes a general obligation
of it); (ii) deposits, certificates of deposit or acceptances
with an original maturity of 365 days or less of any
institution which is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of
not less than US$ 200.0 million at the time of deposit; (iii)
investments with an original maturity of 365 days or less of
any Person that is fully and unconditionally guaranteed by a
bank referred to in clause (ii); (iv) repurchase agreements
and reverse repurchase agreements relating to marketable
direct obligations issued or unconditionally guaranteed by the
United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States
Government; (v) investments in commercial paper, other than
commercial paper issued by the Company or its affiliates, of
any corporation incorporated under the laws of the United
States or any State thereof, which commercial paper has a
rating at the time of purchase at least equal to "A-1" by
Standard & Poor's Ratings Services or at least equal to "P-1"
by Moody's Investors Service, Inc.; and (vi) investments in
money market funds registered under the Investment Company Act
of 1940, as amended, which have net assets of at least $200.0
million and at least 85.0% of whose assets consist of
securities and other obligations of the types described in
clauses (i) through (v) above.
"Person" means any individual, corporation, limited
liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organi-
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zation or other entity or government or any agency or
political subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified
in Section 2.1 hereof.
"Pledged Treasury Securities" has the meaning specified
in Section 2.1 hereof.
"Preferred Securities" has the meaning specified in the
Recitals.
"Proceeds" means all interest, dividends, cash,
instruments, securities, financial assets (as defined in
Section 8-102(a)(9) of the Code) and other property from time
to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Collateral.
"Purchase Contract" has the meaning specified in the
Recitals.
"Purchase Contract Agent" has the meaning specified in
the first paragraph of this Agreement.
"Purchase Contract Agreement" has the meaning specified
in the Recitals.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in
the first paragraph of this Agreement.
"Security Entitlement" has the meaning set forth in
Section 8.102(a)(7) of the Code.
"Stated Amount" has the meaning specified in the
Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry
System maintained by the Federal Reserve Bank of New York
pursuant to the TRADES Regulations.
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"TRADES Regulations" means the regulations of the United
States Department of the Treasury, published at 31 C.F.R. Part
357, as amended from time to time. Unless otherwise defined
herein, all terms defined in the TRADES Regulations are used
herein as therein defined.
"Transfer" means, with respect to the Collateral and in
accordance with the instructions of the Collateral Agent, the
Purchase Contract Agent or the Holder, as applicable:
(i) in the case of Collateral consisting of securities
which cannot be delivered by book-entry or which the
parties agree are to be delivered in physical form,
delivery in appropriate physical form to the
recipient accompanied by any duly executed
instruments of transfer, assignments in blank,
transfer tax stamps and any other documents
necessary to constitute a legally valid transfer to
the recipient; and
(ii) in the case of Collateral consisting of securities
maintained in book-entry form, by causing a
Securities Intermediary to (i) credit a Securities
Entitlement with respect to such securities to a
securities account maintained by or on behalf of the
recipient; (ii) to issue a confirmation to the
recipient with respect to such credit and (iii) to
make appropriate notations in its books to reflect
the security interest of the recipient in such
securities.
"Treasury Security" means a zero-coupon U.S. Treasury
Security maturing on February 15, 2001 (Cusip Number 912820
A20) which are the principal strips of the 73/4% U.S. Treasury
Securities which mature on February 15, 2001.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any
date means, as to (i) a Preferred Security, the Stated Amount,
(ii) Cash, the face amount thereof and (iii) Treasury
Securities, the aggregate principal amount thereof at
maturity.
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Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time,
acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby pledge and grant to the Collateral
Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their
respective obligations under the related Purchase Contracts, a
security interest in (i) all of the right, title and interest
of such Holders (a) in the Preferred Securities now and
hereafter relating to the Securities and all Proceeds thereof
(including any Proceeds from the repayment of the Preferred
Securities by the Trust) and any Treasury Securities delivered
in exchange for such Preferred Securities in accordance with
Section 4 hereof, in each case that have been Transferred to
or received by the Collateral Agent and not released by the
Collateral Agent to such Holders under the provisions of this
Agreement, including any Preferred Securities transferred to
the Collateral Agent in the future pursuant to Section 4.2
hereof (the "Collateral"); (b) in payments made by Holders
pursuant to Section 4.4; (c) in the Collateral Account and all
securities, financial assets and other property credited
thereto and all Security Entitlements related thereto; (d) in
any Debentures delivered to the Collateral Agent upon a
liquidation of the Trust as provided in Section 6.2; and (e)
all proceeds of the foregoing. Prior to or concurrently with
the execution and delivery of this Agreement, the Purchase
Contract Agent, on behalf of the initial Holders of the Income
PRIDES, shall cause the Preferred Securities relating to the
Income PRIDES to be delivered to the Collateral Agent for the
benefit of the Company by physically delivering such
securities to the Securities Intermediary endorsed in blank
and causing the Securities Intermediary to credit the
Collateral Account with such securities and send the
Collateral Agent a confirmation of the deposit of such
securities. In the event a Holder of Income PRIDES so elects,
such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the
release by the Collateral Agent on behalf of the Company of
Preferred Securities to the Purchase Contract Agent on behalf
of such Holder. Treasury Securities shall be Transferred to
the Collateral Account maintained by the Collateral Agent at
the Securities Intermediary by book-entry transfer to the
Collateral Account in accordance with the TRADES Regulations
and other applicable law and by the notation
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<PAGE>
by the Securities Intermediary on its books that a Security
Entitlement with respect to such Treasury Securities has been
credited to the Collateral Account. For purposes of
perfecting the Pledge under applicable law, including, to the
extent applicable, the TRADES Regulations of the Uniform
Commercial Code as adopted and in effect in any applicable
jurisdiction, the Collateral Agent shall be the agent of the
Company as provided herein. The pledge provided in this
Section 2.1 is herein referred to as the "Pledge" and the
Preferred Securities (including Debentures that are pledged
pursuant to Section 6.2 hereof) or Treasury Securities subject
to the Pledge, excluding any Preferred Securities (including
Debentures that are pledged pursuant to Section 6.2 hereof) or
Treasury Securities released from the Pledge as provided in
Section 4 hereof, are hereinafter referred to as "Pledged
Preferred Securities" or the "Pledged Treasury Securities,"
respectively. Subject to the Pledge and the provisions of
Section 2.2 hereof, the Holders from time to time shall have
full beneficial ownership of the Collateral. Whenever
directed by the Collateral Agent acting on behalf of the
Company, the Securities Intermediary shall have the right to
reregister the Preferred Securities or any other securities
held in physical form in its name.
Except as may be required in order to release Preferred
Securities in connection with a Holder's election to convert
its investment from an Income Pride to a Growth Pride, or
except as otherwise required to release securities as
specified herein, the Collateral Agent shall not relinquish
physical possession of any certificate evidencing a Preferred
Security prior to the termination of this Agreement. If it
becomes necessary for the Collateral Agent to relinquish
physical possession of a certificate in order to release a
portion of the Preferred Securities evidenced thereby from the
Pledge, the Collateral Agent shall use its best efforts to
obtain physical possession of a replacement certificate
evidencing any Preferred Securities remaining subject to the
Pledge hereunder registered to it or endorsed in blank within
fifteen days of the date it relinquished possession. The
Collateral Agent shall promptly notify the Company of its
failure to obtain possession of any such replacement
certificate as required hereby.
Section 2.2. Control and Perfection. In connection with
the Pledge granted in Section 2.1, and subject to
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<PAGE>
the other provisions of this Agreement, the Holders from time
to time acting through the Purchase Contract Agent, as their
attorney-in-fact, hereby authorize and direct the Securities
Intermediary (without the necessity of obtaining the further
consent of the Purchase Contract Agent or any of the Holders),
and the Securities Intermediary agrees, to comply with and
follow any instructions and entitlement orders (as defined in
Section 8-102(a)(8) of the Code) that the Collateral Agent on
behalf of the Company may give in writing with respect to the
Collateral Account, the Collateral credited thereto and any
Security Entitlements with respect to any thereof. Such
instructions and entitlement orders may, without limitation,
direct the Securities Intermediary to transfer, redeem, sell,
liquidate, assign, deliver or otherwise dispose of the Pledged
Preferred Securities, the Pledged Treasury Securities and any
security entitlements with respect thereto and to pay and
deliver any income, proceeds or other funds derived therefrom
to the Company. The Holders from time to time, acting through
the Purchase Contract Agent, hereby further authorize and
direct the Collateral Agent, as agent of the Company, to
itself issue instructions and entitlement orders, and to
otherwise take action, with respect to the Collateral Account,
the Collateral credited thereto and any Security Entitlements
with respect to any thereof, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the
Holders. The Collateral Agent shall be the agent of the
Company and shall act as directed in writing by the Company.
Without limiting the generality of the foregoing, the
Collateral Agent shall issue entitlement orders to the
Securities Intermediary when and as directed by the Company.
In order to assure that the Collateral Agent receives the
proceeds of any repayment/repurchase of the Pledged Preferred
Securities, the Purchase Contract Agent on behalf of the
Holders shall send the Trust a notice on the date hereof in
substantially the form of Exhibit C hereto and shall cause the
Trust to acknowledge and agree to the terms of such notice.
Whenever a Preferred Security has been released from the
Pledge created hereby in accordance with the terms hereof,
including without limitation pursuant to Section 4.1 hereof,
the Collateral Agent shall notify the Trust of the release of
such Preferred Securities. Whenever Preferred Securities are
repledged pursuant to Section 4.2 hereof, the Purchase
Contract Agent shall send the Trust a notice in substantially
the form of
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<PAGE>
Exhibit C hereto and shall cause the Trust to acknowledge and
agree to the terms of such notice.
Section 3. Distributions on Pledged Collateral. So
long as the Purchase Contract Agent is the registered owner of
the Pledged Preferred Securities it shall receive all payments
thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the
registered holder, all payments of the Stated Amount of, or
cash distributions on, any Pledged Preferred Securities and
all payments of the principal of, or cash distributions on,
any Pledged Treasury Securities received by the Collateral
Agent that are properly payable hereunder shall be paid by the
Collateral Agent by wire transfer in same day funds:
(i) In the case of (A) cash distributions with
respect to Pledged Preferred Securities and (B) any
payments of the Stated Amount with respect to any
Preferred Securities that have been released from the
Pledge pursuant to Section 4.3 hereof, to the Purchase
Contract Agent, for the benefit of the relevant Holders
of Securities, to the account designated by the Purchase
Contract Agent for such purpose, no later than 2:00 p.m.,
New York City time, on the Business Day such payment is
received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New
York City time, on a Business Day, then such payment
shall be made no later than 10:30 a.m., New York City
time, on the next succeeding Business Day);
(ii) In the case of any principal payments with
respect to any Treasury Securities that have been
released from the Pledge pursuant to Section 4.3 hereof,
to the Holders of the related Growth PRIDES to the
accounts designated by them in writing for such purpose
no later than 2:00 p.m., New York City time, on the
Business Day such payment is received by the Collateral
Agent (provided that in the event such payment is
received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on
a Business Day, then such payment shall be made no later
than 10:30 a.m., New York City time, on the next
succeeding Business Day); and
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<PAGE>
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the principal of any Pledged
Treasury Securities, to the Company on the Purchase Contract
Settlement Date in accordance with the procedure set forth in
Section 4.6(a) or 4.6(b) hereof, as applicable, in full
satisfaction of the respective obligations of the Holders
under the related Purchase Contracts.
