<PAGE> 1
FILED PURSUANT TO RULE 424 B4
FILE NO. 333-13285
PROSPECTUS
PENNCORP FINANCIAL GROUP, INC.
2,875,000 SHARES OF $3.50 SERIES II CONVERTIBLE PREFERRED STOCK
4,118,911 SHARES OF COMMON STOCK
This Prospectus relates to the offer and sale by the Selling
Securityholders (as hereinafter defined) of (i) up to 2,875,000 shares of $3.50
Series II Convertible Preferred Stock, par value $0.01 per share (the
"Convertible Preferred Stock"), of PennCorp Financial Group, Inc., a Delaware
corporation ("PennCorp" or the "Company") and (ii) up to 4,118,911 shares of
common stock, par value $.01 per share, of PennCorp (or such other number of
shares of Common Stock resulting from an adjustment to the conversion price of
the Convertible Preferred Stock pursuant to the antidilution provisions of the
Certificate of Designation (the "Certificate of Designation") governing the
Convertible Preferred Stock) issuable upon conversion of the Convertible
Preferred Stock (the "Common Stock"; the shares of Convertible Preferred Stock
and underlying Common Stock to which this Prospectus relates collectively being
the "Securities"). This Prospectus also relates to the offer and sale by
PennCorp of the Common Stock issuable upon conversion of the Convertible
Preferred Stock. The Company issued and sold all the shares of Convertible
Preferred Stock to Smith Barney Inc., Donaldson, Lufkin & Jenrette Securities
Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated
(collectively, the "Initial Purchasers") in August 1996 in a private placement
transaction. The Selling Securityholders acquired the Convertible Preferred
Stock from the Initial Purchasers or in subsequent secondary market
transactions.
Each share of Convertible Preferred Stock has a liquidation preference of
$50.00. The Convertible Preferred Stock is convertible at the option of the
holder at any time, unless previously redeemed, into Common Stock of PennCorp at
a conversion price of $34.90 per share of Common Stock, subject to adjustment in
certain events. On March 6, 1998, the last reported sale price of the Common
Stock on the New York Stock Exchange (symbol "PFG") was $34.06 per share.
The Convertible Preferred Stock is not redeemable prior to August 2, 1999.
Thereafter, the Convertible Preferred Stock is redeemable at the option of the
Company, in whole or in part, at specified redemption prices plus accrued and
unpaid dividends through the redemption date. Dividends on the Convertible
Preferred Stock are cumulative from August 7, 1996 and are payable quarterly in
arrears. See "Description of the Convertible Preferred Stock."
The Selling Securityholders may sell the Securities to which this
Prospectus relates in whole or from time to time in part through underwriters or
dealers, through brokers or other agents, or directly to one or more purchasers,
at market prices prevailing at the time of sale or at prices otherwise
negotiated. The Company will receive no proceeds from the sale of the Securities
by the Selling Securityholders. The Company will pay all expenses incident to
the registration of the Securities offered hereby, except for brokers'
commissions, underwriters' discounts or commissions, and the fees and expenses
of any counsel for the Selling Securityholders. The Selling Securityholders and
any broker, dealer or underwriter that participates with the Selling
Securityholders in the distribution of the Securities may be deemed to be an
"underwriter" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), and any commissions received by them and any profit on the
resale of such Securities purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. See "Plan of Distribution"
for indemnification arrangements between PennCorp and the Selling
Securityholders.
The Convertible Preferred Stock currently trades in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market. Shares of
Convertible Preferred Stock sold pursuant to this Prospectus thereafter will not
be eligible for trading in the PORTAL Market. PennCorp does not intend to list
the Convertible Preferred Stock on any securities exchange or to seek approval
for quotation of the Convertible Preferred Stock through any automated quotation
system. Although the Initial Purchasers have advised PennCorp that they intend
to make a market in the Convertible Preferred Stock, they are not obligated to
do so and may suspend any such market-making activities at any time and without
prior notice. Accordingly, there can be no assurance that an active market for
the Convertible Preferred Stock will develop or be maintained.
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN FACTORS
TO BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
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 MARCH 9, 1998.
<PAGE> 2
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements, and other information
with the Securities and Exchange Commission (the "Commission"). Such reports,
proxy and information statements, and other information may be inspected and
copied at the public reference facilities of the Commission at Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices at 500 West Madison Street, Suite 1400, Chicago, Illinois 60611, and 7
World Trade Center, 13th Floor, New York, New York 10048. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements regarding registrants, such
as the Company, that file electronically with the Commission. In addition, the
Company's Common Stock is listed on the New York Stock Exchange, Inc. (the
"NYSE") and such material also is available for inspection at its offices at 20
Broad Street, New York, New York 10005.
