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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:
1(f) Form of Underwriting Agreement, among Protective
Life Corporation, Merrill Lynch & Co. and certain
other underwriters named therein with respect to
FELINE PRIDES.
4(y) Form of Purchase Contract Agreement, 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) Form of Pledge Agreement, among Protective Life
Corporation, The Bank of New York, as Purchase Contract
Agent, and The Chase Manhattan Bank, as Collateral Agent.
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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: November 20, 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
----------- -----------
1(f) Form of Underwriting Agreement, among Protective
Life Corporation, Merrill Lynch & Co. and certain
other underwriters named therein with respect to
FELINE PRIDES.
4(y) Form of Purchase Contract Agreement, 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) Form of Pledge Agreement, among Protective Life
Corporation, The Bank of New York, as Purchase Contract
Agent, and The Chase Manhattan Bank, as Collateral Agent.
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EXHIBIT 1(f)
PROTECTIVE LIFE CORPORATION
(A DELAWARE CORPORATION)
PLC CAPITAL TRUST II
(A DELAWARE BUSINESS TRUST)
2,000,000 FELINE PRIDES
FORM OF UNDERWRITING AGREEMENT
DATED: NOVEMBER , 1997
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PROTECTIVE LIFE CORPORATION
(A DELAWARE CORPORATION)
PLC CAPITAL TRUST II
(A DELAWARE BUSINESS TRUST)
FELINE PRIDES (-SM-)(TOPRS-SM-)
(STATED AMOUNT OF $50 PER FELINE PRIDES)
EACH CONSISTING OF
A PURCHASE CONTRACT OF PROTECTIVE LIFE CORPORATION
REQUIRING THE PURCHASE ON FEBRUARY 16, 2001
(OR EARLIER) OF CERTAIN SHARES OF COMMON STOCK OF
PROTECTIVE LIFE CORPORATION
AND
A % TRUST ORIGINATED PREFERRED SECURITY-SM- (TOPRS-SM-)
OF PLC CAPITAL TRUST II
FORM OF UNDERWRITING AGREEMENT
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November , 1997
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
FOX-PITT, KELTON INC.
THE ROBINSON-HUMPHREY COMPANY, LLC
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281-1209
- ----------------------
"FELINE PRIDES," "Income PRIDES," "Trust Originated Preferred
Securities" and "TOPrS" are service marks of Merrill Lynch & Co. Inc.
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Ladies and Gentlemen:
Protective Life Corporation, a Delaware corporation (the "Company"), and
PLC Capital Trust II, a Delaware statutory business trust (the "Trust" and,
together with the Company, the "Offerors"), confirm their agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Goldman, Sachs & Co., Fox-Pitt, Kelton Inc. and The Robinson-Humphrey
Company, LLC and each of the underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill
Lynch"), Goldman, Sachs & Co., Fox-Pitt, Kelton Inc. and The Robinson-Humphrey
Company, LLC serves as representative (in such capacity, the "Representative")
(the "Underwriter"), with respect to the sale to the Underwriters of 2,000,000
FELINE PRIDES (the "Initial Securities"), each of which will initially consist
of a unit (referred to as Income PRIDES-SM-) with a Stated Amount of $50
comprised of (a) a stock purchase contract (the "Purchase Contract") under which
(i) the holder will purchase from the Company on February 16, 2001, a number of
shares of common stock, par value $.50 per share, of the Company (the "Common
Stock") equal to the Settlement Rate as set forth in the Purchase Contract
Agreement (defined below) and (ii) the Company will pay to the holder contract
adjustment payments, if any, and (b) beneficial ownership of a % Trust
Originated Preferred Security (the "Preferred Security") of the Trust, having a
stated liquidation amount of $50. The Company and the Trust also propose to
grant to the Underwriters an option to purchase up to 300,000 additional Income
PRIDES (the "Option Securities" and together with the Initial Securities, the
"Securities") as described in Section 2(b) hereof. In accordance with the terms
of the Purchase Contract Agreement, to be dated as of November , 1997, between
the Company and The Bank of New York, as Purchase Contract Agent (the "Purchase
Contract Agent"), the Preferred Securities constituting a part of the Securities
will be pledged by the Purchase Contract Agent, on behalf of the holders of the
Securities, to The Chase Manhattan Bank, as Collateral Agent, pursuant to the
Pledge Agreement, to be dated as of November , 1997 (the "Pledge Agreement"),
among the Company, the Purchase Contract Agent and the Collateral Agent, to
secure the holders' obligation to purchase Common Stock under the Purchase
Contracts. The rights and obligations of a holder of Securities in respect of
Preferred Securities, subject to the pledge thereof and Purchase Contracts will
be evidenced by Security Certificates (the "Secu-
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rity Certificates") to be issued pursuant to the Purchase Contract Agreement.
The Preferred Securities will be guaranteed by the Company with respect to
distributions and payments upon liquidation, redemption and otherwise (the
"Preferred Securities Guarantee") pursuant to the Preferred Securities Guarantee
Agreement, to be dated as of November , 1997 (the "Preferred Securities
Guarantee Agreement"), between the Company and Wilmington Trust Company, as
trustee (the "Guarantee Trustee"), for the benefit of the holders from time to
time of the Preferred Securities, and certain back-up undertakings of the
Company. All, or substantially all, of the proceeds from the sale of the
Preferred Securities will be combined with the entire net proceeds from the sale
by the Trust to the Company of its common securities (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities") guaranteed
by the Company with respect to distributions and payments upon liquidation and
redemption (the "Common Securities Guarantee" and, together with the Preferred
Securities Guarantee, the "Guarantees") pursuant to the Common Securities
Guarantee Agreement, to be dated as of November , 1997 (the "Common Securities
Guarantee Agreement" and, together with the Preferred Securities Guarantee
Agreement, the "Guarantee Agreements"), between the Company and the Guarantee
Trustee for the benefit of the holders from time to time of the Common
Securities, and certain backup-undertakings of the Company, and will be used by
the Trust to purchase the % Subordinated Debt Securities due February 17,
2003 (the "Subordinated Debt Securities") of the Company. The Preferred
Securities and the Common Securities will be issued pursuant to the amended and
restated declaration of trust of the Trust, to be dated as of November , 1997
(the "Declaration"), among the Company, as Sponsor, Richard J. Bieley and Jerry
W. DeFoor (the "Regular Trustees"), and Wilmington Trust Company, as the
institutional trustee (the "Institutional Trustee") and as the Delaware trustee
(the "Delaware Trustee" and, together with the Institutional Trustee and the
Regular Trustees, the "Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Subordinated
Debt Securities will be issued pursuant to the Subordinated Indenture dated as
of June 1, 1994 (the "Base Indenture"), between the Company and AmSouth Bank of
Alabama (as successor by merger to AmSouth Bank of Alabama, as successor by
conversion of charter to AmSouth Bank, N.A.), as trustee (the "Debt Trustee"),
as supplemented by (i) Supplemental Indenture No. 1, dated as of June 9, 1994
("Supplemental Indenture No. 1"), (ii) Supplemental Indenture No. 2, dated as of
August 1, 1994 ("Supplemental Indenture No. 2"), (iii) Supplemental Indenture
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No. 3, dated as of April 29, 1997 ("Supplemental Indenture No. 3") and
Supplemental Indenture No. 4, to be dated as of November __, 1997 ("Supplemental
Indenture No. 4" and, together with the Base Indenture and all other amendments
and supplements thereto in effect on the date hereof, the "Indenture"), between
the Company and the Debt Trustee. Capitalized terms used herein without
definition shall be used as defined in the Prospectus.
Prior to the purchase and public offering of the Securities by the several
Underwriters, the Offerors and the several Underwriters shall enter into an
agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement may take the form of an exchange of any
standard form of written communication between the Offerors and the Underwriters
and shall specify such applicable information as is indicated in Exhibit A
hereto. The offering of the Securities will be governed by this Agreement, as
supplemented by the Pricing Agreement. From and after the date of the execution
and delivery of the Pricing Agreement, this Agreement shall be deemed to
incorporate the Pricing Agreement.
The Company, the Trust, PLC Capital Trust III, PLC Capital Trust IV
(collectively, the "PLC Capital Trusts") have filed with the Securities and
Exchange Commission (the "Commission") a registration statement on Form S-3 (No.
333-30905) and post-effective amendment no. 1 thereto covering the registration
of securities of the Company and the Trust, including the Securities and the
Purchase Contracts and Preferred Securities included in and shares of Common
Stock underlying, the Securities, under the Securities Act of 1933, as amended
(the "1933 Act"), including the related preliminary prospectus or prospectuses,
and the offering thereof from time to time in accordance with the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations")
and the Company has filed such post-effective amendments thereto as may be
required prior to the execution of the Pricing Agreement. Such registration
statement, as so amended, has been declared effective by the Commission. Such
registration statement, as so amended, as declared effective excluding the
exhibits and schedules thereto, if any, but including the documents incorporated
by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act, and the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b) of the
1933 Act Regulations (the "Rule 430A Information") or Rule 434(d) of the 1933
Act Regulations (the "Rule 434 Information"), is referred to herein as the
"Registration Statement"; and the final prospectus relating to the offering of
the Securities, in the form first furnished to the Underwriters by the Company
for use
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in connection with the offering of the Securities, are collectively referred to
herein as the "Prospectus"; PROVIDED, HOWEVER, that all references to the
"Registration Statement" and the "Prospectus" shall be deemed to include all
documents incorporated therein by reference pursuant to item 12 of Form S-3
under the 1933 Act, prior to the execution of the applicable Pricing Agreement;
PROVIDED, FURTHER, that if the Offerors file a registration statement with the
Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule
462(b) Registration Statement"), then after such filing, all references to
"Registration Statement" shall be deemed to include the Rule 462(b) Registration
Statement; and PROVIDED, FURTHER, that if the Offerors elect to rely upon Rule
434 of the 1933 Act Regulations, then all references to "Prospectus" shall be
deemed to include the final or preliminary prospectus and the applicable term
sheet or abbreviated term sheet (the "Term Sheet"), as the case may be, in the
form first furnished to the Underwriters by the Company in reliance upon Rule
434 of the 1933 Act Regulations, and all references in this Underwriting
Agreement to the date of the Prospectus shall mean the date of the Term Sheet. A
"preliminary prospectus" shall be deemed to refer to any prospectus used before
the registration statement became effective and any prospectus that omitted, as
applicable, the Rule 430A Information, the Rule 434 Information or other
information to be included upon pricing in a form of prospectus filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that was used
after such effectiveness and prior to the execution and delivery of the
applicable Pricing Agreement. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the electronically transmitted copy thereof filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934, as amended (the "1934
Act")
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which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Securities as soon as the Underwriters deem advisable after the
Pricing Agreement has been executed and delivered and the Declaration, the
Indenture and the Preferred Securities Guarantee Agreement have been qualified
under the Trust Indenture Act of 1939, as amended (the "1939 Act").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors represent and warrant to each Underwriter as of the dates
hereof and as of the date of the Pricing Agreement and each Date of Delivery,
(as defined in Section 2(b))(such later date being hereinafter referred to as
the "Representation Date") that:
(i) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
initiated or, to the knowledge of the Offerors, threatened by the
Commission.
(ii) The Company and the Trust meet, and at the respective times of
the commencement and consummation of the offering of the Securities will
meet, the requirements for the use of Form S-3 under the 1933 Act. Each of
the Registration Statement and the Rule 462(b) Registration Statement has
become effective under the 1933 Act. At the respective times the
Registration Statement, the Rule 462(b) Registration Statement and any
post-effective amendments thereto became effective and at each
Representation Date, the Registration Statement, the Rule 462 Registration
Statement and any amendments or supplements thereto, as of their respective
effective dates, complied and will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and the 1939 Act
and the rules and regulations of the Commission under the 1939 Act (the
"1939 Act Regulations"), and, as of their respective effective dates, did
not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading. At the date of the Prospectus and
at the Closing Time (as defined herein), the Prospectus and any amendments
or supplements thereto did not and will not
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include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, the Offerors make no representations or warranties as to (A) that
part of the Registration Statement which constitutes the Statements of
Eligibility and Qualification (Forms T-1) under the 1939 Act of the
Delaware Trustee, the Institutional Trustee, the Debt Trustee or the
Guarantee Trustee or (B) the information contained in or omitted from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished in writing to the Offerors by any
Underwriter through Merrill Lynch specifically for inclusion in the
Registration Statement or the Prospectus and actually included therein. If
the Offerors elect to rely upon Rule 434 of the 1933 Act Regulations, the
Offerors will comply with the requirements of Rule 434.
Each preliminary prospectus and prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied as to
form when so filed in all material respects with the 1933 Act Regulations
and, if applicable, each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with the offering of
the Securities will, at the time of such delivery, be identical in all
material respects to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(iii) The documents incorporated or deemed to be incorporated by
reference in the Registration Statement or the Prospectus, at the time they
were or hereafter are filed or last amended, as the case may be, with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act, and the rules and regulations of Commission
thereunder (the "1934 Act Regulations"), and at the time of filing or as of
the time of any subsequent amendment, did not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were or are made, not misleading;
(iv) The accountants who certified the financial statements and
supporting schedules included or incorporated
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by reference in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and the 1933 Act
Regulations.
(v) The financial statements included or incorporated by reference in
the Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates indicated and the statements
of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included or
incorporated by reference in the Registration Statement present fairly in
accordance with GAAP the information required to be started therein. The
selected financial information and the summary financial information
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement.