All payments received by the Purchase Contract Agent as
provided herein shall be applied by the Purchase Contract
Agent pursuant to the provisions of the Purchase Contract
Agreement. If, notwithstanding the foregoing, the Purchase
Contract Agent shall receive any payments of the Stated Amount
on account of any Preferred Security that, at the time of such
payment, is a Pledged Preferred Security or a Holder of a
Growth PRIDES shall receive any payments of principal on
account of any Treasury Securities that, at the time of such
payment, are Pledged Treasury Securities, the Purchase
Contract Agent or such Holder shall hold the same as trustee
of an express trust for the benefit of the Company (and
promptly deliver the same over to the Company) for application
to the obligations of the Holders under the related Purchase
Contracts, and the Holders shall acquire no right, title or
interest in any such payments of Stated Amount or principal so
received.
Section 4. Substitution, Release, Repledge and
Settlement of Preferred Securities.
Section 4.1. Substitution of Preferred Securities and
the Establishment of Growth PRIDES. At any time on or prior
to the second Business Day immediately preceding the Purchase
Contract Settlement Date, a Holder of Income PRIDES shall have
the right to substitute Treasury Securities for the Pledged
Preferred Securities securing such Holder's obligations under
the Purchase Contract(s) comprising a part of its Income
PRIDES in integral multiples of 20 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities
having a Value equal to the Stated Amount of the Pledged
Preferred Securities to be released and (b) delivering the
related Income PRIDES to the Purchase Contract Agent,
accompanied by a notice, substantially in the form of Exhibit
B hereto, to the Purchase Contract Agent stating that such
Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the
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<PAGE>
Treasury Securities Transferred by such Holder) and requesting
that the Purchase Contract Agent instruct the Collateral Agent
to release from the Pledge the Pledged Preferred Securities
related to such Income PRIDES. The Purchase Contract Agent
shall instruct the Collateral Agent in the form provided in
Exhibit A. Upon receipt of Treasury Securities from a Holder
of Income PRIDES and the related instruction from the Purchase
Contract Agent, the Collateral Agent shall release such
Pledged Preferred Securities and shall promptly Transfer such
Pledged Preferred Securities, free and clear of any lien,
pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.2. Pledge of Preferred Securities and
Re-establishment of Income PRIDES. At any time on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, a Holder of Growth PRIDES shall have
the right to establish or reestablish Income PRIDES consisting
of Purchase Contracts and Preferred Securities in integral
multiples of 20 Growth PRIDES by (a) Transferring to the
Collateral Agent Preferred Securities having a Value equal to
the aggregate principal amount of the Pledged Treasury
Securities to be released and (b) delivering the related
Growth PRIDES to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has
Transferred Preferred Securities to the Collateral Agent
pursuant to clause (a) above (stating the Value of the
Preferred Securities transferred by such Holder) and
requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged
Treasury Securities related to such Growth PRIDES. The
Purchase Contract Agent shall so instruct the Collateral Agent
in the form provided in Exhibit A. Upon receipt of the
Preferred Securities from such Holder and the instruction from
the Purchase Contract Agent, the Collateral Agent shall
release such Pledged Treasury Securities and shall promptly
Transfer such Pledged Treasury Securities, free and clear of
any lien, pledge or security interest created hereby, to the
Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the
Collateral Agent of written notice from the Company or the
Purchase Contract Agent that there has occurred a Termination
Event, the Collateral Agent shall release all Collateral from
the Pledge and shall promptly Transfer
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any Pledged Preferred Securities and Pledged Treasury
Securities to the Purchase Contract Agent for distribution to
the Holders of the Income PRIDES and the Growth PRIDES,
respectively, free and clear of any lien, pledge or security
interest or other interest created hereby.
If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code, and if the
Collateral Agent shall for any reason fail promptly to
effectuate the release and Transfer of all Pledged Preferred
Securities or of all Pledged Treasury Securities, as the case
may be, as provided by this Section 4.3, the Purchase Contract
Agent shall (i) use its best efforts to obtain an opinion of a
nationally recognized law firm reasonably acceptable to the
Collateral Agent to the effect that, as a result of the
Company's being the debtor in such a bankruptcy case, the
Collateral Agent will not be prohibited from releasing or
Transferring the Collateral as provided in this Section 4.3,
and shall deliver such opinion to the Collateral Agent within
ten days after the occurrence of such Termination Event, and
if (y) the Purchase Contract Agent shall be unable to obtain
such opinion within ten days after the occurrence of such
Termination Event or (z) the Collateral Agent shall continue,
after delivery of such opinion, to refuse to effectuate the
release and Transfer of all Pledged Preferred Securities or of
all Pledged Treasury Securities, as the case may be, as
provided in this Section 4.3, then the Purchase Contract Agent
shall within fifteen days after the occurrence of such
Termination Event commence an action or proceeding in the
court with jurisdiction of the Company's case under the
Bankruptcy Code seeking an order requiring the Collateral
Agent to effectuate the release and transfer of all Pledged
Preferred Securities or of all Pledged Treasury Securities, as
the case may be, as provided by this Section 4.3 or (ii)
commence an action or proceeding like that described in
subsection (i)(z) hereof within ten days after the occurrence
of such Termination Event.
Section 4.4. Cash Settlement. Upon receipt by the
Collateral Agent of (a) notice from the Purchase Contract
Agent prior to the Purchase Contract Settlement Date, as
provided in the Purchase Contract Agreement, that a Holder
elects to effect a Cash Settlement with respect to some or all
of such
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Holder's Purchase Contracts in accordance with the terms of
such Purchase Contracts and the Purchase Contract Agreement
and (b) payment by such Holder on or prior to 12:00 p.m., New
York City time, on the Business Day immediately preceding the
Purchase Contract Settlement Date, of the Purchase Price of
such Purchase Contracts by certified or cashiers' check
payable to or upon the order of the Company, or wire transfer
in immediately available funds, then the Collateral Agent
shall, upon the written direction of the Purchase Contract
Agent, promptly invest any Cash received from a Holder in
connection with a Cash Settlement in overnight Permitted
Investments that will mature on the Purchase Contract
Settlement Date. Upon the receipt of the proceeds of any such
investment, the Collateral Agent shall pay or deliver any
certified or cashiers' check received in an aggregate amount
equal to the Purchase Price to the Company on the Purchase
Contract Settlement Date. After payment of the Purchase Price
to the Company on the Purchase Contract Settlement Date, the
Collateral Agent shall release from the Pledge and promptly
Transfer to the Purchase Contract Agent Pledged Preferred
Securities or Pledged Treasury Securities with a Stated Amount
or principal amount, as the case may be, equal to the product
of the Stated Amount and the number of Purchase Contracts as
to which such Holder has elected to effect a Cash Settlement.
The Collateral Agent shall distribute, when received, any
funds in respect of the interest earned from any such
investment to the Purchase Contract Agent, for payment to the
relevant Holders.
Section 4.5. Early Settlement. Upon written notice to
the Collateral Agent by the Purchase Contract Agent that one
or more Holders of Securities have elected to effect Early
Settlement of their respective obligations under the Purchase
Contracts forming a part of such Securities in accordance with
such terms of the Purchase Contracts and the Purchase Contract
Agreement (setting forth the number of such Purchase Contracts
as to which such Holders have elected to effect Early
Settlement), and that the Purchase Contract Agent has received
from such Holders, and paid to the Company as confirmed in
writing by the Company, the related Early Settlement Amounts
pursuant to such terms of the Purchase Contracts and the
Purchase Contract Agreement and that all conditions to such
Early Settlement have been satisfied, then the Collateral
Agent shall release from the Pledge, (a) Pledged Preferred
Securities in the case of a Holder of Income PRIDES or (b)
Pledged Treasury Securities in the case of a Holder of Growth
PRIDES, in either case, with a Stated Amount or principal
amount, as applicable, equal
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<PAGE>
to the product of (i) the Stated Amount times (ii) the number
of such Purchase Contracts as to which such Holders have
elected to effect Early Settlement and shall Transfer all such
Pledged Preferred Securities or Pledged Treasury Securities,
as the case may be, free and clear of the Pledge created
hereby, to the Purchase Contract Agent for the benefit of the
Holders.
Section 4.6. Application of Proceeds Settlement.
(a) In accordance with Section 5.4 of the Purchase Contract
Agreement, a Holder of Income PRIDES who does not make an
effective Cash Settlement or any Early Settlement of the
Purchase Contract(s) shall be deemed to have instructed the
Purchase Contract Agent, without any further instruction from
the Holder of the Income PRIDES: (a) to the extent that the
Debentures continue to remain the assets of the Trust, to
direct the Institutional Trustee to exercise its right as a
holder of Debentures to put the Debentures to the Company on
the Purchase Contract Settlement Date in accordance with
Section 2.8(2) of the Indenture or (b) to the extent that the
Collateral Agent has become the holder of the Debentures (as a
result of the termination of the Trust or otherwise), to
exercise the Collateral Agent's right as a holder of
Debentures to put the Debentures to the Company on the
Purchase Contract Settlement Date in accordance with Section
2.8.(2) of the Indenture. As provided in Section 5.4 of the
Purchase Contract Agreement, the consideration received from
the Company with respect to the put of the Debentures shall be
considered to be Proceeds of the Preferred Securities and as
such will be paid to the Collateral Agent as secured party
with respect to the Preferred Securities. The Collateral
Agent shall pay or deliver any certified or cashiers' checks
received in an aggregate amount equal to the Purchase Price to
the Company on the Purchase Contract Settlement Date, and such
amount shall be applied by the Company to the Purchase Price
for the Purchase Contracts. Any excess funds shall be
distributed by the Collateral Agent to the Purchase Contract
Agent for payment to the relevant Holders.
(b) In the event a Holder of Growth PRIDES has not made an
effective Cash Settlement or an Early Settlement of the
Purchase Contract(s) forming a part of its Growth PRIDES, such
Holder shall be deemed to have elected to pay for the shares
of Common Stock to be issued under such Purchase Contract(s)
from the Proceeds of the relat-
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<PAGE>
ed Pledged Treasury Securities. On the Business Day
immediately preceding the Purchase Contract Settlement Date,
the Collateral Agent shall, at the written direction of the
Purchase Contract Agent, invest the Cash Proceeds received by
the Collateral Agent from the matured Pledged Treasury
Securities in overnight Permitted Investments. Without
receiving any instruction from the Holder of Growth PRIDES,
the Collateral Agent shall apply the Proceeds of such
investment to the settlement of such Purchase Contracts on the
Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related
Pledged Treasury Securities and the investment earnings from
the investment of such Proceeds in overnight Permitted
Investments is in excess of the aggregate Purchase Price of
the Purchase Contracts being settled thereby, the Collateral
Agent shall distribute such excess, when received, to the
Purchase Contract Agent for payment to the Holders of the
related Purchase Contracts.
Section 5. Voting Rights -- Preferred Securities. The
Purchase Contract Agent may exercise, or refrain from
exercising, any and all voting and other consensual rights
pertaining to the Pledged Preferred Securities or any part
thereof for any purpose not inconsistent with the terms of
this Agreement and in accordance with the terms of the
Purchase Contract Agreement; provided, that the Purchase
Contract Agent shall not exercise or, as the case may be,
shall not refrain from exercising such right if, in the
judgment of the Company, such action would impair or otherwise
have a material adverse effect on the value of all or any of
the Pledged Preferred Securities; and provided, further, that
the Purchase Contract Agent shall give the Company and the
Collateral Agent at least five days' prior written notice of
the manner in which it intends to exercise, or its reasons for
refraining from exercising, any such right. Upon receipt of
any notices and other communications in respect of any Pledged
Preferred Securities, including notice of any meeting at which
holders of Preferred Securities are entitled to vote or
solicitation of consents, waivers or proxies of holders of
Preferred Securities, the Collateral Agent shall use
reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from
the Purchase Contract Agent, execute and deliver to the
Purchase Contract Agent
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such proxies and other instruments in respect of such Pledged
Preferred Securities (in form and substance satisfactory to
the Collateral Agent) as are prepared by the Purchase Contract
Agent with respect to the Pledged Preferred Securities.