The Company has filed a Registration Statement (together with all
amendments and exhibits thereto, the "Registration Statement"), of which this
Prospectus is a part, with the Commission with respect to the Securities offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is made to the Registration Statement. Copies of the Registration
Statement and the exhibits thereto are on file at the offices of the Commission
and may be obtained upon payment of the fee prescribed by the Commission, or may
be examined without charge at the public reference facilities of the Commission
referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated into
this Prospectus by reference:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1996, as amended by Form 10-K/A (Amendments Nos. 1, 2, 3 and
4);
(2) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1997, as amended by a Form 10-Q/A;
(3) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1997, as amended by a Form 10-Q/A;
(4) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1997;
(5) The Company's Current Report on Form 8-K dated November 14, 1997;
(6) The Company's Current Report on Form 8-K dated January 13, 1998;
(7) The audited financial statements of United Companies Life
Insurance Company (subsequently renamed United Life & Annuity Insurance
Company) for the years ended December 31, 1995 and 1996 included in the
Annual Report on Form 10-K for the year ended December 31, 1996 of United
Companies Life Insurance Company; and
(8) The selected unaudited pro forma financial information of the
Company included on pages 26-36 of the Proxy Statement dated December 2,
1997 related to the Company's 1997 annual meeting of stockholders.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14, or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document that also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any of the documents which
have been or may be incorporated herein by reference, except that exhibits to
such documents will not be provided unless they are specifically incorporated by
reference into such documents. Requests for such copies should be directed to
PennCorp Financial, Inc., at 3 Bethesda Metro Center, Suite 1600, Bethesda,
Maryland 20814, Attention: Investor Relations, telephone number (301) 656-1777.
---------------------
FOR NORTH CAROLINA INVESTORS: THESE SECURITIES HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA,
NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF
THIS DOCUMENT.
2
<PAGE> 3
THE COMPANY
The Company, through its operating subsidiaries, is a low cost provider of
life insurance, fixed benefit accident and sickness insurance and annuity
products throughout the United States and Canada. The Company's products are
sold through several distribution channels, including exclusive agents, general
agents and payroll deduction programs, and are targeted primarily to middle
income individuals in rural and suburban areas.
The Company's principal executive office is located at 590 Madison Avenue,
New York, New York 10022, and its telephone number is (212) 832-0700. The
Company's principal insurance and related support operations are headquartered
in Raleigh, North Carolina and Dallas, Texas.
RECENT DEVELOPMENTS
On February 18, 1998, the Company announced that it has engaged investment
banking firms Salomon Smith Barney and Fox-Pitt, Kelton Inc. to review strategic
alternatives for maximizing shareholder value, including the sale of the
Company's Career Sales Division. The Company has commenced discussions relating
to a management led buyout of the Career Sales Division. On February 18, 1998,
the Company also announced that it will incur restructuring and other charges
which, in the aggregate, are not expected to exceed $25.0 million, a significant
portion of which will take place in the first quarter. The restructuring charge
recognizes: (a) severance and related benefits incurred due to staff reductions,
(b) estimated holding costs of vacated facilities, (c) the write-off of certain
fixed assets and other impaired assets and (d) estimated contract termination
costs.
RISK FACTORS
The following factors should be carefully considered, together with the
information in this Prospectus and the documents incorporated by reference
herein, in evaluating an investment in the Securities offered hereby.
RELIANCE ON DIVIDENDS AND OTHER PAYMENTS FROM INSURANCE SUBSIDIARIES
PennCorp is a holding company with no independent business operations.
Consequently, PennCorp's primary sources of cash to meet its debt service and
other obligations and to pay dividends on its capital stock are dividends,
surplus debenture payments and tax sharing payments from its various
subsidiaries. The ability of such subsidiaries to make dividend and other
payments to PennCorp is dependent upon their receipt of sufficient cash payments
from their respective insurance subsidiaries. The ability of the Company's
insurance subsidiaries to pay dividends and make other payments is limited by
the insurance laws of their respective states of domicile. There can be no
assurance that the Company's insurance subsidiaries will continue to be able to
make sufficient funds available to the Company without regulatory approval or
that the Company will be able to obtain any regulatory approvals that may be
required from time to time.
LIMITATIONS ON ABILITY TO PAY DIVIDENDS ON CONVERTIBLE PREFERRED STOCK AND
COMMON STOCK
In addition to the limitations imposed on the Company's insurance
subsidiaries' ability to pay dividends under applicable insurance laws, under
Delaware law PennCorp is permitted to pay dividends on its capital stock,
including the Convertible Preferred Stock and the Common Stock issuable upon
conversion thereof, only out of its surplus, or, in the event that it has no
surplus, out of its net profits for the year in which a dividend is declared or
for the immediately preceding fiscal year. Surplus is defined as the excess of a
company's total assets over the sum of its total liabilities plus the par value
of its outstanding capital stock. In order to pay cash dividends, PennCorp must
have surplus or net profits equal to the full amount of the cash dividend at the
time such dividend is declared. In determining PennCorp's ability to pay
dividends, Delaware law permits the Board of Directors to revalue its assets and
liabilities from time to time to their current fair market value in order to
create surplus. PennCorp cannot determine what the fair market value of its
assets and liabilities will be in the future and, accordingly, there can be no
assurance that PennCorp will be able to continue paying dividends.