(vi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been (i) (x)
any material change in the capital stock or (y) any increase in the
long-term debt of the Company or any of its subsidiaries in excess of [$10]
million, (ii) any material adverse change or any development involving a
prospective material adverse change in or affecting the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole or (iii)
any reduction in the statutory capital or surplus of the Company's
subsidiaries engaged in the business of insurance (each an "Insurance
Subsidiary," and collectively, the "Insurance Subsidiaries"), taken as a
whole, in excess of $15 million, in each case otherwise than as set forth
or contemplated in the Prospectus.
(vii) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus and has been duly
qualified as a foreign corporation for the transaction of
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business under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, and is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction.
(viii) Protective Life Insurance Company ("Protective Life Insurance")
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties, or conducts any business, so as to require such qualification,
or is subject to no material liability or disability by reason of the
failure to be so qualified in any such jurisdiction.
(ix) Protective Life Insurance is duly organized and licensed as an
insurance company in its state of incorporation and is duly licensed or
authorized as an insurer in each other jurisdiction where it is required to
be so licensed or authorized, with corporate power to conduct its business
as described in the Prospectus (except for any such jurisdiction in which
the failure to be so licensed or authorized would not reasonably be
expected to have a material adverse effect on the business, financial
condition or results of operations of the Company and its subsidiaries,
considered as a whole); and except as otherwise specifically described in
the Prospectus, neither the Company nor Protective Life Insurance has
received any notification from any insurance regulatory authority to the
effect that any additional authorization, approval, order, consent,
license, certificate, permit, registration or qualification from such
insurance regulatory authority is needed to be obtained by either of the
Company or Protective Life Insurance in any case where it would be
reasonably expected that the failure to obtain any such additional
authorization, approval, order, consent, license, certificate, permit,
registration or qualification would have a material adverse effect on the
business, financial position or results of operations of the Company and
its subsidiaries, considered as a whole.
(x) The Trust has been created and is validly existing and in good
standing as a business trust under the Delaware
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Business Trust Act (the "Delaware Act") with the power and authority to own
property and to conduct its business as described in the Registration
Statement and Prospectus and to enter into and perform its obligations
under this Agreement, the Pricing Agreement, the Preferred Securities, the
Common Securities and the Declaration; the Trust is qualified to transact
business as a foreign entity and is in good standing in each jurisdiction
in which such qualification is necessary, except where the failure to so
qualify or be in good standing would not have a material adverse effect on
the Trust; the Trust is not a party to or otherwise bound by any material
agreement other than those described in the Prospectus; the Trust is and
will, under current law, be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation; and the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles.
(xi) The Purchase Contract Agreement has been authorized by the
Company and, at the Closing Time, when validly executed and delivered by
the Company and assuming due authorization, execution and delivery of the
Purchase Contract Agreement by the Purchase Contract Agent, will constitute
a legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally or by general principles of equity (regardless of whether
enforcement is considered in a proceeding at law or in equity) (the
"Bankruptcy Exceptions"), and will conform in all material respects to the
description thereof contained in the Prospectus.
(xii) The Pledge Agreement has been authorized by the Company and, at
the Closing Time, when validly executed and delivered by the Company and
assuming due authorization, execution and delivery of the Pledge Agreement
by the Collateral Agent and the Purchase Contract Agent, will constitute a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions, and will conform in
all material respects to the description thereof contained in the
Prospectus.
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(xiii) The Common Securities have been authorized by the Trust
pursuant to the Declaration and, when issued and delivered by the Trust to
the Company against payment therefor as described in the Registration
Statement and Prospectus, will be validly issued and will represent
undivided beneficial interests in the assets of the Trust and will conform
in all material respects to the description thereof contained in the
Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Time all of the
issued and outstanding Common Securities of the Trust will be directly
owned by the Company free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equitable right.
(xiv) The Declaration has been duly authorized by the Company and, at
the Closing Time, will have been duly executed and delivered by the Company
and the Trustees, and assuming due authorization, execution and delivery of
the Declaration by the Institutional Trustee and the Delaware Trustee, the
Declaration will, at the Closing Time, be a valid and binding obligation of
the Company and the Regular Trustees, enforceable against the Company and
the Regular Trustees in accordance with its terms, except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions, and
will conform in all material respects to the description thereof contained
in the Prospectus; and at the Closing Time, the Declaration will have been
duly qualified under the 1939 Act.
(xv) Each of the Guarantee Agreements has been authorized by the
Company and, when validly executed and delivered by the Company, and, in
the case of the Preferred Securities Guarantee Agreement, assuming due
authorization, execution and delivery of the Preferred Securities Guarantee
by the Guarantee Trustee, will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions, and each of the Guarantees and the Guarantee
Agreements will conform in all material respects to the description thereof
contained in the Prospectus; and at the Closing Time, the Preferred
Securities Guarantee will have been duly qualified under the 1939 Act.
(xvi) The Securities have been authorized for issuance and sale to the
Underwriters and, when issued and delivered
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against payment therefor as provided herein, will be validly issued and
fully paid and non-assessable and will conform in all material respects to
the description thereof contained in the Prospectus; the issuance of the
Securities is not subject to preemptive or other similar rights.
(xvii) The shares of Common Stock to be issued and sold by the Company
pursuant to the Purchase Contract Agreement (the "Shares"), when issued and
delivered in accordance with the provisions of the Purchase Contract
Agreement and the Pledge Agreement, will be authorized, validly issued and
fully paid and non-assessable and will conform in all material respects to
the description thereof contained in the Prospectus or to any amended or
supplemented description of the Common Stock contained in a then effective
report or registration statement filed pursuant to the 1934 Act; and the
issuance of such Shares will not be subject to preemptive or other similar
rights.
(xviii) The Indenture has been duly authorized by the Company; each of
the Base Indenture, Supplemental Indenture No. 1, Supplemental Indenture
No. 2 and Supplemental Indenture No. 3 does constitute, and Supplemental
Indenture No. 4, when validly executed and delivered by the Debt Trustee,
will constitute a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except to the extent the
enforcement thereof may be limited by the Bankruptcy Exceptions; the
Indenture will conform in all material respects to the description thereof
contained in the Prospectus; and the Indenture has been duly qualified
under the 1939 Act.
(xix) The Subordinated Debt Securities have been authorized by the
Company and, at the Closing Time, will have been executed by the Company
and, when authenticated in the manner provided for in the Indenture and
delivered against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions, and
will be in the form contemplated by, and entitled to the benefits of, the
Indenture and will conform in all material respects to the description
thereof contained in the Prospectus.
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(xx) Each of the Regular Trustees of the Trust is an employee of the
Company and has been authorized by the Company to execute and deliver the
Declaration.
(xxi) The Trust is not in violation of the Declaration or its
certificate of trust filed with the State of Delaware on July 1, 1997
(the "Certificate of Trust"), and neither the Company nor any subsidiary of
the Company which is a "significant subsidiary" (as such term is defined in
Rule 405 of the 1933 Act Regulations) (each such subsidiary, a "Significant
Subsidiary") is in violation of its charter or by-laws. None of the
Company, any Significant Subsidiary or the Trust is in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which it is a party or by which it may be bound, or to which any of its
property or assets may be subject, except for such defaults that would not
be reasonably expected to result in any material adverse effect on the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and the Significant Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business.
(xxii) The entry into the Purchase Contracts underlying the Securities
by the Company, the offer of the Securities as contemplated herein and in
the Prospectus, the issue of the Shares and the sale of the Shares by the
Company pursuant to the Purchase Contracts, the execution, delivery and
performance of this Agreement, the Pricing Agreement, the Purchase
Contracts, the Purchase Contract Agreement, the Pledge Agreement, the
Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debt Securities, the Guarantee Agreements and
the Guarantees and the consummation of the transactions contemplated hereby
and thereby and compliance by the Offerors with their respective
obligations hereunder and thereunder did not or will not result in a breach
of any of the terms or provisions of, or constitute a default or require
the consent of any party under, (A) the Certificate of Trust of the Trust
or the charter or by-laws of the Company or any Significant Subsidiary, (B)
any contract, indenture, mortgage, note, lease, agreement or other
instrument to which any of the Trust, the Company and the Significant
Subsidiaries is a party or by which any of them may be bound, or any
applicable law, rule or regulation or any judgment, order or
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decree of any government, governmental instrumentality or court, domestic
or foreign, having jurisdiction over the Trust, the Company or any
Significant Subsidiary or any of their respective property or assets, or
did not or will not result in the creation or imposition of any lien on the
property or assets of the Trust, the Company or any Significant Subsidiary,
except, in the case of the foregoing clause (B), for such defaults,
consents or liens which would not reasonably be expected to result in a
material adverse effect on the condition (financial or otherwise),
earnings, business affairs or business prospects of the Company and the
Significant Subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business.
(xxiii) Except as disclosed in the Prospectus, there are no actions,
suits or proceedings before or by any government, governmental
instrumentality or court, domestic or foreign, now pending to which the
Company or any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the consolidated financial position,
stockholders' equity (if applicable) or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.
(xxiv) No authorization, approval, consent, order, registration or
qualification of or with any court or governmental authority or agency is
required for the entry into the Purchase Contracts underlying the
Securities, the issuance and sale of the Common Securities, the offering of
the Securities and the issuance and sale of the Shares by the Company
pursuant to such Purchase Contracts, except such as have been obtained and
made under the federal securities laws and such as may be required under
state or foreign securities or Blue Sky laws.
(xxv) This Agreement and the Pricing Agreement have been authorized,
executed and delivered by each of the Offerors.
(xxvi) None of the Offerors is, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net proceeds
therefrom as described in
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the Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
[(xxvii) None of the Company, its subsidiaries or any of their
respective directors, officers or controlling persons, has taken, directly
or indirectly, any action resulting in a violation of Regulation M under
the 1934 Act, or designed to cause or result in, or that has constituted or
that reasonably might be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities or the Common Stock.]
[(xxviii) No "forward-looking statement" (as defined in Rule 175 under
the 1933 Act) contained in the Registration Statement, any preliminary
prospectus or the Prospectus was made or reaffirmed without a reasonable
basis or was disclosed other than in good faith.]
(b) Any certificate signed by any officer of the Company or a Trustee of
the Trust and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Company or the
Trust, as the case may be, to each Underwriter as to the matters covered
thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Offerors agree to
sell to each Underwriter, and each Underwriter severally and not jointly, agrees
to purchase from the Offerors, at the price per security set forth in the
Pricing Agreement, the number of Initial Securities set forth in Schedule A
hereto opposite the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
The initial public offering price per Security and the purchase price per
Security to be paid by the several Underwriters for the Securities have each
been determined and set forth in the Pricing Agreement, dated the date hereof,
and any necessary amendments to the Registration Statement and the Prospectus
will be filed before the Registration Statement becomes effective.
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(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Offerors
hereby grant to the Underwriters, severally and not jointly, the right to
purchase at their election up to 300,000 Option Securities at the price per
share set forth in the Pricing Agreement. The option hereby granted will expire
automatically at the close of business on the 30th calendar day after The
Representation Date and may be exercised in whole or in part from time to time
only for the purpose of covering over-allotments which may be made in connection
with the offering and distribution of the Initial Securities upon notice by the
Underwriters to the Offerors setting forth the aggregate number of additional
Optional Securities to be purchased and the time and date of delivery for the
related Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Underwriters but shall not be later than
seven full business days after the exercise of such option, nor in any event
before the Closing Time, unless otherwise agreed upon by the Underwriters and
the Offerors. If the option is exercised as to all or any portion of the Option
Securities, each of the Underwriters, acting severally and not jointly, will
purchase from the Company the same percentage of the total number of Option
Securities as such Underwriter is purchasing of the Initial Securities as set
forth in Schedule A hereto (subject in each case to such adjustments as the
Underwriters in their discretion shall make to eliminate any fractional Option
Securities).
(c) The Preferred Securities underlying the Securities will be pledged with
the Collateral Agent to secure the holders' obligations to purchase Common Stock
under the Purchase Contracts. Such pledge shall be effected by the transfer to
the Collateral Agent of the Preferred Securities to be pledged at the Closing
Time and appropriate Date of Delivery, if any, in accordance with the Pledge
Agreement.
(d) Delivery of certificates for the Initial Securities and the Option
Securities (if the option provided for in Section 2(b) hereof shall have been
exercised on or before the first business day prior to the Closing Time) shall
be made at the offices of the Underwriters in New York, against the delivery to
the Collateral Agent of the Preferred Securities relating to such Securities by
such Underwriters or on their behalf, and payment of the purchase price for such
Securities shall be made at the offices of Skadden, Arps, Slate, Meagher & Flom
LLP, 919 Third Avenue, New York, New York 10022 or at such other place as shall
be agreed upon by the Underwriters and the Offerors, at 9:00 a.m.
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<PAGE>
(New York time) on the third business day after the execution of The Pricing
Agreement, or such other time not later than ten business days after such date
as shall be agreed upon by the Underwriters and the Offerors (such time and date
of payment and delivery being referred to herein as the "Closing Time").
Payment for the Securities purchased by the Underwriters shall be made by wire
transfer of immediately available funds, payable to the Company, against
delivery to the respective accounts of the Underwriters of the Securities to be
purchased by them. Delivery of, and payment for, the Securities shall be made
through the facilities of the Depository Trust Company. In addition, if the
Underwriters purchase any or all of the Option Securities, payment of the
purchase price and delivery of certificates for such Option Securities shall be
made at the offices of Skadden, Arps, Slate, Meagher & Flom LLP set forth above,
or at such other place as shall be agreed upon by the Underwriters and the
Offerors, on each Date of Delivery as specified in the relevant notice from the
Underwriters to the Offerors.