Section 6. Rights and Remedies.
Section 6.1. Rights and Remedies of the Collateral
Agent. (a) The Collateral Agent shall have all of the rights
and remedies with respect to the Collateral of a secured party
under the Uniform Commercial Code as in effect in the State of
New York (the "Code") (whether or not the Code is in effect in
the jurisdiction where the rights and remedies are asserted),
and the TRADES Regulations and such additional rights and
remedies to which a secured party is entitled under the laws
in effect in any jurisdiction where any rights and remedies
hereunder may be asserted.
(b) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, in the
event the Collateral Agent is unable to make payments to the
Company on account of principal payments of any Pledged
Treasury Securities as provided in Section 3 hereof in
satisfaction of the obligations of the Holder of the
Securities to which such Pledged Treasury Securities relate
under the related Purchase Contracts, the Collateral Agent
shall have and may exercise, with reference to such Pledged
Treasury Securities and such obligations of such Holder, any
and all of the rights and remedies available to a secured
party under the Code and the TRADES Regulations after default
by a debtor, and as otherwise granted herein or under any
other law.
(c) Without limiting any rights or powers otherwise
granted by this Agreement to the Collateral Agent, the
Collateral Agent is hereby irrevocably authorized to receive
and collect all payments of (i) the Stated Amount of, or cash
distributions on, the Pledged Preferred Securities, or (ii)
the principal of the Pledged Treasury Securities, subject, in
each case, to the provisions of Section 3, and as otherwise
granted herein.
(d) The Purchase Contract Agent and each Holder of
Securities agrees that, from time to time, upon the written
request of the Collateral Agent, the Purchase Contract Agent
or such Holder shall execute and deliver
17
<PAGE>
such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order to
maintain the Pledge, and the perfection and priority thereof,
and to confirm the rights of the Collateral Agent hereunder.
The Purchase Contract Agent shall have no liability to any
Holder for executing any documents or taking any such acts
requested by the Collateral Agent hereunder, except for
liability for its own negligent act, its own negligent failure
to act or its own willful misconduct.
Section 6.2. Liquidation of the Trust. Upon the
liquidation of the Trust and after satisfaction of liabilities
to creditors of the Trust, if any, an aggregate principal
amount of the Debentures constituting the assets of the Trust
and underlying the Preferred Securities equal to the
aggregated Stated Amount of the Pledged Preferred Securities
shall be delivered to the Collateral Agent in exchange for the
Pledged Preferred Securities. In the event the Collateral
Agent receives such Debentures in respect of Pledged Preferred
Securities upon a liquidation of the Trust, the Collateral
Agent shall Transfer such Debentures to the Collateral Account
in the manner specified herein for Pledged Preferred
Securities to secure the obligations of the Holders of the
related Income PRIDES to purchase Common Stock under the
related Purchase Contracts. Thereafter, the Collateral Agent
shall have such security interests, rights and obligations
with respect to such Debentures as it had in respect of the
Pledged Preferred Securities as provided in Articles II, III,
IV, V and VI hereof.
Section 7. Representation and Warranties; Covenants.
Section 7.1. Representations and Warranties. The
Holders from time to time, acting through the Purchase
Contract Agent as their attorney-in-fact (it being understood
that the Purchase Contract Agent shall not be liable for any
representation or warranty made by or on behalf of a Holder),
hereby represent and warrant to the Collateral Agent, which
representations and warranties shall be deemed repeated on
each day a Holder Transfers Collateral to the Collateral Agent
that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral being
transferred to the Collat-
18
<PAGE>
eral Agent to secure such Holder's obligations under the
related Purchase Contract(s);
(b) such Holder, in the case of Collateral
delivered in physical form, is the sole holder
of such Collateral and is the sole beneficial
owner of, or has the right to Transfer, the
Collateral it Transfers to the Collateral
Agent, free and clear of any security interest,
lien, encumbrance, calls, liabilities to pay
money or other restrictions other than the
security interest and lien granted under
Section 2 hereof;
(c) upon the Transfer of such Collateral to the
Collateral Account, the Collateral Agent, for
the benefit of the Company, will have a valid
and perfected first priority security interest
therein (assuming that any central clearing
operation or any Intermediary or other entity
not within the control of the Holder involved
in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and
takes the action required of it hereunder and
under applicable law for perfection of that
interest and assuming the establishment and
exercise of control pursuant to Section 2.2
hereof); and
(d) the execution and performance by such Holder of
its obligations under this Agreement will not
result in the creation of any security
interest, lien or other encumbrance on such
Collateral other than the security interest and
lien granted under Section 2 hereof or violate
any provision of any existing law or regulation
applicable to it or of any mortgage, charge,
pledge, indenture, contract or undertaking to
which it is a party or which is binding on it
or any of its assets.
Section 7.2. Covenants. The Holders from time to time,
acting through the Purchase Contract Agent as their
19
<PAGE>
attorney-in-fact (it being understood that the Purchase
Contract Agent shall not be liable for any covenant made by or
on behalf of a Holder), hereby covenant to the Collateral
Agent that for so long as the Collateral remains subject to
the Pledge:
(a) neither the Purchase Contract Agent nor such
Holders will create or purport to create or
allow to subsist any mortgage, charge, lien,
pledge or any other security interest
whatsoever over the Collateral or any part of
it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such
Holders will sell or otherwise dispose (or
attempt to dispose) of the Collateral or any
part of it except for the beneficial interest
therein, subject to the Pledge hereunder,
transferred in connection with the Transfer of
the Securities.
Section 8. The Collateral Agent. It is hereby agreed as
follows:
Section 8.1. Appointment, Powers and Immunities. The
Collateral Agent shall act as agent for the Company hereunder
with such powers as are specifically vested in the Collateral
Agent by the terms of this Agreement, together with such other
powers as are reasonably incidental thereto. The Collateral
Agent: (a) shall have no duties or responsibilities except
those expressly set forth in this Agreement and no implied
covenants or obligations shall be inferred from this Agreement
against the Collateral Agent, nor shall the Collateral Agent
be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be
responsible for any recitals contained in this Agreement, or
in any certificate or other document referred to or provided
for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the
value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement (other than as against the
Collateral Agent), the Securities or the Purchase Contract
Agreement or any other document referred to or provided for
herein or therein or for any failure by the Company or any
other Person (except the Collateral
20
<PAGE>
Agent) to perform any of its obligations hereunder or
thereunder or for the perfection, priority or, except as
expressly required hereby, maintenance of any security
interest created hereunder; (c) shall not be required to
initiate or conduct any litigation or collection proceedings
hereunder (except pursuant to directions furnished under
Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken
by it hereunder or under any other document or instrument
referred to or provided for herein or in connection herewith
or therewith, except for its own negligence or willful
misconduct; and (e) shall not be required to advise any party
as to selling or retaining, or taking or refraining from
taking any action with respect to, any securities or other
property deposited hereunder. Subject to the foregoing,
during the term of this Agreement, the Collateral Agent shall
take all reasonable action in connection with the safekeeping
and preservation of the Collateral hereunder.
No provision of this Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its
duties hereunder. In no event shall the Collateral Agent be
liable for any amount in excess of the Value of the
Collateral. Notwithstanding the foregoing, the Collateral
Agent and Securities Intermediary in its individual capacity
hereby waive any right of setoff, bankers lien, liens or
perfection rights as securities intermediary or any
counterclaim with respect to any of the Collateral.
Section 8.2. Instructions of the Company. The Company
shall have the right, by one or more instruments in writing
executed and delivered to the Collateral Agent, to direct the
time, method and place of conducting any proceeding for the
realization of any right or remedy available to the Collateral
Agent, or of exercising any power conferred on the Collateral
Agent, or to direct the taking or refraining from taking of
any action authorized by this Agreement; provided, however,
that (i) such direction shall not conflict with the provisions
of any law or of this Agreement and (ii) the Collateral Agent
shall be adequately indemnified as provided herein. Nothing
in this Section 8.2 shall impair the right of the Collateral
Agent in its discretion to take any action or omit to take any
action which it deems proper and which is not inconsistent
with such direction.
21
<PAGE>
Section 8.3. Reliance by Collateral Agent. Each of the
Securities Intermediary and the Collateral Agent shall be
entitled to rely upon any certification, order, judgment,
opinion, notice or other communication (including, without
limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person
or Persons (without being required to determine the
correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the
Collateral Agent and the Securities Intermediary. As to any
matters not expressly provided for by this Agreement, the
Collateral Agent and the Securities Intermediary shall in all
cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions given by the
Company in accordance with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral
Agent and the Securities Intermediary and their affiliates may
(without having to account therefor to the Company) accept
deposits from, lend money to, make their investments in and
generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of
Securities (and any of their respective subsidiaries or
affiliates) as if it were not acting as the Collateral Agent,
and the Collateral Agent and its affiliates may accept fees
and other consideration from the Purchase Contract Agent and
any Holder of Securities without having to account for the
same to the Company; provided that each of the Securities
Intermediary and the Collateral Agent covenants and agrees
with the Company that it shall not accept, receive or permit
there to be created in favor of itself and shall take no
affirmative action to permit there to be created in favor of
any other Person, any security interest, lien or other
encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither
the Securities Intermediary nor the Collateral Agent shall be
required to keep itself informed as to the performance or
observance by the Purchase Contract Agent or any Holder of
Securities of this Agreement, the Purchase Contract Agreement,
the Securities or any other document referred to or provided
for herein or therein or to inspect the properties or books of
the Purchase Contract Agent or any Holder of Securities. The
Collateral Agent shall not have any duty or responsibility to
pro-
22
<PAGE>
vide the Company with any credit or other information
concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of
their respective affiliates) that may come into the possession
of the Collateral Agent or the Securities Intermediary or any
of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company
agrees: (i) to pay the Collateral Agent from time to time such
compensation as shall be agreed in writing between the Company
and the Collateral Agent for all services rendered by it
hereunder and (ii) to indemnify the Collateral Agent and the
Securities Intermediary for, and to hold each of them harmless
from and against, any loss, liability or expense incurred
without negligence, willful misconduct or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its powers and duties under this Agreement,
including the costs and expenses (including reasonable fees
and expenses of counsel) of defending itself against any claim
or liability in connection with the exercise or performance of
such powers and duties.
Section 8.7. Failure to Act. In the event of any
ambiguity in the provisions of this Agreement or any dispute
between or conflicting claims by or among the parties hereto
and/or any other Person with respect to any funds or property
deposited hereunder, the Collateral Agent shall be entitled,
after prompt notice to the Company and the Purchase Contract
Agent, at its sole option, to refuse to comply with any and
all claims, demands or instructions with respect to such
property or funds so long as such dispute or conflict shall
continue, and the Collateral Agent shall not be or become
liable in any way to any of the parties hereto for its failure
or refusal to comply with such conflicting claims, demands or
instructions. The Collateral Agent shall be entitled to
refuse to act until either (i) such conflicting or adverse
claims or demands shall have been finally determined by a
court of competent jurisdiction or settled by agreement
between the conflicting parties as evidenced in a writing,
satisfactory to the Collateral Agent or (ii) the Collateral
Agent shall have received security or an indemnity
satisfactory to the Collateral Agent sufficient to save the
Collateral Agent harmless from and against any and all loss,
liability or expense which the Collateral Agent may incur by
reason of its acting. The Col-
23
<PAGE>
lateral Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as
the Collateral Agent may deem necessary. Notwithstanding
anything contained herein to the contrary, the Collateral
Agent shall not be required to take any action that is in its
opinion contrary to law or to the terms of this Agreement, or
which would in its opinion subject it or any of its officers,
employees or directors to liability.