3
<PAGE> 4
Further, PennCorp's ability to pay dividends is limited by the terms of its
(i) outstanding 9 1/4% Senior Subordinated Notes due 2003, (ii) outstanding
$3.375 Convertible Preferred Stock, par value $.01 per share (the "$3.375
Convertible Preferred Stock"), and (iii) revolving credit agreement, and from
time to time may be limited by the terms of its other indebtedness.
REGULATION
Insurance companies are subject to governmental regulation in each of the
jurisdictions in which they conduct business. Insurance regulatory agencies have
broad administrative power with respect to all aspects of an insurance company's
business, including rates, policy forms, dividend payments, capital adequacy and
the amount and type of investments it may have. These regulations are intended
primarily to protect policyholders rather than securityholders.
In certain states, the Company's insurance subsidiaries' licenses are
subject to restrictions, including restrictions on the amount of new business
that may be written without prior regulatory approval. Substantially all of
these restrictions were imposed with respect to events occurring prior to the
Company's acquisition of the affected subsidiaries. These restrictions have not
had a material adverse effect on the Company's results of operation. There can
be no assurance that the Company's insurance subsidiaries will not become
subject to additional and/or more material restrictions in these or other
states.
The insurance regulatory framework continues to be subject to scrutiny by
the National Association of Insurance Commissioners, state legislatures and the
United States Congress. No assurance can be given that future legislative or
regulatory changes resulting from such activity will not adversely affect the
Company.
RATINGS
Claims-paying and financial strength ratings have become an increasingly
important factor in establishing the competitive position of insurance
companies, especially for companies, like certain of PennCorp's insurance
subsidiaries, that sell deferred annuity products. The ratings held by these
subsidiaries are important to maintaining public confidence in the insurer and
its ability to market its annuity products. A lower rating could materially and
adversely affect the insurer's ability to market its products, particularly the
sale of annuities through financial institutions, and could increase the
surrender of its annuity policies. Both of these consequences could, depending
upon the extent thereof, have a material adverse effect on the insurer's
liquidity and, under certain circumstances, net income, the result of which
could have a material adverse effect on the Company.
ABSENCE OF PUBLIC MARKET FOR THE CONVERTIBLE PREFERRED STOCK
The Convertible Preferred Stock currently trades in the PORTAL Market.
However, shares of Convertible Preferred Stock sold pursuant to this Prospectus
will not thereafter be eligible for trading in the PORTAL Market. PennCorp does
not intend to list the Convertible Preferred Stock on any securities exchange or
to seek approval for quotation of the Convertible Preferred Stock through any
automated quotation system. Although the Initial Purchasers have advised
PennCorp that they intend to make a market in the Convertible Preferred Stock,
they are not obligated to do so and may suspend any such market-making
activities at any time and without prior notice. Accordingly, there can be no
assurance that an active market for the Convertible Preferred Stock will develop
or be maintained. Further, future trading prices of the Convertible Preferred
Stock will depend on many factors, including, among other things, prevailing
interest rates, the Company's operating results, the price of the Common Stock
and the market for similar securities.
YEAR 2000 ISSUES
Many computer and software programs were designed to accommodate only two
digit fields to represent a given year (e.g. "97" represents 1997). It is highly
likely that such systems will not be able to accurately process data containing
date information for the year 2000 and beyond. The year 2000 issue has the
potential to affect the Company and its subsidiaries through the disruption of
the processing of business both internally and between the Company and other
businesses with which it interacts.
4
<PAGE> 5
To address the impacts of the year 2000 on its businesses, the Company has
initiated a formal year 2000 assessment and remediation effort to identify and
correct concerns relating to both the Company's own processing and the
processing activities for which the Company is dependent upon its business
partners. The Company has engaged certain outside vendors to help in the full
array of its year 2000 initiative. This includes systems assessment and
monitoring advice, actual code remediation, communication and consultation with
critical business partners and additional data center and testing resources. The
Company expects to incur additional incremental costs associated with such
expertise ranging from $9.0 million to $13.2 million, which are likely to be
incurred primarily during 1998 and early 1999, and which represent approximately
25% of the Company's technology costs. The primary resources to complete the
Company's year 2000 effort are internal and will result in the redeployment of
existing information technology and administrative resources.
During the nine month period ended September, 1997, the Company incurred
additional expenses of approximately $1.1 million associated with its efforts to
remediate its year 2000 exposure. The Company anticipates that it will continue
to incur modestly higher costs for the year ended 1998 and 1999 associated with
year 2000 remediation versus its normalized operating technology and
administrative costs.