Certificates for the Initial Securities and the Option Securities, if any,
shall be in such denominations and registered in such names as the Underwriters
may request in writing at least two full business days before the Closing Time
or any Date of Delivery, as the case may be. Merrill Lynch, individually and
not as representative of the Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the Securities, if any, to be purchased
by any Underwriter whose funds have not been received by the Closing Time, or
the Date of Delivery, as the case may be, but such payment shall not relieve
such Underwriter from its obligations hereunder. The certificates for the
Initial Securities and the Option Securities, if any, will be made available for
examination by the Underwriters no later than 10:00 a.m. (New York City time) on
the last business day prior to the Closing Time or the Date of Delivery, as the
case may be.
(e) If settlement for the Option Securities occurs after the Closing Time,
the Offerors will deliver to the Underwriters on the relevant Date of Delivery,
and the obligations of the Underwriters to purchase the Option Securities shall
be conditioned upon the receipt of, supplemental opinions, certificates and
letters confirming as of such date the opinions, certificates and letters
delivered at the Closing Time pursuant to Section 5(k) hereof.
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<PAGE>
SECTION 3. COVENANTS OF THE OFFERORS. The Offerors agree with the
Underwriters as follows:
(a) Promptly following the execution of this Agreement, the Offerors
will cause the Prospectus to be filed with the Commission pursuant to Rule
424 of the 1933 Act Regulations and the Offerors will promptly advise the
Underwriters when such filing has been made.
(b) The Offerors will comply with the requirements of Rule 430A of the
1933 Act Regulations and/or Rule 434 of the 1933 Act Regulations if and as
applicable, and will notify the Underwriters immediately, and confirm the
notice in writing, (i) of the effectiveness of any post-effective amendment
to the Registration Statement or the filing of any supplement or amendment
to the Prospectus, (ii) the receipt of any comments from the Commission,
(iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose and (v) of the issuance
by any state securities commission or other regulatory authority of any
order suspending the qualification or the exemption from qualification of
the Securities or the Shares under state securities or Blue Sky laws or the
initiation or threatening of any proceeding for such purpose. The Offerors
will make every reasonable effort to prevent the issuance of any stop order
and, if any stop order is issued, to obtain the lifting thereof at the
earliest possible moment.
(c) The Offerors will give the Underwriters notice of their intention
to file or prepare any amendment to the Registration Statement (including
any post-effective amendment and any filing under Rule 462(b) of the 1933
Act Regulations), any Term Sheet or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the time
it became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise; will furnish the Underwriters with copies of any
such Rule 462(b) Registration Statement, Term Sheet, amendment, supplement
or revision a reasonable amount of time prior to such proposed filing or
use, as the case may be; and will not file any such Rule 462(b)
Registration Statement, Term Sheet, amendment, supplement or revision to
17
<PAGE>
which the Underwriters or counsel for the Underwriters shall reasonable
object.
(d) The Offerors will deliver to the Representatives and counsel for
the Underwriters, without charge, as many conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein,
and documents incorporated or deemed to be incorporated by reference
therein) executed signature pages thereof and signed copies of all consents
and certificates of experts as the Representatives may reasonably request.
If applicable, the copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical in all material
respects to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
(e) The Company has delivered to each Underwriter, without charge, as
many copies of each preliminary prospectus as such Underwriter reasonably
requested, and the Company hereby consents to the use of such copies for
purposes permitted by the 1933 Act. The Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request. If applicable, the Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(f) The Offerors will comply with the 1933 Act and the 1933 Act
Regulations and the 1934 Act and the 1934 Act Regulations so as to permit
the completion of the distribution of the Securities as contemplated in
this Agreement and in the Registration Statement and the Prospectus. If,
at any time when the Prospectus is required by the 1933 Act or the 1934 Act
to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Offerors, to amend the
Registration Statement in order that the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not
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<PAGE>
misleading or to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations, the
Offerors will promptly prepare and file with the Commission, subject to
Section 3(c), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement
or the Prospectus comply with such requirements, and the Offerors will
furnish to the Underwriters, without charge, such number of copies of
such amendment or supplement as the Underwriters may reasonably request.
(g) The Company will make generally available to its securityholders
as soon as practicable, but not later than 45 days (or 90 days, in the case
of a period that is also the Company's fiscal year) after the close of the
period covered thereby, an earnings statement of the Company and its
subsidiaries (in form complying with the provisions of Rule 158 of the 1933
Act Regulations) covering a twelve-month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in said Rule 158) of the Registration Statement.
(h) The Company will use the net proceeds received by it from the sale
of the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
(i) If the Offerors elect to rely upon Rule 462(b), the Offerors shall
file a Rule 462(b) Registration Statement with the Commission in compliance
with Rule 462(b) and pay the applicable fees in accordance with Rule 111 of
the 1933 Act Regulations by the earlier of (i) 10:00 p.m. Eastern time on
the date of the Pricing Agreement and (ii) the time confirmations are sent
or given, as specified by Rule 462(b)(2).
(j) The Offerors, during the period when the Prospectus is required to
be delivered under the 1933 Act, will file all documents required to be
filed with the Commission pursuant to Section 13, 14 or 15 of the 1934 Act
within the
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<PAGE>
time periods required by the 1934 Act and the 1934 Act Regulations.
(k) The Offerors will use their best efforts to effect the listing of
the Income PRIDES and the Shares on the New York Stock Exchange and to
cause the Securities to be registered under the 1934 Act.
(l) During a period of 90 days from the date of the Pricing Agreement,
neither the Trust nor the Company will, without the prior written consent
of Merrill Lynch, directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, or enter into any
agreement to sell, any Income PRIDES, Purchase Contracts, Preferred
Securities or Common Stock or any security convertible into or exchangeable
or exercisable for Securities, Purchase Contracts, Preferred Securities,
Common Stock or the Subordinated Debt Securities, or any equity securities
substantially similar to the Securities, Preferred Securities, Purchase
Contracts or Common Stock or any debt securities substantially similar to
the Subordinated Debt Securities; PROVIDED, HOWEVER, that such restriction
shall not affect the ability of the Offerors to take any such action (i) in
connection with any employee benefit, dividend reinvestment, stock option
or stock purchase plan of the Company or its subsidiaries; (ii) in
connection with any Securities issued pursuant to a merger or acquisition;
(iii) in connection with the offering of the Securities, including the
Preferred Securities, and the Subordinated Debt Securities issued pursuant
to this Agreement or (iv) upon exercise of stock options; [or (B) enter
into any swap or any other agreement or any transaction that transfers, in
whole or in part, directly or indirectly, the economic consequence of
ownership of the Securities, any security convertible into or exchangeable
into or exercisable for the Securities or Subordinated Debt Securities or
any debt securities substantially similar to the Subordinated Debt
Securities or equity securities substantially similar to the Securities,
whether any such swap or transaction is to be settled by delivery of
Securities, Subordinated Debt Securities or other securities, in cash or
otherwise.]
[(m) The Company, during a period of three years from the Closing
Time, will make generally available to the Underwriters copies of all
reports and other communications (financial or other) mailed to
stockholders, and deliver to the Underwriters promptly after they are
available, copies of any reports and financial statements furnished to or
20
<PAGE>
filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed; and shall furnish such
additional information concerning the business and financial condition of
the Company as the Underwriters may from time to time reasonably request
(such financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission).]
(n) The Company will reserve and keep available at all times, free of
preemptive or other similar rights and liens and adverse claims, sufficient
shares of Common Stock to satisfy any obligations to issue Shares upon
settlement of the Purchase Contracts and shall take all actions necessary
to keep effective the Registration Statement with respect to the Shares.
[(o) None of the Company, its subsidiaries or any of their respective
directors, officers or controlling persons, will take, directly or
indirectly, any action resulting in a violation of Regulation M under the
1934 Act, or designed to cause or result in, or that reasonably might be
expected to constitute, the stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities or the Common Stock.]
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, the Pricing
Agreement, the Purchase Contracts, the Purchase Contract Agreement and the
Pledge Agreement, including, without limitation, expenses related to the
following, if incurred: (i) the preparation, delivery, printing and filing of
the Registration Statement and Prospectus as originally filed (including
financial statements and exhibits) and of each amendment thereto; (ii) the
preparation, issuance and delivery of the certificates for the Securities and
the Shares; (iii) the fees and disbursements of the Company's counsel,
accountants and other advisors or agents (including the transfer agents and
registrars), as well as fees and disbursements of the Trustees, the Purchase
Contract Agent, the Collateral Agent and any Depositary, and their respective
counsel (except as provided for in the Prospectus); (iv) the qualification of
the Securities and the Shares under securities laws in accordance with the
provisions of Section 3(g), including filing fees and the fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of the Blue Sky Survey and any
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Legal Investment Survey; (v) the printing and delivery to the Underwriters of
copies of the Registration Statement as originally filed and of each amendment
thereto, of each preliminary prospectus, any Term Sheet and of the Prospectus
and any amendments or supplements thereto; (vi) the printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any Legal Investment Survey;
(vii) any fees payable in connection with the rating of the Securities by
nationally recognized statistical rating organizations; (viii) any fees payable
to the Commission; (ix) any fees payable or expenses incurred pursuant to any
Uniform Commercial Code related filings; and (x) the fees and expenses incurred
in connection with the listing of the Income PRIDES and the Shares on the New
York Stock Exchange.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their out-of-pocket expenses, including the
reasonable fees and disbursements of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters to purchase and pay for the Securities pursuant to this
Agreement are subject to the accuracy of the representations and warranties of
the Offerors herein contained or in certificates of any officer of the Company
or any subsidiary or the Trustees of the Trust delivered pursuant to the
provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, shall have become effective under the 1933 Act not later than
5:30 p.m., New York City time, on the date hereof, and on the date hereof
and at the Closing Time and any Date of Delivery, no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the
satisfaction of counsel to the Underwriters. A prospectus containing
information relating to the description of the Securities, the specific
method of distribution and similar matters shall have been filed with the
Commission in accordance with Rule 424(b)(1), (2), (3), (4) or (5), as
applicable (or any required post-effective amendment providing such
information shall have been filed and declared
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effective in accordance with the requirements of Rule 430A), or, if the
Company has elected to rely upon Rule 434 of the 1933 Act Regulations, a
Term Sheet including the Rule 434 Information shall have been filed with
the Commission in accordance with Rule 424(b)(7).
(b) At the Closing Time the Underwriters shall have received:
(1) The favorable opinion, dated as of the Closing Time, of
Deborah J. Long, Esq., Senior Vice President, Secretary and General
Counsel of the Company, or any successor having substantially
equivalent responsibilities with the Company in form and substance
reasonably satisfactory to counsel for the Underwriters, to the effect
that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware, with power and authority (corporate and other)
to own its properties and conduct its business as described in
the Prospectus as amended or supplemented, and has been duly
qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts
any business, so as to require such qualification, or is subject
to no material liability or disability by reason of the failure
to be so qualified in any such jurisdiction.
(ii) The Company has an authorized capitalization as set
forth in the Prospectus as amended or supplemented, and all of
the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable and conform in all material respects to the
description thereof in the Prospectus as amended or supplemented;
and all of the issued shares of capital stock of Protective Life
Insurance have been duly and validly authorized and issued, are
fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the
Company, free and clear of any perfected security interests and,
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to such counsel's best knowledge, any other security interests,
claims, liens or encumbrances.
(iii) Each of the documents incorporated by reference in the
Registration Statement or the Prospectus at the time they were
filed or became effective (other than the financial statements
and the notes thereto, the financial statement schedules, and any
other financial or statistical data included or incorporated by
reference therein, as to which such counsel need express no
opinion) complied as to form in all material respects with the
requirements of the 1934 Act and the 1934 Act Regulations, as
applicable; and such counsel has no reason to believe that any of
such documents, when such documents became effective or were so
filed, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(iv) All of the issued and outstanding Common Securities are
directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable
right.
(v) None of the entry into the Purchase Contracts underlying
the Securities by the Company, the offer of the Securities as
contemplated herein and in the Prospectus, the issue of the
Shares and the sale of the Shares by the Company pursuant to the
Purchase Contracts, the execution, delivery and performance of
this Agreement, the Pricing Agreement, the Purchase Contracts,
the Purchase Contract Agreement, the Pledge Agreement, the
Declaration, the Preferred Securities, the Common Securities, the
Indenture, the Subordinated Debt Securities, the Guarantee
Agreements, and the Guarantees and the consummation of the
transactions contemplated hereby and thereby, and the compliance
by each of the Offerors with their respective obligations
hereunder and thereunder do not and will not (a) conflict with or
result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any con-
24
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tract, indenture, mortgage, agreement, note, lease or other
agreement or instrument known to such counsel to which any of the
Trust, the Company and Protective Life Insurance is a party or by
which any of them may be bound or to which any of their property
or assets is subject, except, in all such cases, for such
conflicts, breaches, violations or defaults as would not
reasonably be expected to have a material adverse effect on the
financial condition of the Trust, the Company and Protective Life
Insurance taken as a whole or would not reasonably be expected to
have a material adverse effect on the issuance or sale of the
Securities, or (b) result in any violation of the provisions of
(x) the charter or by-laws of the Company or Protective Life
Insurance or the Certificate of Trust of the Trust or (y) any
statute, rule or regulation known to such counsel of any court or
insurance regulatory authority or other governmental agency or
body having jurisdiction over the Trust, the Company or
Protective Life Insurance or any of their respective properties
or assets, except, with respect to clause (y) above, such
violations as would not reasonably be expected to have a material
adverse effect on the financial condition or results of
operations of the Company and Protective Life Insurance taken as
a whole or the Trust or would not affect the validity of or
otherwise have a material adverse effect on the issuance or sale
of the Securities; and except that for purposes of this paragraph
(v) such counsel need not express any opinion as to any violation
of any federal or state securities laws or blue sky or insurance
securities laws; PROVIDED FURTHER that insofar as performance by
the Offerors of their obligations hereunder is concerned, such
counsel need not express any opinion as to the Bankruptcy
Exceptions.