Section 8.8. Resignation of Collateral Agent. Subject
to the appointment and acceptance of a successor Collateral
Agent as provided below, (a) the Collateral Agent may resign
at any time by giving notice thereof to the Company and the
Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent may be removed at any
time by the Company and (c) if the Collateral Agent fails to
perform any of its material obligations hereunder in any
material respect for a period of not less than 20 days after
receiving written notice of such failure by the Purchase
Contract Agent and such failure shall be continuing, the
Collateral Agent may be removed by the Purchase Contract
Agent. The Purchase Contract Agent shall promptly notify the
Company of any removal of the Collateral Agent pursuant to
clause (c) of the immediately preceding sentence. Upon any
such resignation or removal, the Company shall have the right
to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed and shall have
accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation or such
removal, then the retiring Collateral Agent may petition any
court of competent jurisdiction for the appointment of a
successor Collateral Agent. The Collateral Agent shall be a
bank which has an office in New York, New York with a combined
capital and surplus of at least $50,000,000. Upon the
acceptance of any appointment as Collateral Agent hereunder by
a successor Collateral Agent, such successor Collateral Agent
shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring
Collateral Agent, and the retiring Collateral Agent shall take
all appropriate action to transfer any money and property held
by it hereunder (including the Collateral) to such successor
Collateral Agent. The retiring Collateral Agent shall, upon
such succession, be discharged from its duties and obligations
as Collateral Agent hereunder. After any retiring Collateral
Agent's resignation hereunder as Collateral Agent, the
provisions
24
<PAGE>
of this Section 8 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it
while it was acting as the Collateral Agent.
Section 8.9. Right to Appoint Agent or Advisor. The
Collateral Agent shall have the right to appoint agents or
advisors in connection with any of its duties hereunder, and
the Collateral Agent shall not be liable for any action taken
or omitted by, or in reliance upon the advice of, such agents
or advisors selected in good faith. The appointment of agents
pursuant to this Section 8.9 shall be subject to prior consent
of the Company, which consent shall not be unreasonably
withheld.
Section 8.10. Survival. The provisions of this Section
8 shall survive termination of this Agreement and the
resignation or removal of the Collateral Agent.
Section 8.11. Indemnity. Anything in this Agreement to
the contrary notwithstanding, in no event shall the Collateral
Agent or the Securities Intermediary or their officers,
employees or agents be liable under this Agreement to any
third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits,
whether or not the likelihood of such loss or damage was known
to the Collateral Agent or the Securities Intermediary, or any
of them, incurred without any act or deed that is found to be
attributable to gross negligence on the part of the Collateral
Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders.
Without the consent of any Holders, the Company, the
Collateral Agent and the Purchase Contract Agent, at any time
and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the
Purchase Contract Agent, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company, and the assumption by any such successor of
the covenants of the Company; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or
power herein conferred upon the Company so
25
<PAGE>
long as such covenants or such surrender do not adversely
affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Collateral Agent,
Securities Intermediary or Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement
any provisions herein which may be mistaken or
inconsistent with any other such provisions herein, or to
make any other provisions with respect to such matters or
questions arising under this Agreement, provided such
action shall not materially adversely affect the
interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With
the consent of the Holders of not less than 662/3% of the
Purchase Contracts at the time outstanding, by Act of said
Holders delivered to the Company, the Purchase Contract Agent
or the Collateral Agent, as the case may be, the Company, when
authorized by a Board Resolution, the Purchase Contract Agent
and the Collateral Agent may amend this Agreement for the
purpose of modifying in any manner the provisions of this
Agreement or the rights of the Holders in respect of the
Securities; provided, however, that no such supplemental
agreement shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the amount or type of Collateral
underlying a Security (except for the rights of holders
of Income PRIDES to substitute Treasury Securities for
the Pledged Preferred Securities or the rights of Holders
of Growth PRIDES to substitute Preferred Securities for
Pledged Treasury Securities), impair the right of the
Holder of any Security to receive distributions on the
underlying Collateral or otherwise adversely affect the
Holder's rights in or to such Collateral; or
(2) otherwise effect any action that would require
the consent of the Holder of each Outstanding Security
affected thereby pursuant to the Purchase Contract
Agreement if such action were effected by an agreement
supplemental thereto; or
26
<PAGE>
(3) reduce the percentage of Purchase Contracts the
consent of whose Holders is required for any such
amendment; or
(4) materially and adversely alter the rights of the
holders of Preferred Securities.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed
amendment, but it shall be sufficient if such Act shall
approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any
amendment permitted by this Section, the Collateral Agent and
the Purchase Contract Agent shall be entitled to receive and
(subject to Section 6.1 hereof, with respect to the Collateral
Agent, and Section 7.1 of the Purchase Contract Agreement,
with respect to the Purchase Contract Agent) shall be fully
protected in relying upon, an Opinion of Counsel stating that
the execution of such amendment is authorized or permitted by
this Agreement and that all conditions precedent, if any, to
the execution and delivery of such amendment have been
satisfied.
Section 9.4. Effect of Amendments. Upon the execution
of any amendment under this Section, this Agreement shall be
modified in accordance therewith, and such amendment shall
form a part of this Agreement for all purposes; and every
Holder of Certificates theretofore or thereafter
authenticated, executed on behalf of the Holders and delivered
under the Purchase Contract Agreement shall be bound thereby.
Section 9.5. Reference to Amendments. Security
Certificates authenticated, executed on behalf of the Holders
and delivered after the execution of any amendment pursuant to
this Section may, and shall if required by the Collateral
Agent or the Purchase Contract Agent, bear a notation in form
approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the
Company shall so determine, new Security Certificates so
modified as to conform, in the opinion of the Collateral
Agent, the Purchase Contract Agent and the Company, to any
such amendment may be prepared and executed by the Company and
authenticated, executed on behalf of the Holders and delivered
by the Purchase Contract Agent in accordance
27
<PAGE>
with the Purchase Contract Agreement in exchange for
Outstanding Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the
Collateral Agent or any of its agents to exercise, and no
course of dealing with respect to, and no delay in exercising,
any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or
remedy hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of
any remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. Without limiting the foregoing, the above
choice of law is expressly agreed to by the Securities
Intermediary, the Collateral Agent and the Holders from time
to time acting through the Purchase Contract Agent, as their
attorney-in-fact, in connection with the establishment and
maintenance of the Collateral Account. The Company, the
Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, hereby submit to the nonexclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York state court
sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or
the transactions contemplated hereby. The Company, the
Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as
their attorney-in-fact, irrevocably waive, to the fullest
extent permitted by applicable law, any objection which they
may now or hereafter have to the laying of the venue of any
such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an
inconvenient forum.
Section 10.3. Notices. All notices, requests, consents
and other communications provided for herein (including,
without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in
writing (including, without limitation, by
28
<PAGE>
telecopy) delivered to the intended recipient at the "Address
for Notices" specified below its name on the signature pages
hereof or, as to any party, at such other address as shall be
designated by such party in a notice to the other parties.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the
respective successors and assigns of the Company, the
Collateral Agent and the Purchase Contract Agent, and the
Holders from time to time of the Securities, by their
acceptance of the same, shall be deemed to have agreed to be
bound by the provisions hereof and to have ratified the
agreements of, and the grant of the Pledge hereunder by, the
Purchase Contract Agent.
Section 10.5. Counterparts. This Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one and the same instrument, and any
of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 10.6. Severability. If any provision hereof is
invalid and unenforceable in any jurisdiction, then, to the
fullest extent permitted by law, (i) the other provisions
hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in order to
carry out the intentions of the parties hereto as nearly as
may be possible and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the
validity or enforceability of such provision in any other
jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to
reimburse the Collateral Agent for: (a) all reasonable
out-of-pocket costs and expenses of the Collateral Agent
(including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection
with (i) the negotiation, preparation, execution and delivery
or performance of this Agreement and (ii) any modification,
supplement or waiver of any of the terms of this Agreement;
(b) all reasonable costs and expenses of the Collateral Agent
(including, without limitation,
29
<PAGE>
reasonable fees and expenses of counsel) in connection with
(i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy
its obligations under the Purchase Contracts forming a part of
the Securities and (ii) the enforcement of this Section 10.7;
and (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other
document referred to herein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security
interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of
the Collateral Agent and security interests hereunder, and all
obligations of the Holders from time to time hereunder, shall
be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any
provision of the Purchase Contracts or the Securities or
any other agreement or instrument relating thereto;
(b) any change in the time, manner or place of
payment of, or any other term of, or any increase in the
amount of, all or any of the obligations of Holders of
Securities under the related Purchase Contracts, or any
other amendment or waiver of any term of, or any consent
to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or any other
agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise
constitute a defense available to, or discharge of, a
borrower, a guarantor or a pledgor.
30
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first
above written.
Protective Life Corporation
By: /s/ Deborah J. Long
-----------------------------------------
Name: Deborah J. Long
Title: Senior Vice President,
Secretary and General Counsel
Address for Notices:
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
Attention: General Counsel
Telecopy: (205) 868-3597
The Bank of New York
as Purchase Contract Agent and
as attorney-in-fact of the Holders
from time to time of the Securities
By: /s/ Betty A. Cocozza
---------------------------------------------
Name: Betty A. Cocozza
Title: Assistant Vice President
Address for Notices:
The Bank of New York
101 Barclay Street
Corporate Trust Administration
New York, New York 10007
Attention: Derivatives Products
Unit
Betty A. Cocozza
Telecopy: (212) 815-7157
<PAGE>
The Chase Manhattan Bank
as Collateral Agent and as Securities
Intermediary
By: /s/ Larry O'Brien
-----------------------------------------
Name: Larry O'Brien
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trust
Administration
Department
Telecopy: (212) 946-8159
<PAGE>
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, New York 10001
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of Protective Life Corporation (the
"Company"), and PLC Capital Trust II
We hereby notify you in accordance with Section 4.1 of
the Pledge Agreement, dated as of ______ __, 1997, (the "Pledge
Agreement") among the Company, yourselves, as Collateral Agent,
and ourselves, as Purchase Contract Agent and as attorney-in-fact
for the holders of [Income PRIDES] [Growth PRIDES] from time to
time, that the holder of securities listed below (the "Holder")
has elected to substitute [$_____ aggregate principal amount of
Treasury Securities] [$_______Stated Amount of Preferred
Securities] in exchange for an equal Value of [Pledged Preferred
Securities] [Pledged Treasury Securities] held by you in
accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities] to you, as Collateral Agent.
We hereby instruct you, upon receipt of such [Pledged Treasury
Securities] [Pledged Preferred Securities], to release the
[Preferred Securities] [Treasury Securities] related to such
[Income PRIDES] [Growth PRIDES] to us in accordance with the
Holder's instructions. Capitalized terms used herein but not
defined shall have the meaning set forth in the Pledge Agreement.