Each of the operating divisions is primarily responsible for its
remediation efforts with corporate oversight provided as necessary. The Company
believes that the Career Division has substantially completed its year 2000
assessment and remediation efforts, which will be subject to ongoing tests for
the remainder of 1998. The Payroll Division has completed the remediation of its
largest administrative platforms, except for American-Amicable Life Insurance
Company of Texas ("AATX"), and anticipates successful remediation and testing of
the remaining sub-system and system interfaces during 1998. AATX is in the
process of upgrading its policy administration system to a year 2000 compliant
version. AATX will rely on contracted vendor resources in working to complete
its upgrade process. The Company's Financial Services Division has only recently
begun its year 2000 remediation efforts. Those efforts are dependent on the
utilization of outside resources. The Company believes that the Financial
Services Division has contracted with sufficient resources to be able to
remediate its essential business systems. In addition, the Financial Services
Division has committed to a strategy of utilizing third party administrative
experts, who have indicated year 2000 compliance, to handle the processing of
its health insurance business, thus eliminating the need for the upgrade or
modification of certain existing health administration systems.
Although the Company believes that its operating divisions, outside vendors
and most critical business partners will be sufficiently compliant that the year
2000 issue should not cause a material disruption in the Company's business,
there can be no assurance that there will not be material disruptions to the
Company's business or an increase in the cost of the Company doing business.
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Securities by the Selling Securityholders. All of the expenses incurred in
connection with the registration of the Securities offered hereby will be paid
by the Company, except for brokers' commissions, underwriters' discounts or
commissions, and the fees and expenses of any counsel for the Selling
Securityholders, which will be paid by the Selling Securityholders.
5
<PAGE> 6
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The Company's ratio of earnings to fixed charges and preferred stock
dividends for each of the periods indicated is as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
- --------------------------------- ------------------
1992 1993 1994 1995 1996 1996 1997
- ----- ----- ----- ----- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C>
1.94x 5.91x 3.62x 3.12x 2.93x 3.02x 2.18x
</TABLE>
For purposes of the foregoing ratio, earnings consist of pre-tax income
from operations plus fixed charges (excluding capitalized interest). The
Company's fixed charges consist of (i) interest, whether expensed or
capitalized, (ii) amortization of deferred debt issuance costs, including any
discount or premium, whether expensed or capitalized, and (iii) the component of
rental expense determined by management to be representative of the interest
factor thereon. Preferred stock dividends have been adjusted to an amount equal
to the pre-tax earnings necessary to provide for the dividends.
SELLING SECURITYHOLDERS
The Registration Statement of which the Prospectus is a part has been filed
pursuant to Rule 415 under the Securities Act to afford the holders of the
Securities the opportunity to sell their Securities in public transactions
rather than pursuant to an exemption from the registration and prospectus
delivery requirements of the Securities Act. In order to avail itself of that
opportunity, a holder must notify the Company in writing of its intention to
sell Securities and request that the Company file a supplement to this
Prospectus or an amendment to the Registration Statement identifying such holder
as a Selling Securityholder and disclosing such other information concerning the
Selling Securityholder and the Securities to be sold as may then be required by
the Securities Act and the rules and regulations thereunder, as applicable. No
offer or sale pursuant to this Prospectus may be made by any holder until such a
request has been made and until any such supplement has been filed or any such
amendment has become effective. The holders of Securities who have made such a
request and as to which any such required supplement or amendment has been filed
or become effective are referred to herein as the "Selling Securityholders."
The following table sets forth certain information as of December 4, 1997
(except as otherwise indicated) as to the security ownership of the Selling
Securityholders. Except as set forth below, none of the Selling Securityholders
has had a material relationship with the Company or any of its predecessors or
affiliates within the past three years. The table includes information furnished
to the Company by The Trust Depository Company, the transfer agent for the
Convertible Preferred Stock and the Common Stock and by or on behalf of the
Selling Securityholders.
<TABLE>
<CAPTION>
SHARES OF CONVERTIBLE
PREFERRED STOCK
BENEFICIALLY OWNED PRIOR
TO OFFERING NUMBER OF SHARES OF
------------------------- CONVERTIBLE
PERCENT OF PREFERRED STOCK SHARES OF COMMON
TOTAL INCLUDED IN THIS STOCK UNDERLYING
NAME NUMBER OUTSTANDING OFFERING CONVERTIBLE PREFERRED STOCK
---- --------- ----------- ------------------- ---------------------------
<S> <C> <C> <C> <C>
Alpine Associates............... 254,700(1) 8.9 254,700 364,900
Lipper Convertibles LP.......... 244,300(3) 8.5 244,300 350,000
General Motors Employees
Domestic Group Trust, Mellon
Bank, N.A., as trustee........ 224,550(2) 7.8 224,550 321,705
Highbridge International LDC.... 218,140(4) 7.6 218,140 312,521
Forest Fulcrum Fund LP.......... 175,500(5) 6.1 175,500 251,433
MFS Total Return Fund........... 140,100(6) 4.9 140,100 200,716
</TABLE>
Continued . . .