(vi) To the best of such counsel's knowledge, no consent,
approval, authorization, order, registration or qualification of
or with any court or insurance regulatory authority or other
governmental agency or body having jurisdiction over the Company
or any of its subsidiaries or the Trust is required for the issue
or sale of the Securities being delivered or the consummation by
the Company
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or the Trust of the transactions contemplated hereby, except such
as have been, or will have been prior to Closing Time, obtained
under the 1933 Act and the 1939 Act and such consents, approvals,
orders, authorizations, registrations or qualifications as may be
required under state securities laws or blue sky laws or
insurance securities laws in connection with the purchase and
distribution of the Securities by the Underwriters, and except
those which, if not obtained, would not reasonably be expected to
have a material adverse effect on the financial condition or
results of operation of the Company and its subsidiaries taken as
a whole or the Trust.
(vii) There are no legal or governmental proceedings pending
or, to the best of such counsel's knowledge, threatened, to which
the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject
of a character required under the Federal securities laws to be
disclosed in the Registration Statement or Prospectus which are
not adequately disclosed in the Registration Statement or
Prospectus.
(viii) All conditions precedent provided for in the Purchase
Contract Agreement relating to the authentication and delivery of
the Security Certificates have been complied with and the Company
is duly entitled to the authentication and delivery of the
Security Certificates in accordance with the terms of the
Purchase Contract Agreement; the Security Certificates are in a
form contemplated by the Purchase Contract Agreement and comply
with all applicable statutory requirements and with the
requirements of the New York Stock Exchange.
Such counsel shall also have stated that, while she has not
herself checked the accuracy or completeness of or otherwise verified,
and is not passing upon and assumes no responsibility for the accuracy
or completeness of, the statements contained in the Registration
Statement or the Prospectus, in the course of her review and
discussion of the contents of the Registration Statement and
Prospectus and any amendment or
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supplement thereto with certain officers and employees of the Company
and its independent accountants, but without independent check or
verification, no facts have come to her attention that would cause her
to believe that the Registration Statement or the Prospectus, as
amended or supplemented, as of the date hereof and the Closing Time
(other than the financial statements and related notes, the financial
statement schedules and other financial and statistical data included
therein and the statements of eligibility of the respective Trustees
on Form T-1 under the 1939 Act, as to which she need express no
belief) contained or contains an untrue statement of a material fact
or omitted or omits to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering the opinion required hereby, (i) such counsel may
state that she is admitted to the Bar of the State of Alabama only and
(ii) such counsel may rely (A) as to any matter of Delaware or Federal
law, upon the opinion of Debevoise & Plimpton delivered in accordance
with Section 5(b)(2) and the opinion of Richards, Layton & Finger,
P.A. delivered in accordance with Section 5(b)(3), (B) as to any
matter to which the Representatives consent (which consent shall not
be unreasonably withheld), to the extent specified in such opinion,
upon the opinions (copies of which shall have been provided to the
Representatives) of other counsel in good standing whom such counsel
believes to be reliable, PROVIDED that such counsel shall state that
she believes that both she and the Underwriters are justified in
relying on such opinions and (C) as to matters of fact, upon
certificates of officers and representatives of the Company and of
public officials (copies of which shall have been provided to the
Underwriters), PROVIDED that such counsel shall state that she
believes that both she and the Underwriters are justified in relying
upon such certificates.
(2) The favorable opinion, dated as of the Closing Time, of
Debevoise & Plimpton, special counsel to the Offerors, in form and
substance satisfactory to counsel for the Underwriters and subject to
the qualifications and assumptions stated therein, to the effect that:
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<PAGE>
(i) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements
and related notes, the financial statement schedules and other
financial and statistical data included or incorporated by
reference therein, as to which no opinion is being expressed)
complied as to form in all material respects with the
requirements of the 1933 Act, the 1933 Act Regulations, the 1939
Act and the 1939 Act Regulations; and the Declaration, the
Indenture, the Guarantee Agreements and the Statements of
Eligibility on Forms T-1 with respect to each of the
Institutional Trustee, the Debt Trustee and the Guarantee Trustee
filed with the Commission as part of the Registration Statement
complied as to form in all material respects with the
requirements of the 1939 Act and the 1939 Act Regulations.
(ii) The Registration Statement has become effective under
the 1933 Act; the Prospectus has been filed pursuant to Rule 424
of the 1933 Act Regulations, and no proceedings for a stop order
have been instituted or are pending or, to the knowledge of such
counsel, threatened under Section 8(d) of the 1933 Act; and no
further approval of, authorization, consent, certificate or order
of any governmental body, federal, state or other, is required in
connection with the issuance and sale of the Securities to the
Underwriters as provided in the Agreement, except as may be
required by state securities laws.
(iii) The Declaration has been duly authorized, executed and
delivered by the Company and the Trustees and, assuming due
authorization, execution and delivery by the Institutional
Trustee and the Delaware Trustee, is a valid and binding
obligation of the Company, enforceable against the Company and
each of the Regular Trustees in accordance with its terms, except
to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions; and the Declaration has been duly
qualified under the 1939 Act.
28
<PAGE>
(iv) Each of the Offerors meets the requirements for use of
Form S-3 under the 1933 Act Regulations.
(v) The Common Securities, the Preferred Securities, the
Subordinated Debt Securities, each of the Guarantees, the
Declaration, the Indenture and each of the Guarantee Agreements
conform in all material respects to the descriptions thereof
contained in the Prospectus.
(vi) The statements in the Prospectus under the captions
"Description of the FELINE PRIDES," "Description of the Purchase
Contracts," "Certain Provisions of the Purchase Contract
Agreement and the Pledge Agreement," "Description of the
Preferred Securities", "Description of the Preferred Securities
Guarantee", "Description of the Subordinated Debt Securities"
"Effect of Obligations under the Subordinated Debt Securities and
the Preferred Securities Guarantee," and "Description of the
Common Stock," insofar as such statements constitute summaries of
certain provisions of the documents and laws referred to therein,
has been reviewed by such counsel and fairly summarizes the
material provisions of such documents and laws.
(vii) The Securities have been authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when
issued and delivered by the Company pursuant to this Agreement
against payment of the consideration set forth in the Pricing
Agreement, will be validly issued and fully paid and
non-assessable; the Common Stock and the Securities are each
registered under the 1934 Act, and the Income PRIDES issuable at
the Closing Time and the Shares issuable by the Company pursuant
to the Purchase Contracts have been authorized for listing on the
New York Stock Exchange, upon official notice of issuance.
(viii) The Shares subject to the Purchase Contract Agreement
have been validly authorized and reserved for issuance and, when
issued and delivered by the Company in accordance with the
provisions of the Purchase Contract Agreement, the Purchase
Contracts and the Pledge Agreement, will
29
<PAGE>
be fully paid and non-assessable; the issuance of such Shares
will not be subject to preemptive or other similar rights arising
by law or, to the best of such counsel's knowledge, otherwise.
(ix) The issuance of the Securities is not subject to
preemptive or other similar rights arising by law or, to the best
of such counsel's knowledge, otherwise.
(x) This Agreement has been duly authorized, executed and
delivered by each of the Trust and the Company.
(xi) The Purchase Contract Agreement has been duly
authorized by the Company and, assuming due authorization,
execution and delivery of the Purchase Contract Agreement by the
Purchase Contract Agent, constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xii) The Pledge Agreement has been duly authorized by the
Company and, assuming due authorization, execution and delivery
of the Pledge Agreement by the Collateral Agent and the Purchase
Contract Agent, constitutes a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may
be limited by the Bankruptcy Exceptions.
(xiii) Each of the Guarantees and Guarantee Agreements has
been duly authorized, executed and delivered by the Company; the
Preferred Securities Guarantee and the Preferred Securities
Guarantee Agreement, assuming they are duly authorized, executed
and delivered by the Guarantee Trustee, constitute valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions;
and the Preferred Securities Guarantee Agreement has been duly
qualified under the 1939 Act.
30
<PAGE>
(xiv) The Indenture has been duly executed and delivered by
the Company and, assuming due authorization, execution, and
delivery thereof by the Debt Trustee, is a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; and the
Indenture has been duly qualified under the 1939 Act.
(xv) The Securities, the Shares, the Common Securities, the
Subordinated Debt Securities, each of the Guarantees, the
Declaration and each of the Guarantee Agreements conform in all
material respects to the description thereof contained in the
Prospectus.
(xvi) The Subordinated Debt Securities are in the form
contemplated by the Indenture, have been duly authorized,
executed and delivered by the Company and, when authenticated by
the Debt Trustee in the manner provided for in the Indenture and
delivered against payment therefor as provided in this Agreement,
will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions.
(xvii) None of the Offerors is, and following consummation
of the transactions contemplated hereby and the application of
the proceeds therefrom in the manner set forth in the Prospectus
will be, an "investment company" or under the "control" of an
"investment company" as such terms are defined.
(xviii) The Purchase Contract Agreement, the Purchase
Contracts underlying the Securities being delivered at the
Closing Time and at any Date of Delivery, and the Pledge
Agreement have been duly authorized, executed and delivered by
the Company and each is a valid and legally binding agreement of
the Company enforceable against the Company in accordance with
its terms, except as may be limited by the Bankruptcy Exceptions;
PROVIDED, HOWEV-
31
<PAGE>
ER, that based on a review of applicable case law, upon the
occurrence of a Termination Event, Section 365(e)(1) of the
Bankruptcy Code (11 U.S.C. Sections 101-1330, as amended) should
not substantively limit the provisions of Sections 3.15 and 5.8
of the Purchase Contract Agreement and Section 4.3 of the Pledge
Agreement that require termination of the Purchase Contracts and
release of the Collateral Agent's security interest in the
Preferred Securities or the Treasury Securities; PROVIDED,
HOWEVER, that restrictions respecting relief from the automatic
stay under Section 362 of the Code may affect the timing of the
exercise of such rights and remedies.
(xix) When the Securities are issued in accordance with the
terms of the Purchase Contract Agreement and delivered against
payment therefor, the Securities will entitle the holders thereof
to the rights specified in the Purchase Contract Agreement.
(xx) For purposes of the opinions expressed therein, such
counsel has assumed that (1) the Pledge Agreement has been
authorized, executed and delivered by the Purchase Contract Agent
on behalf of each of the holders of the Securities from time to
time, (2) the Purchase Contract Agent is incorporated and validly
existing under the laws of the state of its incorporation, (3)
the Purchase Contract Agent and each of the holders of the
Securities has full power, authority and legal right (including,
without limitation, any legal right dependent upon there being no
necessary governmental approvals or filings and no conflict with
laws, governing documents or contracts) to make and perform its
obligations under the Pledge Agreement, (4) the Pledge Agreement
is the legal, valid, binding and enforceable obligation of the
Purchase Contract Agent on behalf of each of the holders of the
Securities from time to time, and (5) the Purchase Contract Agent
and each holder of Securities has sufficient rights in the
Preferred Securities or the Treasury Securities, as the case may
be, for the security interest of the Collateral Agent for the
benefit of the Company to attach.
32
<PAGE>
For purposes of such counsel's opinion: (i) "UCC" means the
Uniform Commercial Code as in effect on the date thereof in the State
of New York; (ii) "FEDERAL BOOK-ENTRY REGULATIONS" means the United
States Department of Treasury regulations governing the transfer and
pledge of marketable Treasury Securities maintained in the form of
entries in the records of the Federal Reserve Banks and set forth in
61 Fed. Reg. 43,626 (1996) (to be codified at 31 C.F.R. Part 357);
(iii) "SECURITIES INTERMEDIARY" means The Bank of New York, acting
solely in its capacity as a "securities intermediary" as defined in
the UCC and the Federal Book-Entry Regulations; and (iv) "COLLATERAL
ACCOUNT" means account number C24967 maintained by the Securities
Intermediary in the name of 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" pursuant to the Pledge
Agreement, dated as of November 25, 1997, among the Securities
Intermediary, the Purchase Contract Agent and the Company (the "Pledge
Agreement").
The provisions of the Pledge Agreement are effective to create,
in favor of the Collateral Agent for the benefit of the Company, a
valid security interest under the UCC in all "securities entitlements"
(as defined in Section 8-102(a)(17) of the UCC and the Federal
Book-Entry Regulations) now or hereafter credited to the Collateral
Account relating to Preferred Securities or Treasury Securities (such
securities entitlements, the "Pledged Securities Entitlements"). The
provisions of the Pledge Agreement are effective under the UCC and the
Federal Book-Entry Regulations to perfect the security interest of the
Collateral Agent for the benefit of the Company in the Pledged
Security Entitlements.