Date:_____________ THE BANK OF NEW YORK
By:______________________
Name:
Title:
Please print name and address of Registered Holder electing to
substitute [Treasury Securities] [Preferred Securities] for the
[Pledged Preferred Securities] [Pledged Treasury Securities]:
___________________________ _________________________
Name Social Security or other
Taxpayer Identification
___________________________ Number, if any
Address
___________________________
___________________________
<PAGE>
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The Bank of New York
101 Barclay Street, 12E
New York, New York 10286
Attention:
Re: FELINE PRIDES of PROTECTIVE LIFE CORPORATION (the
"Company"), and PLC Capital Trust II
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent,
$_______ aggregate [principal amount] [Stated Amount] of
[Treasury Securities] [Preferred Securities] in exchange for an
equal Value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by the Collateral Agent (the "Pledge
Agreement"), in accordance with Section 4.1 of the Pledge
Agreement, dated ________ __, 1997, between you, the Company and
the Collateral Agent. The undersigned Holder hereby instructs
you to instruct the Collateral Agent to release to you on behalf
of the undersigned Holder the [Pledged Preferred Securities]
[Pledged Treasury Securities] related to such [Income PRIDES]
[Growth PRIDES]. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Dated:_____________ _________________________
Signature
Please print name and address of Registered Holder:
_________________________ _________________________
Name Social Security or other
Taxpayer Identification
_________________________ Number, if any
Address
_________________________
_________________________
_________________________
<PAGE>
EXHIBIT C
____________, 1997
PLC Capital Trust II
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35223
Reference is made to the ___ % Trust Originated
Preferred Securities identified on Schedule I hereto (the
"Preferred Securities") issued by you for which we, as agent (the
"Purchase Contract Agent") for certain holders of securities
issued by the Protective Life Corporation (the "Company") known
as FELINE PRIDES (the "Securities") are the record owner.
Pursuant to a Pledge Agreement dated as of ___________, 1997
among the Company, The Chase Manhattan Bank as collateral agent
for the benefit of the Company (the "Collateral Agent") and the
Purchase Contract Agent, we have this date pledged the Preferred
Securities to the Collateral Agent as security for the
obligations of the holders of the Securities to the Company. You
are hereby instructed that in the event of a repurchase by you of
the Preferred Securities, the proceeds thereof should be paid by
you to the Collateral Agent for all such Preferred Securities
except for any Preferred Securities for which you have received
written notice from the Collateral Agent that such Preferred
Securities have been released from the pledge of the Pledge
Agreement.
Very truly yours,
THE BANK OF NEW YORK,
as Purchase Contract Agent
BY:___________________
AGREED AND ACKNOWLEDGED
PLC Capital Trust II
BY: _____________________________
<PAGE>
- --------------------------------------------------------------------------
EXHIBIT 4(gg)
AMENDED AND RESTATED DECLARATION
OF TRUST
PLC CAPITAL TRUST II
Dated as of November 20, 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............................... 10
SECTION 2.2. Lists of Holders of Securities................................. 10
SECTION 2.3. Reports by the Institutional Trustee........................... 11
SECTION 2.4. Periodic Reports to Institutional Trustee...................... 11
SECTION 2.5. Evidence of Compliance with Conditions Precedent............... 11
SECTION 2.6. Events of Default; Waiver...................................... 11
SECTION 2.7. Event of Default; Notice....................................... 13
ARTICLE III.
ORGANIZATION
SECTION 3.1. Name.......................................................... 14
SECTION 3.2. Office........................................................ 14
SECTION 3.3. Purpose....................................................... 14
SECTION 3.4. Authority..................................................... 15
SECTION 3.5. Title to Property of the Trust................................ 15
SECTION 3.6. Powers and Duties of the Regular Trustees..................... 15
SECTION 3.7. Prohibition of Actions by the Trust and the Trustees.......... 18
SECTION 3.8. Powers and Duties of the Institutional Trustee................ 19
SECTION 3.9. Certain Duties and Responsibilities of the
Institutional Trustee......................................... 21
SECTION 3.10. Certain Rights of Institutional Trustee....................... 23
SECTION 3.11. Delaware Trustee.............................................. 25
SECTION 3.12. Execution of Documents........................................ 25
SECTION 3.13. Not Responsible for Recitals or Issuance of Securities........ 25
SECTION 3.14. Duration of Trust............................................. 26
SECTION 3.15. Mergers....................................................... 26
i
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ARTICLE IV.
SPONSOR
SECTION 4.1. Sponsor's Purchase of Common Securities....................... 28
SECTION 4.2. Responsibilities of the Sponsor............................... 28
SECTION 4.3. Right to Proceed.............................................. 28
ARTICLE V.
TRUSTEES
SECTION 5.1. Number of Trustees............................................ 29
SECTION 5.2. Delaware Trustee.............................................. 29
SECTION 5.3. Institutional Trustee; Eligibility............................ 30
SECTION 5.4. Certain Qualifications of Regular Trustees
and Delaware Trustee Generally................................ 31
SECTION 5.5. Regular Trustees.............................................. 31
SECTION 5.6. Appointment, Removal and Resignation of Trustees.............. 31
SECTION 5.7. Vacancies Among Trustees...................................... 33
SECTION 5.8. Effect of Vacancies........................................... 33
SECTION 5.9. Meetings...................................................... 33
SECTION 5.10. Delegation of Power........................................... 34
SECTION 5.11. Merger, Conversion, Consolidation or Succession to Business... 34
ARTICLE VI.
DISTRIBUTIONS
SECTION 6.1. Distributions................................................. 34
ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities....................... 35
SECTION 7.2. Paying Agent.................................................. 36
ARTICLE VIII.
TERMINATION OF TRUST
SECTION 8.1. Termination of Trust........................................... 36
ii
<PAGE>
ARTICLE IX.
TRANSFER OF INTERESTS
SECTION 9.1. Transfer of Securities........................................ 37
SECTION 9.2. Transfer of Certificates...................................... 37
SECTION 9.3. Deemed Security Holders....................................... 38
SECTION 9.4. Book Entry Interests.......................................... 38
SECTION 9.5. Notices to Clearing Agency.................................... 39
SECTION 9.6. Appointment of Successor Clearing Agency...................... 39
SECTION 9.7. Definitive Preferred Security Certificates.................... 39
SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates............. 40
ARTICLE X.
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1. Liability..................................................... 40
SECTION 10.2. Exculpation................................................... 41
SECTION 10.3. Fiduciary Duty................................................ 41
SECTION 10.4. Indemnification............................................... 42
SECTION 10.5. Outside Businesses............................................ 45
ARTICLE XI.
ACCOUNTING
SECTION 11.1. Fiscal Year................................................... 46
SECTION 11.2. Certain Accounting Matters.................................... 46
SECTION 11.3. Banking....................................................... 46
SECTION 11.4. Withholding................................................... 46
ARTICLE XII.
AMENDMENTS AND MEETINGS
SECTION 12.1. Amendments.................................................... 47
SECTION 12.2. Meetings of the Holders of Securities;
Action by Written Consent..................................... 49
ARTICLE XIII.
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1. Representations and Warranties of Institutional Trustee....... 50
SECTION 13.2. Representations and Warranties of Delaware Trustee............ 51
iii
<PAGE>
ARTICLE XIV.
MISCELLANEOUS
SECTION 14.1. Notices....................................................... 52
SECTION 14.2. Governing Law................................................. 53
SECTION 14.3. Intention of the Parties...................................... 53
SECTION 14.4. Headings...................................................... 53
SECTION 14.5. Successors and Assigns........................................ 53
SECTION 14.6. Partial Enforceability........................................ 54
SECTION 14.7. Counterparts.................................................. 54
ANNEX I TERMS OF SECURITIES
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE
EXHIBIT B SPECIMEN OF DEBENTURE
EXHIBIT C UNDERWRITING AGREEMENT
iv
<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.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PLC CAPITAL TRUST II
November 20, 1997
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration") dated
and effective as of November 20, 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 (as defined herein) to be issued
pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established PLC Capital Trust II
(the "Trust"), a trust under the Delaware Business Trust Act, pursuant to a
Declaration of Trust dated as of July 1, 1997 (the "Original Declaration") and a
Certificate of Trust filed with the Secretary of State of the State of Delaware
on July 1, 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 Newspaper" means a daily newspaper, in the English
language, customarily published on each day that is a Business Day in The City
of New York, whether or not published on days that are legal holidays, and of
general circulation in The City of New York. The Authorized Newspaper for the
purposes of the Reset Spread Announcement Date is currently anticipated to be
The Wall Street Journal.
"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.
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"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.
"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" and each "Date of Delivery"
under the Underwriting 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(a).
"Common Securities Guarantee" means the guarantee agreement, dated as
of November , 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.
3
<PAGE>
"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
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.
"Creditor" has the meaning set forth in Section 4.4.
"Debenture Issuer" means Protective Life Corporation, a Delaware
corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Repayment Price" means, with respect to any Debentures put to
the Debenture Issuer on the Purchase Contract Settlement Date, an amount per
Debenture equal to $50, plus accrued and unpaid interest thereon, if any.
"Debenture Trustee" means AmSouth Bank (as successor by merger to
AmSouth Bank of Alabama, successor by conversion of charter to 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
4
<PAGE>
(b) in any other case, in the name of such Person by one or more
Authorized Officers of such Person.
"Direct Action" has the meaning specified in Section 3.8(e).
"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.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"FELINE PRIDES(-SM-)" means a security which, upon issuance, will consist
of a unit (referred to as an Income PRIDES(-SM-)) comprised of (i) a stock
purchase contract (a "Purchase Contract") under which (a) the holder of the unit
will purchase from the Sponsor, for an amount in cash, a certain number of
shares of common stock of the Sponsor and (b) the Sponsor will pay the holder
contract adjustment payments, if any, and (ii) beneficial ownership of a 61/2%
Preferred Security. After issuance, FELINE PRIDES units with respect to which
Treasury Securities (as defined in the Purchase Contract Agreement) have been
substituted for the related Preferred Securities will be referred to as Growth
PRIDES(-SM-).
"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. 4, dated as of
November 20, 1997 between the Debenture Issuer and the Debenture Trustee).
"Institutional Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.3.
5
<PAGE>
"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(f).
"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.
"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.
6
<PAGE>
"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.
"Pledge Agreement" means the Pledge Agreement dated as of November 26, 1997
among the Sponsor, The Chase Manhattan Bank, as collateral agent (the
"Collateral Agent") and The Bank of New York as purchase contract agent (the
"Purchase Contract Agent").
"Preferred Securities Guarantee" means the guarantee agreement, dated
as of November 26, 1997, of the Sponsor in respect of the Preferred Securities.
"Preferred Security" has the meaning specified in Section 7.1(a).
"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).
"Preferred Security Certificate" means a certificate representing a
Preferred Security substantially in the form of Exhibit A-1.
"Pricing Agreement" means the pricing agreement between the Trust, the
Debenture Issuer, and the underwriters designated by the Regular Trustees with
respect to the offer and sale of the Preferred Securities.
"Purchase Contract Agreement" means the Purchase Contract Agreement dated
as of November 26, 1997 among The Bank of New York, as Purchase Contract Agent,
and the Sponsor.
"Purchase Contract Settlement Date" means February 16, 2001.
"Put Option" has the meaning set forth in Annex I hereto.
"Quorum" means a majority of the Regular Trustees or, if there are
only two Regular Trustees, both of them.
"Regular Trustee" has the meaning set forth in Section 5.1(b).
7
<PAGE>
"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.
"Reset Agent" means a nationally recognized investment banking firm
chosen by the Sponsor to determine the Reset Rate. It is currently anticipated
that Merrill Lynch & Co. will act in such capacity.