6
<PAGE> 7
<TABLE>
<CAPTION>
SHARES OF CONVERTIBLE
PREFERRED STOCK
BENEFICIALLY OWNED PRIOR
TO OFFERING NUMBER OF SHARES OF
------------------------- CONVERTIBLE
PERCENT OF PREFERRED STOCK SHARES OF COMMON
TOTAL INCLUDED IN THIS STOCK UNDERLYING
NAME NUMBER OUTSTANDING OFFERING CONVERTIBLE PREFERRED STOCK
---- --------- ----------- ------------------- ---------------------------
<S> <C> <C> <C> <C>
Swiss Bank Corporation --
London Branch................. 127,500(5) 4.4 127,500 182,665
Salomon Smith Barney (*)........ 124,850(7) 4.3 124,850 178,868
Cincinnati Insurance Company.... 100,000(2) 3.5 100,000 143,266
GPZ Trading..................... 98,000(8) 3.4 98,000 140,401
Forest Global Convert
Fd Ser A-S.................... 87,910(5) 3.1 87,910 125,946
Putnam Convertible Income --
Growth Trust.................. 83,700(9) 2.9 83,700 119,914
Pacific Horizon Capital Income
Fund.......................... 75,000(10) 2.6 75,000 107,450
Donaldson, Lufkin & Jenrette
Securities Corporation (**)... 71,800(11) 2.5 71,800 102,865
Paloma Securities L.L.C......... 68,160 2.4 68,160 97,650
Oppenheimer Bond Fund for
Growth........................ 60,000(6) 2.1 60,000 85,960
Silverton International Fund
Limited....................... 52,440 1.8 52,440 75,129
Cincinnati Life Insurance
Company....................... 50,000(2) 1.7 50,000 71,633
Golden Rule Insurance
Company....................... 44,000 1.5 44,000 63,037
Motors Insurance Corporation.... 43,450(2) 1.5 43,450 62,249
State of Connecticut Combined
Investment Funds.............. 42,000 1.5 42,000 60,172
Aim Balanced Fund............... 40,000 1.4 40,000 57,307
Alexandra Global Investment Fund
I, Ltd........................ 37,500 1.3 37,500 53,725
Delta Air Lines Master Trust.... 28,000 1.0 28,000 40,115
Vanguard Convertible Securities
Fund, Inc..................... 24,700 0.9 24,700 35,387
The Alpine Group................ 22,500 0.8 22,500 32,235
Toronto Dominion (New York),
Inc........................... 19,780(13) 0.7 19,780 28,338
KA Trading L.P.................. 17,500(2) 0.6 17,500 25,072
KA Management Ltd............... 17,500(2) 0.6 17,500 25,072
Q Investments, L.P.............. 16,250(14) 0.6 16,250 23,281
Xerox Corporation............... 16,000 0.6 16,000 22,923
New Hampshire State Retirement
System........................ 12,900(9) 0.4 12,900 18,481
LLT LTD......................... 12,000(5) 0.4 12,000 17,192
State Employees Retirement Fund
of the State of Delaware...... 11,300(12) 0.4 11,300 16,189
Promutual....................... 10,800(9) 0.4 10,800 15,473
Hartford Fire Insurance Company 10,350(9) 0.4 10,350 14,828
Orrington Investments L.P....... 9,950(15) 0.3 9,950 14,255
</TABLE>
Continued . . .
7
<PAGE> 8
<TABLE>
<CAPTION>
SHARES OF CONVERTIBLE
PREFERRED STOCK
BENEFICIALLY OWNED PRIOR
TO OFFERING NUMBER OF SHARES OF
------------------------- CONVERTIBLE
PERCENT OF PREFERRED STOCK SHARES OF COMMON
TOTAL INCLUDED IN THIS STOCK UNDERLYING
NAME NUMBER OUTSTANDING OFFERING CONVERTIBLE PREFERRED STOCK
---- --------- ----------- ------------------- ---------------------------
<S> <C> <C> <C> <C>
Raytheon Company Master Pension
Trust......................... 9,900 0.3 9,900 14,183
Putnam Convertible Opportunities
and Income Trust.............. 9,390(9) 0.3 9,390 13,453
R(2) Investments, LDC........... 8,750(14) 0.3 8,750 12,536
TQA Vantage Fund, L.P........... 8,000(6) 0.3 8,000 11,461
General Motors Foundation,
Inc. ......................... 7,000(2) 0.2 7,000 10,029
TQA Vantage Plus Fund, Ltd...... 6,000(6) 0.2 6,000 8,596
TQA Levage Fund, L.P............ 6,000(6) 0.2 6,000 8,596
Orrington International Fund
Ltd........................... 5,700(15) 0.2 5,700 8,166
Putnam Balanced Retirement
Fund.......................... 5,300(9) 0.2 5,300 7,593
The Northwestern Mutual Life
Insurance Company............. 5,000(16) 0.2 5,000 7,163
Boston College Endowment........ 4,850(9) 0.2 4,850 6,949
No. Dakota State Land........... 4,700(6) 0.2 4,700 6,734
TCW Galileo CVT Fund............ 4,500(6) 0.2 4,500 6,447
Bank of America Convertible
Securities Fund............... 4,500 0.2 4,500 6,447
Pacific Innovation Trust Capital
Income Fund................... 3,850(10) 0.1 3,850 5,516
OCM Convertible Limited
Partnership................... 3,100(12) 0.1 3,100 4,441
Museum of Fine Arts, Boston..... 2,960(9) 0.1 2,960 4,241
University of Rochester......... 2,600(9) 0.1 2,600 3,725
Employee Benefit Convertible
Securities Fund............... 2,500 0.1 2,500 3,582
Jefferies & Co. Inc............. 650(17) *** 650 931
Putnam Funds Trust -- Putnam
High Yield Total Return
Fund.......................... 435(9) *** 435 623
Unnamed holders of the
Convertible Preferred Stock or
any future transferees,
pledgees, donees or successors
of or from such unnamed
holders(18)................... 76,185 2.6 76,185 109,111
--------- ----- --------- ---------
Total........................... 2,875,000 100.0 2,875,000 4,118,911
========= ===== ========= =========
</TABLE>
Continued . . .
