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As filed with the Securities and Exchange Commission on May 22, 1997
Registration No. 333-25009
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
--------------------------------
PROVIDENT COMPANIES, INC. Delaware 62-1598430
PROVIDENT FINANCING TRUST I Delaware Applied For
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(Exact Name of Registrants (States or Other (I.R.S. Employer
as Specified in Jurisdictions of Identification
their Charters) Incorporation or Numbers)
Organization)
1 Fountain Square
Chattanooga, TN 37402
(423) 755-1011
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrants' Principal Executive Offices)
Susan N. Roth
Provident Companies, Inc.
1 Fountain Square
Chattanooga, TN 37402
(423) 755-1011
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service for Each Registrant)
Copies To:
David E. Brown, Jr. Michael Groll
Alston & Bird LLP LeBoeuf, Lamb, Greene & MacRae, L.L.P.
1201 W. Peachtree Street 125 West 55th Street
Atlanta, GA 30309 New York, NY 10019-5389
(404) 881-7000 (212) 424-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: FROM TIME TO
TIME AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE AS DETERMINED BY MARKET
CONDITIONS AND OTHER FACTORS.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest re-investment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
re-investment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective Registration Statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [_]
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OR
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
$900,000,000
PROVIDENT COMPANIES, INC.
SENIOR DEBT SECURITIES, SUBORDINATED DEBT SECURITIES,
PREFERRED STOCK, COMMON STOCK, WARRANTS,
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
PROVIDENT FINANCING TRUST I
PREFERRED SECURITIES FULLY AND UNCONDITIONALLY
GUARANTEED, AS DESCRIBED HEREIN, BY PROVIDENT COMPANIES, INC.
Provident Companies, Inc. (the "Company") may offer and sell from time
to time (i) its unsecured senior debt securities ("Senior Debt Securities"), and
unsecured subordinated debt securities ("Subordinated Debt Securities"),
consisting of debentures, notes or other evidences of indebtedness, (ii) shares
of its preferred stock, par value $1.00 per share (the "Preferred Stock"), (iii)
shares of its common stock, par value $1.00 per share (the "Common Stock"), (iv)
warrants to purchase any of the foregoing Senior Debt Securities, Subordinated
Debt Securities, Preferred Stock or Common Stock (the "Warrants"), (v) stock
purchase contracts ("Stock Purchase Contracts") to purchase Common Stock or (vi)
stock purchase units ("Stock Purchase Units"), each representing ownership of a
Stock Purchase Contract and (x) Senior Debt Securities or Subordinated Debt
Securities, (y) Preferred Securities (as defined below), or (z) debt obligations
of third parties, including U.S. Treasury Securities, securing the holder's
obligation to purchase the Common Stock under the Stock Purchase Contract, in
each case in one or more series and in amounts, at prices and on terms to be
determined at or prior to the time of sale. Such securities may be offered in
one or more separate classes or series, in amounts, at prices and on terms to be
determined by market conditions at the time of sale and to be set forth in a
supplement or supplements to this Prospectus (a "Prospectus Supplement"). Such
securities may be sold for U.S. dollars, foreign denominated currency or
currency units and amounts payable with respect to any such securities may
likewise be payable in U.S. dollars, foreign denominated currency or currency
units, in each case as the Company specifically designates.
Provident Financing Trust I (the "Provident Trust"), a statutory
business trust created under the laws of the State of Delaware, may offer, from
time to time, preferred securities, which may be designated as preferred
securities or capital securities, representing undivided beneficial interests in
the assets of the Provident Trust ("Preferred Securities"). The payment of
periodic cash distributions ("Distributions") with respect to Preferred
Securities out of monies held by the Provident Trust, and payments on
liquidation, redemption or otherwise with respect to such Preferred Securities,
will be guaranteed by the Company to the extent described herein (a "Trust
Guarantee"). See "Description of Preferred Securities" and "Description of Trust
Guarantees." The Company's obligations under the Trust Guarantees will rank
junior and subordinate in right of payment to all other liabilities of the
Company, except those made subordinate or pari passu by their terms, and pari
passu with its obligations under the most senior preferred or preference stock
of the Company. See "Description of Trust Guarantees -- Status of the Trust
Guarantees." Subordinated Debt Securities may be issued and sold from time to
time by the Company in one or more series to the Provident Trust or a Trustee of
the Provident Trust in connection with the investment of the proceeds from the
offering of Preferred Securities and Common Securities (as defined herein) of
the Provident Trust. Subordinated Debt Securities purchased by the Provident
Trust may be subsequently distributed pro rata to holders of Preferred
Securities and Common Securities in connection with the dissolution of the
Provident Trust upon the occurrence of certain events as may be described in an
accompanying Prospectus Supplement.
Specific terms of the particular Senior Debt Securities, Subordinated
Debt Securities, Preferred Stock, Common Stock, Warrants, Stock Purchase
Contracts, the Stock Purchase Units and Preferred Securities and the related
Trust Guarantees, in respect of which this Prospectus is being delivered (the
"Offered Securities") will be set forth in an accompanying Prospectus Supplement
or Supplements, together with the terms of the offering of the Offered
Securities, the initial price thereof and the net proceeds from the sale
thereof. A Prospectus Supplement will set forth with regard to the particular
Offered Securities, certain terms thereof, including, where applicable, (i) in
the case of Senior Debt Securities and Subordinated Debt Securities, the ranking
as senior or subordinated Debt Securities, the specific designation, aggregate
principal amount, purchase price, maturity, interest rate (which may be fixed or
variable), if any, the time and method of calculating interest payments, if any,
time of payment of interest, if any, listing, if any, on a securities exchange,
authorized denomination, any exchangeability, conversion, redemption, prepayment
or sinking fund provisions, the currency or currencies or currency unit or units
in which principal, premium, if any, or interest, if any, is payable, public
offering price and any other specific terms of the Debt Securities; (ii) in the
case of Preferred Stock, the specific designation, number of shares, purchase
price and the rights, preferences and privileges thereof and any qualifications
or restrictions thereon (including dividends, liquidation value, voting rights,
terms for the redemption, conversion or exchange thereof and any other specific
terms of the Preferred Stock), listing, if any, on a securities exchange; (iii)
in the case of Common Stock, the number of shares offered, the initial offering
price, market price and dividend information; (iv) in the case of Warrants, the
specific designation, the number, purchase price and terms thereof, any listing
of the Warrants or the underlying securities on a securities exchange or any
other terms in connection with the offering, sale and exercise of the Warrants,
as well as the terms on which and the securities for which such Warrants may be
exercised; (v) in the case of Stock Purchase Contracts, the designation and
number of shares of Common Stock issuable thereunder, the purchase price of the
Common Stock, the date or dates on which the Common Stock is required to be
purchased by the holders of the Stock Purchase Contracts, any periodic payments
required to be made by the Company to the holders of the Stock Purchase
Contracts or vice versa, and the terms of the offering and sale thereof; (vi) in
the case of Stock Purchase Units, the specific terms of the Stock Purchase
Contracts and any Debt Securities or Preferred Securities or debt obligations of
third parties securing the holder's obligation to purchase the Common Stock
under the Stock Purchase Contracts, and the terms of the offering and sale
thereof; and (vii) in the case of Preferred Securities, the specific
designation, number of securities, liquidation amount per security, the purchase
price, any listing on a securities exchange, distribution rate (or method of
calculation thereof), dates on which distribution shall be payable and dates
from which distribution shall accrue, any voting rights, terms for any
conversion or exchange into other securities, any redemption, exchange or
sinking fund provisions, any other rights, preferences, privileges, limitations
or restrictions relating to the Preferred Securities and the terms upon which
the proceeds of the sale of the Preferred Securities shall be used to purchase a
specific series of Subordinated Debt Securities of the Company.
The Offered Securities may be offered in amounts, at prices and on
terms to be determined at the time of offering; provided, however, that the
aggregate offering price to the public of the Offered Securities will be limited
to $900,000,000. Any Prospectus Supplement relating to any Offered Securities
will contain information concerning certain United States federal income tax
considerations, if applicable, to such Offered Securities.
The Offered Securities may be offered directly by the Company, through
agents designated from time to time by the Company, or to or through
underwriters or dealers. If any agents or underwriters are involved in the sale
of any of the Offered Securities, their names, and any applicable purchase
price, fee, commission or discount arrangements between or among them, will be
set forth, or will be calculable from the information set forth, in the
applicable Prospectus Supplement. See "Plan of Distribution." No Offered
Securities may be sold without delivery of the applicable Prospectus Supplement
or a term sheet describing the method and terms of the offering of such series
of Offered Securities.
This Prospectus may not be used to consummate sales of the Offered
Securities unless accompanied by a Prospectus Supplement.
SEE "RISK FACTORS" ON PAGE 5 FOR INFORMATION THAT SHOULD BE CONSIDERED
BY PROSPECTIVE INVESTORS.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is May 22, 1997.
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TABLE OF CONTENTS
Available Information...................................................... 2
Forward Looking Statements................................................. 3
Incorporation of Certain Documents by Reference............................ 3
The Company................................................................ 4
The Provident Trust........................................................ 4
Risk Factors............................................................... 5
Use of Proceeds............................................................ 7
Consolidated Ratios of Earnings to Fixed Charges and Earnings to Combined
Fixed Charges and Preferred Stock Dividends.............................. 8
Description of Debt Securities............................................. 9
Description of Preferred Stock............................................. 22
Description of Common Stock................................................ 26
Description of Warrants.................................................... 29
Description of Stock Purchase Contracts and Stock Purchase Units........... 30
Description of Preferred Securities........................................ 30
Description of Trust Guarantee............................................. 32
Effect of Obligations Under the Subordinated Debt Securities and the
Trust Guarantee.......................................................... 34
Plan of Distribution....................................................... 35
Legal Opinions............................................................. 36
Experts.................................................................... 36
NOTICE TO NORTH CAROLINA RESIDENTS: THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA RULED UPON
THE ACCURACY OR ADEQUACY OF THIS DOCUMENT.
State insurance holding company laws and regulations applicable to the
Company generally provide that no person may acquire control of the Company, and
thus indirect control of its insurance subsidiaries, unless such person has
provided certain required information to, and such acquisition is approved (or
not disapproved) by, the appropriate insurance regulatory authorities.
Generally, any person acquiring beneficial ownership of 10% or more of the
Common Stock would be presumed to have acquired such control, unless the
appropriate insurance regulatory authorities upon advance application determine
otherwise.
No dealer, salesman or other individual has been authorized to give any
information or to make any representations not contained in this Prospectus, any
accompanying Prospectus Supplement or the documents incorporated or deemed
incorporated herein in connection with the offering covered by this Prospectus
or any accompanying Prospectus Supplement. If given or made, such information or
representations must not be relied upon as having been authorized by the
Company, or any underwriter, dealer or agent. This Prospectus and any
accompanying Prospectus Supplement do not constitute an offer to sell, or a
solicitation of an offer to buy, any securities other than the registered
securities to which it relates in any jurisdiction where, or to any person to
whom, it is unlawful to make such offer or solicitation. Neither the delivery of
this Prospectus or any accompanying Prospectus Supplement nor any sale made
hereunder shall, under any circumstances, create any implication that there has
not been any change in the facts set forth in this Prospectus or any
accompanying Prospectus Supplement or in the affairs of the Company since the
date hereof or thereof.
___________________
Unless otherwise indicated, currency amounts in this Prospectus and any
Prospectus Supplement are stated in United States dollars ("$," "dollars" or
"U.S.$").
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder (the "Exchange Act"), and in accordance therewith files reports,
proxy and information statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy and information
statements and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549; and at
the Commission's Northeast Regional Office, 7 World Trade Center, Suite 1300,
New York, New York 10048, and Midwest Regional Office, Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can also be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington D.C. 20549. The
Commission maintains a Web site that contains reports, proxy and information
statements and other information regarding registrants such as the Company that
file electronically with the Commission. The address of such site is
http://www.sec.gov. In addition, such reports, proxy and information statements
and other information concerning the Company may be inspected at the offices of
the New York Stock Exchange, Inc. (the "NYSE"), 20 Broad Street, New York, New
York 10005.
The Company and the Provident Trust have filed a Registration Statement on
Form S-3 (together with all amendments and exhibits filed or to be filed in
connection therewith, the "Registration Statement") with the Commission pursuant
to the Securities Act of 1933, as amended (the "Securities Act"), with respect
to the Offered Securities, of which this Prospectus forms a part. This
Prospectus does not contain all the information set forth in the Registration
Statement and the exhibits thereto, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. In addition,
certain documents filed by the Company with the Commission have been
incorporated in this Prospectus by reference. See "Incorporation of Certain
Documents by Reference." Such additional information may be obtained from the
Commission's principal office in Washington, D.C. Any
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statements contained herein concerning the provisions of any documents do not
purport to be complete and are necessarily summaries of such documents and, in
each instance, are qualified in all respects by reference to the copy of such
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is subject to and qualified in its
entirety by such reference. For further information with respect to the Company,
the Provident Trust and the Offered Securities, reference is made to the
Registration Statement, including the exhibits thereto, and the documents
incorporated herein by reference.
No separate financial statements of the Provident Trust have been included
or incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of Preferred Securities
because (i) all of the voting securities of the Preferred Trust will be owned,
directly or indirectly, by the Company, a reporting company under the Exchange
Act, (ii) the Provident Trust has and will have no independent operations but
exists for the sole purpose of issuing securities representing undivided
beneficial interests in its assets and investing the proceeds thereof in
Subordinated Debt Securities issued by the Company, and (iii) the Company's
obligations described herein and in any accompanying Prospectus Supplement,
under the Declaration of Trust for the Provident Trust (including the obligation
to pay expenses of the Provident Trust), the Subordinated Indenture and any
supplemental indentures thereto, the Subordinated Debt Securities issued to the
Provident Trust and the Trust Guarantees taken together, constitute a full and
unconditional guarantee by the Company of payments due on the Preferred
Securities. See "Description of Preferred Securities" and "Description of Trust
Guarantees."
FORWARD LOOKING STATEMENTS
This Prospectus contains and incorporates by reference certain forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 with respect to the results of operations and businesses of
the Company. These forward looking statements involve certain risks and
uncertainties. Factors that may cause actual results to differ materially from
those contemplated or projected, forecast, estimated or budgeted in such forward
looking statements include, among others, the following possibilities: (i)
heightened competition, including specifically the intensification of price
competition, the entry of new competitors and the development of new products by
new and existing competitors; (ii) adverse state and federal legislation and
regulation, including limitations on premium levels, increases in minimum
capital and reserves, and other financial viability requirements; (iii) failure
to develop multiple distribution channels in order to obtain new customers or
failure to retain existing customers; (iv) inability to carry out marketing and
sales plans, including, among others, changes to certain products and acceptance
of the revised products in the market; (v) loss of key executives; (vi) changes
in interest rates causing a reduction of investment income; (vii) general
economic and business conditions which are less favorable than expected; (viii)
unanticipated changes in industry trends; (ix) inaccuracies in assumptions
regarding future morbidity, persistency, mortality and interest rates used in
calculating reserve amounts; (x) failure to continue improvement of the claims
management process; and (xi) with respect to cost savings that will be realized
from, and costs associated with, the acquisition of The Paul Revere Corporation
("Paul Revere") (the "Paul Revere Merger"), the following possibilities: (a) the
expected cost savings to be realized beginning primarily in 1997 through
combining certain functions of both the Company and Paul Revere, restructuring
the field organizations of both companies to eliminate redundant facilities and
better serve the combined company's customers, and reductions in staff cannot be
fully realized because the changes are not made or unanticipated offsetting
costs are incurred; and (b) costs or difficulties related to the integration of
the businesses of the Company and Paul Revere are greater than expected. See
"Risk Factors."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company (File No. 1-11834)
with the Commission pursuant to the Exchange Act, and are incorporated herein by
reference:
1. The Company's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997;
3. The Company's Current Reports on Form 8-K dated March 27, 1997; and
4. The description of the Company's capital stock set forth in the
Company's registration statement filed with the Commission pursuant to Section
12 of the Exchange Act, and any amendment or report filed for the purpose of
updating any such description.
In addition, all documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering hereunder shall be deemed to be incorporated by
reference in this Prospectus or any Prospectus Supplement and to be part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated by reference herein or in any Prospectus Supplement shall be deemed
to be modified or superseded for all purposes to the extent that a statement
contained herein or in any other subsequently filed document which is deemed to
be incorporated by reference herein or in any Prospectus Supplement modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as modified or superseded, to constitute a part of this
Prospectus or any Prospectus Supplement.