"Reset Announcement Date" means the fifth (5) Business Day immediately
preceding the Purchase Contract Settlement Date.
"Reset Rate" means the distribution rate per annum (to be determined by the
Reset Agent), equal to the sum of (X) the Reset Spread and (Y) the Treasury Rate
on the Two-Year Benchmark Treasury on the Purchase Contract Settlement Date.
"Reset Spread" means a spread amount, to be determined by the Reset Agent on the
fifth (5) Business Day immediately preceding the Purchase Contract Settlement
Date, which, when added to the Treasury Rate, would be the Rate the Securities
should bear in order for a Security to have an approximate market value of
100.5% of its liquidation amount on the Purchase Contract Settlement Date;
provided, however, in no event will Reset Spread be greater than 200 basis
points (2%).
"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 Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"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.
8
<PAGE>
"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.
"Successor Common Securities" has the meaning set forth in Section
3.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Treasury Rate" means the bid side rate displayed at 10:00 A.M., New
York City time, on the Purchase Contract Settlement Date in the Telerate system
(or if the Telerate system is (a) no longer available on the Purchase Contract
Settlement Date or (b) in the opinion of the Reset Agent (after consultation
with the Company) no longer an appropriate system from which to obtain such
rate, such other nationally recognized quotation system as, in the opinion of
the Reset Agent (after consultation with the Company) is appropriate). If such
rate is not so displayed, the rate for the Two-Year Benchmark Treasury shall be,
as calculated by the Reset Agent, the yield to maturity for the Two-Year
Benchmark Treasury, expressed as a bond equivalent on the basis of a year of 365
or 366 days, as applicable, and applied on a daily basis, and computed by taking
the arithmetic mean of the secondary market bid rates, as of 10:30 a.m., New
York City time, on the Purchase Contract Settlement Date of three leading United
States government securities dealers selected by the Reset Agent (after
consultation with the Company) (which may include the Reset Agent or an
affiliate thereof).
"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.
9
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Two-Year Benchmark Treasury" means direct obligations of the United
States (which may be obligations traded on a when-issued basis only) having a
maturity comparable to the remaining term to maturity of the Preferred
Securities on the Purchase Contract Settlement Date, as agreed upon by the
Company and the Reset Agent.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Preferred Securities in the form of Exhibit C.
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.
(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
10
<PAGE>
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.
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
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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 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
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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, 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.
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ARTICLE III.
ORGANIZATION
SECTION 3.1. Name. The Trust is named "PLC Capital Trust II," 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 to be classified as other
than a grantor trust for United States federal income tax purposes.
It is the intent of the parties to this Declaration for the Trust to
be classified as a grantor trust for United States federal income tax purposes
under Subpart E of Subchapter J of the Code, pursuant to which the owners of the
Preferred Securities and the Common Securities will be the beneficial owners of
the assets of the Trust for United States federal income tax purposes, and such
owners will include directly in their gross income the income, gain, deduction
or loss of the Trust as if the Trust did not exist. By the acceptance of this
Trust the Trustees, the Sponsor and the Holders and beneficial owners of the
Preferred Securities or Common Securities agree that they will not take any
position which is contrary to the classification of the Trust as a grantor trust
or the treatment of the Debentures as indebtedness of the Debenture Issuer for
all United States federal, state and local income tax and franchise tax
purposes.
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
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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
Section 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 one 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 a registration statement
on Form S-3 prepared by the Sponsor, including any amendments thereto,
pertaining 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 or
advisable in order to qualify or register all or part of the FELINE
PRIDES in any State in which the Sponsor has determined to qualify or
register such FELINE PRIDES 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 FELINE PRIDES;
(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 FELINE PRIDES under
Section 12(b) of the Exchange Act; and
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(v) execute and enter into the Underwriting Agreement and Pricing
Agreement providing for the sale of the FELINE PRIDES;
(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;
(d) 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;
(e) to take all actions and perform such duties as may be required of
the Regular Trustees pursuant to the terms of the Securities;
(f) 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;
(g) 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;
(h) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(i) 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;
(j) to incur expenses that are necessary, appropriate, convenient or
incidental to carry out any of the purposes of the Trust;
(k) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
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(l) 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;
(m) 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 and of the Common Securities or to enable the
Trust to effect the purposes for which the Trust was created;
(n) 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 to:
(i) cause the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) cause the Trust to continue to be classified for United
States federal income tax purposes as a grantor trust; and
(iii) cooperate 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;
(o) 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
(p) 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.
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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;
(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;
(vii) take any action that would cause the Trust to fail to qualify as
a "grantor trust" for United States federal income tax purposes;
(viii) other than as provided in this Declaration (including, without
limitation, Annex I), (A) exercise the remedies available under the
Indenture with respect to the Debentures, (B) waive any Event of 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 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.
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
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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 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 repayment of the Preferred Securities and
the Common Securities pursuant to this Declaration (including, without
limitation, Annex I) to the extent the Debentures mature or the Put
Option is exercised; 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
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Trustee has actual knowledge or the Institutional Trustee's duties and
obligations under this Declaration or the Trust Indenture Act. 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 on or principal of the
Debentures on the date such interest or principal is otherwise payable (or in
the case of redemption, on the redemption date), then such 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 (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
rights of the holders of Common Securities will be subrogated to the rights of
such holders of Preferred Securities. In connection with such Direct Action,
the Debenture Issuer shall be subrogated to the rights of such holder of
Preferred Securities with respect to payments on the Preferred Securities under
this Declaration to the extent of any payment made by the Debenture Issuer to
such holder of Preferred Securities in such Direct Action. Except as provided
in the preceding sentences, the holders of Preferred Securities will not be able
to exercise directly any other remedy available to the holders of the
Debentures.
(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
(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 and shall not have any powers or duties except as
expressly set forth herein.
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.
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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 or waiver 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 or non-performance of such duties and obligations
as are specifically set forth in this Declaration, and no implied
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
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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;
(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;
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(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;
(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
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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 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
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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.
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 seven (7) years from the Closing Date.
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
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(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, repayment and otherwise and
substitutes for the Common Securities other securities having
substantially the same terms as the Common Securities (the "Successor
Common Securities") so long as the Successor Common Securities rank the
same as the Common Securities rank with respect to Distributions and
payments upon liquidation, repayment, 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 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
new entity);
(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 and
Successor Common 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
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(viii) the Sponsor guarantees the obligations of such Successor Entity
under the Successor Securities and Successor Common Securities at least to
the extent provided by the Preferred Securities Guarantee and the Common
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, 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 FELINE PRIDES 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
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(e) to negotiate the terms of the Underwriting Agreement and Pricing
Agreement providing for the sale of the FELINE PRIDES.
SECTION 4.3. Right to Proceed The Sponsor acknowledges the rights of
Holders to institute a Direct Action as set forth in Section 3.8(e) hereto.
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:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor; and
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(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 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 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.
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(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 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
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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.
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 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.
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ARTICLE VII.
ISSUANCE OF SECURITIES
SECTION 7.1. General Provisions Regarding Securities. (a) The
Regular Trustees shall, on behalf of the Trust, issue one series 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 series 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 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
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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 Institutional Trustee 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 terminate:
(i) upon the bankruptcy of the Sponsor or the holder of the Common
Securities;
(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.
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(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.
(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:
(i) the Trust to fail to be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust to be an Investment Company or the transferee to
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 or the Sponsor 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
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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. The Preferred Securities
Certificates, on original issuance, in addition to being issued in the form of
one or more definitive, fully registered Preferred Securities Certificate (each
a "Definitive Preferred Securities Certificate") registered initially in the
books and records of the Trust in the name of The Bank of New York, as Purchase
Contract Agent, 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 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. Except for the
Definitive Preferred Security Certificates as specified herein and the
definitive, fully registered Preferred Securities Certificates that 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
issued in the form of a Global Certificate 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
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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 Securities 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.
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.
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SECTION 9.8. Mutilated, Destroyed, Lost or Stolen Certificates. If:
(a) any mutilated Certificates should be surrendered to the Regular
Trustees, or the Institutional Trustee or if the Regular Trustees or the
Institutional Trustee 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 and the
Institutional Trustee 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 such Regular Trustee or the Institutional Trustee shall deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of 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 Indenture, 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 Debenture Issuer 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.
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(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 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,
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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.
(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 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.
(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
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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 10.4(a), or in defense of any claim, issue or matter therein, he
shall be indemnified by the Debenture Issuer, 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 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 10.4(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 10.4(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 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
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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 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 Debenture Issuer 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 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 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 Debenture Issuer 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
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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 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. No 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,
but in no event later than is required by applicable law.
(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 be classified as other than a grantor
trust for United States federal income tax purposes;
(B) reduce or otherwise adversely affect the powers of the
Institutional Trustee in contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
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(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 to ensure that the Trust will be classified
for United States federal income tax purposes as a grantor trust at all
times that any Securities are outstanding or to ensure that the Trust will
not be required to register as an "Investment Company" as such term is
defined under the Investment Company Act of 1940, as amended, 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 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
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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 Security Certificates held by the Holders of Securities
exercising the right to call a meeting and only those Securities evidenced by
Securities 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 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;
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(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 action
on the part of the Institutional Trustee. The Declaration has been duly
executed and delivered by the 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);
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(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 or association 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
(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.
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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 II
c/o 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):
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.
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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 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.
/s/ Richard J. Bielen
------------------------------------
Name: Richard J. Bielen
Title: Trustee
/s/ Jerry W. DeFoor
------------------------------------
Name: Jerry W. DeFoor
Title: Trustee
WILMINGTON TRUST COMPANY
Trustee
By: /s/ Emmett R. Harmon
------------------------------------
Name: Emmett R. Harmon
Title: Vice President
PROTECTIVE LIFE CORPORATION
as Sponsor
By: /s/ Deborah J. Long
------------------------------------
Name: Deborah J. Long
Title: Senior Vice President,
Secretary and General Counsel
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ANNEX I
TERMS OF
6-1/2% TRUST ORIGINATED PREFERRED SECURITIES
6-1/2% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of
Trust, dated as of November 20, 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. 2,300,000
Preferred Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of one hundred and fifteen million dollars
($115,000,000) and a liquidation amount with respect to the assets of the Trust
of $50 per preferred security, are hereby designated for the purposes of
identification only as "6-1/2% 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. 71,135 Common Securities of the Trust with an
aggregate liquidation amount with respect to the assets of the Trust of three
million five hundred and fifty six thousand seven hundred fifty dollars
($3,556,750) and a liquidation amount with respect to the assets of the Trust of
$50 per common security, are hereby designated for the purposes of
identification only as "6-1/2% 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 initially at a rate per annum of 6-1/2% (the "Coupon Rate") of the stated
liquidation amount of $50 per Security through and including February 15, 2001,
and at the Reset Rate thereafter, such rates being the rates 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 rates of 6-1/2% through and including February 15,
2001 and at the Reset Rate thereafter (to the extent permitted by applicable
law). The term "Distributions" as used herein includes such cash distributions
and any such interest payable unless otherwise
<PAGE>
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 30-day Month.
(b) Distributions on the Securities will be cumulative, will
accumulate from November 26, 1997, and will be payable quarterly in arrears, on
March 31, June 30, September 30, and December 31 of each year, commencing on
December 31, 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 or
periods not extending, in the aggregate, beyond the maturity date of the
Debentures (each such period, an "Extension Period"), during which Extension
Period no interest shall be due and payable on 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 rate of 6-1/2% through and
including February 15, 2001, and at the Reset Rate thereafter, compounded
quarterly during any such Extension Period. Payments of accrued Distributions
will be payable to Holders as they appeared 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; provided that such Extension Period together with all such previous and
further extensions thereof may not extend beyond the maturity date of the
Debentures.