8
<PAGE> 9
- ---------------
* Smith Barney Inc. was an underwriter in connection with the Company's 1996
Common Stock offering and an initial purchaser in connection with the
Company's 1996 private placement of preferred stock. In addition, on
February 18, 1998, the Company engaged Salomon Smith Barney to review
strategic alternatives for maximizing stockholder value. See "Recent
Developments."
** Donaldson, Lufkin & Jenrette Securities Corporation was an underwriter in
connection with the Company's 1996 Common Stock offering and an initial
purchaser in connection with the Company's 1996 private placement of
preferred stock.
*** Less than 0.1% after rounding.
(1) As of November 25, 1997.
(2) As of November 26, 1997.
(3) As of December 5, 1997.
(4) As of December 10, 1997.
(5) As of December 1, 1997.
(6) As of December 8, 1997.
(7) As of February 11, 1998.
(8) As of December 3, 1997.
(9) As of December 11, 1997.
(10) As of January 5, 1998.
(11) As of December 9, 1997.
(12) As of December 4, 1997.
(13) As of December 2, 1997.
(14) As of February 20, 1998.
(15) January 30, 1998.
(16) All such shares are held in The Northwestern Mutual Life Insurance Company
Group Annuity Separate Account.
(17) As of November 28, 1997.
(18) No such holder may offer Convertible Preferred Stock pursuant to this
Prospectus until such holder is included as a Selling Securityholder in a
supplement to this Prospectus.
Because the Selling Securityholders may offer all or some of the shares of
Convertible Preferred Stock and Common Stock issued upon conversion thereof
pursuant to the offering contemplated by this Prospectus, and because there are
currently no agreements, arrangements or understandings with respect to the sale
of any of the shares of Convertible Preferred Stock or underlying Common Stock,
no estimate can be given as to the number of shares of Convertible Preferred
Stock and Common Stock that will be held by the Selling Securityholders after
completion of this offering. See "Plan of Distribution."
9
<PAGE> 10
PLAN OF DISTRIBUTION
The Selling Securityholders may sell the Securities to which this
Prospectus relates in whole or from time to time in part through underwriters or
dealers, through brokers or other agents, or directly to one or more purchasers,
at market prices prevailing at the time of sale or at prices otherwise
negotiated. PennCorp will receive no proceeds from the sale of the Securities by
the Selling Securityholders. The Company will pay all expenses incident to the
registration of the Securities offered hereby, except for brokers' commissions,
underwriters' discounts or commissions, and the fees and expenses of any counsel
for the Selling Securityholders.
The Convertible Preferred Stock currently trades in the PORTAL Market.
However, shares of Convertible Preferred Stock sold pursuant to this Prospectus
will not thereafter be eligible for trading in the PORTAL Market. PennCorp does
not intend to list the Convertible Preferred Stock on any securities exchange or
to seek approval for quotation of the Convertible Preferred Stock through any
automated quotation system. Although the Initial Purchasers have advised
PennCorp that they intend to make a market in the Convertible Preferred Stock,
they are not obligated to do so and may suspend any such market-making
activities at any time and without prior notice. Accordingly, there can be no
assurance that an active market for the Convertible Preferred Stock will develop
or be maintained.
The Company will issue the shares of Common Stock issuable upon conversion
of the Convertible Preferred Stock to registered holders of the Convertible
Preferred Stock upon the conversion thereof. The Common Stock is listed on the
NYSE and trades under the symbol "PFG."
In order to comply with the securities laws of certain states, if
applicable, the Securities will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Securities may not be sold unless they have been registered or qualified for
sale in the applicable state or an exemption from the registration or
qualification requirement is available and is complied with.
The Selling Securityholders and any broker, dealer or underwriter that
participates with the Selling Securityholders in the distribution of the
Securities may be deemed to be an "underwriter" within the meaning of the
Securities Act, and any commissions received by them and any profit on the
resale of such Securities purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Under applicable rules and regulations under the Exchange Act, each Selling
Securityholder will be subject to applicable provisions of the Exchange Act and
the rules and regulations thereunder, including, without limitation, Regulation
M, which provisions may limit the timing of purchases and sales of the
Securities by the Selling Securityholders. All of the foregoing may affect the
marketability of the Securities.