The Company will provide, without charge, to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any and all of the documents incorporated by reference (not including
the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents). Requests for such copies should be
directed to Susan N. Roth, Secretary, Provident Companies, Inc., 1 Fountain
Square, Chattanooga, Tennessee 37402, or by telephone at (423) 755-1011 or
facsimile at (423) 755-3194.
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THE COMPANY
The Company is the largest provider of individual disability insurance and
the second largest overall disability insurer in the United States on the basis
of in-force premiums. It also provides a complementary portfolio of life
insurance products, including life insurance, annuities, employer- and
employee-paid group benefits and related services. The Company is the parent
holding company for a group of insurance companies that collectively operate in
all 50 states, the District of Columbia, Puerto Rico, and Canada.
Since 1994, the Company has completed a comprehensive corporate
repositioning that has prepared it to support growth and increase stockholder
value. A new management team headed by J. Harold Chandler, who joined the
Company in November 1993, initiated a strategic review of the business. As a
result of its review, management refocused the Company's strategy to (i) serve
the individual and employee benefits insurance markets, (ii) leverage the
Company's disability insurance expertise, (iii) utilize multiple distribution
channels to reach broader market segments, and (iv) more closely align the
interests of the Company's employees with those of its stockholders.
The Company has successfully undertaken a number of major initiatives in
pursuing this strategy. These initiatives include strengthening its capital
position and investment portfolio, reorganizing internally, and reassessing its
product offerings. The acquisitions of Paul Revere and GENEX Services, Inc.
in early 1997 are the latest accomplishments under the Company's strategic plan.
Both acquisitions strengthen the Company's disability insurance capabilities and
enable the Company to offer a more complete portfolio of products and services
to its customers.
The Company's principal executive offices are located at 1 Fountain Square,
Chatanooga, Tennessee 34702, and its telephone number is (423) 755-1011.
THE PROVIDENT TRUST
The Provident Trust is a statutory business trust created under Delaware
law pursuant to (i) a declaration of trust (as amended and restated, the
"Declaration") executed by the Company as sponsor for such trust (the
"Sponsor"), and certain of the Provident Trustees (as defined herein) of such
trust and (ii) the filing of a certificate of trust with the Secretary of State
of the State of Delaware on April 10, 1997. The Provident Trust exists for the
exclusive purposes of (i) issuing the Preferred Securities and common securities
representing undivided beneficial interests in the assets of the Provident Trust
(the "Common Securities" and, together with the Preferred Securities, the "Trust
Securities"), (ii) investing the gross proceeds from the sale of the Trust
Securities in Subordinated Debt Securities, and (iii) engaging in only those
other activities necessary or incidental thereto. All of the Common Securities
will be directly or indirectly owned by the Company. The Common Securities will
rank pari passu, and payments will be made thereon pro rata, with the Preferred
Securities, except that, if any event of default under the Declaration has
occurred and is continuing, the rights of the holders of the Common Securities
to payment in respect of distributions and payments upon liquidation, redemption
and otherwise will be subordinated to the rights of the holders of the Preferred
Securities. The Company will directly or indirectly acquire Common Securities in
an aggregate liquidation amount equal to at least 3% of the total capital of the
Provident Trust.
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The Provident Trust has a term of approximately 45 years but may dissolve
earlier, as provided in the Declaration. The Provident Trust's business and
affairs will be conducted by the trustees (the "Provident Trustees") appointed
by the Company as the direct or indirect holder of all the Common Securities.
The holder of the Common Securities will be entitled to appoint, remove or
replace any of, or increase or reduce the number of, the Provident Trustees.
The duties and obligations of the Provident Trustees shall be governed by the
Declaration. A majority of the Provident Trustees (the "Regular Trustees") will
be persons who are employees or officers of or who are affiliated with the
Company. One Provident Trustee will be a financial institution that is
unaffiliated with the Company and has a minimum amount of combined capital and
surplus of not less than $50,000,000, which shall act as property trustee and as
indenture trustee for the purpose of compliance with the provisions of the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), pursuant to the
terms set forth in the applicable Prospectus Supplement (the "Property
Trustee"). In addition, unless the Property Trustee maintains a principal place
of business in the State of Delaware and otherwise meets the requirements of
applicable law, one Provident Trustee will be an entity having a principal place
of business in the State of Delaware (the "Delaware Trustee"). The Company will
pay all fees and expenses related to the Provident Trust and the offering of the
Trust Securities.
The Property Trustee is The Chase Manhattan Bank, 450 West 33rd Street,
15th Floor, New York, New York 10001. The Delaware Trustee is First Union Trust
Company, National Association and its address in the State of Delaware is
One Rodney Square, 920 King Street, 1st floor, Wilmington, Delaware 19801.
The principal place of business of the Provident Trust shall
be c/o Provident Companies, Inc., 1 Fountain Square, Chattanooga, Tennessee
37402; telephone (423) 755-1011.
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should consider carefully the following factors
before making an investment in the Offered Securities offered hereby. Any one or
more of such factors may cause the Company's actual results for various
financial reporting periods to differ materially from those expressed in any
forward-looking statements made by or on behalf of the Company.
RESERVES
The Company maintains reserves for future policy benefits and unpaid claims
expenses which include policy reserves and claim reserves established for its
individual disability insurance, group insurance, and individual life insurance
products. Policy reserves represent the portion of premiums received which are
reserved to provide for future claims. Claim reserves are established for future
payments not yet due on claims already incurred, primarily relating to
individual disability and group disability insurance products. Reserves, whether
calculated under generally accepted accounting principles ("GAAP") or statutory
accounting practices, do not represent an exact calculation of future benefit
liabilities but are instead estimates made by the Company using actuarial and
statistical procedures. There can be no assurance that any such reserves would
be sufficient to fund future liabilities of the Company in all circumstances.
Future loss development could require reserves to be increased, which would
adversely affect earnings in current and future periods. Adjustments to reserve
amounts may be required in the event of changes from the assumptions regarding
future morbidity (the incidence of claims and the rate of recovery, including
the effects thereon of inflation, and other societal and economic factors),
persistency, mortality, and interest rates used in calculating the reserve
amounts.
CAPITAL ADEQUACY
The capacity for an insurance company's growth in premiums is in part a
function of its statutory surplus. Maintaining appropriate levels of statutory
surplus, as measured by state insurance regulators, is considered important by
state insurance regulatory authorities and the private agencies that rate
insurers' claims-paying abilities and financial strength. Failure to maintain
certain levels of statutory surplus could result in increased regulatory
scrutiny, action by state regulatory authorities or a downgrade by the private
rating agencies.
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Effective in 1993, the National Association of Insurance Commissioners
("NAIC") adopted a risk-based capital ("RBC") formula, which prescribes a system
for assessing the adequacy of statutory capital and surplus for all life and
health insurers. The basis of the system is a risk-based formula that applies
prescribed factors to the various risk elements in a life and health insurer's
business to report a minimum capital requirement proportional to the amount of
risk assumed by the insurer. The life and health RBC formula is designed to
measure annually (i) the risk of loss from asset defaults and asset value
fluctuation, (ii) the risk of loss from adverse mortality and morbidity
experience, (iii) the risk of loss from mismatching of asset and liability cash
flow due to changing interest rates and (iv) business risks. The formula is to
be used as an early warning tool to identify companies that are potentially
inadequately capitalized. The formula is intended to be used as a regulatory
tool only and is not intended as a means to rank insurers generally.
Based on computations made by the Company in accordance with the prescribed
life and health RBC formula, each of the Company's life insurance subsidiaries
exceeded the minimum capital requirements at December 31, 1996.
During 1995 and 1996, the Division of Insurance of the Commonwealth of
Massachusetts (the "Massachusetts Division of Insurance") conducted a
quadrennial examination of The Paul Revere Life Insurance Company ("Paul Revere
Life") and The Paul Revere Variable Annuity Insurance Company ("Paul Revere
Varible") for the period ended December 31, 1994. In connection with this
examination, as well as in consideration of a comprehensive study undertaken by
Paul Revere in 1995 and early 1996 of its statutory reserves, Paul Revere Life
and The Paul Revere Protective Life Insurance Company ("Paul Revere Protective")
strengthened their individual disability statutory reserves by a combined total
of $35.0 million and reflected this strengthening in the annual statutory
financial statements for the year ended December 31, 1995.
During the third quarter of 1996, Paul Revere initiated a comprehensive
study of the adequacy of its individual disability reserves under GAAP and under
statutory accounting principles to consider experience through September 30,
1996. The results of such study prompted Paul Revere to strengthen its GAAP
individual disability reserves by $380.0 million before taxes in the quarter
ended September 30, 1996. The Massachusetts Division of Insurance subsequently
updated its examination of Paul Revere's statutory reserves to review the
results of Paul Revere's statutory reserve study, with the result that Paul
Revere's statutory reserves were strengthened by $144.0 million. In connection
with the Paul Revere Merger, Textron Inc. ("Textron"), the principal
stockholder of Paul Revere, contributed $121.0 million, representing the amount
of the statutory reserve increases, net of tax benefits, as additional capital
to Paul Revere prior to the effective time of the Paul Revere Merger.
DISABILITY INSURANCE
Disability insurance may be affected by a number of social, economic,
governmental, competitive, and other factors. Changes in societal attitudes,
work ethics, motivation, stability, and mores can significantly affect the
demand for and underwriting results from disability products. Economic
conditions affect not only the market for disability products, but also
significantly affect the claims rates and length of claims. The climate and the
nature of competition in disability insurance have also been markedly affected
by the growth of Social Security, worker's compensation, and other governmental
programs in the workplace. The nature of that portion of the Company's
outstanding insurance business that consists of noncancelable disability
policies, whereby the policy is guaranteed renewable through the life of the
policy at a fixed premium, does not permit the Company to adjust its premiums on
business in-force on account of changes resulting from such factors. Disability
insurance products are important products for the Company. To the extent that
disability products are adversely affected in the future as to sales or claims,
the business or results of operations of the Company could be materially
adversely affected.
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INDUSTRY FACTORS
All of the Company's businesses are highly regulated and competitive. The
Company's profitability is affected by a number of factors, including rate
competition, frequency and severity of claims, lapse rates, government
regulation, interest rates, and general business considerations. There are
many insurance companies which actively compete with the Company in its lines
of business, some of which are larger and have greater financial resources
than the Company, and there is no assurance that the Company will be able to
compete effectively against such companies in the future.
In recent years, some U.S. life insurance companies have faced claims,
including class-action lawsuits, alleging various improper sales practices in
the sales of certain types of life insurance products. These claims often
relate to the selling of whole life and universal life policies that
accumulate cash values which may be utilized to fund the cost of insurance in
later years of the policy. Due to subsequent reductions in dividends or
interest credited or due to other factors, the cash values have not
accumulated sufficiently to cover costs of insurance, resulting in the need
for ongoing premium payments. Although never a principal product line for the
Company or Paul Revere, both companies have sold a modest amount of interest
sensitive whole life and universal life policies. There can be no assurance
that any future claims relating to sales of such policies will not have a
material adverse effect on the Company.
EFFECT OF THE PAUL REVERE MERGER; INTEGRATION OF OPERATIONS
The success of the Paul Revere Merger will be determined by various
factors, including the financial performance of the combined company's
operations and management's ability to realize expected cost savings through
combining certain functions of both the Company and Paul Revere and
restructuring the field organizations of both companies. The integration of the
operations of Paul Revere and the Company may be negatively affected if, among
other things, the proposed changes are not made, customers do not react
positively to some of the planned changes intended to increase service or
integrate the businesses of the two companies, unanticipated offsetting costs
are incurred, or costs or difficulties related to the integration of the
businesses of the Company and Paul Revere are greater than expected. There can
be no assurance that the anticipated benefits of the Paul Revere Merger will be
realized or that the Paul Revere Merger will not adversely affect the future
operating results of the Company.
FOREIGN CURRENCY RISKS
An investment in the Offered Securities denominated in other than U.S.
dollars entails significant risks that are not associated with a similar
investment in a security denominated in U.S. dollars. Such risks include,
without limitation, the possibility of significant changes in rates of exchange
between the U.S. dollar and the various foreign currencies or composite
currencies, and the possibility of the imposition or modification of foreign
exchange controls by either the U.S. or foreign governments. Such risks
generally depend on economic and political events over which the Company has no
control. In recent years, rates of exchange between the U.S. dollar and certain
foreign currencies have been highly volatile, and such volatility may be
expected to continue in the future. Fluctuations in any particular exchange rate
that have occurred in the past are not necessarily indicative, however, of
fluctuations in the rate that may occur during the term of any Offered Security.
Depreciation of the specified currency other than U.S. dollars against the U.S.
dollar would result in a decrease in the effective yield of such Offered
Security below its coupon rate, and in certain circumstances could result in a
loss to the investor on a U.S. dollar basis.
Governments have imposed from time to time and may in the future impose
exchange controls that could affect exchange rates as well as the availability
of a specified foreign currency at an offered Security's maturity. Even if there
are no actual exchange controls, it is possible that the specified currency for
any particular Offered Security would not be available at such Offered
Security's maturity. In that event, the Company will repay such Offered Security
at maturity in U.S. dollars on the basis of the most recently available Exchange
Rate.
This Prospectus does not describe all the risks of an investment in Offered
Securities denominated in other than U.S. dollars. Prospective investors should
consult their own financial and legal advisors as to the risks entailed by an
investment in Offered Securities denominated in other than U.S. dollars. Offered
Securities denominated in other than U.S. dollars are not an appropriate
investment for investors who are unsophisticated about foreign currency
transactions.
Currently, there are limited facilities in the United States for conversion
of U.S. dollars into certain foreign currencies, and vice versa.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of the Offered Securities, the net proceeds received by the Company
from the sale of the Offered Securities will be used for
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general corporate purposes, which may include without limitation funding
investments in, or extensions of credit to, the Company's subsidiaries,
repayment of maturing obligations, redemption of outstanding indebtedness or
other securities, financing possible future acquisitions and for working
capital. Pending such use, the Company may temporarily invest the net proceeds
or may use them to reduce short-term indebtedness. The proceeds from the sale of
Preferred Securities by the Provident Trust will be invested in Subordinated
Debt Securities of the Company. The Company does not have any present plans, and
is not engaged in any negotiations, for the use of any such proceeds, or the
issuance of Common Stock, in any future acquisition. Any proposal to use
proceeds from any offering of the Offered Securities in connection with an
acquisition will be disclosed in the Prospectus Supplement relating to such
offering.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES AND
EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The consolidated ratio of earnings to fixed charges for the Company
including its consolidated subsidiaries is computed by dividing earnings by
fixed charges. The ratio of earnings to combined fixed charges and preferred
stock dividends is computed by dividing earnings by the sum of fixed charges and
preferred stock dividend requirements. For these purposes earnings consist
primarily of income (loss) from continuing operations before income taxes
adjusted for fixed charges. Fixed charges consist primarily of interest (whether
expensed or capitalized), amortization of debt expense and discount of premium
relating to any indebtedness, whether expensed or capitalized, and the portion
of rental expense representative of the interest factor in these rentals.
The following table sets forth the Company's consolidated ratios of
earnings to fixed charges and ratios of earnings to fixed charges and preferred
dividends for the periods shown:
<TABLE>
<CAPTION>
Three Months Year Ended December 31,
Ended -----------------------------
March 31, 1997 1996 1995 1994 1993 1992
-------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges(a)(b).... 16.4 12.9 9.5 8.9 (5.1) 8.3
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock Dividends(b).... 7.2 6.5 5.3 5.3 (3.3) 8.3
</TABLE>
_____________
(a) Excludes preferred stock dividends.
(b) This financial information does not reflect the anticipated effects of the
Paul Revere Merger.
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DESCRIPTION OF DEBT SECURITIES
GENERAL
The following description of the terms of the Senior Debt Securities and
Subordinated Debt Securities (collectively, the "Debt Securities") sets forth
certain general terms and provisions of the Debt Securities to which any
Prospectus Supplement may relate. The particular terms of the Debt Securities
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may not apply to the Debt Securities so offered will be
described in the Prospectus Supplement relating to such Debt Securities.
The Senior Debt Securities are to be issued under an indenture (the "Senior
Indenture"), to be entered into between the Company and The Chase Manhattan
Bank, as Trustee. The Subordinated Debt Securities are to be issued under an
indenture (the "Subordinated Indenture"), also to be entered into between the
Company and The Chase Manhattan Bank, as Trustee. The term "Trustee" as used
herein shall refer to The Chase Manhattan Bank, or such other bank or trust
company as the Company may appoint as trustee pursuant to the terms of the
applicable Indenture, in its or their capacity as Trustee for the Senior Debt
Securities or the Subordinated Debt Securities, as appropriate. The forms of the
Senior Indenture and the Subordinated Indenture (being sometimes referred to
herein collectively as the "Indentures" and individually as an "Indenture") are
filed as exhibits to the Registration Statement. The Indentures are subject to
and governed by the Trust Indenture Act, and may be supplemented from time to
time following execution. The statements made under this heading relating to the
Debt Securities and the Indentures are summaries of the provisions thereof and
do not purport to be complete and are qualified in their entirety by reference
to the Indentures and such Debt Securities. All section and article references
below are to sections of the Indentures and capitalized terms used but not
defined herein shall have the respective meanings set forth in the Indentures.