(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 Supplement dated November 20, 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 exchange on which the securities are listed and, if none, shall be
the March 15, June 15, September 15, December 15, as the case may be, before
the relevant payment dates; provided, that for so long as the Income PRIDES
or Growth PRIDES shall continue to remain in book-entry form, the relevant
record date for the Preferred Securities
A-2
<PAGE>
shall be the day immediately proceeding the relevant Payment Date 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. So long as
the Holder of any Preferred Securities is the Collateral Agent, the payment of
Distributions on such Preferred Securities held by the Collateral Agent will be
made at such place and to such account as may be designated by the Collateral
Agent.
(d) The Coupon Rate on the Securities (as well as the interest rate
on the Debentures) will be reset on the Purchase Contract Settlement Date to the
Reset Rate. On the Reset Announcement Date, the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be announced by
the Sponsor. On the Business Day immediately following the Reset Announcement
Date, the Holders of Securities will be notified of such Reset Spread and
Two-Year Benchmark Treasury by the Sponsor. Such notice shall be sufficiently
given to Holders of Securities if published in an Authorized Newspaper.
(e) Not later than 7 calendar days nor more than 15 calendar days
prior to the Reset Announcement Date, the Sponsor will notify DTC or its nominee
(or any successor Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Preferred Security Beneficial Owner or Clearing Agency
Participants holding Preferred Securities, Income PRIDES or Growth PRIDES, of
such Reset Announcement Date and in procedures to be followed by such Holders of
Income PRIDES who intend to settle their obligation under the Purchase Contract
with separate cash on the Purchase Contract Settlement Date.
(f) 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
A-3
<PAGE>
stated liquidation amount of $50 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
rate of 6-1/2%, if on or prior to February 15, 2001, and at the Reset Rate
thereafter 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. Repayment and Distribution.
(a) Upon the repayment of the Debentures in whole (but not in part),
at their maturity, the proceeds from such repayment shall be simultaneously
applied to repay Securities having an aggregate liquidation amount equal to the
aggregate principal amount of the Debentures so repaid at a repayment price of
$50 per Security plus an amount equal to accumulated and unpaid Distributions
thereon at the date of the repayment, payable in cash (the "Repayment Price").
Holders will be given not less than 30 nor more than 60 days' notice of such
repayment.
(b) 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 of 6-1/2%, if on, or prior to, February 15,
2001, and at the Reset Rate thereafter and accrued and unpaid interest equal to
accumulated 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 on a pro rata basis
within 90 days following receipt of the Sponsor's notice of election.
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), or the Collateral Agent 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
A-4
<PAGE>
Debentures having an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate of 6-1/2% on or prior to
February 15, 2001, and at the Reset Rate thereafter and accumulated 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.
(c) 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.
(d) Repayment or Distribution Procedures.
(i) Notice of any repayment of, or notice of distribution of
Debentures in exchange for, the Securities (a "Repayment/Distribution
Notice") will be given by the Trust by mail to each Holder of Securities to
be repaid or exchanged not fewer than 30 nor more than 60 days before the
date fixed for repayment or exchange thereof which, in the case of a
repayment, will be the date fixed for repayment of the Debentures. For
purposes of the calculation of the date of repayment or exchange and the
dates on which notices are given pursuant to this Section 4(d)(i), a
Repayment/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 Repayment/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 Repayment/Distribution
Notice or in the mailing of either thereof with respect to any Holder shall
affect the validity of the repayment or exchange proceedings with respect
to any other Holder.
(ii) If Securities are to be repaid and the Trust gives a
Repayment/Distribution Notice, which notice may only be issued if the
Debentures are repurchased 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 repayment date, provided that the Debenture Issuer
has paid the Institutional Trustee a sufficient amount of cash in
connection with the related 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 Repayment Price with respect to the Preferred Securities and
will give the Depository irrevocable instructions and authority to pay the
Repayment 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 on maturity of the Debentures, the Institutional Trustee will
pay the relevant Repayment
A-5
<PAGE>
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 repayment date. If a Repayment/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 repayment date, as applicable, distributions will cease to
accrue on the Securities so repaid and all rights of Holders of such
Securities so repaid will cease, except the right of the Holders of such
Securities to receive the Repayment Price, but without interest on such
Repayment 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 repaid. If any date fixed for repayment of
Securities is not a Business Day, then payment of the Repayment Price
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 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 repayment. If payment of the Repayment 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 accumulate from the original repayment date
to the actual date of payment, in which case the actual payment date
will be considered the date fixed for repayment for purposes of
calculating the Repayment Price.
(iii) Repayment/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.
(iv) 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 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. Repayment at Option of Holders
(a) Each holder of Securities, including the Purchase Contract Agent
and the Collateral Agent, if applicable, shall have the right to require the
Trust to repay all or a portion of the Securities owned by or pledged with such
Holder (the "Put Option") on February 16, 2001, (the "Put Option Exercise
Date"), at a repayment price of $50 per Security plus an amount equal to
accumulated and unpaid Distributions thereon to the date of payment (the "Put
Option Repayment Price").
A-6
<PAGE>
(b) The Trust will obtain funds to pay the Put Option Repayment Price
of Securities to be repaid under the Put Option through the presentation by the
Institutional Trustee, on behalf of the Trust, to the Debenture Issuer, pursuant
to the right of the holder of the Debentures to require the Debenture Issuer to
repay all or a portion of the Debentures on the Put Option Exercise Date, of
Debentures in an aggregate principal amount equal to the aggregate liquidation
amount of such Securities for repayment on the Put Option Exercise Date at the
Debenture Repayment Price.
(c) In order for the Securities to be repaid on the Put Option
Exercise Date, the Trust must receive, at the Corporation Trust Office of the
Institutional Trustee not later than 10:00 a.m. on the third Business Day prior
to the Put Option Exercise Date, the Securities to be repaid with the form
entitled "Option to Elect Repayment" on the reverse thereof or otherwise
accompanying such Security duly completed. Any such notice received by the
Trust shall be irrevocable. All questions as to the validity, eligibility
(including time of receipt) and acceptance of Securities for repayment shall be
determined by the Trust, whose determination shall be final and binding.
Notwithstanding the foregoing, each Holder of Preferred Securities that are then
pledged to secure such Holder's obligations under the Purchase Contract(s) (as
defined in the Purchase Contract Agreement) forming a part of such Holder's
FELINE PRIDES who does not make an effective Cash Settlement or Early Settlement
(as such terms are defined in the Purchase Contract Agreement) shall be deemed,
upon delivery by the Purchase Contract Agent or the Collateral Agent, to the
Trust, on the Business Day immediately preceding the Put Option Exercise Date of
a notice with respect thereto, to have required the Trust to repay all of such
Preferred Securities on the Put Option Exercise Date.
(d) Payment of the Put Option Repayment Price to Holders of
Securities who shall have exercised (or who shall have been deemed to have
exercised) the Put Option shall be made at the Corporate Trust Office of the
Institutional Trustee, provided that the Debenture Issuer has paid the
Institutional Trustee a sufficient amount of cash in connection with the related
repayment of the Debentures. Notwithstanding the foregoing, the payment of the
Put Option Repayment Price in respect of the Preferred Securities described in
the last sentence of the preceding paragraph shall be made no later than 1:00
p.m., New York City time, on the Put Option Exercise Date by check or wire
transfer in immediately available funds at such place and to such account as may
be designated by the Collateral Agent. If the Institutional Trustee holds
immediately available funds sufficient to pay the Put Option Repayment Price of
the Securities in respect of which the Put Option shall have been exercised or
deemed to have been exercised, then, immediately prior to the close of business
on the Put Option Exercise Date, such Securities will cease to be outstanding
and distributions thereon will cease to accrue, whether or not Securities are
delivered to the Institutional Trustee, and all other rights of the Holders in
respect of such Securities, including each Holder's right to require the Trust
to repay such Preferred Securities, shall terminate and lapse (other than the
right to receive the Put Option Repayment Price but without interest on such Put
Option Repayment Price). Neither the Regular Trustees nor the Trust shall be
required to register or
A-7
<PAGE>
cause to be registered the transfer of any Securities for which repayment has
been elected. If payment of the Put Option Repayment Price in respect of
Securities is (i) improperly withheld or refused and not paid either by the
Institutional Trustee or by the Sponsor as guarantor pursuant to the Preferred
Securities Guarantee or the Common Securities Guarantee, or (ii) not paid by the
Institutional Trustee as the result of an Event of Default with respect to the
Debentures presented for repayment as described in paragraph 5(b), Distributions
on such Securities will continue to accrue, from the original Put Option
Exercise Date to the actual date of payment, in which case the actual payment
date will be considered the Put Option Exercise Date for purposes of calculating
the Put Option Repayment Price.
6. Voting Rights - Preferred Securities. (a) Except as provided under
Sections 6(b) and 8 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, as holder of the Debentures, to (i) exercise the remedies available
under the Indenture with respect to the Debentures, (ii) waive any past default
and its consequences that is waivable under Section 5.7 of the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable, (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures where such
Consent shall be required; 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") affected thereby, 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. The Institutional Trustee shall notify all holders
of the Preferred Securities of any notice of default received from the Debenture
Trustee with respect to the Debentures. Such Notice in the case of an Event of
Default, shall state that such Event of Default also constitutes a Declaration
of Event of Default. 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 in clauses (i), (ii) and (iii) 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 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-8
<PAGE>
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 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 repay 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.
Holders of Preferred Securities will have no rights to appoint or
remove the PLC Capital Trustees, who may be appointed, removed or replaced
solely by the Company as the indirect or direct holder of all of the Common
Securities.
A-9
<PAGE>
7. Voting Rights - Common Securities. (a) Except as provided under
Sections 7(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 the
Institutional Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under the Declaration, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture with respect to the
Debentures, (ii) waive any past default and its consequences that is waivable
under Section 5.7 of the Indenture, (iii) exercise any right to rescind or annul
a declaration that the principal of all the Debentures shall be due and payable,
or (iv) consent to any amendment, modification or termination of the Indenture
or the Debentures where such consent shall be required; 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 7(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 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.
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
A-10
<PAGE>
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 repay and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
8. 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 by way of amendment to the Declaration
or otherwise, or (ii) the dissolution of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single 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.
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 as other than a grantor trust for purposes of United
States federal income taxation, (ii) reduce or otherwise adversely affect the
power of the Institutional Trustee or (iii) cause the Trust to be deemed an
"investment company" which is required to be registered under the Investment
Company Act of 1940.
(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 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 such action in
accordance with the directions of the Holders of the Securities unless the
Institutional Trustee has obtained an opinion of a nationally recognized tax
counsel experienced in such matters to the effect that, as
A-11
<PAGE>
a result of such action, the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes.
9. 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 liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
10. 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 has occurred 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 or otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
11. 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.
12. 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, and to the provisions of the Indenture.
13. No Preemptive Rights. The Holders of the Securities shall have no
preemptive rights to subscribe for any additional securities.
14. 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.