In addition, any securities covered by this Prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A under the Securities Act may be sold
under Rule 144 or Rule 144A rather than pursuant to this Prospectus. There is no
assurance that any Selling Securityholder will sell any or all of the
Convertible Preferred Stock or Common Stock described herein, and any Selling
Securityholder may transfer, devise or make a gift of such securities by other
means not described herein.
The Company and the Selling Securityholders are obligated to indemnify each
other against certain liabilities arising under the Securities Act.
10
<PAGE> 11
DESCRIPTION OF THE CONVERTIBLE PREFERRED STOCK
The following summary description of the Convertible Preferred Stock is
qualified in its entirety by reference to the Certificate of Designation
governing the Convertible Preferred Stock, a copy of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
GENERAL
The Convertible Preferred Stock is a series of preferred stock consisting
of 2,875,000 shares.
DIVIDENDS
Holders of Convertible Preferred Stock are entitled to receive, when, as
and if declared by the Board of Directors out of legally available funds, cash
dividends at an annual rate of $3.50 per share, payable quarterly in arrears on
February 1, May 1, August 1 and November 1 of each year. If that date is a
Saturday, Sunday or legal holiday, however, the dividend will be payable on the
next business day. Dividends will accrue and be cumulative from the most recent
date to which dividends have been paid and will be payable to holders of record
on the record date for each dividend payment fixed by the Board of Directors.
The Convertible Preferred Stock has priority as to dividends over the
Common Stock and any other series or class of the Company's stock that ranks
junior to the Convertible Preferred Stock as to dividends ("Junior Dividend
Stock"). No dividend (other than dividends payable solely in Common Stock, any
Junior Dividend Stock or warrants or other rights to acquire such Common Stock
or Junior Dividend Stock) may be paid or set apart for payment on, and no
purchase, redemption or other acquisition shall be made by the Company of, the
Common Stock or Junior Dividend Stock unless all accrued and unpaid dividends on
the Convertible Preferred Stock, including the full dividend for the
then-current quarterly dividend period, shall have been paid or declared and set
apart for payment without interest.
Except as provided below, the Company may not pay dividends on any class or
series of stock, if hereafter issued, having parity with the Convertible
Preferred Stock as to dividends ("Parity Dividend Stock") unless it has paid or
declared and set apart for payment or contemporaneously pays or declares and
sets apart for payment all accrued and unpaid dividends for all prior dividend
payment periods on the Convertible Preferred Stock. In addition, except as
provided below, the Company may not pay dividends on the Convertible Preferred
Stock unless it has paid or declared and set apart for payment or
contemporaneously pays or declares and sets apart for payment all accrued and
unpaid dividends for all prior dividend payment periods on the Parity Dividend
Stock. Whenever all accrued dividends in respect of prior dividend payment
periods are not paid in full on Convertible Preferred Stock and on any Parity
Dividend Stock, all dividends declared on the Convertible Preferred Stock and
the Parity Dividend Stock will be declared and made pro rata so that the amount
of dividends declared on the Convertible Preferred Stock and the Parity Dividend
Stock will bear the same ratio that accrued and unpaid dividends in respect of
prior dividend payment periods on the Convertible Preferred Stock and the Parity
Dividend Stock bear to each other. The $3.375 Convertible Preferred Stock is
Parity Dividend Stock and accrues an aggregate of $7.8 million in dividends per
annum, which dividends are payable quarterly in arrears.
The Company may not purchase any shares of the Convertible Preferred Stock
or any Parity Dividend Stock (except for consideration payable in Common Stock
or Junior Dividend Stock) or redeem fewer than all the shares of the Convertible
Preferred Stock and Parity Dividend Stock then outstanding if the Company has
failed to pay any accrued dividend on the Convertible Preferred Stock or any
Parity Dividend Stock on a stated payment date. Notwithstanding the foregoing,
in such event, the Company may purchase or redeem fewer than all the shares of
the Convertible Preferred Stock and Parity Dividend Stock if such repurchase or
redemption is made pro rata so that the amounts purchased or redeemed bear to
each other the same ratio that the required redemption payments on the shares of
the Convertible Preferred Stock and any Parity Dividend Stock then outstanding
bear to each other.
If the Company hereafter issues any series or class of stock that ranks
senior as to dividends to the Convertible Preferred Stock ("Senior Dividend
Stock") and fails to pay or declare and set apart for payment
11
<PAGE> 12
accrued and unpaid dividends on any Senior Dividend Stock (except to the extent
allowed by the terms of the Senior Dividend Stock), the Company may not pay or
declare and set apart for payment any dividend on the Convertible Preferred
Stock unless and until all accrued and unpaid dividends on the Senior Dividend
Stock, including the full dividends for the then current dividend period, have
been paid or declared and set apart for payment without interest. The Company
has no Senior Dividend Stock outstanding on the date of this Prospectus.
The dividend payable on Convertible Preferred Stock for each quarterly
dividend period is computed by dividing the annual dividend amount by four. The
amount of dividends payable for the initial dividend period and for any period
shorter than a full quarterly dividend period is computed on the basis of a
360-day year of twelve 30-day months. No interest is payable on any Convertible
Preferred Stock dividend that may be in arrears.