Wherever particular sections or defined terms of the Indentures are referred to,
it is intended that such sections or defined terms shall be incorporated herein
by reference.
TERMS
The Debt Securities will be direct, unsecured obligations of the Company.
The indebtedness represented by the Senior Debt Securities will rank pari passu
with all other unsecured and unsubordinated debt of the Company. The
indebtedness represented by the Subordinated Debt Securities will rank junior
and subordinate in right of payment, to the extent and in the manner set forth
in the Subordinated Indenture, to the prior payment in full of the Senior Debt
of the Company as described under "Subordination."
The amount of Debt Securities offered by this Prospectus will be limited to
the amount described on the cover of this Prospectus. Each Indenture provides
that the Debt Securities may be issued without limit as to aggregate principal
amount, in one or more series, in each case as established from time to time in,
or pursuant to authority granted by, a resolution of the Board of Directors of
the Company or as established in one or more indentures supplemental to such
Indenture. Debt Securities may be issued with terms different from those of Debt
Securities previously issued; all Debt Securities of one series need not be
issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series. (Section 301
of each Indenture) The Debt Securities may be denominated and payable in foreign
currencies or units based on or related to foreign currencies, including
European Currency Units. Special United States federal income tax considerations
applicable to any Debt Securities so denominated are described in the relevant
Prospectus Supplement.
Each Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under an
Indenture may resign or be removed with respect to one or more series of Debt
Securities, and a successor Trustee may be appointed to act with respect to such
series. (Section 608 of each Indenture) In the event that two or more persons
are acting as Trustee with respect to different series of Debt Securities, each
such Trustee shall be a Trustee of a trust under the applicable Indenture
separate and apart from the trust administered by any other Trustee (Section 101
and Section 609 of each Indenture), and, except as otherwise indicated herein,
any action described herein to be taken by each Trustee may
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be taken by each such Trustee with respect to, and only with respect to, the one
or more series of Debt Securities for which it is Trustee under the applicable
Indenture.
Reference is made to the applicable Prospectus Supplement relating to a
particular series of Debt Securities being offered thereby for the specific
terms thereof, including, but not limited to:
(1) the title of such Debt Securities and whether such Debt Securities are
Senior Debt Securities or Subordinated Debt Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) the price (expressed as a percentage of the principal amount thereof)
at which such Debt Securities will be issued;
(4) the terms, if any, by which such securities may be convertible into or
exchangeable for Common Stock or other securities or property of the Company;
(5) if convertible or exchangeable, any applicable limitations on the
ownership or transferability of the securities or property into which such Debt
Securities are convertible or exchangeable;
(6) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable and the amount of
principal payable thereon;
(7) the rate or rates (which may be fixed or variable at which such Debt
Securities will bear interest, if any), or the method by which such rate or
rates shall be determined;
(8) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the dates on which any such interest
will be payable, the Regular Record Dates (as defined in the Indenture) if any,
for such interest payable, or the method by which such dates shall be
determined, the Persons to whom such interest shall be payable, and the basis
upon which interest shall be calculated if other than that of a 360-day year
consisting of twelve 30-day months;
(9) the place or places where the principal of and premium or Make-Whole
Amount (as defined in the Indenture, if any), interest, if any, on and
Additional Amounts (as defined in the Indenture), if any, payable in respect of
such Debt Securities will be payable, where such Debt Securities may be
surrendered for conversion or registration of transfer or exchange and where
notices or demands to or upon the Company in respect of such Debt Securities and
the Indenture may be served;
(10) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(11) the period or periods within which, the price or prices (including
premium or Make-Whole Amount, if any) at which, the currency or currencies,
currency unit or units or composite currency or currencies in which, and the
other terms and conditions upon which such Debt Securities may be redeemed, as a
whole or in part, at the option of the Company if the Company is to have such an
option;
(12) the obligation, if any, of the Company to redeem, repay or purchase
Debt Securities pursuant to any sinking fund or analogous provision or at the
option of a Holder thereof, and the period or periods within which or the date
or dates on which, the price or prices at which, the currency or currencies,
currency unit or units or composite currency or currencies in which, and other
terms and conditions upon which Debt Securities shall be redeemed, repaid or
purchased, in whole or in part, pursuant to such obligation;
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(13) the currency or currencies in which such Debt Securities are being
sold and are denominated and payable, which may be a foreign currency or units
of two or more foreign currencies or a composite currency or currencies, and the
terms and conditions relating thereto;
(13) whether the amount of payment of principal of (and premium or
Make-Whole Amount, if any) or interest, if any, on such Debt Securities may be
determined with reference to an index, formula or other method (which index,
formula or method may, but need not be, based on a currency, currencies,
currency unit or units, composite currency or currencies, commodities, equity
indices or other indices) and the manner in which such amounts shall be
determined;
(14) whether the principal of (and premium or Make-Whole Amount, if any) or
interest or Additional Amounts, if any, on such Debt Securities are to be
payable, at the election of the Company or a Holder thereof, in a currency or
currencies, currency unit or units or composite currency or currencies other
than that in which such Debt Securities are denominated or stated to be payable,
the period or periods within which, and the terms and conditions upon which,
such election may be made, and the time and manner of, and identity of the
exchange rate agent with responsibility for, determining the exchange rate
between the currency or currencies, currency unit or units or composite currency
or currencies in which such Debt Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are to be payable;
(15) provisions, if any, granting special rights to the Holders of such
Debt Securities upon the occurrence of such events as may be specified;
(16) any addition to, modifications of or deletions from the terms of such
Debt Securities with respect to the Events of Default or covenants set forth in
the applicable Indenture;
(17) whether such Debt Securities will be issued in certificated or
book-entry form and terms and conditions relating thereto;
(18) whether such Debt Securities will be in registered ("Registered Debt
Securities") or bearer ("Bearer Debt Securities") form and terms and conditions
relating thereto, and if in registered form, the denominations thereof if other
than $1,000 and any integral multiple thereof and, if in bearer form, the
denominations thereof if other than $5,000;
(19) the applicability, if any, of the defeasance and covenant defeasance
provisions of the Indenture;
(20) any applicable United States federal income tax consequences,
including whether and under what circumstances the Company will pay Additional
Amounts, if any, as contemplated in the applicable Indenture on such Debt
Securities to any Holder who is not a United States person in respect of any
tax, assessment or governmental charge withheld or deducted and, if so, whether
the Company will have the option to redeem such Debt Securities in lieu of
paying such Additional Amounts (and the terms of any such option);
(21) any other covenant or warranty included for the benefit of the Debt
Securities in addition to (and not inconsistent with) those included in the
Indenture for the benefit of Debt Securities of all series, or any other
covenant or warranty included for the benefit of the Debt Securities in lieu of
any covenant or warranty included in the Indenture for the benefit of Debt
Securities of all series or any provision that any covenant or warranty included
in the Indenture for the benefit of Debt Securities of all series shall not be
for the benefit of the Debt Securities, or any combination of such covenants,
warranties or provisions;
(22) the proposed listing, if any, of the Debt Securities on any securities
exchange; and
(23) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture. (Section 301 of each Indenture)
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The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
as a result of the occurrence and continuation of an Event of Default ("Original
Issue Discount Securities"). (Section 502 of each Indenture) Any special U.S.
federal income tax, accounting and other considerations applicable to Original
Issue Discount Securities will be described in the applicable Prospectus
Supplement.
Debt Securities may be issued, from time to time, with the principal amount
payable on any principal payment date, or the amount of interest payable on any
interest payment date, to be determined by reference to one or more currency
exchange rates, commodity prices, equity indices or other factors. Holders of
such Debt Securities may receive a principal amount on any principal payment
date, or a payment of interest on any interest payment date, that is greater
than or less than the amount of principal or interest otherwise payable on such
dates, depending upon the value on such dates of the applicable currency,
commodity, equity index or other factors. Information as to the methods for
determining the amount of principal or interest payable on any date, the
currencies, commodities, equity indices or other factors to which the amount
payable on such date is linked and certain additional tax considerations will be
set forth in the applicable Prospectus Supplement.
The Indentures do not contain any provisions that afford Holders of the
Debt Securities protection in the event of a highly leveraged or similar
transaction involving the Company.
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series issued in registered form will be issuable in
denominations of $1,000 and integral multiples thereof. Unless otherwise
described in the applicable Prospectus Supplement, the Debt Securities of any
series issued in bearer form will be issuable in denominations of $5,000.
(Section 302 of each Indenture)
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest,
if any, on any series of Debt Securities will be payable in the currency
designated in the Prospectus Supplement at the corporate trust office of the
Trustee, initially located at The Chase Manhattan Bank, 450 West 33rd, Global
Trust Services, 15th Floor, New York, New York 10001 in the case of each
of the Senior Debt Securities and the Subordinated Debt Securities, provided
that, at the option of the Company, payment of interest may be made by check
mailed to the address of the Person (as defined in the Indentures) entitled
thereto as it appears in the Security Register for such series or by wire
transfer of funds to such Person at an account maintained within the United
States. (Sections 301, 305, 307 and 1002 of each Indenture) The Company may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agents or approve a change in the office through which any Paying Agent
acts, except that the Company will be required to maintain a Paying Agent in
each Place of Payment for such series. All monies paid by the Company to a
Paying Agent for the payment of principal of and premium, if any, and interest,
if any, on any Debt Security which remains unclaimed at the end of two years
after such principal, premium or interest shall have become due and payable will
be repaid to the Company, and the Holder of such Offered Debt Security will
thereafter look only to the Company for payment thereof. (Section 1003 of each
Indenture)
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable Regular Record
Date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
applicable Trustee, notice whereof shall be mailed to each Holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner, all as more completely described in the
applicable Indenture. (Section 307 of each Indenture)
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee referred to
above. In addition, subject to certain limitations imposed upon
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Debt Securities issued in book-entry form, the Debt Securities of any series may
be surrendered for conversion or registration of transfer or exchange at the
corporate trust office of the applicable Trustee referred to above. Every Debt
Security surrendered for conversion, registration of transfer or exchange shall
be duly endorsed or accompanied by a written instrument of transfer. No service
charge will be made for any registration of transfer or exchange of any Debt
Securities, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. (Section 305
of each Indenture) If the applicable Prospectus Supplement refers to any
transfer agent (in addition to the applicable Trustee) initially designated by
the Company with respect to any series of Debt Securities, the Company may at
any time rescind the designation of any such transfer agent or approve a change
in the location through which any such transfer agent acts, except that the
Company will be required to maintain a transfer agent in each Place of Payment
for such series. The Company may at any time designate additional transfer
agents with respect to any series of Debt Securities. (Section 1002 of each
Indenture)
Neither the Company nor any Trustee shall be required to: (i) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before any selection of Debt
Securities of that series to be redeemed and ending at the close of business on
the day of mailing or publication of the relevant notice of redemption; (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part; (iii) exchange any Bearer Debt Security selected for
redemption, except that such a Bearer Debt Security may be exchanged for a
Registered Debt Security of that series and like tenor, provided that such
Registered Debt Security shall be simultaneously surrendered for redemption or
exchange; or (iv) issue, register the transfer of or exchange any Debt Security
that has been surrendered for repayment at the option of the Holder, except the
portion, if any, of such Debt Security not to be so repaid. (Section 305 of each
Indenture)
GLOBAL DEBT SECURITIES
The registered Debt Securities of a series may be issued in the form of one
or more fully registered global Securities (a "Registered Global Security") that
will be deposited with a depositary (a "Depositary") or with a nominee for a
Depositary identified in the Prospectus Supplement relating to such series and
registered in the name of the Depositary or a nominee thereof. In such case, one
or more Registered Global Securities will be issued in a denomination or
aggregate denominations equal to the portion of the aggregate principal amount
of outstanding registered Debt Securities of the series to be represented by
such Registered Global Security or Securities. Unless and until it is exchanged
in whole for Debt Securities in definitive registered form, a Registered Global
Security may not be transferred except as a whole by the Depositary for such
Registered Debt Security to a nominee of such Depositary or by a nominee of such
Depositary to such Depositary or another nominee of such Depositary or by such
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such series.
The Company anticipates that the following provisions will apply to all
depositary arrangements.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Debt Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Debt Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through, records maintained by the Depositary
for such Registered Global Security (with respect to interests of participants)
and on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in Registered Global Securities.
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So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Registered Global Security for all
purposes under the applicable Indenture. Except as set forth below, owners of
beneficial interests in a Registered Global Security will not be entitled to
have the Debt Securities represented by such Registered Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of such Debt Securities in definitive form and will not be considered
the owners or holders thereof under the applicable Indenture. Accordingly, each
person owning a beneficial interest in a Registered Global Security must rely on
the procedures of the Depositary for such Registered Global Security and, if
such person is not a participant, on the procedures of the participant through
which such person owns its interest, to exercise any rights of a holder under
the applicable Indenture. The Company understands that under existing industry
practices, if the Company requests any action of holders or if an owner of a
beneficial interest in a Registered Global Security desires to give or take any
action which a holder is entitled to give or take under the applicable
Indenture, the Depositary for such Registered Global Security would authorize
the participants holding the relevant beneficial interests to give or take such
action, and such participants would authorize beneficial owners owning through
such participants to give or take such action or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal and premium, if any, and interest, if any, of Debt
Securities represented by a Registered Global Security registered in the name of
a Depositary or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owners of such Registered Global Security.
None of the Company, the Trustee or any other agent of the Company or agent of
the Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Registered Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depositary for any Debt Securities represented
by a Registered Global Security, upon receipt of any payment of principal,
premium or interest in respect of such Registered Global Security, will
immediately credit participants' accounts with payments in amounts proportionate
to their respective beneficial interests in such Registered Global Security as
shown on the records of such Depositary. The Company also expects that payments
by participants to owners of beneficial interests in such Registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Registered
Global Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depositary registered as a clearing agency under the Exchange Act is
not appointed by the Company within 90 days, the Company will issue such Debt
Securities in definitive form in exchange for such Registered Global Security.
In addition, the Company may at any time and in its sole discretion determine
not to have any of the Debt Securities of a series represented by one or more
Registered Global Securities and, in such event, will issue Debt Securities of
such series in a definitive form in exchange for all of the Registered Global
Security or Securities representing such Debt Securities. Any Debt Securities
issued in definitive form in exchange for a Registered Global Security will be
registered in such name or names as the Depositary shall instruct the Trustee.
It is expected that such instructions will be based upon directions received by
the Depositary from participants with respect to ownership of beneficial
interests in such Registered Global Security.
Bearer Debt Securities of a series may also be issued in the form of one or
more global Securities (a "Bearer Global Security") that will be deposited with
a common depositary for Euroclear and CEDEL, or with a nominee for such
depositary identified in the Prospectus Supplement relating to such series. The
specific terms and procedures, including the specific terms of the depositary
arrangement and any specific procedures for the issuance of Debt Securities in
definitive form in exchange for a Bearer Global Security, with respect to any
portion of a series of Debt Securities to be represented by a Bearer Global
Security will be described in the Prospectus Supplement relating to such series.
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MERGER, CONSOLIDATION OR SALE
The Company may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other corporation
or trust or entity provided that: (i) either the Company shall be the continuing
entity, or the successor entity (if other than the Company) formed by or
resulting from any such consolidation or merger or which shall have received the
transfer of such assets shall be an entity organized under the laws of any
United States or a state thereof and expressly assume by supplemental indenture
the due and punctual payment of the principal of (and premium or Make-Whole
Amount, if any) and interest (including any Additional Amounts), if any, on all
of the Offered Debt Securities and the due and punctual performance and
observance of all of the covenants and conditions contained in each Indenture;
(ii) immediately after giving effect to such transaction and treating any
indebtedness that becomes an obligation of the Company or any Subsidiary as a
result thereof as having been incurred by the Company or such Subsidiary at the
time of such transaction, no Event of Default under the Indenture, and no event
which, after notice or the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (iii) certain other
conditions are met. (Sections 801 and 803 of each Indenture)
This covenant would not apply to any recapitalization transaction, a change
of control of the Company or a highly leveraged transaction unless such
transactions or change of control were structured to include a merger or
consolidation or transfer or lease of the Company's assets substantially as an
entirety. Except as may be described in a Prospectus Supplement applicable to a
particular series of Debt Securities, there are no covenants or other provisions
in the Indentures providing for a put or increased interest or that would
otherwise afford holders of Debt Securities additional protection in the event
of a recapitalization transaction, a change of control of the Company or a
highly leveraged transaction.