A-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, A NEW YORK CORPORATION ("DTC")
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 DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
Certificate Number:
Number of Preferred Securities: _________
CUSIP NO.: 693408205
Certificate Evidencing Preferred Securities
of
PLC CAPITAL TRUST II
6 1/2% Trust Originated Preferred Securities(-SM-) ("TOPrS"-SM-)
(liquidation amount $50 per Preferred Security)
<PAGE>
PLC CAPITAL TRUST II, 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 in the assets of the Trust
designated the 6 1/2% Trust Originated Preferred Securities(SM) (liquidation
amount $50 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 set forth in and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust dated as of November 20, 1997, as the same may be amended or
supplemented 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 Sponsor 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 and each beneficial owner agrees to treat,
for United States federal, state and local income and franchise tax purposes,
the Debentures as indebtedness of the Company and the Trust as a grantor trust.
A-1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 26th
day of __________, 199__.
PLC CAPITAL TRUST II
By:
_________________________________
Name:
Title:
A-1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed initially at
a rate per annum of 6 1/2% (the "Coupon Rate") of the stated liquidation amount
of $50 per Preferred Security, through and including February 15, 2001, and at
the Reset Rate thereafter, 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
rate of 6 1/2% through and including February 15 , 2001, and at the Reset Rate
thereafter (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 30-day month.
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 December 31, 1997, if in book-entry only
form, to holders of record one day prior to the relevant payment date, and if in
definitive certificated form, to holders of record on the 15th day of the month
in which the relevant payment date occurs; provided, that for so long as the
Income PRIDES or Growth PRIDES shall continue to remain in book-entry only form,
distributions on the Preferred Securities shall be made to the holders of record
one day prior to the relevant payment date, which payment dates shall correspond
to the interest payment dates on the Debentures. 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 beyond the date of maturity of the Debentures (each an "Extension
Period") and, as a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accumulate with interest thereon (to the extent permitted by applicable law) at
the rate of 61/2% through and including February 15, 2001, and at the Reset Rate
thereafter, compounded quarterly during any such Extension Period. Payments of
accumulated 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;
provided, that such Extension Period together with all such previous and further
extensions thereof may not extend beyond the maturity date of the Debentures.
The Preferred Securities shall be repayable as provided in the Declaration.
OPTION TO ELECT REPAYMENT
A-1-4
<PAGE>
The undersigned hereby irrevocably requests and instructs the Trust to
repay $__________ liquidation amount of the within Security, pursuant to its
terms, on the "Put Option Exercise Date," together with distributions thereon
accumulated and unpaid to the date of repayment, to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a new
Security or Securities representing the remaining stated liquidation amount of
this Security.
For this Option to Elect Repayment to be effective, this Security with the
Option to Elect Repayment duly completed must be received by the Trust at the
Corporate Trust Office of the Institutional Trustee at Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, on or
prior to the third Business Day immediately preceding the Put Option Exercise
Date Attention: Corporate Trust Administration.
Dated: Signature:__________________________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Security in every particular without
alternation or enlargement or any change whatsoever.
A-1-5
<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)
A-1-6
<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:
(i) the Trust to fail to be classified for United States federal
income tax purposes as a grantor Trust; and
(ii) the Trust to be an Investment Company or the transferee to
become an Investment Company.
Certificate Number
Number of Common Securities
Certificate Evidencing Common Securities
of
PLC CAPITAL TRUST II
6 1/2% Trust Originated Common Securities
(liquidation amount $50 per Common Security)
PLC CAPITAL TRUST II, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that Protective Life
Corporation (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
designated the 6 1/2% Trust Originated Common Securities (liquidation amount $50
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 set forth in and shall in all respects be subject to the provisions
of the Amended and Restated Declaration of Trust of the Trust dated as of
November 20, 1997, as the same may be amended or supplemented from
<PAGE>
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 Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder and beneficial owner agree to treat, for
United States federal, state or local income and franchise tax purposes, the
Debentures as indebtedness of the Company and the Trust as a grantor trust.
A-2-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this _____ day
of ________, 1997.
PLC CAPITAL TRUST II
By_________________________________
Name:______________________________
Title: Regular Trustee
A-2-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed initially at a
rate per annum of 6 1/2 % (the "Coupon Rate") of the stated liquidation amount
of $50 per Common Security, through and including February 15, 2001, and at the
Reset Rate thereafter, such rates being the rates 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
rate of 6 1/2% through and including February 15, 2001, and at the Reset Rate
thereafter (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 30-day month.
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 December 31, 1997, to Holders of record on the 15th
day of the month in which the relevant payment date occurs; provided, that for
so long as the Income PRIDES or Growth PRIDES shall continue to be in book-entry
only form, distributions on the Common Securities shall be made to the holders
of record one day prior to the relevant payment date, which payment dates shall
correspond to, the interest payment dates on the Debentures. 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 extending beyond the maturity date of the Debentures (each an
"Extension Period") and, as a consequence of such deferral, Distributions will
also be deferred. Despite such deferral, quarterly Distributions will continue
to accumulate with interest thereon (to the extent permitted by applicable law)
at the rate of 6 1/2% through and including February 15, 2001, and at the Reset
Rate thereafter, compounded quarterly during any such Extension Period.
Accumulated 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
Extension Period; provided, that such Extension Period together with all such
previous and further extensions thereof may not extend beyond the maturity date
of the Debentures. Upon the termination of any Extension Period and the payment
of all amounts then due, the Debenture Issuer may commence a new Extension
Period; provided, that such Extension Period together with all such previous
and further extensions thereof may not extend beyond the maturity date of the
Debentures.
A-2-4
<PAGE>
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably requests and instructs the Trust to
repay $__________ liquidation amount of the within Security, pursuant to its
terms, on the "Put Option Exercise Date," together with distributions thereon
accumulated and unpaid to the date of repayment, to the undersigned at:
(Please print or type Name and Address of the Undersigned)
and to issue to the undersigned, pursuant to the terms of the Declaration, a new
Security or Securities representing the remaining stated liquidation amount of
this Security.
For this Option to Elect Repayment to be effective, this Security with the
Option to Elect Repayment duly completed must be received by the Trust at the
Corporate Trust Office of the Institutional Trustee at Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890, on or
prior to the third Business Day immediately preceding the Put Option Exercise
Date. Attention: Corporate Trust Administration.
Dated: Signature:__________________________________
Note: The signature to this Option to Elect Repayment must correspond with the
name as written upon the face of the within Security in every particular without
alternation or enlargement or any change whatsoever.
A-2-5
<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)
A-2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
<PAGE>
EXHIBIT 8
DEBEVOISE & PLIMPTON
875 Third Avenue
New York, New York 10022
Telephone: (212) 909-6000
Telecopy: (212) 909-6836
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
PLC Capital Trust II
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
November 26, 1997
Protective Life Corporation
PLC Capital Trust II
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special United States tax counsel to Protective Life
Corporation, a Delaware corporation (the "Company") and PLC Capital Trust II, a
statutory business trust organized under the laws of Delaware (the "Trust") in
connection with the preparation and filing with the Securities and Exchange
<PAGE>
Protective Life Corporation
PLC Capital Trust II 2 November 26, 1997
Commission (the "Commission") of a Registration Statement on Form S-3 (File No.
333-30905) (the "Initial Registration Statement") on July 8, 1997 under the
Securities Act of 1933, as amended (the "Act"), in accordance with the
procedures of the Commission permitting a delayed or continuous offering
pursuant to Rule 415 of the General Rules and Regulations under the Act (the
"Rules and Regulations") and a Registration Statement on Form S-3 (File No.
333-39899) on November 10, 1997 pursuant to Rule 462(b) of the Rules and
Regulations (the "462(b) Registration Statement" and, together with the Initial
Registration Statement, the "Registration Statement") relating to the
registration under the Act of 2,300,000 Stock Purchase Units, consisting of
Income PRIDES(SM) and Growth PRIDES(SM) (together the "FELINE PRIDES(SM)"), the
Company's Common Stock, par value $.50 per share, the Trust's 6-1/2% Trust
Originated Preferred Securities (the "Preferred Securities") and certain other
securities of the Company.
The Income PRIDES(SM) initially will be sold to the public pursuant to
the Registration Statement and the proceeds from such sale will be applied to
purchase the Preferred Securities. The entire proceeds from the sale of the
Preferred Securities are to be used by the Trust to purchase 6-1/2% Subordinated
Debentures (the "Subordinated Debentures") being issued by the Company.
In connection with the issuance pursuant to the Registration Statement
of the Income PRIDES(SM), you have requested that we render the opinion set
forth below. In rendering such opinion, we have examined the Amended and
Restated Declaration of Trust of the Trust, dated as of November 20, 1997 (the
"Amended Declaration of Trust"), the Certificate of the Trust, dated July 1,
1997, the Registration Statement, the base prospectus, dated July 18, 1997 and
the related prospectus supplement, dated November 20, 1997 (the "Prospectus
Supplement"), the Preferred Securities Guarantee Agreement, dated as of November
26, 1997, the Common Securities Guarantee Agreement, dated as of November 26,
1997, the Indenture, dated as of June 1, 1994, as supplemented and amended by
the First Supplemental Indenture, dated June 9, 1994, the Second Supplemental
Indenture, dated August 1, 1994, the Third Supplemental Indenture, dated April
29, 1997 and the Fourth Supplemental Indenture, dated November 20, 1997, the
Purchase Contract Agreement, dated as of November 26, 1997, the Pledge
Agreement, dated as of November 26, 1997, the Underwriting Agreement, dated
November 20, 1997, the Subordinated Debt Securities, the Preferred Securities,
the Income PRIDES(SM) and the Growth PRIDES(SM). We have also examined and
relied upon the representations and warranties as to factual matters contained
in or made pursuant to the documents referred to above, and upon
<PAGE>
Protective Life Corporation
PLC Capital Trust II 3 November 26, 1997
originals, or copies certified or otherwise identified to our satisfaction, of
such records, documents, certificates or other instruments as in our judgment
are necessary or appropriate to enable us to render the opinion expressed below,
including a letter from Merrill Lynch, Pierce, Fenner & Smith Incorporated,
dated November 26, 1997, concerning the anticipated trading activity of the
Income PRIDES(SM) and Growth PRIDES(SM) and certain other matters. We have not,
however, undertaken any independent investigation of any factual matter set
forth in any of the foregoing. We have also assumed that the Amended
Declaration of Trust is valid and enforceable in accordance with its terms and
that the Trust will at all times comply with the Delaware Business Trust Act (38
Del. C. Section 3801 et seq.) and the terms of the Amended Declaration of Trust.
<PAGE>
Protective Life Corporation
PLC Capital Trust II 4 November 26, 1997
Based upon and subject to the limitations, qualifications, exceptions
and assumptions set forth herein, we are of the opinion that, under current
United States federal income tax law:
(i) the Trust will be classified as a grantor trust and not as an
association taxable as a corporation;
(ii) the Subordinated Debentures will be classified as indebtedness of
the Company; and
(iii) the statements set forth in the Prospectus Supplement under
the heading "Certain Federal Income Tax Consequences," to
the extent that such statements relate to matters of law or
legal conclusion, constitute the opinion of Debevoise &
Plimpton based upon the assumptions stated or referred to
therein.
This opinion is based on the relevant law in effect (or, in the case
of Proposed Treasury Regulations, proposed) and the relevant facts that exist as
of the date hereof. No assurance can be given that the law or facts will not
change, and we have not undertaken to advise you or any other person with
respect to any event subsequent to the date hereof. Any such changes could
adversely affect the opinion expressed herein.
This opinion is addressed solely to you and no other person may rely
on it, provided that we hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
caption "Certain Federal Income Tax Consequences" and "Legal Matters" in the
Prospectus Supplement for the FELINE PRIDES and the Preferred Securities
included within the Registration Statement. In giving such consent, we do not
thereby concede that we are within the category of persons whose consent is
required under Section 7 of the 1933 Act or the Rules and Regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