Debevoise & Plimpton shall also have stated that, while they have
not themselves checked the accuracy or completeness of or otherwise
verified, and are not passing upon and assume no responsibility for
the accuracy or completeness of, the statements contained in the
Registration Statement or the Prospectus, except to the limited extent
stated in paragraphs (vii) and (viii) above, in the course of their
review and discus-
33
<PAGE>
sion of the contents of the Registration Statement and the Prospectus
with certain officers and employees of the Company and its independent
accountants, but without independent check or verification, no facts
have come to the attention of such counsel that would cause such
counsel to believe that the Registration Statement or the Prospectus,
as amended or supplemented, as of the date hereof and the Closing Time
(other than the financial statements and related notes, the financial
statement schedules, and other financial and statistical data included
or incorporated by reference therein as to which such counsel need
express no belief) contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
In rendering the foregoing opinion, Debevoise & Plimpton may
state that they express no opinion as to the laws of any jurisdiction
other than the Federal laws of the United States and the laws of the
States of New York and Delaware. In giving such opinion, such counsel
may rely, as to matters of Delaware law, upon the opinion of Richards,
Layton & Finger, P.A., special Delaware counsel to the Offerors, in
which case the opinion shall state that such counsel believes that you
and such counsel are entitled to so rely.
(3) The favorable opinion, dated as of the Closing Time, of
Richards, Layton & Finger, special Delaware counsel to the Offerors,
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) The Trust has been created and is validly existing in
good standing as a business trust under the Delaware Act, and has
the business trust power and authority to conduct its business as
described in the Prospectus.
(ii) The Declaration constitutes a legal, valid and binding
obligation of the Company and is enforceable against the Company
in accordance with its terms, except that to the extent
enforceability thereof may be limited by the (i) bankruptcy,
insolvency, moratorium, receivership, reorgani-
34
<PAGE>
zation, liquidation, fraudulent conveyance and other similar laws
relating to or affecting the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law
relating to fiduciary duties (regardless of whether considered
and applied in a proceeding in equity or at law), and (iii) the
effect of applicable public policy on the enforcement of
provisions related to indemnification.
(iii) Under the Delaware Act and the Declaration, the Trust
has the power and authority to (i) execute and deliver, and to
perform its obligations under, this Agreement and the Pricing
Agreement and (ii) issue, and perform its obligations under, the
Trust Securities.
(iv) Under the Delaware Act and the Declaration, the
execution and delivery by the Trust of this Agreement and the
Pricing Agreement, and the performance by the Trust of its
obligations hereunder and under the Pricing Agreement, have been
authorized by all necessary action on the part of the Trust.
(v) The Preferred Securities have been authorized by the
Declaration and, when executed by the Trust and authenticated by
the Institutional Trustee in accordance with the Declaration and
delivered against payment therefor in accordance with the terms
of this Agreement, will be validly issued and, subject to
qualifications hereinafter expressed, fully paid and
nonassessable undivided beneficial interests in the assets of the
Trust; the Holders of the Preferred Securities, as beneficial
owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware; said counsel may note that the
holders of the Preferred Securities may be obligated to make
payments as set forth in the Declaration.
(vi) The Common Securities have been authorized by the
Declaration and, when issued, executed and authenticated in
accordance with the terms
35
<PAGE>
of the Declaration, and delivered and paid for as set forth in
the Prospectus, will be validly issued, undivided beneficial
interests in the assets of the Trust.
(vii) Under the Delaware Act and the Declaration, the
issuance of the Trust Securities is not subject to preemptive or
other similar rights.
(viii) None of the execution and delivery by the Trust of,
or the performance by the Trust of its obligations under, this
Agreement, the issuance and sale of the Preferred Securities by
the Trust in accordance with the terms of this Agreement and the
Pricing Agreement, or the consummation by the Trust of the other
transactions contemplated thereby, will contravene any provisions
of applicable Delaware law or Delaware administrative regulations
or the Certificate of Trust or the Declaration.
(ix) No authorization, approval, consent, order,
registration or qualification of or with any Delaware state
governmental authority or Delaware state agency is required for
the issuance and sale by the Trust of the Securities to the
Underwriters, or the performance by the Trust of its obligations
under this Agreement, the Pricing Agreement, the Preferred
Securities, the Declaration and the Trust Securities, except such
as has been obtained and made under the federal securities laws
or such as may be required under state or foreign securities or
Blue Sky laws.
(4) The favorable opinion, dated as of the Closing Time, of
Richards, Layton & Finger, counsel to Wilmington Trust Company, as
Delaware Trustee, Institutional Trustee under the Declaration, and
Guarantee Trustee under the Preferred Securities Guarantee Agreement,
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
(i) Wilmington Trust Company is duly incorporated, validly
existing and in good standing as a banking corporation under the
laws of the State of Delaware with all necessary power and
authority to execute and deliver, and to carry out and per-
36
<PAGE>
form its obligations under the terms of the Declaration and the
Preferred Securities Guarantee Agreement.
(ii) The execution, delivery and performance by the
Institutional Trustee of the Declaration and the execution,
delivery and performance by the Guarantee Trustee of the
Preferred Securities Guarantee Agreement have been duly
authorized by all necessary corporation action on the part of the
Institutional Trustee and the Guarantee Trustee, respectively.
The Declaration and the Preferred Securities Guarantee Agreement
have been duly executed and delivered by the Institutional
Trustee and the Guarantee Trustee, respectively, and constitute
the legal, valid and binding obligations of the Institutional
Trustee and the Guarantee Trustee, respectively, enforceable
against the Institutional Trustee and the Guarantee Trustee,
respectively, in accordance with their terms, except to the
extent enforcement thereof may be limited by the Bankruptcy
Exceptions.
(iii) The execution, delivery and performance of the
Declaration and the Preferred Securities Guarantee Agreement by
the Institutional Trustee and the Guarantee Trustee,
respectively, do not conflict with or constitute a breach of the
Articles of Organization or By-laws of the Institutional Trustee
and the Guarantee Trustee, respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal banking
authority is required for the execution, delivery or performance
by the Institutional Trustee and the Guarantee Trustee of the
Declaration and the Preferred Securities Guarantee Agreement.
(5) The favorable opinion, dated as of the Closing Time, of
Emmet, Marvin & Martin, counsel to The Bank of New York, as Purchase
Contract Agent, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
37
<PAGE>
(i) The Bank of New York is duly incorporated and is validly
existing as a banking corporation with trust powers under the
laws of the United States with all necessary power and authority
to execute, deliver and perform its obligations under the
Purchase Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery of the Securities
have been duly authorized by all necessary corporate action on
the part of the Purchase Contract Agent. The Purchase Contract
Agreement and the Pledge Agreement have been duly executed and
delivered by the Purchase Contract Agent, and constitute the
legal, valid and binding obligations of the Purchase Contract
Agent, enforceable against the Purchase Contract Agent in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(iii) the execution, delivery and performance of the
Purchase Contract Agreement and the Pledge Agreement by the
Purchase Contract Agent does not conflict with or constitute a
breach of the charter or by-laws of the Purchase Contract Agent.
(iv)No consent, approval or authorization of, or
registration with or notice to, any New York or federal
governmental authority or agency is required for the execution,
delivery or performance by the Purchase Contract Agent of the
Purchase Contract Agreement and the Pledge Agreement.
(6) The signed opinion of Debevoise & Plimpton, special tax
counsel to the Offerors, together with signed or reproduced copies of
such opinion for each of the other Underwriters, generally to the
effect that (i) the Trust will be classified as a grantor trust and
not as an association taxable as a corporation for federal income tax
purposes and (ii) the statements set forth in the Prospectus relating
to the issuance of the Preferred Securities under the caption "Certain
Federal
38
<PAGE>
Income Tax Considerations", to the extent that such statements relate
to matters of law or legal conclusion, constitute the opinion of
Debevoise & Plimpton, in each case based upon current law and the
assumptions stated or referred to therein. Such opinion may be
conditioned on, among other things, the initial and continuing
accuracy of the facts, financial and other information, covenants and
representations set forth in certificates of officers of the Company
and the Trust and other documents deemed necessary for such opinion.
(7) The favorable opinion, dated as of the Closing Time, of
Skadden, Arps, Slate, Meagher & Flom LLP, counsel for the
Underwriters, in form and substance satisfactory to the Underwriters,
with respect to the issuance and sale of the Securities, and other
related matters as the Underwriters may reasonably require, and the
Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(8) The favorable opinions, dated as of the Closing Time, of (i)
Leboeuf, Lamb, Greene & MacRae LLP, special Connecticut counsel for
the Company, (ii) Leboeuf, Lamb, Greene & MacRae LLP, special
Pennsylvania counsel for the Company, (iii) Dickinson, Wright, Moon,
Van Dusen & Freeman, special Michigan counsel for the Company, and
(iv) Shook, Hardy & Bacon, special Kansas counsel to the Company, in
form and substance satisfactory to the Underwriters, with respect to
the applicability of the "bucket shop" laws of such states.
(c) Between the date of this Agreement and prior to the Closing Time,
no material adverse change shall have occurred in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
the Trust or the Company and its subsidiaries, considered as one
enterprise, whether or not in the ordinary course of business.
(d) At the Closing Time, the Underwriters shall have received a
certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company and a
certificate of a Regular Trustee of the Trust, and dated as of the Closing
Time, to the effect that (i) there has been no material adverse change in
the condition, financial or otherwise, or
39
<PAGE>
in the earnings, business affairs or business prospects of the Trust or the
Company and its subsidiaries considered as one enterprise, whether or not
in the ordinary course of business, (ii) the representations and warranties
in Section 1 hereof are true and correct as though expressly made at and as
of the Closing Time, (iii) the Company and the Trust have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been initiated or threatened by
the Commission.
(e) At the time of the execution of this Agreement, the Underwriters
shall have received from Coopers & Lybrand LLP a letter dated such date in
form and substance satisfactory to the Underwriters, to the effect set
forth below and as to such other matters as the Underwriters may reasonably
request, that:
(i) They have audited the consolidated balance sheets of
Protective Life Corporation and subsidiaries (the "Company") as of December
31, 1996 and 1995, and the related consolidated statements of income,
stockholders' equity, and cash flows for each of the three years in the
period ended December 31, 1996, and the related financial statement
schedules, included in or incorporated by reference in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996, and incorporated
by reference in the registration statement (file No. 333-30905) on Form S-3
filed by Protective Life Corporation, PLC Capital Trust II, PLC Capital
Trust III, and PLC Capital Trust IV under the Securities Act of 1933, as
amended (the "Act"); their report with respect thereto is also incorporated
by reference in such registration statement. Such registration statement,
including information incorporated by reference and the prospectus dated
July 18, 1997 and the prospectus supplement dated November 20, 1997, are
referred to in such letter as the "Registration Statement." In connection
with the Registration Statement:
1. They are independent certified public accountants with
respect to the Company within the meaning of the Act and the applicable
published rules and regulations thereunder.
40
<PAGE>
2. In their opinion, the consolidated financial statements and
financial statement schedules of the Company audited by them and
incorporated by reference in the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the related published rules and regulations.
3. They have not audited any financial statements of the
Company as of any date or for any period subsequent to December 31, 1996;
although they have conducted an audit for the year ended December 31, 1996,
the purpose (and therefore the scope) of the audit was to enable them to
express their opinion on the consolidated financial statements as of
December 31, 1996, and for the year then ended, but not on the consolidated
financial statements for any interim period within that year. Therefore,
they are unable to and do not express any opinion on the unaudited
condensed consolidated balance sheet as of March 31, 1997, June 30, 1997,
and September 30, 1997 and the unaudited consolidated condensed statements
of income, stockholders' equity and cash flows for the three-month periods
ended March 31, 1997 and 1996, the three-month and six-month periods ended
June 30, 1997 and 1996, and the three-month and nine-month periods ended
September 30, 1997 and 1996, included in the Company's quarterly reports on
Form 10-Q for the quarters ended March 31, 1997, June 30, 1997, and
September 30, 1997 incorporated by reference in the Registration Statement,
or on the financial position, results of operations or cash flows as of any
date or for any period subsequent to December 31, 1996.
4. For purpose of such letter, they have read the 1997 minutes
of the meetings of the Stockholders, the Board of Directors of the Company
and its subsidiaries as set forth in the minute books at November ___,
1997, officials of the Company having advised them that the minutes for all
such meetings through that date were set forth therein; they have carried
out other procedures to November ____, 1997 as follows (their work did not
extend to the period from November ____, 1997 to November ____, 1997,
inclusive):
a. With respect to the three-month, six-month, and
nine-month periods ended March 31, 1997 and
41
<PAGE>
1996, June 30, 1997 and 1996, and September 30, 1997 and 1996,
respectively, they have:
(i) Performed the procedures (completed on April 23, 1997)
specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in SAS No.
71, "Interim Financial Information," on the unaudited condensed
consolidated balance sheet as of March 31, 1997 and unaudited
condensed consolidated statements of income, stockholders' equity, and
cash flows for the three-month periods ended March 31, 1997 and 1996,
included in the Company's quarterly report on Form 10-Q for the
quarter ended March 31, 1997 and incorporated by reference in the
Registration Statements.
(ii) Performed the procedures (completed on July 23, 1997)
specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in SAS No.
71, "Interim Financial Information," on the unaudited condensed
consolidated balance sheet as of June 30, 1997 and unaudited condensed
consolidated statements of income, stockholders' equity, and cash
flows for the three-month and six-month periods ended June 30, 1997
and 1996, included in the Company's quarterly report on Form 10-Q for
the quarter ended June 30, 1997 and incorporated by reference in the
Registration Statements.
(iii) Performed the procedures (completed on October 23,
1997) specified by the American Institute of Certified Public
Accountants for a review of interim financial information as described
in SAS No. 71, "Interim Financial Information," on the unaudited
condensed consolidated balance sheet as of September 30, 1997 and
unaudited condensed consolidated statements of income, stockholders'
equity, and cash flows for the three-month and nine-month periods
ended September 30, 1997 and 1996, included in the Company's quarterly
report on Form 10-Q for the quarter ended September 30, 1997 and
incorporated by reference in the Registration Statements.