CERTAIN COVENANTS
Existence. Except as permitted under "Merger, Consolidation or Sale," the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its legal existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if it determines that the preservation thereof
is no longer desirable in the conduct of its business and the loss thereof is
not disadvantageous in any material respect to the holders of any Debt
Securities. (Section 1005 of each Indenture)
Maintenance of Properties. The Company will cause all of its material
properties used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working order
and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Company may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that the Company and its Subsidiaries shall not
be prevented from selling or otherwise disposing of their properties in the
ordinary course of business. (Section 1006 of each Indenture)
Payment of Taxes and Other Claims. The Company will pay or discharge, or
cause to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Company or any
Subsidiary and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Company or any
Subsidiary; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings. (Section 1008 of each Indenture)
Provision of Financial Information. Whether or not the Company is subject
to Section 13 or 15(d) of the Exchange Act, the Company will, within 15 days of
each of the respective dates by which the Company would have been required to
file annual reports, quarterly reports and other documents with the Commission
pursuant to such Section 13 and 15(d) if the Company were so subject, (i)
transmit by mail to all Holders of Debt Securities, as their names and addresses
appear in the Security Register (as defined in this Indenture), without cost to
such Holders,
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copies of the annual reports and quarterly reports that the Company would have
been required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections, (ii) file with the
applicable Trustee copies of the annual reports, quarterly reports and other
documents that the Company would have been required to file with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act if the Company were subject
to such Sections and (iii) promptly upon written request and payment of the
reasonable cost of duplication and delivery, supply copies of such documents to
any prospective Holder. (Section 1009 of each Indenture)
Waiver of Certain Covenants. The Company may omit to comply with any term,
provision or condition of the foregoing covenants, and with any other term,
provision or condition with respect to the Debt Securities of any series
specified in Section 301 of the Indentures (except any such term, provision or
condition which could not be amended without the consent of all Holders of Debt
Securities of such series), if before or after the time for such compliance the
Holders of at least a majority in principal amount of all outstanding Debt
Securities of such series, by Act of such Holders, either waive such compliance
in such instance or generally waive compliance with such covenant or condition
except to the extent so expressly waived, and until such waiver shall become
effective, the obligations of the Company and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect. (Section 1012 of each Indenture)
Additional Covenants. Any additional covenants with respect to any series
of Debt Securities will be set forth in the Prospectus Supplement relating
thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Except as otherwise provided in a Prospectus Supplement with respect to a
particular series of Debt Securities, each Indenture provides that the following
events are "Events of Default" with respect to any series of Debt Securities
issued thereunder: (i) default for 30 days in the payment of any installment of
interest or Additional Amounts, if any, payable on any Debt Security of such
series; (ii) default in the payment of the principal of (or premium or Make-
Whole Amount, if any, on) any Debt Security of such series when due, either at
maturity, redemption or otherwise; (iii) default in making any sinking fund
payment as required for any Debt Security of such series; (iv) default in the
performance or breach of any other covenant or agreement of the Company
contained in the Indenture other than a covenant added to the Indenture solely
for the benefit of a series of Debt Securities issued thereunder other than such
series, continued for 60 days after written notice as provided in the applicable
Indenture; (v) default under a bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (or by any Subsidiary, the
repayment of which the Company has guaranteed or for which the Company is
directly responsible or liable as obligor or guarantor) having a principal
amount outstanding in excess of $10,000,000 (other than indebtedness which is
non-recourse to the Company or the Subsidiaries), whether such indebtedness now
exists or shall hereafter be created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such acceleration
having been rescinded or annulled within 30 days after written notice to the
Company as provided in the Indenture; (vi) certain events of bankruptcy,
insolvency or reorganization; and (vii) any other Event of Default provided with
respect to a particular series of Debt Securities. (Section 501 of each
Indenture)
If an Event of Default under an Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the applicable Trustee or the Holders of not less than 25% in
aggregate principal amount of the Outstanding Debt Securities (as defined in the
Indentures) of each such affected series (voting as a single class) may declare
the principal amount (or, if the Debt Securities of that series are Original
Issue Discount Securities (as defined in the Indentures) or Indexed Securities
(as defined in the Indentures), such portion of the principal amount as may be
specified in the terms thereof) of and premium or Make-Whole Amount, if any, on
all of the Debt Securities of that series to be due and payable immediately by
written notice thereof to the Company (and to the applicable Trustee if given by
the Holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
Outstanding under the applicable Indenture, as the case may be) has been made,
but before a judgment or decree for payment of the money due has been obtained
by the applicable Trustee, the Holders of not less than a
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majority in principal amount of the Outstanding Debt Securities of such series
(or of all Debt Securities then Outstanding under the applicable Indenture, as
the case may be) may rescind and annul such declaration and its consequences if
(i) the Company shall have deposited with the applicable Trustee all required
payments of the principal of (and premium or Make-Whole Amount, if any) and
interest, and any Additional Amounts, on the Debt Securities of such series (or
of all Debt Securities then Outstanding under the applicable Indenture, as the
case may be), plus certain fees, expenses, disbursements and advances of the
applicable Trustee and (ii) all Events of Default, other than the nonpayment of
accelerated principal (or a specified portion thereof and the premium or Make-
Whole Amount, if any) or interest, with respect to Debt Securities of such
series (or of all Debt Securities then Outstanding under the applicable
Indenture, as the case may be) have been cured or waived as provided in the
Indenture. (Section 502 of each Indenture) Each Indenture also provides that the
Holders of not less than a majority in principal amount of the Outstanding Debt
Securities of any series (or of all Debt Securities then Outstanding under the
applicable Indenture, as the case may be) may waive any past default with
respect to such series and its consequences, except a default (x) in the payment
of principal of (or premium or Make-Whole Amount, if any) or interest or
Additional Amounts, if any, on any Debt Security of such series or (y) in
respect of a covenant or provision contained in the applicable Indenture that
cannot be modified or amended without the consent of the Holders of each
Outstanding Debt Security affected thereby. (Section 513 of each Indenture)
The Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the applicable Indenture unless such default
shall have been cured or waived; provided, however, that such Trustee may
withhold notice to the Holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal of
(or premium or Make-Whole Amount, if any) or interest or Additional Amounts, if
any, on any Debt Security of such series or in the payment of any sinking fund
installment in respect of any Debt Security of such series) if the Responsible
Officers (as defined in the Indentures) of such Trustee consider such
withholding to be in the interest of such Holders. (Section 601 of each
Indenture) Each Indenture provides that no Holder of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the case of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. (Section 507 of each Indenture) This provision will not
prevent, however, any Holder of Debt Securities from instituting suit for the
enforcement of payment of the principal of (and premium or Make-Whole Amount, if
any) and interest if any, on or Additional Amounts, if any, payable with respect
to such Debt Securities at the respective due dates thereof. (Section 508 of
each Indenture)
Subject to provisions in each Indenture relating to its duties in case of
default, the Trustee is not under an obligation to exercise any of its rights or
powers under such Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under such Indenture, unless such
Holders shall have offered to the Trustee thereunder reasonable security or
indemnity. (Section 602 of each Indenture) Subject to such provisions for the
indemnification of the Trustee, the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series (or of all
Debt Securities then Outstanding under each Indenture, as the case may be) shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the applicable Trustee, or of exercising any trust
or power conferred upon such Trustee. However, the Trustee may refuse to follow
any direction which is in conflict with any law or the applicable Indenture,
which may involve such Trustee in personal liability or which may be unduly
prejudicial to the Holders of Debt Securities of such series not joining
therein. (Section 512 of each Indenture)
Within 120 days after the close of each fiscal year, the Company must
deliver to each Trustee a certificate, signed by one of several specified
officers, stating such officer's knowledge of the Company's compliance with all
the conditions and covenants under the applicable Indenture and, in the event of
any noncompliance, specifying such noncompliance and the nature and status
thereof. (Section 1010 of each Indenture)
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MODIFICATION OF THE INDENTURES
Modification and amendment of an Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities issued under such Indenture which are affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each such Debt Security
affected thereby, (i) change the Stated Maturity (as defined in the Indentures)
of the principal of (or premium or Make-Whole Amount, if any), or any
installment of principal of or interest or Additional Amounts, if any, payable
on, any such Debt Security, (ii) reduce the principal amount of, or the rate or
amount of interest on, or any premium or Make-Whole Amount, payable on
redemption of or any Additional Amount, if any, payable with respect to any such
Debt Security, or reduce the amount of principal of an Original Issue Discount
Security or Make-Whole Amount, if any, that would be due and payable upon
declaration of acceleration of the maturity thereof or would be provable in
bankruptcy, or adversely affect any right of repayment of the Holder of any such
Debt Security, (iii) change the Place of Payment (as defined in the Indentures)
where, or the currency or currencies, currency units or composite currency or
currencies in which payment of the principal of (and Premium or Make-Whole
Amount, if any), or interest on, or any Additional Amounts payable with respect
to, any such Debt Security, is payable, (iv) impair the right to institute suit
for the enforcement of any payment on or with respect to any such Debt Security,
(v) reduce the percentage of the Holders of outstanding Debt Securities of any
series necessary to modify or amend the applicable Indenture, to waive
compliance with certain provisions thereof or certain defaults and consequences
thereunder or to reduce the quorum or voting requirements set forth in the
applicable Indenture, or (vi) modify any of the foregoing provisions or any of
the provisions relating to the waiver of certain past defaults or certain
covenants, except to increase the required percentage to effect such action or
to provide that certain other provisions may not be modified or waived without
the consent of the Holder of such Debt Security. (Section 902 of each Indenture)
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities issued under either Indenture have the right to waive compliance
by the Company with certain covenants in such Indenture. (Section 1012 of each
Indenture)
Modifications and amendments of an Indenture may be made by the Company and
the respective Trustee thereunder without the consent of any Holder of Debt
Securities for any of the following purposes: (i) to evidence the succession of
another Person to the Company as obligor under such Indenture; (ii) to add to
the covenants of the Company for the benefit of the Holders of all or any series
of Debt Securities or to surrender any right or power conferred upon the Company
in such Indenture; (iii) to add Events of Default for the benefit of the Holders
of all or any series of Debt Securities; (iv) to add or change any provisions of
an Indenture to facilitate the issuance of, or to liberalize certain terms of,
Debt Securities in bearer form, or to permit or facilitate the issuance of Debt
Securities in uncertificated form, provided that such action shall not adversely
affect the interests of the Holders of the Debt Securities of any series in any
material respect; (v) to add, change or eliminate any provisions of an
Indenture, provided that any such addition, change or elimination shall become
effective only when there are no Outstanding Debt Securities of any series
created prior thereto which are entitled to the benefit of such provision; (vi)
to secure the Debt Securities; (vii) to establish the form or terms of Debt
Securities of any series, including the provisions and procedures, if
applicable, for the conversion of such Debt Securities into Common Stock of the
Company or other securities or property of the Company; (viii) to provide for
the acceptance or appointment of a successor Trustee or facilitate the
administration of the trusts under an Indenture by more than one Trustee; (ix)
to cure any ambiguity, defect or inconsistency in an Indenture, provided that
such action shall not adversely affect the interests of Holders of Debt
Securities of any series issued under such Indenture; (x) to close an Indenture
with respect to the authentication and delivery of additional series of Debt
Securities or to qualify, or maintain qualification of, an Indenture under the
TIA; or (xi) to supplement any of the provisions of an Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of such
Debt Securities, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in any material
respect. (Section 901 of each Indenture)
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SUBORDINATION
Unless otherwise indicated in a Prospectus Supplement for a particular
series of Subordinated Debt Securities, the following subordinated provisions
will apply to the Subordinated Debt Securities.
Upon any distribution to creditors of the Company in a liquidation,
dissolution, bankruptcy, insolvency or reorganization, the payment of the
principal of and interest on the Subordinated Debt Securities will be
subordinated to the extent provided in the Subordinated Indenture in right of
payment to the prior payment in full of all Senior Debt (Sections 1701 and 1702
of the Subordinated Indenture), but the obligation of the Company to make
payment of the principal of and interest on the Subordinated Securities will not
otherwise be affected. (Section 1608 of the Subordinated Indenture) No payment
of principal or interest may be made on the Subordinated Securities at any time
in the event there shall have occurred and be continuing a default in any
payment with respect to Senior Debt, or an event of default with respect to any
Senior Debt resulting in the acceleration of the maturity thereof, or if any
judicial proceeding shall be pending with respect to any such default and the
Company receives notice of the default. (Section 1703 of the Subordinated
Indenture) The Company may resume payments on the Subordinated Securities when
the default is cured or waived if the subordination provisions of the
Subordinated Indenture otherwise permit payment at that time. (Section 1703 of
the Subordinated Indenture) After all Senior Debt is paid in full and until the
Subordinated Debt Securities are paid in full, Holders will be subrogated to the
rights of holders of Senior Debt to the extent that distributions otherwise
payable to Holders have been applied to the payment of Senior Debt. (Section
1707 of the Subordinated Indenture) By reason of such subordination, in the
event of a distribution of assets upon insolvency, certain general creditors of
the Company may recover more, ratably, than Holders of the Subordinated
Securities.
Senior Debt is defined in the Subordinated Indenture as the principal,
premium, if any, unpaid interest (including interest accruing on or after the
filing of any petition in bankruptcy or for reorganization relating to the
Company whether or not a claim for post-filing interest is allowed in such
proceeding), fees, charges, expenses, reimbursement and indemnification
obligations, and all other amounts payable under or in respect of the following
indebtedness of the Company for money borrowed, whether any such indebtedness
exists as of the date of the Subordinated Indenture or is created, incurred,
assumed or guaranteed after such date:
(1) any debt (i) for money borrowed by the Company, or (ii) evidenced by a
bond, note, debenture, or similar instrument (including purchase money
obligations) given in connection with the acquisition of any business, property
or assets, whether by purchase, merger, consolidation or otherwise, but shall
not include any account payable or other obligation created or assumed in the
ordinary course of business in connection with the obtaining of materials or
services, or (iii) which is a direct or indirect obligation which arises as a
result of banker's acceptances or bank letters of credit issued to secure
obligations of the Company, or to secure the payment of revenue bonds issued for
the benefit of the Company, whether contingent or otherwise;
(2) any debt of others described in the preceding clause (1) which the
Company has guaranteed or for which it is otherwise liable;
(3) the obligation of the Company as lessee under any lease of property
which is reflected on the Company's balance sheet as a capitalized lease; and
(4) any deferral, amendment, renewal, extension, supplement or refunding
of any liability of the kind described in any of the preceding clauses (1), (2),
and (3); provided, however, that, in computing the indebtedness of the Company,
there shall be excluded any particular indebtedness if, upon or prior to the
maturity thereof, there shall have been deposited with a depository in trust
money (or evidence of indebtedness if permitted by the instrument creating such
indebtedness) in the necessary amount to pay, redeem or satisfy such
indebtedness as it becomes due, and the amount so deposited shall not be
included in any computation of the assets of the Company provided, further, that
in computing the indebtedness of the Company hereunder, there shall be excluded
(i) any such indebtedness, obligation or liability referred to in clauses (1)
through (4) above as to which, in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
indebtedness, obligation or liability is not superior in right of payment to the
Subordinated Debt Securities, or
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ranks pari passu with the Subordinated Securities, (ii) any such indebtedness,
obligation or liability which is subordinated to indebtedness of the Company to
substantially the same extent as or to a greater extent than the Subordinated
Securities are subordinated, (iii) any indebtedness to a Subsidiary of the
Company, and (iv) the Subordinated Debt Securities. (Section 101 of the
Subordinated Indenture).
There is no limit on the amount of Senior Debt that the Company may incur.