(iv) Inquired of certain officials of the Company who have
responsibility for financial and accounting matters whether the
unaudited condensed con-
42
<PAGE>
solidated financial statements referred to in 4.a.(i), 4.a.(ii), and
4.a.(iii) comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Also, they would not
necessarily reveal matters of significance with respect to the comments in
the following paragraph. Accordingly, they make no representations
regarding the sufficiency of the foregoing procedures for your purposes.
5. Nothing came to their attention as a result of the foregoing
procedures, however, that caused them to believe that the unaudited
condensed consolidated financial statements described in 4.a.(i), 4.a.(ii)
and 4.a.(iii) do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related published
rules and regulations.
6. Company officials have advised them that no consolidated
financial statements as of any date or for any period subsequent to
September 30, 1997 are available, accordingly, the procedures carried out
by them with respect to financial statement items after September 30, 1997
have been, of necessity, even more limited than those with respect to the
periods referred to in paragraph 4. They have made inquiries of certain
officials of the Company who have responsibility for financial and
accounting matters as to whether (a) at November ___, 1997, there was any
change in the common stock, any increase in short-term or long-term debt,
or any decreases in consolidated net assets or stockholders' equity (other
than the effect on stockholders' equity of unrealized gains and losses on
investments or dividends in the interim period) as compared with the
amounts shown on the September 30, 1997 unaudited condensed consolidated
balance sheet incorporated by reference in the Registration Statement or
(b) for the period from October 1, 1997 to November ____, 1997, there were
any decreases as compared with the corresponding period in the preceding
year, in consolidating operating revenues or in the total or per-share
amounts of income before extraordinary items, or net of income. On the
basis of these inquiries and our reading of the minutes as described in 4.,
nothing came to out attention that caused us to believe that there were any
43
<PAGE>
such changes, increases, or decreases, except in all instances for changes,
increases, or decreases that the Registration Statement discloses have
occurred or may occur.
7. For purposes of such letter, they have also read selected
items from the Registration Statement and incorporated documents and have
performed the procedures set forth in such letter, which were applied as
indicated in such letter, with respect to such items.
(f) At the Closing Time, the Underwriters shall have received from
Coopers & Lybrand LLP a letter, dated as of the Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant to
subsection (e) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Closing Time.
(g) At the Closing Time, and at each Date of Delivery, counsel for the
Underwriters shall have been furnished with such documents, certificates
and opinions as they may reasonably request for the purpose of enabling
them to pass upon the issuance and sale of the Securities as herein
contemplated or in order to evidence the accuracy of any of the
representations or warranties or statement or statements of either of the
Offerors, the performance of the of the covenants of the Offerors, or the
fulfillment of any of the conditions here contained.
[(h) At the Closing Time, (i) the Securities shall be rated in one of
the four highest rating categories for preferred stock ("Investment Grade")
by any nationally recognized statistical rating agency, and the Offerors
shall have delivered to the Underwriters a letter, dated the Closing Time,
from such nationally recognized statistical rating agency, or other
evidence satisfactory to the Underwriters, confirming that the Securities
have Investment Grade ratings, (ii) there shall not have occurred any
decrease in the rating assigned to the Securities or any other securities
of the Company or of the financial condition of the Company by any
"nationally recognized statistical rating organization," as defined for
purposes of Rule 436(g)(2) under the 1933 Act Regulations, and (iii) no
downgrading shall have occurred in the AA (Excellent) claims-paying ability
rating of Protective Life Insurance assigned by S & P, the A+ (Superior)
financial strength rating assigned to Protective Life Insurance by A.M.
Best Company,Inc. or the
44
<PAGE>
A1 insurance financial strength rating assigned to Protective Life
Insurance by Moody's Investors Service and (iv) no such organization shall
have publicly announced that it has under surveillance or review its rating
of the Securities or any other securities of the Company or of the
financial condition or claims-paying ability of the Company.]
(i) At the Closing Time, the Income PRIDES and the Shares shall have
been approved for listing on the New York Stock Exchange upon notice of
issuance.
(j) In the event that the Underwriters exercise their option provided
in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Offerors contained
herein and the statements in any certificates furnished by the Offerors
hereunder shall be true and correct as of, and as if made on, each Date of
Delivery, and at the relevant Date of Delivery, the Underwriters shall have
received:
(1) A certificate, dated such Date of Delivery, of the President
or a Vice-President of the Company and the Chief Financial Officer or
Chief Accounting Officer of the Company and a certificate of a Regular
Trustee of the Trust confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof is true and correct as
of, and as if made on, such Date of Delivery.
(2) The favorable opinion of Deborah J. Long, Esq., Senior Vice
President, Secretary and General Counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(1) hereof.
(3) The favorable opinions of Debevoise & Plimpton, special
counsel and special tax counsel for the Offerors, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Sections 5(b)(2) and
5(b)(6) hereof.
(4) The favorable opinion of Richards, Layton & Finger, special
Delaware counsel for the Offerors, in
45
<PAGE>
form and substance satisfactory to counsel for the Underwriters, dated
such Date of Delivery, relating to the Option Securities and otherwise
to the same effect as the opinion required by Section 5(b)(3) hereof.
(5) The favorable opinion of Richards, Layton & Finger, counsel
to Wilmington Trust Company, in form and substance satisfactory to
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities and otherwise to the same effect as the opinion
required by Section 5(b)(4) hereof.
(6) The favorable opinion of Emmet, Marvin & Martin, counsel to
The Bank of New York, as Purchase Contract Agent, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities and otherwise to
the same effect as the opinion required by Section 5(b)(5) hereof.
(7) The favorable opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, counsel for the Underwriters, dated such Date of Delivery,
relating to the Option Securities and otherwise to the same effect as
the opinion required by Section 5(b)(7) hereof.
(8) A letter from Coopers & Lybrand LLP in form and substance
satisfactory to the Underwriters and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to the Underwriters pursuant to Section 5(f) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
shall be a date not more than five days prior to such Date of
Delivery.
(9) At the Date of Delivery, (i) the Securities shall be rated
in one of the four highest rating categories for preferred stock
("Investment Grade") by any nationally recognized statistical rating
agency, and the Offerors shall have delivered to the Underwriters a
letter, dated the Closing Time, from such nationally recognized
statistical rating agency, or other evidence satisfactory to the
Underwriters, confirming that the Securities have Investment Grade
ratings, (ii) there shall not have occurred any decrease in the rating
assigned to the Securities or any other securities of the Company or
of the financial condition of the Compa-
46
<PAGE>
ny by any "nationally recognized statistical rating organization," as
defined for purposes of Rule 436(g)(2) under the 1933 Act Regulations,
and (iii) no downgrading shall have occurred in the AA (Excellent)
claims-paying ability rating of Protective Life Insurance assigned by
S & P, the A+ (Superior) financial strength rating assigned to
Protective Life Insurance by A.M. Best Company,Inc. or the A1
insurance financial strength rating assigned to Protective Life
Insurance by Moody's Investors Service and (iv) no such organization
shall have publicly announced that it has under surveillance or review
its rating of the Securities or any other securities of the Company or
of the financial condition or claims-paying ability of the Company.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the
case of any condition to the purchase of Option Securities on a Date of
Delivery which is after the Closing Time, the obligations of the several
Underwriters to purchase the relevant Option Securities may be terminated
by the Underwriters by notice to the Company at any time at or prior to the
Closing Time, or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8
shall survive any such termination and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) The Offerors jointly and severally agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all losses, claims, expenses, damages and
liabilities whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information deemed to be a part thereof, if applicable, or
the omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
47
<PAGE>
Prospectus (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all losses, claims, expenses, damages and
liabilities whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; PROVIDED that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Offerors; and
(iii) against any and all expense whatsoever (including the fees and
disbursements of counsel chosen by Merrill Lynch), as incurred, which
expenses are reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above;
PROVIDED, HOWEVER, that the foregoing indemnity agreement shall not apply
to any loss, claim, expense, damage or liability (x) to the extent arising out
of any untrue statement or omission or alleged untrue statement or omission made
in the Prospectus in reliance upon and in conformity with information furnished
in writing to the Offerors by any Underwriter through Merrill Lynch specifically
for inclusion and actually included therein and (y) with respect to any
preliminary prospectus to the extent that any such loss, claim, expense, damage
or liability of such Underwriter results from the fact that such Underwriter
sold Preferred Securities to a person as to whom it shall be established by the
Company that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (as then amended or
supplemented) in any case where such delivery is required by the 1933 Act, if
such Underwriter failed to make reasonable efforts generally consistent with the
then prevailing industry practice to effect such delivery and the Company has
previously furnished copies thereof in sufficient quantities to such Underwriter
and the loss, claim, expense, damage or liabili-
48
<PAGE>
ty of such Underwriter results from an untrue statement or omission of a
material fact contained in the preliminary prospectus that was corrected in the
Prospectus.
(b) Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, the Trust, the Trustees and each of the Company's
directors, each of the Company's officers who signed the Registration Statement
and each person, if any, who controls the Company or the Trust within the
meaning of Section 15 of the 1933 Act, to the same extent as the foregoing
indemnity from the Offerors to each Underwriter, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Prospectus in reliance upon and in conformity with information furnished in
writing to the Offerors by such Underwriter through Merrill Lynch specifically
for inclusion and actually included therein.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve it from any liability hereunder to the
extent it is not materially prejudiced as a result thereof and in any event
shall not relieve it from any liability that it may have otherwise than on
account of this indemnity agreement. In the case of parties indemnified pursuant
to paragraph 6(a) above, counsel to the indemnified parties shall be selected by
Merrill Lynch, and, in the case of parties indemnified pursuant to paragraph
6(b) above, counsel to the indemnified parties shall be selected by the
Offerors. An indemnifying party may participate at its own expense in the
defense of such action; PROVIDED, HOWEVER, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one counsel (in
addition to any local counsel) separate from their own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are
49
<PAGE>
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(ii)
effected without its consent if such indemnifying party (x) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (y) provides written notice to the indemnified
party substantiating the unpaid balance as unreasonable, in each case prior to
the date of such settlement.
SECTION 7. CONTRIBUTION.
If the indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Offerors on the one hand and the Underwriters
on the other hand from the offering of the Securities pursuant to this Agreement
or (ii) if the allocation provided by clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) above but also the relative fault of the
Offerors on the one hand and of the Underwriters on the other hand in connection
with the
50
<PAGE>
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Offerors on the one hand and the
Underwriters on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Offerors
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, or, if Rule 434 is used, the
corresponding location on the Term Sheet, bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Offerors on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Offerors and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such
51
<PAGE>
untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company and each Trustee of
the Trust who signed the Registration Statement, and each person, if any, who
controls the Company and the Trust within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Offerors. The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Preferred Securities
set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The representations, warranties, indemnities, agreements and other statements of
the Trust, the Company or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Trust, the
Company, any Underwriter or any controlling person thereof, and will survive
delivery of and payment for the Securities.
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Representatives may terminate this Agreement, by notice to the
Company and the Trust, at any time at or prior to the Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material adverse
change in the condition (financial or otherwise), earnings, business affairs or
business prospects of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (ii) if
there has occurred any material adverse change in the financial markets in the
United States or internationally or any outbreak of hostilities or escalation of
existing hostilities or other calamity or crisis or any change or development
involving a prospective
52
<PAGE>
change in national or international political, financial or economic conditions,
in each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable to market the Securities, or enforce contracts
for the sale of the Securities, (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the New York Stock Exchange, the
American Stock Exchange or the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by any of such
exchanges or by such system or by order of the Commission, the NASD or any other
governmental authority or (iv) if a banking moratorium has been declared by
either Federal, Alabama, Delaware or New York State authorities.
This Agreement may also terminate pursuant to the provisions of Section 5,
with the effect stated in such Section.
(b) If this Agreement is terminated pursuant to this Section 9, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and except that Sections 1, 6, 7 and 8 shall
survive any such termination and will remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more of
the Underwriters shall fail at the Closing Time or a Date of Delivery, as the
case may be, to purchase the Securities which it or they are obligated to
purchase under this Agreement and the Pricing Agreement (the "Defaulted
Securities"), Merrill Lynch shall have the right, within 24 hours thereafter, to
make arrangements for one or more of the non-defaulting Underwriters, or any
other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, Merrill Lynch shall not have completed such arrangements
within such 24-hour period, then:
(a) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities does not exceed 10% of the total number or
aggregate principal amount, as the case may be, of Securities, the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
53
<PAGE>
(b) if the number or aggregate principal amount, as the case may be,
of Defaulted Securities exceeds 10% of the total number or aggregate
principal amount, as the case may be, of the Securities to be purchased on
such date, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either Merrill Lynch or the Company shall have the right to
postpone the Closing Time or the relevant Date of Delivery, as the case may
be,for a period not exceeding seven days in order to effect any required changes
in the Registration Statement or the Prospectus or in any other documents or
arrangements. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Underwriters c/o Merrill Lynch at Merrill
Lynch World Headquarters, World Financial Center, North Tower, New York, New
York 10281, (telecopier No. (212) 455-2502) Attention of Antonio Ursano, with a
copy to Skadden, Arps, Slate, Meagher & Flom LLP, 919 Third Avenue, New York,
New York, 10022 (telecopier No. (212) 735-2000) Attention of Vincent Pisano,
Esq.; notices to the Company and the Trust shall be directed to them at
Protective Life Corporation, 2801 Highway 280 South, Birmingham, Alabama 35223
(telecopier no.: (205) 868-3597), attention of General Counsel, with a copy to
Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022 (telecopier
no.: (212) 909-6836), Attention of Michael Blair, Esq.
SECTION 12. PARTIES. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon the Offerors and the Underwriters
and their respective successors. Nothing expressed or mentioned in this
Agreement or the Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriters and the Offerors
54
<PAGE>
and their respective successors and the controlling persons and officers and
directors referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or the Pricing Agreement or any provision herein or
therein contained. This Agreement and the Pricing Agreement and all conditions
and provisions hereof and thereof are intended to be for the sole and exclusive
benefit of the parties hereto and thereto and their respective successors and
legal representatives, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME UNLESS
OTHERWISE INDICATED.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
55
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, shall become a binding agreement
among the Company, the Trust and the several Underwriters in accordance with its
terms.
Very truly yours,
PROTECTIVE LIFE CORPORATION
By:
------------------------
Name:
Title:
PLC CAPITAL TRUST II
By:
------------------------
Name:
Title: Regular Trustee
By:
------------------------
Name:
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO
FOX-PITT, KELTON INC.
THE ROBINSON-HUMPHREY COMPANY, LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
---------------------
Authorized Signatory:
<PAGE>
EXHIBIT A
PROTECTIVE LIFE CORPORATION
(A DELAWARE CORPORATION)
PLC CAPITAL TRUST II
(A DELAWARE BUSINESS TRUST)
2,000,000 FELINE PRIDES
(STATED AMOUNT OF $50 PER SECURITY)
EACH CONSISTING OF
A PURCHASE CONTRACT OF PROTECTIVE LIFE CORPORATION
REQUIRING THE PURCHASE ON FEBRUARY 16, 2001
(OR EARLIER) OF CERTAIN SHARES OF COMMON STOCK
OF PROTECTIVE LIFE CORPORATION
AND
A % TRUST ORIGINATED PREFERRED SECURITY
OF PLC CAPITAL TRUST II
PRICING AGREEMENT
November , 1997
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED, as representative of the
several Underwriters named in the within
mentioned Underwriting Agreement
Merrill Lynch World Headquarters
World Financial Center
North Tower
New York, New York 10281
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated November ,
1997 (the "Underwriting Agreement"), relating to the purchase by the several
Underwriters named in Schedule A thereto of the above FELINE PRIDES (the
"Securities") of Protective Life
_____________________
"FELINE PRIDES" is a service mark of Merrill Lynch & Co. Inc.
<PAGE>
Corporation (the "Company"), and PLC Capital Trust II (the "Trust").
Pursuant to Section 2 of the Underwriting Agreement, the Company and
the Trust agree with each Underwriter as follows:
1. The initial public offering price per security for the Securities,
determined as provided in said Section 2, shall be $50.00.
2. The purchase price per security for the Securities to be paid by
the several Underwriters shall be $ , being an amount equal to the
initial public offering price set forth above less $ per security.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company and the Trust in accordance with its
terms.
Very truly yours,
PROTECTIVE LIFE CORPORATION
By:
------------------------
Name:
Title:
PLC CAPITAL TRUST II
By:
------------------------
Name:
Title: Regular Trustee
By:
------------------------
Name:
Title: Regular Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO
FOX-PITT, KELTON INC.
THE ROBINSON-HUMPHREY COMPANY, LLC
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
----------------------
Authorized Signatory:
<PAGE>
EXHIBIT 4(y)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
--------------------------
FORM OF PURCHASE CONTRACT AGREEMENT
--------------------------
DATED AS OF _______ __, 1997
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
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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 . . . . . . . . . . . . . 13
Section 1.4. Acts of Holders; Record Dates. . . . . . . . . . . . . . . . . 14
Section 1.5. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 1.6. Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . 17
Section 1.7. Effect of Headings and Table of
Contents . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 1.8. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 18
Section 1.9. Separability Clause. . . . . . . . . . . . . . . . . . . . . . 18
Section 1.10. Benefits of Agreement. . . . . . . . . . . . . . . . . . . . . 18
Section 1.11. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.12. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 1.13. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 19
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
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ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations . . . . . . . . . . . . . . . . 21
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 . . . . . . . . . . . . . . . . . . . . 24
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 3.9. Definitive Certificates. . . . . . . . . . . . . . . . . . . . 28
Section 3.10. Mutilated, Destroyed, Lost and
Stolen Certificates. . . . . . . . . . . . . . . . . . . . . 29
Section 3.11. Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . 30
Section 3.12. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . 31
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 . . . . . . . . . . . . . . . . . . . 35
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ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distributions; Rights to
Distributions Preserved;
Distribution Rate Reset; Notice. . . . . . . . . . . . . . . 36
Section 4.2. Notice and Voting. . . . . . . . . . . . . . . . . . . . . . . 38
Section 4.3. Liquidation of the Trust . . . . . . . . . . . . . . . . . . . 38
ARTICLE V
The Purchase Contracts . . . . . . . . . . . 39
Section 5.1. Purchase of Shares of Common Stock . . . . . . . . . . . . . . 39
Section 5.2. Contract Adjustment Payments . . . . . . . . . . . . . . . . . 41
Section 5.3. Deferral of Payment Dates for
Contract Adjustment Payments . . . . . . . . . . . . . . . . 43
Section 5.4. Payment of Purchase Price. . . . . . . . . . . . . . . . . . . 45
Section 5.5. Issuance of Shares of Common Stock . . . . . . . . . . . . . . 48
Section 5.6. Adjustment of Settlement Rate. . . . . . . . . . . . . . . . . 49
Section 5.7. Notice of Adjustments and Certain
Other Events . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 5.8. Termination Event; Notice. . . . . . . . . . . . . . . . . . . 57
Section 5.9. Early Settlement . . . . . . . . . . . . . . . . . . . . . . . 57
Section 5.10. No Fractional Shares . . . . . . . . . . . . . . . . . . . . . 60
Section 5.11. Charges and Taxes. . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to
Receive Contract Adjustment
Payments and to Purchase
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 61
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Section 6.2. Restoration of Rights and Remedies . . . . . . . . . . . . . . 61
Section 6.3. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . 62
Section 6.4. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . 62
Section 6.5. Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . 62
Section 6.6. Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . 63
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities. . . . . . . . . . . . . . 63
Section 7.2. Notice of Default. . . . . . . . . . . . . . . . . . . . . . . 64
Section 7.3. Certain Rights of Agent. . . . . . . . . . . . . . . . . . . . 65
Section 7.4. Not Responsible for Recitals or
Issuance of Securities . . . . . . . . . . . . . . . . . . . 66
Section 7.5. May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 66
Section 7.6. Money Held in Custody. . . . . . . . . . . . . . . . . . . . . 66
Section 7.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . 66
Section 7.8. Corporate Agent Required;
Eligibility. . . . . . . . . . . . . . . . . . . . . . . . . 67
Section 7.9. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 7.10. Acceptance of Appointment by
Successor. . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 7.11. Merger, Conversion, Consolidation
or Succession to Business. . . . . . . . . . . . . . . . . . 70
Section 7.12. Preservation of Information;
Communications to Holders. . . . . . . . . . . . . . . . . . 70
Section 7.13. No Obligations of Agent. . . . . . . . . . . . . . . . . . . . 71
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Section 7.14. Tax Compliance . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without
Consent of Holders . . . . . . . . . . . . . . . . . . . . . 72
Section 8.2. Supplemental Agreements with Consent
of Holders . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 8.3. Execution of Supplemental Agreements . . . . . . . . . . . . . 74
Section 8.4. Effect of Supplemental Agreements. . . . . . . . . . . . . . . 74
Section 8.5. Reference to Supplemental Agreements . . . . . . . . . . . . . 75
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions . . . . . . . . . . . . . . . . . . 75
Section 9.2. Rights and Duties of Successor
Corporation. . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 9.3. Opinion of Counsel to Agent. . . . . . . . . . . . . . . . . . 76
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase
Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . 77
Section 10.2. Maintenance of Office or Agency. . . . . . . . . . . . . . . . 77
Section 10.3. Company to Reserve Common Stock. . . . . . . . . . . . . . . . 78
Section 10.4. Covenants as to Common Stock . . . . . . . . . . . . . . . . . 78
Section 10.5. Statements of Officers of the
Company as to Default. . . . . . . . . . . . . . . . . . . . 78
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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
<PAGE>
FORM OF PURCHASE CONTRACT AGREEMENT, dated as of _______ __, 1997, between
Protective Life Corporation, a Delaware corporation (the "Company"), and The
Bank of New York, a national banking association, 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.
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"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
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<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 3.13.
"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" means the fee payable by the Company in
respect of each Purchase Contract, equal to ____% 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 5.2.
"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-
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tered, which office at the date hereof is located at
, Attention:
_____________________________, 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
____% Debentures due February 17, 2003, to be issued under the Indenture as of
the date hereof.
"Declaration" means the Amended and Restated Declaration of Trust of PLC
Capital Trust II, dated ______ __, 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 Depositary 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 Chairman of the Board, any Vice Chairman, its
President or a Vice President and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant 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 Chairman of the
Board, any Vice Chairman of the Board, the President, any Vice President, the
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 determination, all Income PRIDES and/or Growth
PRIDES
7
<PAGE>
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 PRIDES or Growth PRIDES and that the pledgee is
not the Company or any Affiliate of the Company.
8
<PAGE>
"Payment Date" means each March 31, June 30, September 30, and December 31,
commencing __________ __, 199 .
"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 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 Certifi-
9
<PAGE>
cate 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 ____% 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, 2000.
"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 and 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.
"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
10
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"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 a 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.
"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
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 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
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<PAGE>
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, or shall admit in writing
its inability to pay its debts generally as they become due.
"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 ) which is the principal strip of the 8.50%
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 _______ __,
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.
"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."
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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 Company shall furnish to the Agent 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.
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.
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
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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 an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer 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 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 delivered 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
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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 take the relevant 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 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.
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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 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 ,
Attention: 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
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prepaid, to the Company at 2801 Highway 280 South, Birmingham, Alabama
35223, Attention: , 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 Trust 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, Corporate Financial Center, Wilmington, DE 19890,
Attention:___________________, 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
, Attention: , 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 ap-
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pears 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.
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
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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 Purchase
Contracts shall not be performed on such date, but the Purchase Contracts shall
be performed on the next 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.
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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 are 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, 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.
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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.
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
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Holders and delivered hereunder is limited to 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
Contracts to purchase Common Stock. Prior to the purchase of shares of 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
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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
Contracts to purchase Common Stock. Prior to the purchase, if any, of shares of
Common Stock under 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.
Subject to the provisions of Sections 3.13 and 3.14 hereof, 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 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.
The Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Certificates may be manual or facsimile.
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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.
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 are 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.
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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 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 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.
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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.
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
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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 relating 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 relating 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.
The Certificates, on original issuance, will be issued in the form of one
or more, fully registered Global Certificates, to be delivered to the Depositary
by, or on behalf of, the Company. Such Global Certificate shall initially be
registered on the books and records of the Company in 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 Depositary if so requested by the Company. 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
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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 or the Company's agent shall give such
notices and communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency or the nominee of a Clearing Agency,
the Company or the Company's agent shall, 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 the Securities, the Company may, in its sole
discretion, appoint a successor Clearing Agency with respect to the Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services as securities
depositary with respect to 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 the Securities, or (iii) there shall have occurred and be
continuing a default by the Company in
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respect of its obligations under one or more Purchase Contracts, then upon
surrender of the Global Certificates representing the Book-Entry Interests with
respect to the Securities by the Clearing Agency, 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 in exchange therefor, a new Certificate,
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 destruction, 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,
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
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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, 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, relating 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 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
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Preferred Securities, receiving payments of Contract Adjustment Payments,
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 constituting 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.
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, 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, or a Collateral Substitution or the
re-establishment of an Income PRIDES 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 Issuer Order, 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 by this Agreement. All cancelled
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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
cancelled or for cancellation.
Section 3.13. Substitution of Securities.
A Holder may separate Preferred Securities from the related Purchase
Contracts in respect of an 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 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 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;
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(ii) transfer the 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 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 underlying 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 comprising such Income PRIDES may be acquired, and may be
transferred and exchanged, only as an Income PRIDES.
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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 transferred the relevant amount of Preferred
Securities to the Collateral Agent and requesting that the Agent instruct the
Collateral Agent to release the Treasury Securities relating to such Growth
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 Preferred 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 effect the release of the Treasury
Securities having a corresponding aggregate principal amount from the Pledge to
the Agent 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 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 underlying a Growth PRIDES remains in effect, such Growth PRIDES shall
not be sepa-
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rable 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 comprising 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,
underlying the Income PRIDES and the Growth PRIDES, respectively, pursuant 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 underlying 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, 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 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
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or otherwise, of the Purchase Contract by the Company, receiver, liquidator or a
Person performing similar functions, 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.
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 accrue 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 a 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
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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
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, 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.
Not later than 7 calendar days nor more than 15 calendar days prior to the
Reset Announcement Date, the Company will notify the DTC or its nominee (or any
successor Clearing Agency or its nominee) by first-class mail, postage prepaid,
to notify the Beneficial Owner 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 who intend to settle their
obligation under the
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Purchase Contract with separate cash on the Purchase Contract Settlement Date.
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 a notice
(a) containing such information as is contained in the notice or 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) shall be
entitled to instruct the Agent as to the exercise of the voting 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, 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. 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, and the Trust shall covenant in the
Declaration to take all action 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.