At March 31, 1997, Senior Debt of the Company aggregated approximately
$725 million. There are no restrictions in the Subordinated Indenture upon
the creation of additional Senior Debt or other indebtedness.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under each Indenture, the Company may discharge certain obligations to
Holders of any series of Debt Securities issued thereunder that have not already
been delivered to the applicable Trustee for cancellation and that either have
become due and payable or will become due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
applicable Trustee, in trust, funds in such currency or currencies, currency
unit or units or composite currency or currencies in which such Debt Securities
are payable in an amount sufficient to pay the entire indebtedness on such Debt
Securities in respect of principal (and premium or Make-Whole Amount, if any)
and interest and any Additional Amounts payable to the date of such deposit (if
such Debt Securities have become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be (Section 401 of each Indenture). Each
Indenture provides that, if the provisions of Article Fourteen thereof are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of such Indenture, the Company may elect either (i) to defease and be
discharged from any and all obligations with respect to such Debt Securities
(except for the obligation to pay Additional Amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402 of each Indenture) or (ii) to be released from its
obligations with respect to such Debt Securities under Sections of each
Indenture described under "Certain Covenants" or, if provided pursuant to
Section 301 of each Indenture, its obligations with respect to any other
covenant, and any omission to comply with such obligations shall not constitute
a default or an Event of Default with respect to such Debt Securities ("covenant
defeasance") (Section 1403 of each Indenture), in either case upon the
irrevocable deposit by the Company with the applicable Trustee, in trust, of an
amount, in such currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are payable at Stated
Maturity, or Government Obligations (as defined below), or both, applicable to
such Debt Securities which through the scheduled payment of principal and
interest in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium or Make-Whole Amount, if any)
and interest and any Additional Amounts on such Debt Securities, and any
mandatory sinking fund or analogous payments thereon, on the scheduled due dates
therefor.
Such a trust may only be established if, among other things, the Company
has delivered to the applicable Trustee an Opinion of Counsel (as specified in
each Indenture) to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for United States federal income tax purposes as
a result of such defeasance or covenant defeasance and will be subject to United
States federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such Opinion of Counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a change
in applicable United States federal income tax laws occurring after the date of
such Indenture. (Section 1404 of each Indenture)
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency (as defined in the Indentures) in which the Debt Securities of a
particular series are payable, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America or
the government which issued the Foreign Currency in which the Debt Securities of
such series are payable, the payment of which is unconditionally guaranteed as a
full faith and credit obligation by the United States of
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America or such other government, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank or trust company as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt. (Section 101 of each Indenture)
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(i) the Holder of a Debt Security of such series is entitled to, and does, elect
pursuant to Section 301 of either Indenture or the terms of such Debt Security
to receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(ii) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium or Make-Whole Amount, if any) and interest and any Additional
Amounts on such Debt Security as they become due out of the proceeds yielded by
converting the amount so deposited in respect of such Debt Security into the
currency, currency unit or composite currency in which such Debt Security
becomes payable as a result of such election or such cessation of usage based on
the applicable market exchange rate (Section 1405 of each Indenture).
Unless otherwise provided in a Prospectus Supplement, "Conversion Event"
means the cessation of use of (i) a currency, currency unit or composite
currency issued by the government of one or more countries other than the United
States both by the government of the country that issued such currency and for
the settlement of transactions by a central bank or other public institutions of
or within the international banking community, (ii) any currency unit or
composite currency for the purposes for which it was established. (Section 101
of each Indenture) Unless otherwise provided in the applicable Prospectus
Supplement, all payments of principal of (and premium or Make-Whole Amount, if
any) and interest and any Additional Amounts on any Debt Security that is
payable in a Foreign Currency that ceases to be used by its government of
issuance shall be made in United States dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default described
in clause (iv) under "Events of Default, Notice and Waiver" with respect to
Sections 1004 to 1009, inclusive, of either Indenture (which Sections would no
longer be applicable to such Debt Securities) or described in clause (vii) under
"Events of Default, Notice and Waiver" with respect to a covenant as to which
there has been covenant defeasance, the amount in such currency, currency unit
or composite currency in which such Debt Securities are payable, and Government
Obligations on deposit with the Trustee, will be sufficient to pay amounts due
on such Debt Securities at the time of their Stated Maturity but may not be
sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the Company would
remain liable to make payment of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION AND EXCHANGE RIGHTS
The terms on which Debt Securities of any series are convertible into or
exchangeable for Common Stock or other securities or property of the Company
will be set forth in the Prospectus Supplement relating thereto. Such terms
shall include the conversion or exchange price (or manner of calculation
thereof), the exchange or conversion period, provisions as to whether conversion
or exchange is mandatory, at the option of the Holder or at the option of the
Company, and may include provisions pursuant to which the number of shares of
Common Stock
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or other securities or property of the Company to be received by the Holders of
Debt Securities would be calculated according to the market price of Common
Stock or other securities or property of the Company as of a time stated in the
Prospectus Supplement. The conversion exchange price of any Debt Securities of
any series that is convertible into Common Stock of the Company may be adjusted
for any stock dividends, stock splits, reclassification, combinations or similar
transactions, as set forth in the applicable Prospectus Supplement. (Article
Sixteen of each Indenture)
GOVERNING LAW
The Indentures are governed by and shall be construed in accordance with
the laws of the State of New York.
REDEMPTION OF DEBT SECURITIES
The Indentures provide that the Debt Securities may be redeemed at any time
at the option of the Company, in whole or in part. Debt Securities may also be
subject to optional or mandatory redemption on terms and conditions described in
the applicable Prospectus Supplement.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have been
made available on such redemption date, such Debt Securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the Holders of the Debt Securities will be to receive payment of
the Redemption Price (as defined in the Indentures).
CONCERNING THE TRUSTEE
The Chase Manhattan Bank, is one of a number of banks with which the
Company and its subsidiaries maintain banking relationships in the ordinary
course of business. The Company's banking relationship with The Chase Manhattan
Bank includes serving as administrative agent for the Company's $800 million
Credit Agreement dated as of July 1, 1996, providing $44 million of funding as a
participating bank in the $800 million Credit Agreement dated as of July 1,
1996, providing custodial services for the Provident's bond and stock
portfolios, and providing general banking services. Upon the occurrence of an
Event of Default or an event which, after notice or lapse of time or both, would
become an Event of Default under a series of Senior Debt Securities or
Subordinated Debt Securities, or upon the occurrence of a default under such
other indenture, the Trustee may be deemed to have a conflicting interest with
respect to the Senior Debt Securities or the Subordinated Debt Securities for
purposes of the Trust Indenture Act and, accordingly, may be required to resign
as Trustee under the Senior Indenture or the Subordinated Indenture. In that
event, the Company would be required to appoint a successor Trustee.
DESCRIPTION OF PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general rules and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Particular terms of the Preferred Stock
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Preferred Stock so offered will be described
in the Prospectus Supplement relating to such Preferred Stock. The description
of certain provisions of the Preferred Stock set forth below and in the
Prospectus Supplement does not purport to be complete and is subject to and
qualified in its entirety by reference to the Certificate of Designations
relating to the particular series of Preferred Stock, which will be filed with
the Commission at or prior to the time of the sale of such Preferred Stock.
GENERAL
Under the Company's Amended and Restated Certificate of Incorporation (the
"Certificate"), the Board of Directors of the Company is authorized without
further stockholder action to adopt resolutions providing for the issuance of up
to 25,000,000 shares of Preferred Stock, in one or more series, with such voting
powers, full or limited, and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions, as may be determined by the Board of Directors. As of the date
of this
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Prospectus, the Company had one series of Preferred Stock outstanding, which is
described below under "Outstanding Preferred Stock."
Each series of shares of Preferred Stock shall have the dividend,
liquidation, redemption, voting rights and, if applicable, conversion rights set
forth below unless otherwise provided in the Prospectus Supplement relating to a
particular series of Preferred Stock. Reference is made to the Prospectus
Supplement relating to the particular series of Preferred Stock offered thereby
for specific terms, including, where applicable: (i) the title, designation,
number of shares and stated value of such Preferred Stock; (ii) the price at
which such Preferred Stock will be issued; (iii) the dividend rates (or method
of calculation) and dates on which dividends shall be payable, whether such
dividends will be cumulative or noncumulative and, if cumulative, the dates from
which dividends shall commence to cumulate; (iv) the dates on which the
Preferred Stock will be subject to redemption and the redemption price; (v) any
redemption or sinking fund provisions; (vi) whether the Preferred Stock are
convertible or exchangeable and, if so, the securities or rights into which such
Preferred Stock are convertible or exchangeable (which may include other
Preferred Stock, Senior Debt Securities, Subordinated Debt Securities, Common
Stock or other securities or rights of the Company (including rights to receive
payment in cash or securities based on the value, rate or price of one or more
specified commodities, currencies or indices) or securities of other issuers or
a combination of the foregoing), and the terms and conditions upon which such
conversions or exchanges will be effected including the initial conversion or
exchange prices or rates, the conversion or exchange period and any other
related provisions; (vii) if other than the currency of the United States of
America, the currency or currencies including composite currencies in which such
Preferred Stock are denominated and/or in which payments will or may be payable;
(viii) the method by which amounts in respect of such Preferred Stock may be
calculated and any commodities, currencies or indices, or value, rate or price,
relevant to such calculation; (ix) the place or places where dividends and other
payments on the Preferred Stock are payable and the identity of the transfer
agent, registrar and dividend disbursement agent for the Preferred Stock; (x)
any additional dividend, liquidation, redemption, sinking fund, voting and other
rights, preferences, privileges, limitations and restrictions.
Upon their issuance and receipt of payment therefor, the shares of
Preferred Stock will be fully paid and nonassessable, and for each share issued,
a sum equal to the stated value will be credited to the Company's preferred
stock account. Unless otherwise specified in the Prospectus Supplement relating
to a particular series of Preferred Stock, each series of Preferred Stock will
rank on a parity in all respects with each other series of Preferred Stock. See
"Outstanding Preferred Stock," below.
DIVIDENDS
Holders of Preferred Stock will be entitled to receive cash dividends, when
and as declared by the Board of Directors of the Company out of assets of the
Company legally available for payment, at such rates and on such dates as will
be set forth in the applicable Prospectus Supplement. Each dividend will be
payable to holders of record as they appear on the stock books of the Company on
the record dates fixed by the Board of Directors of the Company. Different
series of the Preferred Stock may be entitled to dividends at different rates or
based upon different methods of determination. Such rate may be fixed or
variable or both. Dividends on any series of the Preferred Stock may be
cumulative or noncumulative, as provided in the Prospectus Supplement relating
thereto.
LIQUIDATION RIGHTS
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the holders of each series of Preferred Stock will be
entitled to receive out of assets of the Company available for distribution to
stockholders, before any distribution of assets is made to holders of Common
Stock or any other class of stock ranking junior to such series of Preferred
Stock, liquidating distributions in the amount of the stated value per share (as
set forth in the applicable Prospectus Supplement) plus all accrued and unpaid
dividends up to the date fixed for distribution for the current dividend period
and, if such series of the Preferred Stock is cumulative, for all dividend
periods prior thereto, all as set forth in the Prospectus Supplement with
respect to such shares. If, upon any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the amounts payable with respect to a
series of Preferred Stock and any other shares of stock of the Company ranking
as to any distribution on a parity with such series of Preferred Stock are not
paid in full, the holders of such series of
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Preferred Stock and of such other shares will share ratably in any such
distribution of assets of the Company in proportion to the full respective
preferential amounts to which they are entitled. After payment of the full
amount of the liquidating distribution to which they are entitled, the holders
of Preferred Stock will not be entitled to any further participation in any
distribution of assets by the Company.
Neither the sale, conveyance, exchange or transfer of all or substantially
all the property and assets of the Company, the consolidation or merger of the
Company with or into any other corporation, nor the merger or consolidation of
any other corporation into or with the Company shall be deemed to be a
liquidation, dissolution or winding up of the Company.
REDEMPTION
The terms, if any, on which shares of a series of Preferred Stock may be
subject to optional or mandatory redemption, in whole or in part, will be set
forth in the Prospectus Supplement relating to such series.
VOTING RIGHTS
Except as indicated below or in the applicable Prospectus Supplement, or
except as expressly required by applicable law, the holders of the Preferred
Stock will not be entitled to vote.
CONVERSION AND EXCHANGE RIGHTS
The terms, if any, on which shares of any series of Preferred Stock are
convertible or exchangeable will be set forth in the Prospectus Supplement
relating thereto. The Prospectus Supplement will describe the securities or
rights into which such shares of Preferred Stock are convertible or exchangeable
(which may include other Preferred Stock, Senior Debt Securities, Subordinated
Debt Securities, Common Stock or other securities or rights of the Company
(including rights to receive payment in cash or securities based on the value,
rate or price of one or more specified commodities, currencies or indices) or
securities of other issuers or a combination of the foregoing). Such terms may
include provisions for conversion, either mandatory, at the option of the
holder, or at the option of the Company, in which case the consideration to be
received by the holders of Preferred Stock would be calculated as of a time and
in the manner stated in the Prospectus Supplement.
TRANSFER AGENT AND REGISTRAR
The transfer agent, registrar and dividend disbursement agent for the
Preferred Stock will be designated in the applicable Prospectus Supplement. The
registrar for shares of Preferred Stock will send notices to shareholders of any
meetings at which holders of the Preferred Stock have the right to elect
directors of the Company or to vote on any other matter.
OUTSTANDING PREFERRED STOCK
As of March 31, 1997, the Company's only outstanding series of shares of
Preferred Stock is designated the 8.10% Cumulative Preferred Stock (the
"Cumulative Preferred Stock"), of which 1,041,534 shares were outstanding.
The following summary of the Cumulative Preferred Stock is qualified in its
entirety by reference to the Certificate and to the applicable provisions of the
Delaware General Corporation Law ("DGCL").
DIVIDENDS. Holders of the Cumulative Preferred Stock are entitled to
receive, when, as and if declared by the Board of Directors of the Company, out
of assets of the Company legally available for payment, cumulative cash
dividends at the annual rate of 8.10% calculated as a percentage of the
liquidation preference of $150 per share. Dividends on the Cumulative Preferred
Stock are payable quarterly on February 1, May 1, August 1 and November 1 of
each year at such annual rate. Dividends are cumulative from the date of
original issue.
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Dividends payable on the Cumulative Preferred Stock for each full dividend
period are computed by dividing the annual dividend rate by four. Dividends
payable on the Cumulative Preferred Stock for any period greater or less than a
full dividend period shall be computed on the basis of a 360-day year consisting
of twelve 30-day months.
REDEMPTION. The Cumulative Preferred Stock may not be redeemed prior to
February 24, 1998. At any time or from time to time on and after February 24,
1998, the Company, at its option, may redeem the Cumulative Preferred Stock in
whole or in part, upon not less than 30 nor more than 60 days notice, at a
redemption price of $150 per share plus accrued and unpaid dividends thereon to
the date fixed for redemption. In the event that fewer than all of the
outstanding shares of the Cumulative Preferred Stock are to be redeemed, the
shares to be redeemed shall be determined by lot or pro rata or by any other
method as may be determined by the Board of Directors of the Company to be
equitable. The Company will provide notice of any redemption of the Cumulative
Preferred Stock to holders of record of the Cumulative Preferred Stock to be
redeemed not less than 30 nor more than 60 days prior to the date fixed for
redemption. Such notice shall specify, among other things, the redemption price
and the amount of accrued and unpaid dividends to the date of redemption,
whether the Company is calling all or less than all of the Cumulative Preferred
Stock for redemption, and if less than all, which shares of the Cumulative
Preferred Stock are being called, the place or places where certificates for
such shares are to be surrendered for redemption and whether the Company is
depositing with a bank or trust company on or before the redemption date the
cash payable by the Company with respect thereto and the date for such deposit.
Such notice shall be provided by mailing notice of such redemption to the
holders of the Cumulative Preferred Stock to be called. Each holder of the
Cumulative Preferred Stock to be called shall surrender the certificates
representing such Cumulative Preferred Stock to the Company at the place
designated in such notice and shall be entitled to receive payment following
such surrender and following the date of such redemption. If such notice of
redemption shall have been duly given, and if on the redemption date funds
necessary for the redemption shall be set aside therefor, then, notwithstanding
that the certificates evidencing any shares of the Cumulative Preferred Stock so
called for redemption shall not have been surrendered, the dividends with
respect to the shares so called for redemption shall cease to accrue after the
redemption date therefor and all rights with respect to the shares so called for
redemption shall forthwith after such redemption date cease and terminate,
except for the right of the holders to receive the redemption price plus an
amount equal to accrued and unpaid dividends to the redemption date therefor,
without interest, upon surrender of their certificates therefore. The Company's
Certificate does not restrict the Company's ability to redeem or repurchase
shares of the Cumulative Preferred Stock when dividends on the Cumulative
Preferred Stock are in arrears.
LIQUIDATION PREFERENCE. In the event of any voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company, after
payment or provision for payment of debts and other liabilities of the Company
and before any distribution to the holders of shares of Common Stock or any
stock junior to the Cumulative Preferred Stock as to the distribution of assets
upon liquidation, the holders of the Cumulative Preferred Stock will receive
$150 per share, plus an amount equal to accrued and unpaid dividends to the date
of payment. The rights of the holders of the Cumulative Preferred Stock to
participate in the assets of the Company upon its liquidation will be subject to
the prior claims of the creditors of the Company and its subsidiaries.
VOTING RIGHTS. Holders of the Cumulative Preferred Stock have only those
voting rights described below and those rights applicable to all series of
Preferred Stock as described in "Description of Preferred Stock - Voting
Rights." The Certificate provides that if an amount equal to at least four
quarterly dividend payments on the Cumulative Preferred Stock are accrued and
remain unpaid at the time of any meeting of the stockholders of the Company for
the election of directors, the Board of Directors shall increase the number of
directors of the Company by two directors and provide for the election of such
two directors and the holders of the Cumulative Preferred Stock, voting
separately as a single class with the holders of shares of any other series of
Preferred Stock so entitled, will be entitled to elect two additional directors
to fill such vacancies. The right of the holders of the Cumulative Preferred
Stock and any other series of Preferred Stock to elect such directors will
continue only until all arrearages in dividends on the outstanding shares of the
Cumulative Preferred Stock and such other series have been eliminated.
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MISCELLANEOUS. The Cumulative Preferred Stock does not have any conversion
or preemptive rights and are not subject to any sinking fund or other
obligations of the Company to repurchase or retire the Cumulative Preferred
Stock.
DESCRIPTION OF COMMON STOCK
This summary of certain terms and provisions of the Common Stock does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, the terms and provisions of the Company's Certificate and Bylaws,
as amended, which are filed as exhibits to the Registration Statement of which
this Prospectus is a part.
The Company is authorized to issue an aggregate of 150,000,000 shares of
Common Stock. As of March 31, 1997, there were 61,132,226 shares of Common Stock
outstanding held by approximately 1,304 shareholders of record. All outstanding
shares of Common Stock are fully paid and nonassessable. The Common Stock is
listed on the NYSE.
DIVIDENDS
Subject to the preferences of holders of Preferred Stock, including the
Cumulative Preferred Stock, holders of Common Stock are entitled to dividends
when, as, and if declared by the Board of Directors out of funds legally
available therefor.
VOTING RIGHTS
Except as otherwise provided by law or by the designation of the
preferences, limitations and relative rights of any series of Preferred Stock,
the voting power of the Company is held by the holders of Common Stock. Each
holder of Common Stock is entitled to one vote for each share held. Holders of
Common Stock are not entitled to cumulative voting rights and, therefore,
holders of a plurality of shares voting in the election of directors may elect
the entire class of the Board of Directors standing for election at a
stockholders' meeting at which a quorum is present. In that event, holders of
the remaining shares of Common Stock would not be able to elect any director to
the Board of Directors. As a general rule, the vote required to take action at a
stockholders' meeting is a majority vote of the shares present and voting
assuming the presence of a quorum, which consists of a majority of the
outstanding shares present in person or by proxy at a meeting. Some matters
under Delaware law, such as an amendment of the certificate of incorporation or
approval of a merger, require the approval of a majority of the shares
outstanding, unless the certificate of incorporation provides for a different
vote. The Company's Certificate provides that mergers, certain sales of assets,
and amendments to the Certificate require the approval of two-thirds of the
outstanding shares of Common Stock. For a description of certain voting rights
of Cumulative Preferred Stock, see "Description of Preferred Stock -- Cumulative
Preferred Stock - Voting Rights."
LIQUIDATION AND DISSOLUTION
Except as otherwise provided by the designation of the preferences,
limitations and relative rights of any series of Preferred Stock, in the event
of any liquidation, dissolution, or winding up of the Company, whether voluntary
or involuntary, after payment has been made to the holders of each series of
Preferred Stock of the full amount to which they are entitled pursuant to the
Certificate of Designations of such series, the holders of shares of Common
Stock will be entitled to share, ratably according to the number of shares of
Common Stock held by them, in all remaining assets of available for distribution
to its stockholders. Shares of Cumulative Preferred Stock have a Stated
Liquidation Value of $150 per share.
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PREEMPTIVE RIGHTS
Holders of Common Stock are not entitled to any preemptive or preferential
right to purchase or subscribe for shares of capital stock of any class.
REDEMPTION
Common Stock is not subject to mandatory redemption.
TRANSFER AGENT
The transfer agent and registrar for shares of the Common Stock is First
Chicago Trust Company of New York.
CERTAIN PROVISIONS THAT MAY BE DEEMED TO HAVE AN ANTI-TAKEOVER EFFECT
The Company's Certificate contains several provisions that may be deemed
under some circumstances to have an "anti-takeover" effect in that they could
impede or prevent an acquisition of control of the Company unless the potential
acquiror has obtained the prior approval of the Company's Board of Directors or
a higher stockholder vote than is otherwise required by the DGCL. The provisions
of the Company's Certificate and relevant provisions of Delaware law described
below are collectively referred to herein as the "Protective Provisions." The
purpose of the Protective Provisions in general is, among other things, to
facilitate stability of leadership and enhance the Board of Directors' role in
connection with attempts to acquire control of the Company so that the Board can
further and protect the interests of the Company, its stockholders, and its
other constituencies as appropriate under the circumstances.
AUTHORIZED CAPITAL STOCK. The Company's Certificate authorizes the issuance
of up to 150,000,000 shares of Common Stock and up to 25,000,000 shares of
Preferred Stock. Such shares may be issued by the Company's Board of Directors
without further action or authorization by the Company's stockholders, unless
such action is required in a particular case by applicable laws or regulations
or by any stock exchange upon which the Company's capital stock may be listed
and the directors may fix the voting rights, conversion rights, and other terms
thereof without stockholder approval. Preferred Stock will be issuable in one or
more classes or series, with each class or series having such rights and
preferences as the Company's Board of Directors may fix and determine by
resolution.
This authority of the Board of Directors to issue additional shares of
Common Stock and Preferred Stock will provide the Company with the flexibility
necessary to meet its future needs without the time delay resulting from seeking
stockholder approval unless otherwise required. The unissued shares of Common
Stock and Preferred Stock will be issuable from time to time for any corporate
purpose, including, without limitation, stock splits, stock dividends, employee
benefit and compensation plans, acquisitions, and public or private sales for
cash as a means of raising capital. Such shares could be used to dilute the
stock ownership of persons seeking to obtain control of the Company. In
addition, the sale of a substantial number of shares of Common Stock to persons
who have an understanding with the Company concerning the voting of such shares,
or the discriminatory distribution or dividend of shares of Common Stock (or the
right to receive Common Stock) to the stockholders of the Company, may have the
effect of discouraging or increasing the cost of unsolicited attempts to acquire
control of the Company. The issuance of Preferred Stock may also, under certain
circumstances, have an anti-takeover effect, particularly if such stock has
broad class voting rights or a substantial number of votes per share.
The actual effect of any issuance of Preferred Stock upon the rights of
holders of Common Stock cannot be specified because the Company's Board of
Directors has not determined the issuance prices or terms or the rights of the
holders of any Preferred Stock, other than the Cumulative Preferred Stock. Such
effects might include:
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(i) restrictions on Common Stock dividends if Preferred Stock dividends have not
been paid; (ii) dilution of the voting power and equity interest of current
holders of Common Stock to the extent that any Preferred Stock has voting rights
or is convertible into Common Stock; and (iii) current holders of all the shares
of Common Stock not being entitled to share in the Company's assets upon
liquidation until satisfaction of any liquidation preferences granted to holders
of Preferred Stock.
AMENDMENT OF CERTIFICATE. The DGCL generally provides that the approval of
a corporation's board of directors and the affirmative vote of both a majority
of the shares entitled to vote thereon and a majority of the shares of each
class of stock entitled to vote thereon as a class, is required to amend the
corporation's certificate of incorporation, unless the certificate specifies a
greater voting requirement. The Company's Certificate provides that the
provisions of the Company's Certificate may be amended, altered, changed,
repealed, or any inconsistent provision adopted, only by the affirmative vote of
the holders of sixty-six and two-thirds percent (66 2/3%) of the outstanding
shares of Common Stock.
MERGER, CONSOLIDATION, SALES OF SUBSTANTIALLY ALL OF THE ASSETS AND
DISSOLUTION. The DGCL generally provides that the approval of a corporation's
board of directors and the affirmative vote of a majority of the shares entitled
to vote thereon is required to approve a merger or consolidation to which the
corporation is party, a sale of substantially all of the assets of the
corporation or a dissolution of the corporation. The Company's Certificate
provides that a merger, consolidation, share exchange, sale of substantially all
of the assets, liquidation or dissolution of the Company requires the approval
of the holders of sixty-six and two-thirds percent (66 2/3%) of the
outstanding Common Stock. The higher vote requirement does not apply to certain
mergers or consolidations which relate to internal reorganizations or to a
disposition of assets to a subsidiary or to facilitate a financing arrangement.
In addition, the insurance laws and regulations of the jurisdictions in
which the Company's insurance subsidiaries do business may impede or delay a
business combination involving the Company.
DIRECTOR EXCULPATION AND LIMITED LIABILITY. Article VI of the Company's
Certificate provides that a director of the Company, to the maximum extent now
or hereafter permitted by Section 102(b)(7) of the DGCL or any successor
provision or provisions, will have no personal liability to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (i) any breach of the director's duty of loyalty to the
Company or its stockholders, (ii) acts or omissions not in good faith or that
involve intentional misconduct or a knowing violation of law, (iii) the payment
of certain unlawful dividends and the making of certain unlawful stock purchases
or redemptions or (iv) any transaction from which the director derived an
improper personal benefit. This provision absolves directors of personal
liability for negligence in the performance of their duties, including gross
negligence.
Although this provision does not affect the availability of injunctive or
other equitable relief as a remedy for a breach of duty by a director, it does
limit the remedies available to a stockholder who has a valid claim that a
director acted in violation of his duties, if the action is among those as to
which liability is limited. Because of this provision, stockholders will not
have a claim for monetary damages based on breach of the directors' duty, even
if the directors' conduct involved gross negligence (including a grossly
negligent business decision involving a takeover proposal for the Company),
unless the conduct is of a type for which the DGCL does not permit limitation of
liability. If the stockholders do not have a claim for monetary damages, their
only remedy may be a suit to enjoin completion of the Board's action or to
rescind completed action. The stockholders may not be aware of a proposed
transaction that might otherwise give rise to a claim until the transaction is
completed or until it is too late to prevent its completion by injunction. In
such a case, the Company and its stockholders may have no effective remedy for
an injury resulting from the Board's action. This provision may reduce the
likelihood of stockholder derivative litigation against directors and may
discourage or deter stockholders or management from bringing a lawsuit against
directors for breach of their duties, even though such action, if successful,
might have benefited the Company and its stockholders. Such a provision could
have an entrenchment effect by making it more difficult for a stockholder to
obtain personal damages against a director.
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The Commission has taken the position that similar provisions added to
other corporations' certificates of incorporation would not protect those
corporations' directors from liability for violations of the federal securities
laws. The Company included this exculpation provision in its Certificate to
provide its directors with the maximum protection from personal liability made
available by the DGCL. It is believed that this provision will help the Company
to attract and retain as directors the persons most qualified for those
positions.
FUTURE PLANS. The Board of Directors may consider and adopt, or propose to
the stockholders for adoption, certain additional Protective Provisions in the
future if the Board believes such provisions are in the best interest of
Company.
DESCRIPTION OF WARRANTS
GENERAL
The Company may issue Warrants to purchase Senior Debt Securities,
Subordinated Debt Securities, Preferred Stock, Common Stock or any combination
thereof (collectively, the "Underlying Warrant Securities"), and such Warrants
may be issued independently or together with any such Underlying Warranty
Securities and may be attached or separate from such Underlying Warrant
Securities. Each series of Warrants will be issued under a separate warrant
agreement (each a "Warrant Agreement") to be entered into between the Company
and a warrant agent ("Warrant Agent"). The Warrant Agent will act solely as an
agent of the Company in connection with the Warrants of such series and will not
assume any obligation or relationship of agency for or with holders or
beneficial owners of Warrants. The following sets forth certain general terms
and provisions of the Warrants offered hereby. Further terms of the Warrants
and the applicable Warrant Agreement are set forth in the applicable Prospectus
Supplement.
The applicable Prospectus Supplement will describe the terms of any
Warrants in respect of which this Prospectus is being delivered, including the
following: (i) the title of such Warrants; (ii) the aggregate number of such
Warrants; (iii) the price or prices at which such Warrants will be issued; (iv)
the currency or currencies, including composite currencies, in which the price
of such Warrants may be payable; (v) the designation and terms of the Underlying
Warrant Securities purchasable upon exercise of such Warrants; (vi) the price at
which and the currency or currencies, including composite currencies, in which
the Underlying Warrant Securities purchasable upon exercise of such Warrants may
be purchased; (vii) the date on which the right to exercise such Warrants shall
commence and the date on which such right shall expire; (viii) whether such
Warrants will be issued in registered form or bearer form; (ix) if applicable,
the minimum or maximum amount of such Warrants which may be exercised at any one
time; (x) if applicable, the designation and terms of the Underlying Warrant
Securities with which such Warrants are issued and the number of such Warrants
issued with each such Underlying Warrant Security; (xi) if applicable, the date
on and after which such Warrants and the related Underlying Warrant Securities
will be separately transferable; (xii) information with respect to book-entry
procedures, if any; (xiii) if applicable, a discussion of certain United States
federal income tax considerations; (xiv) the procedures and conditions relating
to the exercise of such Warrants; and (xv) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Warrants.
Warrant certificates may be exchanged for new warrant certificates of
different denominations, and Warrants may be exercised at the corporate trust
office of the Warrant Agent or any other office indicated in the Prospectus
Supplement. Prior to the exercise of their Warrants, holders of Warrants
exercisable for Debt Securities will not have any of the rights of holders of
the Debt Securities purchasable upon such exercise and will not be entitled to
payments of principal (or premium, if any) or interest, if any, on the Debt
Securities purchasable upon such exercise. Prior to the exercise of their
Warrants for shares of Preferred Stock or Common Stock, holders of such Warrants
will not have any rights of holders of the Preferred Stock or Common Stock
purchasable upon such exercise and will not be entitled to dividend payments, if
any, or voting rights of the Preferred Stock or Common Stock purchasable upon
such exercise.
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DESCRIPTION OF STOCK PURCHASE CONTRACTS
AND STOCK PURCHASE UNITS
The Company may issue Stock Purchase Contracts, representing contracts
obligating holders to purchase from the Company, and the Company to sell to the
holders, a specified number of shares of Common Stock at a future date or dates.
The price per share of Common Stock may be fixed at the time the Stock Purchase
Contracts are issued or may be determined by reference to a specific formula set
forth in the Stock Purchase Contracts. The Stock Purchase Contracts may be
issued separately or as a part of units ("Stock Purchase Units") consisting of a
Stock Purchase Contract and (x) Senior Debt Securities or Subordinated Debt
Securities (y) Preferred Securities, or (z) debt obligations of third parties,
including U.S. Treasury securities, securing the holders obligations to purchase
the Common Stock under the Stock Purchase Contracts. The Stock Purchase
Contracts may require the Company to make periodic payments to the holders of
the Stock Purchase Units or vice versa, and such payments may be unsecured or
prefunded on some basis. The Stock Purchase Contracts may require holders to
secure their obligations thereunder in a specified manner.
The applicable Prospectus Supplement will describe the terms of any Stock
Purchase Contracts or Stock Purchase Units. The description in the Prospectus
Supplement will not purport to be complete and will be qualified in its entirety
by reference to the Stock Purchase Contracts, and, if applicable, collateral
arrangements and depositary arrangements, relating to such Stock Purchase
Contracts or Stock Purchase Units.