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
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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 the Common Stock of the Company under the Purchase Contracts
constituting 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 the 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 the 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 new 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 defined
below) is equal to or greater than $____ (the "Threshold Appreciation Price"),
____ shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price, but is greater than $____,
the number of shares of Common Stock equal to the
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Stated Amount divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $____, ____ 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.
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,
irrevo-
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cably 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 the 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 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 Contract and such
Holder shall acquire no right, title or interest in such payments.
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
underlying such Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase Contracts
underlying the Certificates so transferred and the Pledge Agreement. The
Company covenants and agrees, and each Holder of a Certificate, by its
acceptance thereof, likewise covenants 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 herein, 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 a 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 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
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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 underlying such other Certificates.
In the case of any Security with respect to which Early Settlement of the
underlying Purchase Contract is effected on an Early Settlement Date, after any
Record Date and on or prior to the next succeeding Payment Date, Contract
Adjustment Payments, if any, otherwise payable 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.
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The Company's obligations with respect to Contract Adjustment Payments, if
any, generally will be (i) subordinate and junior in right of payment to all
Senior Indebtedness (as such terms are defined in the Indenture), (ii) PARI
PASSU with respect to PLC Capital's % Trust Originated Common Securities,
having an aggregate liquidation amount of $ , PLC Capital's % Subordinated
Debentures, due , Series , having an aggregate liquidation amount of $
, the Company'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 81/4% Trust Originated Preferred Securities, having an
aggregate liquidation amount of $75 million, the Company's guarantee of PLC
Capital Trust I's 81/4% Trust Originated Common Securities, having an aggregate
liquidation amount of $2.3 million and the Company's 81/4% Subordinated
Debentures due 2027, Series B, having an aggregate liquidation amount of $77.3
million, all unsecured trade obligations of the Company and any other
liabilities or obligations that may be PARI PASSU by their terms and (iii)
senior to the Company's common stock, the most senior preferred or preference
stock now or hereafter issued by the Company and with any guarantee now or
hereafter entered into by 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 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 New York
Stock Exchange 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
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Record Date. Any Contract Adjustment Payments so deferred shall bear additional
Contract Adjustment Payments thereon at the rate of ____% 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 a 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 on the Purchase
Contract Settlement Date. In lieu of fractional shares otherwise issuable 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)
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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, and (iv) redemptions of purchases pursuant to Protective
Life's Rights Agreement, dated as of August 7, 1995, between the Company 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 either through
the early delivery of cash to the Purchase Contract 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 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 Business
Day immediately preceding the Purchase Contract Settlement Date and (B)
concurrently making a payment of the Purchase Price to the Collateral Agent
prior to 5:00 p.m., New York City time, on the 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.
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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 related 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(b) 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 put the Debentures to the
Company on the Purchase Contract Settlement Date in accordance with Section
2.8(b) 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. After application of the proceeds
of the put of the Debentures to the Purchase Price, the Preferred
Securities will be returned to the Purchase Contract Agent for the benefit
of the Holders free of the lien created by the Pledge Agreement for
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return to the Holder of the related Income PRIDES; 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 Purchase Contract from
the Proceeds of the related Pledged Treasury Securities 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 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 for the benefit of the Holder of the
related Growth PRIDES when received.
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 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
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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 Security 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 new shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian for the
Holders (such certificates for shares of Common Stock, together with any
dividends or distributions with respect thereto, 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
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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 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.
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(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 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
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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 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 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 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
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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 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
transactions 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
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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 expiring 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 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 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
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
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(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 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 Applica-
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ble 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
or warrants to purchase or subscribe for stock or from any event 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 corporation), (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
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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 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
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(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 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
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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
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 payable to 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
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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, ____ 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 the Purchase Contracts, the Holder of
such related Securities will forfeit the right to receive any Deferred Contract
Adjustment Payments. 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 Secu-
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rities or Treasury Securities, as the case may be, forming a part of such
Securities, 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, countersign 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.
(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.
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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 a Certificate
surrendered in respect of the Purchase Contracts evidenced thereby, other than
in the name 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 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 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 with respect to the Purchase Contract constituting a part of
such Security 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
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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.
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 re-
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quire, 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 or Contract Adjustment
Payments, if any, on any Purchase Contract on or 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.
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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 examine 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.
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(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:
(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 may 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;
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(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;
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 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
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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 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
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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.
(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,
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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 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.
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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 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
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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 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
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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 application 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
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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 inconsistent 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 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 when authorized by a Board
Resolution, 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;
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(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 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.
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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.
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.
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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.
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
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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.
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.
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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 location 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)
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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
By:
- -------------------- ----------------------------
Name:
Title:
THE BANK OF NEW YORK
Attested by
By:
- -------------------- ----------------------------
Name:
Title:
<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. ______
Form of Face of Income PRIDES Certificate
____% Income PRIDES
This Income PRIDES Certificate certifies that ___________ 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 _____% 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 New Jersey 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
_______, 199_ (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 shares of Common Stock, par value $.10 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") equal to _____% 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
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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 a Purchase Contract
Agreement, dated as of _____, 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
$_____ (the "Threshold Appreciation Price"), ______ shares of Common Stock per
Purchase Contract, (b) if the Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $_____, 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
$____, ____ 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 Trust to deliver to the
Company a principal amount of the Debenture underlying the Preferred Security
equal to the Stated Amount of the Purchase Contract, for application to the
Purchase Price of the Common Stock.
A-7
<PAGE>
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 forming a part of 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 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 the notice or 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 the record
date for determining the holders of Preferred Securities entitled to vote) shall
be entitled to instruct the Agent as to the exercise of the voting rights
pertaining to the Preferred Securities
A-8
<PAGE>
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, 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.
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, the Debentures shall be held by the Collateral Agent to
secure the obligations of each Holder of Income PRIDES to purchase shares of
Common Stock under the Purchase Contracts constituting 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
the 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 the 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 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
A-9
<PAGE>
or expenses payable in connection therewith. Except as provided in the Purchase
Contract Agreement, for so long as the Purchase Contract underlying 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
constituting 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
$_____. 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 recreate Income PRIDES by delivering to the
Collateral Agent Preferred Securities with 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
the terms of the Purchase Contract Agreement and the Pledge 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
A-10
<PAGE>
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 ___% 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 respect 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
A-11
<PAGE>
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, and (iv)
redemptions of purchases pursuant to Protective Life's 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 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.
A-12
<PAGE>
Subject to and upon compliance with the provisions of the Purchase Contract
Agreement 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 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 payable to 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 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 _____
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
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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 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 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 to the Stated Amount of the related Pledged Preferred 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.
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.
A-14
<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 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)
TEN ENT - 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
- ----------------------------------------------------------------------
of Assignee 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 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 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 OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have
been made:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Principal
Amount of Amount of Amount of Signature of
decrease in increase in this Global authorized
Principal Principal 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 A
DEPOSITARY 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
DEPOSITARY 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. ________
Form of Face of Growth PRIDES Certificate
This Growth PRIDES Certificate certifies that __________ 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 20 Purchase
Contracts 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
B-1
<PAGE>
benefit of the Company, to secure the obligations of the 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 , 2000
(the "Purchase Contract Settlement Date"), at a price equal to $50 (the "Stated
Amount"), a number of 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 ____% 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
B-2
<PAGE>
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 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 _______, 1997 (as supplemented from time to
time, the "Purchase Contract Agreement") between the Company and
, 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 $____ (the "Threshold Appreciation Price"),
____ shares of Common Stock per Purchase Contract, (b) if the Applicable Market
Value is less than the Threshold Appreciation Price but is greater than $____,
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 $____, _____ 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 underlying 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 constituting 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 $______. 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 recreate a Growth PRIDES by delivering to
the Collateral Agent Treasury Securities in an aggregate principal amount equal
to the aggregate liquidation amount of the Pledged Preferred Securities in
exchange for the release of such Pledged Preferred Securities in accordance with
the terms of the Purchase Contract Agreement and the Pledge Agreement. Any such
recreation of a Growth PRIDES
B-7
<PAGE>
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 ____% 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 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 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.
B-8
<PAGE>
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, make
distributions 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 capital stock of the Company 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 outstanding on the date of such event requiring the Company to purchase
capital stock of the Company, (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 the conversion or exchange provisions of the Company's
capital stock or the security being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company or (v) redemptions or purchases of
any rights pursuant to the Rights Agreement, or any successor to the Rights
Agreement, and the declaration thereunder of a dividend of rights in the
future).
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, the Collateral
Agent shall release the Treasury Securities from the Pledge in accordance with
the provisions of the Pledge Agreement.
B-9
<PAGE>
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, 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 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 payable
to 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 _____ 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 _______ 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, 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
B-10
<PAGE>
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.
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 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.
B-11
<PAGE>
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)
TEN ENT - 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
- --------------------------------------------------------------------------
of Assignee the within Growth PRIDES Certificates and all rights
- --------------------------------------------------------------------------
thereunder, hereby irrevocably constituting and appointing
- --------------------------------------------------------------------------
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 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 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:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Principal
Amount of Amount of Amount of Signature of
decrease in increase in this Global authorized
Principal Principal 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 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.
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 of [Treasury Securities]
[Preferred Securities] in exchange for 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].
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
FORM OF PLEDGE AGREEMENT
Dated as of _______ __, 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 Settlement
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
ii
<PAGE>
FORM OF PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of __________ __, 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 , 2001,
for an amount equal to the Stated Amount, a number of 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 ____% Trust
Originated Preferred Security (a "Preferred Security") issued by Protective Life
Corporation Capital II (the "Trust"), having a liquidation amount equal to $50
(the "Stated Amount") and maturing on February 17, 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.
2
<PAGE>
"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 _____) 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 _____ __, 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.
3
<PAGE>
"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-
4
<PAGE>
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 preamble to 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.
5
<PAGE>
"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" (as defined
in Section 8-102(a)(14) of the Code) to (i) credit a "securities
entitlement" (as defined in Section 8-102(a)(17) of the Code) 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 ____________) which are the principal strips of
the % 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
6
<PAGE>
(iii) Treasury Securities, the aggregate principal amount thereof at maturity.
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
7
<PAGE>
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and other applicable law and by the
notation 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
herein) 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.
8
<PAGE>
Section 2.2. CONTROL AND PERFECTION. In connection with the Pledge
granted in Section 2.1, and subject to 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 [redemption/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
9
<PAGE>
Section 4.2 hereof, the Purchase Contract Agent shall send the Trust a notice in
substantially the form of 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
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a.m., New York City time, on the next succeeding Business Day); and
(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 relevant Payment Date in accordance with the
procedure set forth in Section 4.6(a) or 4.6(b) hereof, 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
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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 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 the
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 Stated 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 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 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
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Termination Event, the Collateral Agent shall release all Collateral from the
Pledge and shall promptly Transfer any Pledged Preferred Securities and Pledged
Treasury Securities to the Purchase Contract Agent for the benefit of 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 Holder's
Purchase Contracts in accor-
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dance with the terms of such Purchase Contracts and the Purchase Contract
Agreement and (b) payment by such Holder on or prior to 5:00 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 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 an 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 the
terms of the Purchase Contracts and such 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 the 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, as the case may be,
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with a Stated Amount or principal amount, as the case may be, equal 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 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(b) 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 put the Debentures to the Company
on the Purchase Contract Settlement Date in accordance with Section 2.8.(b) of
the Indenture. As provided in Section 5.4 of the Purchase Contract Agreement,
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, at the written direction of the Purchase Contract Agent, shall
be invested in overnight Permitted Investments. The Collateral Agent shall
automatically pay an 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 Contract. Any excess funds shall
be distributed by the Collateral Agent to the Purchase Contract Agent for
payment to the relevant Holders. After application of the proceeds of the put
of the Debentures to the Purchase Price, the Preferred Securities will be
returned to the Purchase Contract Agent for the benefit of the Holders free of
the lien created by this Agreement for return to the Holder of the related
Income PRIDES.
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(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) underlying 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 related 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
of the maturing 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 the related Pledged Treasury
Securities 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 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 the benefit of
the holder 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
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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 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.
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(d) The Purchase Contract Agent and each Holder of Securities, in the
event such Holder becomes the holder of a Growth PRIDES, 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 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, a 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 the 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 the Company's 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:
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(a) such Holder has the power to grant a security interest in and
lien on the Collateral;
(b) such Holder is the sole beneficial owner of the Collateral and,
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 the 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.
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Section 7.2. COVENANTS. 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 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
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to or provided for herein or therein or for any failure by the Company or any
other Person (except the Collateral 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
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omit to take any action which it deems proper and which is not inconsistent with
such direction.
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
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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 provide 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
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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 Collateral 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
24
<PAGE>
discharged from its duties and obligations as Collateral Agent hereunder. After
any retiring Collateral Agent's resignation hereunder as Collateral Agent, the
provisions 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
25
<PAGE>
(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 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 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 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 66 2/3% 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 Outstand-
26
<PAGE>
ing Security affected thereby pursuant to the Purchase Contract Agreement
if such action were effected by an agreement supplemental thereto; or
(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
amend-
27
<PAGE>
ment 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
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
28
<PAGE>
(including, without limitation, any modifications of, or waivers or consents
under, this Agreement) shall be given or made in writing (including, without
limitation, by 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
29
<PAGE>
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, 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:
----------------------------------
Name:
Title:
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:
----------------------------------
Name:
Title:
Address for Notices:
The Bank of New York
One Wall Street
New York, New York 10286
Attention:
Telecopy:
<PAGE>
The Chase Manhattan Bank
as Collateral Agent and as Securities Intermediary
By:
----------------------------------
Name:
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] [Slated 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:
-----------------------------