DESCRIPTION OF PREFERRED SECURITIES
The Provident Trust may issue, from time to time, only one series of
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration authorizes the Regular Trustees of the
Provident Trust to issue on behalf of the Provident Trust one series of
Preferred Securities. The Declaration will be qualified as an indenture under
the Trust Indenture Act. The Property Trustee, The Chase Manhatten Bank, an
independent trustee, will act as indenture trustee for the Preferred Securities,
to be issued by the Provident Trust, for the purposes of compliance with the
provisions of the Trust Indenture Act. The Preferred Securities will have such
terms, including distributions, redemption, voting, liquidation rights and such
other preferred, deferred or other special rights or such restrictions as shall
be set forth in the Declaration or made part of the Declaration by the Trust
Indenture Act, and which will mirror the terms of the Subordinated Debt
Securities held by the Provident Trust and as described in the Prospectus
Supplement related thereto. Reference is made to the Prospectus Supplement
relating to the Preferred Securities of the Provident Trust for specific terms,
including (i) the distinctive designation of such Preferred Securities; (ii) the
number of Preferred Securities issued; (iii) the annual distribution rate (or
method of determining such rate) for Preferred Securities issued by the
Provident Trust and the date or dates upon which such distributions shall be
payable; provided, however, that distributions on such Preferred Securities
shall be payable on a periodic basis to holders of such Preferred Securities as
of a record date in each period during which such Preferred Securities are
outstanding; (iv) whether distributions on Preferred Securities shall be
cumulative, and, in the case of Preferred Securities having such cumulative
distribution rights, the date or dates or method of determining the date or
dates from which distributions on Preferred Securities shall be cumulative; (v)
the amount or amounts which shall be paid out of the assets to the holders of
Preferred Securities upon voluntary or involuntary dissolution, winding-up or
termination of the Provident Trust; (vi) the obligation, if any, of the
Provident Trust to purchase or redeem Preferred Securities and the price or
prices at which, the period or periods within which, and the terms and
conditions upon which, Preferred Securities shall be purchased or redeemed, in
whole or in part, pursuant to such obligation (with such redemption price to be
determined through negotiations among the Company and the Underwriters based on,
among other factors, redemption prices of securities similar to the Preferred
Securities and market conditions generally); (vii) the voting rights, if any, of
Preferred Securities in addition to those required by law, including the number
of votes per Preferred Security and any requirement for the approval by the
holders of Preferred Securities as a condition to specified action or amendments
to the Declaration of the Provident Trust; (viii) the terms and conditions, if
any, upon which the Subordinated Debt Securities may be distributed to holders
of Preferred Securities; (ix) if applicable, any securities exchange upon which
the Preferred Securities shall be listed; and
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(x) any other relevant rights, preferences, privileges, limitations or
restrictions of Preferred Securities not inconsistent with the Declaration of
the Provident Trust or with applicable law. All Preferred Securities offered
hereby will be guaranteed by the Company to the extent set forth below under
"Description of Trust Guarantee." The Trust Guarantee of Provident, when taken
together with Provident's obligations under the Subordinated Debt Securities and
the relevant Supplemental Indenture, and its obligations under each Declaration,
including obligations to pay costs, expenses, debts and liabilities of the
Provident Trust (other than with respect to the Trust Securities), would provide
a full and unconditional guarantee of amounts due on Preferred Securities issued
by the Provident Trust. Certain United States federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
In connection with the issuance of Preferred Securities, the Provident
Trust will issue one series of Common Securities. The Declaration authorizes the
Regular Trustees to issue on behalf of the Provident Trust one series of Common
Securities having such terms including distributions, redemption, voting,
liquidation rights or such restrictions as shall be set forth therein. The terms
of the Common Securities issued by the Provident Trust will be substantially
identical to the terms of the Preferred Securities issued by the Provident Trust
and the Common Securities will rank pari passu, and payments will be made
thereon pro rata, with the Preferred Securities except that, upon an event of
default under the Declaration, the rights of the holders of the Common
Securities to payment in respect of distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. Except in certain limited circumstances, the Common
Securities will also carry the right to vote to appoint, remove or replace any
of the Provident Trustees. All of the Common Securities of the Provident Trust
will be directly or indirectly owned by the Company.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF TRUST PREFERRED SECURITIES
If an Event of Default under the Declaration occurs and is continuing, then
the holders of Preferred Securities would rely on the enforcement by the
Property Trustee of its rights as a holder of the applicable series of
Subordinated Debt Securities against the Company. In addition, the holders of a
majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Property Trustee or to direct the exercise of any trust or
power conferred upon the Property Trustee under the Declaration, including the
right to direct the Property Trustee to exercise the remedies available to it as
a holder of the Subordinated Debt Securities. If the Property Trustee fails to
enforce its rights under the applicable series of Subordinated Debt Securities,
a holder of Preferred Securities may, to the fullest extent permitted by law,
institute a legal proceeding directly against the Company to enforce the
Property Trustee's rights under the applicable series of Subordinated Debt
Securities without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if an
Event of Default under the applicable Declaration has occurred and is continuing
and such event is attributable to the failure of the Company to pay interest or
principal on the applicable series of Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the applicable series of Subordinated Debt
Securities having a principal amount equal to the aggregate liquidation amount
of the Preferred Securities of such holder (a "Direct Action") on or after the
respective due date specified in the applicable series of Subordinated Debt
Securities. In connection with such Direct Action, the Company will be
subrogated to the right of such holder of Preferred Securities under the
Declaration to the extent of any payment made by the Company to such holder of
Preferred Securities in such Direct Action.
PROPOSED TAX LEGISLATION
On February 6, 1997, the revenue portion of President Clinton's Budget
proposal (the "Proposal") was released. The Proposal would, among other things,
deny deductions for interest on a debt instrument issued by a corporation with a
maximum weighted average maturity of more than 40 years or which has a maximum
term of more than 15 years and is not shown as indebtedness on the separate
balance sheet of the issuer. An instrument would not be shown as indebtedness on
a balance sheet merely because it was described as indebtedness in footnotes or
other narrative disclosures. The Proposal would apply only to corporations which
file annual financial statements with the Commission, and the relevant balance
sheet would be the balance sheet filed with the Commission. The Proposal would
be effective generally for instruments issued on or after the date of first
committee action. As currently drafted, the Proposal would affect the
Subordinated Debt Securities unless the Subordinated Debt Securities were issued
prior to the first date of any committee action. In addition, the Proposal could
be enacted with retroactive effect. If the Proposal is enacted so as to apply to
the Subordinated Debt Securities, the Company would not be entitled to an
interest deduction with respect to the Subordinated Debt Securities. There can
be no assurance that current or future legislative proposals or final
legislation will not give rise to a Tax Event (as defined in the Declaration),
which would permit the Company to cause a redemption of the Subordinated Debt
Securities or a distribution of the Subordinated Debt Securities in a
liquidation.
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See "Description of the Preferred Securities -- Special Event Redemption or
Distribution" in the Prospectus Supplement relating thereto.
DESCRIPTION OF TRUST GUARANTEE
Set forth below is a summary of information concerning the Trust Guarantee
which will be executed and delivered by the Company for the benefit of the
holders from time to time of Preferred Securities. The Trust Guarantee will be
qualified as an indenture under the Trust Indenture Act. The Chase Manhattan
Bank, an independent trustee, will act as indenture trustee under the Trust
Guarantee (the "Preferred Guarantee Trustee") for the purposes of compliance
with the provisions of the Trust Indenture Act. The terms of the Trust Guarantee
will be those set forth in the Trust Guarantee and those made part of the Trust
Guarantee by the Trust Indenture Act. The following summary does not purport to
be complete and is subject in all respects to the provisions of, and is
qualified in its entirety by reference to, the form of Trust Guarantee, which is
filed as an exhibit to the Registration Statement of which this Prospectus forms
a part, and the Trust Indenture Act. The Trust Guarantee will be held by the
Preferred Guarantee Trustee for the benefit of the holders of the Preferred
Securities of the Provident Trust.
GENERAL
Pursuant to the Trust Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full, to the
holders of the Preferred Securities, the Guarantee Payments (as defined herein)
(except to the extent paid by the Provident Trust), as and when due, regardless
of any defense, right of set-off or counterclaim which the Provident Trust may
have or assert. The following payments or distributions with respect to
Preferred Securities issued by the Provident Trust to the extent not paid by the
Provident Trust (the "Guarantee Payments"), will be subject to the Trust
Guarantee (without duplication): (i) any accrued and unpaid distributions which
are required to be paid on such Preferred Securities, to the extent the
Provident Trust shall have funds available therefore; (ii) the redemption price
(the "Redemption Price") and all accrued and unpaid distributions to the date of
redemption to the extent the Provident Trust has funds available therefore with
respect to any Preferred Securities called for redemption by the Provident
Trust; and (iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Provident Trust (other than in connection with the
distribution of Subordinated Debt Securities to the holders of Preferred
Securities or the redemption of all of the Preferred Securities), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
distributions on such Preferred Securities to the date of payment, to the extent
the Provident Trust has funds available therefore and (b) the amount of assets
of the Provident Trust remaining available for distribution to holders of such
Preferred Securities in liquidation of the Provident Trust. The Company's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Company to the holders of Preferred Securities or by
causing the Provident Trust to pay such amounts to such holders.
The Trust Guarantee will be a guarantee with respect to the Preferred
Securities issued by the Provident Trust, but will not apply to any payment of
distributions except to the extent the Provident Trust shall have funds
available therefor. If the Company does not make interest payments on the
Subordinated Debt Securities purchased by the Provident Trust, the Provident
Trust will not pay distributions on the Preferred Securities issued by the
Provident Trust and will not have funds available therefor. See "Description
of the Provident Debt Securities -- Particular Terms of the Subordinated Debt
Securities." The Trust Guarantee, when taken together with the Company's
obligations under the Subordinated Debt Securities, the Subordinated
Indenture, and the Declaration will provide a full and unconditional
guarantee on a subordinated basis by the Company of payments due on the
Preferred Securities.
The Company has also agreed separately to irrevocably and unconditionally
guarantee the obligations of the Provident Trust with respect to the Common
Securities (the "Common Securities Guarantee") to the same extent as the Trust
Guarantee, except that upon an event of default under the Subordinated
Indenture,
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holders of Preferred Securities shall have priority over holders of Common
Securities with respect to distributions and payments on liquidation, redemption
or otherwise.
CERTAIN COVENANTS OF THE COMPANY
In the Trust Guarantee, the Company will covenant that, so long as any
Preferred Securities remain outstanding, if there shall have occurred any event
that would constitute an event of default under the Trust Guarantee or the
Declaration, then (a) the Company shall not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire or make
liquidation payment with respect to, any of its capital stock (other than (i)
purchases or acquisitions of shares of Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plans
or the satisfaction by the Company of its obligations pursuant to any contract
or security outstanding on the date of such event requiring the Company to
purchase shares of the Company Common Stock, (ii) as a result of a
reclassification of Provident's capital stock or the exchange or conversion of
one class or series of Provident's capital stock for another class or series of
Provident's capital stock or, (iii) the purchase of fractional interests in
shares of Provident's capital stock pursuant to the conversion or exchange
provisions of such Provident capital stock or the security being converted or
exchanged), (b) the Company shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities
(including guarantees) issued by the Company which rank pari passu with or
junior to such Subordinated Debt Securities and (c) the Company shall not make
any guarantee payments with respect to the foregoing (other than pursuant to the
Trust Guarantee).
MODIFICATION OF THE TRUST GUARANTEE; ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Preferred Securities in any material respect (in which case no
vote will be required), the Trust Guarantee may be amended only with the prior
approval of the holders of not less than a majority in liquidation amount of the
outstanding Preferred Securities. The manner of obtaining any such approval of
holders of such Preferred Securities will be as set forth in an accompanying
Prospectus Supplement. All guarantees and agreements contained in the Trust
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities then outstanding.
TERMINATION
The Trust Guarantee will terminate as to the Preferred Securities issued by
the Provident Trust (a) upon full payment of the Redemption Price of all
Preferred Securities of the Provident Trust, (b) upon distribution of the
Subordinated Debt Securities held by the Provident Trust to the holders of the
Preferred Securities or (c) upon full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Provident Trust. The
Trust Guarantee will continue to be effective or will be reinstated, as the case
may be, if at any time any holder of Preferred Securities must restore payment
of any sums paid under such Preferred Securities or the Trust Guarantee.
EVENTS OF DEFAULT
An event of default under the Trust Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations thereunder.
The holders of a majority in liquidation amount of the Preferred Securities
to which the Trust Guarantee relates have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of the Trust Guarantee or to direct the exercise of
any trust or power conferred upon the Preferred Guarantee Trustee under the
Trust Guarantee. If the Preferred Guarantee Trustee fails to enforce the Trust
Guarantee, any holder of Preferred Securities to which the Trust Guarantee
relates may institute a legal proceeding directly against the Company to enforce
such holder's rights under the Trust Guarantee, without first instituting a
legal proceeding against the Provident Trust, the Preferred Guarantee Trustee or
any other person or entity. Notwithstanding the foregoing, if the Company has
failed to make a Guarantee
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Payment, a holder of Preferred Securities may directly institute a proceeding
against the Company for enforcement of the Trust Guarantee for such payment. The
Company waives any right or remedy to require that any action be brought first
against the Provident Trust or an other person or entity before proceeding
directly against the Company.
STATUS OF THE TRUST GUARANTEE
The Trust Guarantee will constitute an unsecured obligation of the Company
and will rank (i) subordinate and junior in right of payment to all other
liabilities of the Company, except those made subordinate or pari passu by their
terms; (ii) pari passu with 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; and (iii) senior to the Company's common stock. The
terms of the Preferred Securities provide that each holder of Preferred
Securities by acceptance thereof agrees to the subordination provisions and
other terms of the Trust Guarantee relating thereto.
The Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the guarantee without
instituting a legal proceeding against any other person or entity).
INFORMATION CONCERNING THE PREFERRED GUARANTEE TRUSTEE
The Preferred Guarantee Trustee, prior to the occurrence of a default with
respect to the Trust Guarantee, undertakes to perform only such duties as are
specifically set forth in the Trust Guarantee and, after default, shall exercise
the same degree of care as a prudent individual would exercise in the conduct of
his or her own affairs. Subject to such provisions, the Preferred Guarantee
Trustee is under no obligation to exercise any of the powers vested in it by the
Trust Guarantee at the request of any holder of Preferred Securities, unless
offered reasonable indemnity against the costs, expenses and liabilities which
might be incurred thereby; but the foregoing shall not relieve the Preferred
Guarantee Trustee, upon the occurrence of an event of default under the Trust
Guarantee, from exercising the rights and powers vested in it by the Trust
Guarantee.
GOVERNING LAW
The Trust Guarantee will be governed by and construed in accordance with
the internal laws of the State of New York.
EFFECT OF OBLIGATIONS UNDER THE SUBORDINATED DEBT SECURITIES
AND THE TRUST GUARANTEE
As set forth in the Declaration, the sole purpose of the Provident Trust is
to issue the Trust Securities evidencing undivided beneficial interests in the
assets of the Provident Trust, and to invest the proceeds from such issuance and
sale in the Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on the
Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Subordinated Debt Securities will
be equal to the sum of the aggregate stated liquidation amount of the Trust
Securities; (ii) the interest rate and the interest and other payment dates on
the Subordinated Debt Securities will match the distribution rate and
the Company and other payment dates for the Preferred Securities; (iii) the
Company shall pay all, and the Provident Trust shall not be obligated to pay,
directly or indirectly, all costs, expenses, debt, and obligations of the
Provident Trust (other than with respect to the Trust Securities); and (iv) the
Declaration further provides that the Provident Trustees shall not take or cause
or permit the Provident Trust to, among other things, engage in any activity
that is not consistent with the purposes of the Provident Trust.
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Payments of distributions (to the extent funds therefore are available) and
other payments due on the Preferred Securities (to the extent funds therefore
are available) are guaranteed by the Company as and to the extent set forth
under "Description of the Trust Guarantee." If the Company does not make
interest payments on the Subordinated Debt Securities purchased by the Provident
Trust, it is expected that the Provident Trust will not have sufficient funds to
pay distributions on the Preferred Securities. The Trust Guarantee does not
apply to any payment of distributions unless and until the Provident Trust has
sufficient funds for the payment of such distributions. The Trust Guarantee
covers the payment of distributions and other payments on the Preferred
Securities only if and to the extent that the Company has made a payment of
interest or principal on the Subordinated Debt Securities held by the Provident
Trust as its sole asset. The Trust Guarantee, when taken together with the
Company's obligations under the Subordinated Debt Securities and the
Subordinated Indenture and its obligations under the Declaration, including its
obligations to pay costs, expenses, debts and liabilities of the Provident Trust
(other than with respect to the Trust Securities), provide a full and
unconditional guarantee of amounts on the Preferred Securities.
If the Company fails to make interest or other payments on the Subordinated
Debt Securities when due (taking account of any Extension Period as defined in
the Declaration), the Declaration provides a mechanism whereby the holders of
the Preferred Securities, using the procedures described in "Description of
Preferred Securities -- Book-Entry Only Issuance -- The Depository Trust
Company" and "-Voting Rights" in any accompanying Prospectus Supplement, may
direct the Property Trustee to enforce its rights under the Subordinated Debt
Securities. If the Property Trustee fails to enforce its rights under the
Subordinated Debt Securities, a holder of Preferred Securities may, to the
fullest extent permitted by law, institute a legal proceeding against the
Company to enforce the Property Trustee's rights under the Subordinated Debt
Securities without first instituting any legal proceeding against the Property
Trustee or any other person or entity. Notwithstanding the foregoing, if a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay interest or principal on the
Subordinated Debt Securities on the date such interest or principal is otherwise
payable (or in the case of redemption on the redemption date), then a holder of
Preferred Securities may institute a Direct Action for payment on or after the
respective due date specified in the Subordinated Debt Securities. In connection
with such Direct Action, the Company will be subrogated to the rights of such
holder of Preferred Securities under the Declaration to the extent of any
payment made by the Company to such holder of Preferred Securities in such
Direct Action. The Company, under the Trust Guarantee, acknowledges that the
Preferred Guarantee Trustee shall enforce the Trust Guarantee on behalf of the
holders of the Preferred Securities. If the Company fails to make payments under
the Trust Guarantee, the Trust Guarantee provides a mechanism whereby the
holders of the Preferred Securities may direct the Preferred Guarantee Trustee
to enforce its rights thereunder. Any holder of Preferred Securities may
institute a legal proceeding directly against the Company to enforce the
Preferred Guarantee Trustee's rights under the Trust Guarantee without first
instituting a legal proceeding against the Provident Trust, the Preferred
Guarantee Trustee, or any other person or entity.
The Company and the Provident Trust believe that the above mechanisms and
obligations, taken together, provide a full and unconditional guarantee by
the Company of payments due on the Preferred Securities. See "Description of
Trust Guarantee -- General."
PLAN OF DISTRIBUTION
The Company and/or the Provident Trust may offer and sell the Offered
Securities to or through underwriters or dealers, and also may offer and sell
the Offered Securities directly to other purchasers or through designated
agents. Any such underwriter or agent involved in the offer and sale of the
Offered Securities will be named in the applicable Prospectus Supplement.
The distribution of the Offered Securities may be effected from time to
time in one or more transactions at a fixed price or prices, which may be
changed, or at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. The Company and/or the
Provident Trust also may, from time to time, authorize underwriters acting as
the Company's agents to offer and sell the Offered Securities upon the terms and
conditions set forth in any Prospectus Supplement.
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In connection with the sale of Offered Securities, underwriters may receive
compensation from the Company and/or the Provident Trust or from purchasers of
the Offered Securities, for whom they may act as agents, in the form of
discounts, concessions or commissions. Underwriters may sell the Offered
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agents. Underwriters,
dealers and agents that participate in the distribution of the Offered
Securities may be deemed to be underwriters, and any discounts or commissions
they receive from the Company and/or the Provident Trust, and any profit on the
resale of the Offered Securities they realize may be deemed to be underwriting
discounts and commissions under the Securities Act. Any such underwriter or
agent will be identified, and any such compensation received from the Company
and/or the Provident Trust will be described, in the applicable Prospectus
Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of the Offered Securities will be a new issue with no established trading
market, other than the Common Stock and any series of Preferred Stock which are
listed on the NYSE. Any Common Stock sold pursuant to a Prospectus Supplement
will be listed on the NYSE, subject to official notice of issuance. The Company
may elect to list any of the other Offered Securities on an exchange, but is not
obligated to do so. It is possible that one or more underwriters may make a
market in a series of the Offered Securities, but will not be obligated to do so
and may discontinue any market making at any time without notice. Therefore, no
assurance can be given as to the liquidity of the trading market for the Offered
Securities.
If dealers are utilized in the sale of the Offered Securities, the Company
and/or the Provident Trust will sell such Offered Securities to the dealers as
principals. The dealers may then resell such Offered Securities to the public at
varying prices to be determined by such dealers at the time of resale. The names
of the dealers and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Under agreements the Company may enter into, underwriters, dealers and
agents who participate in the distribution of the Offered Securities may be
entitled to indemnification by the Company and/or the Provident Trust against
certain liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments which such agents, dealers or underwriters
may be required to make in respect thereof.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Company and/or the Provident
Trust in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Company and/or
the Provident Trust will authorize underwriters or other persons acting as the
Company's or the Provident Trust agents to solicit offers by certain purchasers
to purchase the Offered Securities from the Company and/or the Provident Trust
at the public offering price set forth in the Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on a future date.
Such contracts will be subject to only those conditions set forth in the
Prospectus Supplement, and the Prospectus Supplement will set forth the
commission payable to the solicitor of such offers.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
legality and validity of the Offered Securities will be passed upon for the
Company by Alston & Bird LLP, Atlanta, Georgia and for the underwriters by
LeBoeuf, Lamb, Greene & MacRae, L.L.P., a limited liability partnership
including professional corporations, New York, New York. LeBoeuf, Lamb, Greene &
MacRae, L.L.P., provides certain legal services to the Company from time to
time. Certain United States federal income taxation matters will be passed upon
for the Company and the Provident Trust by Alston & Bird LLP, Atlanta, Georgia.
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon for the Provident Trust and the Company by
Richards, Layton & Finger, Wilmington, Delaware.
EXPERTS
The consolidated financial statements of Provident Companies, Inc.
incorporated by reference in its Annual Report on Form 10-K for the year ended
December 31, 1996 and the consolidated financial statements of The Paul Revere
Corporation for the year ended December 31, 1996 included in Provident
Companies, Inc.'s Current Report on Form 8-K, dated March 27, 1997, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
reports thereon incorporated by reference or set forth therein and incorporated
herein by reference. Such consolidated financial statements are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
With respect to Provident's unaudited condensed consolidated interim
financial information for the three-month period ended March 31, 1997,
incorporated by reference in this Prospectus, Ernst & Young LLP have reported
that they have applied limited procedures in accordance with professional
standards for a review of such information. However, their report, included in
Provident's Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
and incorporated herein by reference, states that they did not audit and they do
not express an opinion on that interim financial information. Accordingly, the
degree of reliance on their report on such information should be restricted
considering the limited nature of the review procedures applied. The independent
auditors are not subject to the liability provision of Section 11 of the
Securities Act for their report on the unaudited interim financial information
because this report is not a "report" or a "part" of the Registration Statement
on Form S-3, of which this Prospectus is a part, prepared or certified by the
auditors within the meaning of Sections 7 and 11 of the Securities Act.
-36-
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the distribution of the Offered Securities
are set forth in the following table. All amounts except the Securities and
Exchange Commission registration fee are estimated.
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee $272,728
NYSE Listing Fee *
Blue Sky Fees and Expenses *
Printing and Engraving Costs *
Rating Agencies' Fees *
Accounting Fees and Expenses *
Legal Fees and Expenses *
Trustee and Registrar Fees *
Miscellaneous --------
--------
Total $ *
========
* To be filed by amendment or Rule 424 filing.
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Certificate of Incorporation and Bylaws provide for
indemnification of directors and officers of the Registrant to the full extent
permitted by Delaware law.
Section 145 of the General Corporation Law of the State of Delaware
provides generally that a corporation may indemnify any person who was or is a
part or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he or she is or was a director,
officer, employee or agent of the corporation, or is or was serving at its
request in such capacity in another corporation or business association, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he or she acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
In addition, pursuant to the authority of Delaware law, the Certificate of
Incorporation of the Registrant also eliminates the monetary liability of
directors to the fullest extent permitted by Delaware law.
The Declaration of the Provident Trust provides that no Property Trustee or
any of its Affiliates, or any officer, director, shareholder, member, partner,
employee, representative or agent of the Property Trustee or the Delaware
Trustee (each a "Fiduciary Indemnified Person"), and no Regular Trustee,
Affiliate of any Regular Trustee, or any officer, director, shareholder, member,
partner, employee, representative or agent of the Provident Trust or any of its
Affiliates (each a "Company Indemnified Person") shall be liable, responsible or
accountable in damages or otherwise to the Provident Trust or any officer,
director, shareholder, member, partner, employee, representative or agent of the
Provident Trust or its Affiliates or to any holder of Preferred Securities for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Fiduciary Indemnified Person or Company Indemnified Person in
good faith on behalf of the Provident Trust and in a manner such Fiduciary
Indemnified Person or Company Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Fiduciary Indemnified Person
or Company Indemnified Person by such Declaration or by law, except that a
Fiduciary Indemnified Person or Company Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Fiduciary Indemnified
Person's or Company Indemnified Person's gross negligence or willful misconduct
with respect to such acts or omissions.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933, as amended (the "Act") may be permitted to directors, officers or
persons controlling the Registrant pursuant to the foregoing provisions, the
Registrant has been informed that in the opinion of the Securities and Exchange
Commission (the "Commission") such indemnification is against public policy as
expressed in the Act and is therefore unenforceable.
ITEM 16. EXHIBITS
1.1 Form of Underwriting Agreement for Senior Debt Securities (to be filed under
subsequent Form 8-K).
1.2 Form of Underwriting Agreement for Subordinated Debt Securities (to be
filed under subsequent Form 8-K).
1.3 Form of Underwriting Agreement for Preferred Stock (to be filed under
subsequent Form 8-K).
1.4 Form of Underwriting Agreement for Common Stock (to be filed under
subsequent Form 8-K).
1.5 Form of Underwriting Agreement for Stock Purchase Contracts (to be filed
under subsequent Form 8-K).
II-1
<PAGE>
1.6 Form of Underwriting Agreement for Stock Purchase Units (to be filed under
subsequent Form 8-K).
1.7 Form of Underwriting Agreement for Preferred Securities (to be filed under
subsequent Form 8-K).
3.1 Amended and Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3.1 to the Company's Annual Report on Form 10-K (File
No. 1-11834) for the year ended December 31, 1995), as amended by
Certificate of Amendment (incorporated by reference to Exhibit 3.1 to the
Company's Annual Report on Form 10-K (File No. 1-11834) for the year ended
December 31, 1996).
3.2 By-Laws (incorporated by reference to Exhibit 3.2 to the Company's Annual
Report on Form 10-K (File No. 1-11834) for the year ended December 31,
1995).
4.1 Form of Indenture for Senior Debt Securities (Form of Senior Debt Security
included therein).**
4.2 Form of Indenture for Subordinated Debt Securities (Form of Subordinated
Debt Security included therein).**
4.3 Form of Preferred Stock.*
4.4 Form of Preferred Security (included in Exhibit 4.11).
4.5 Form of Subordinated Debt Security (included in Exhibit 4.12).
4.6 Form of Warrant Agreement.*
4.7 Form of Purchase Contract Agreement (including as Exhibit A the form of the
Security Certificate).*
4.8 Form of Pledge Agreement.*
4.9 Form of Preferred Securities Guarantee Agreement.*
4.10 Certificate of Trust of Provident Financing Trust I.**
4.11 Declaration of Trust of Provident Financing Trust I.**
4.12 Form of Amended and Restated Declaration of Trust of Provident Financing
Trust I.*
4.13 Form of Supplemental Indenture to Indenture for Subordinated Debt
Securities to be used in connection with the issuance of Subordinated Debt
Securities related to Preferred Securities.*
5.1 Opinion of Alston & Bird LLP regarding legality of the Offered Securities.*
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel regarding
legality of the Preferred Securities.*
8.1 Opinion of Alston & Bird LLP as to certain federal income taxation
matters.*
12.1 Statement regarding computation of ratio of earnings to fixed charges.*
12.2 Statement regarding computation of ratio of earnings to combined fixed
charges and preferred stock dividends. *
15.1 Acknowledgement of Ernst & Young LLP.
23.1 Consents of Ernst & Young LLP.
23.2 Consent of Alston & Bird LLP (included in Exhibit 5.1).*
23.3 Consent of Alston & Bird LLP (included in Exhibit 8.1).*
23.4 Consent of Richards, Layton & Finger, special Delaware counsel (included in
Exhibit 5.2).*
24.1 Power of Attorney (included on signature page of this Registration
Statement).
25.1 Statement of Eligibility and Qualification of Trustee on Form T-1 under
Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank under
the Senior Debt Securities.**
25.2 Statement of Eligibility and Qualification of Trustee on Form T-1 under
Trust Indenture Act of 1939, as amended, of The Chase Manhattan Bank under
the Subordinated Debt Securities.**
25.3 Statement of Eligibility and Qualification of Trustee on Form T-1 under
Trust Indenture Act of 1939, as amended, of the Trustee under the Amended
and Restated Declaration of Trust of Provident Financing Trust I.*
25.4 Statement of Eligibility and Qualification of Trustee on Form T-1 under
Trust Indenture Act of 1939, as amended, of the Trustee of the Preferred
Securities Guarantee of Provident Companies, Inc. for the benefit of the
holders of the Preferred Securities of Provident Financing Trust I.*
* To be filed by amendment or as an exhibit to a document to be incorporated
by reference herein in connection with an offering of the offered
securities.
** Previously filed.
ITEM 17. UNDERTAKINGS
A. RULE 415 OFFERING.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
II-2
<PAGE>
(i) to include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the
most recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the information
set forth in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in the volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective Registration Statement;
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new Registration Statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
B. SUBSEQUENT DOCUMENTS INCORPORATED BY REFERENCE.
The undersigned Registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement shall be deemed to be a new Registration Statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
C. INDEMNIFICATION OF OFFICERS, DIRECTORS AND CONTROLLING PERSONS.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
D. RULE 430A.
The undersigned registrant hereby undertakes that:
II-3
<PAGE>
(1) For the purpose of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4), or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
E. QUALIFICATION OF TRUST INDENTURES
The undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the Trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Chattanooga, State of Tennessee, as of
May 22, 1997.
PROVIDENT COMPANIES, INC.
/s/ J. Harold Chandler
By:_______________________________________
J. Harold Chandler
Chairman of the Board, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated as of May 22, 1997.
<TABLE>
<CAPTION>
Signatures Title
- ---------- -----
<S> <C>
* Chairman of the Board, President and Chief
- ---------------------------
J. Harold Chandler Executive Officer (principal executive officer)
* Vice Chairman, Chief Financial Officer and Director
- ---------------------------
Thomas R. Watjen (principal financial officer)
* Senior Vice President and Controller
- --------------------------- (principal accounting officer)
Ralph A. Rogers, Jr.
* Director
- ---------------------------
William L. Armstrong
- ---------------------------
William H. Bolinder Director
- ---------------------------
Steven M. Gluckstern Director
* Director
- ---------------------------
Charlotte M. Heffner
* Director
- ---------------------------
Hugh B. Jacks
* Director
- ---------------------------
William B. Johnson
</TABLE>
II-5
<PAGE>
<TABLE>
<S> <C>
* Director
- ---------------------------
Hugh O. Maclellan, Jr.
* Director
- ---------------------------
A. S. MacMillan
* Director
- ---------------------------
C. William Pollard
* Director
- ---------------------------
Scott L. Probasco, Jr.
* Director
- ---------------------------
Steven S Reinemund
* Director
- ---------------------------
Burton E. Sorensen
</TABLE>
*By: /s/ Susan N. Roth
-----------------------
Susan N. Roth
Attorney-in-Fact
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Provident
Financing Trust I certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chattanooga, State of Tennessee, as of
May 22, 1997.
PROVIDENT FINANCING TRUST I
By: /s/ Susan N. Roth
-------------------------------
Susan N. Roth, Trustee
PROVIDENT COMPANIES, INC.
as Depositor
By: /s/ Susan N. Roth
-------------------------------
Susan N. Roth, Secretary
<PAGE>
EXHIBIT 15.1
ACKNOWLEDGMENT
Board of Directors and Stockholders
Provident Companies, Inc.
We are aware of the incorporation by reference in the Registration
Statement (Form S-3) and related Prospectus of Provident Companies, Inc.and
Provident Financing Trust I for the registration of $900,000,000 of debt and
equity securities of our report dated May 12, 1997 relating to the unaudited
condensed consolidated interim financial statements of Provident Companies, Inc.
that are included in its Form 10-Q for the quarter ended March 31, 1997.
Pursuant to Rule 436(c) of the Securities Act of 1933 our report is not
a part of the registration statement prepared or certified by accountants within
the meaning of Section 7 or 11 of the Securities Act of 1933.
ERNST & YOUNG LLP
Chattanooga, Tennessee
May 21, 1997
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Provident Companies,
Inc. and Provident Financing Trust I for the registration of $900,000,000 of
debt and equity securities and to the incorporation by reference therein of our
reports dated February 10, 1997 with respect to the consolidated financial
statements of Provident Companies, Inc. incorporated by reference in its Annual
Report (Form 10-K) for the year ended December 31, 1996 and the related
financial statement schedules included therein, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Chattanooga, Tennessee
May 21, 1997
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3) and related Prospectus of Provident Companies,
Inc. and Provident Financing Trust I for the registration of $900,000,000 of
debt and equity securities and to the incorporation by reference therein of our
report dated January 23, 1997 with respect to the consolidated financial
statements of The Paul Revere Corporation incorporated by reference in Provident
Companies' Report on Form 8-K dated March 27, 1997, filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Boston, Massachusetts
May 20, 1997