Under Delaware law, the Company may declare and pay dividends or make other
distributions on its capital stock only out of surplus, as defined in the
Delaware General Corporation Law, or if no surplus is available, out of its net
profits for the fiscal year in which the dividend or distribution is declared
and the preceding fiscal year. No dividends or distributions may be declared or
paid if the Company is or would be rendered insolvent by virtue of the dividend
or distribution, or if the declaration, payment or distribution would contravene
the Company's Second Restated Certificate of Incorporation, as amended. The
Company's ability to pay dividends on its capital stock, including the
Convertible Preferred Stock, is dependent upon the receipt of funds from its
subsidiaries. Dividends and other payments by the Company's insurance
subsidiaries are regulated by the insurance laws of their respective
jurisdictions of domicile. See "Risk Factors -- Reliance on Dividends and Other
Payments from Insurance Subsidiaries."
LIQUIDATION RIGHTS
In the case of the voluntary or involuntary liquidation, dissolution or
winding up of the Company, subject to the payment in full, or until provision
has been made for the payment in full, of all claims of creditors of the
Company, holders of Convertible Preferred Stock are entitled to receive the
liquidation preference of $50.00 per share, plus an amount equal to any accrued
and unpaid dividends, whether or not declared, to the payment date, before any
payment or distribution is made to the holders of Common Stock or any other
series or class of stock hereafter issued that ranks junior as to liquidation
rights to the Convertible Preferred Stock ("Junior Liquidation Stock"). Holders
of Convertible Preferred Stock are not entitled to receive the liquidation
preference of their shares until the liquidation preference of any other series
or class of stock hereafter issued that ranks senior as to liquidation rights to
the Convertible Preferred Stock ("Senior Liquidation Stock"), if any, has been
paid in full. The holders of Convertible Preferred Stock and any series or class
of stock hereafter issued that ranks on a parity as to the liquidation rights
with the Convertible Preferred Stock ("Parity Liquidation Stock") are entitled
to share ratably, in accordance with the respective preferential amounts payable
on their stock, in any distribution (after payment of the liquidation preference
on any Senior Liquidation Stock) that is not sufficient to pay in full the
aggregate liquidation preference on both the Convertible Preferred Stock and any
Parity Liquidation Stock.
After payment in full of the liquidation preference plus any accrued and
unpaid dividends on the Convertible Preferred Stock, the holders will not be
entitled to any further participation in any distribution of assets by the
Company. Neither a consolidation or merger of the Company with another entity
nor a sale or transfer of all or part of the Company's assets for cash,
securities or other property will be considered a liquidation, dissolution or
winding up of the Company.
The $3.375 Convertible Preferred Stock ($112.4 million aggregate
liquidation preference as of December 31, 1997) is Parity Liquidation Stock.
VOTING RIGHTS
The holders of Convertible Preferred Stock have no voting rights except as
described below or as required by law. In exercising any voting rights, each
outstanding share of Convertible Preferred Stock is entitled to one vote,
although shares held by the Company or any entity controlled by the Company have
no voting rights.
12
<PAGE> 13
Whenever dividends on the Convertible Preferred Stock are in arrears in an
aggregate amount equal to at least six quarterly dividends (whether or not
consecutive), the size of the Company's Board of Directors will be increased by
two, and the holders of Convertible Preferred Stock, voting separately as a
class together with holders of Parity Dividend Stock, will be entitled to elect
the two additional directors to the Board of Directors at, subject to certain
limitations, any annual meeting of stockholders at which directors are to be
elected held during the period when the dividends remain in arrears or, under
certain circumstances, at a special meeting of stockholders. These voting rights
will terminate when all dividends in arrears and for the current quarterly
period have been paid in full or declared and set apart for payment. The term of
office of the additional directors so elected will terminate immediately upon
that payment or provision for payment.
In addition, so long as any Convertible Preferred Stock is outstanding, the
Company will not, without the affirmative vote or consent of the holders of at
least 66 2/3% of all outstanding shares of Convertible Preferred Stock and
outstanding Parity Dividend Stock, voting as a single class (i) amend, alter or
repeal (by merger or otherwise) any provision of the Second Restated Certificate
of Incorporation, as amended, or the by-laws so as to affect adversely the
relative rights, preferences, qualifications, limitations or restrictions of the
Convertible Preferred Stock or (ii) effect any reclassification of the
Convertible Preferred Stock.
REDEMPTION AT OPTION OF THE COMPANY
The Convertible Preferred Stock may not be redeemed prior to August 2,
1999. Thereafter, the Convertible Preferred Stock may be redeemed by the
Company, at its option, in whole or in part at any time, if redeemed during the
12-month period beginning August 1 (August 2 in the case of 1999), of any year
specified below, at the following redemption prices:
<TABLE>
<CAPTION>
PRICE PRICE
YEAR PER SHARE YEAR PER SHARE
---- --------- ---- ---------
<S> <C> <C> <C>
1999........................... $52.45 2003........................... $51.05
2000........................... 52.10 2004........................... 50.70
2001........................... 51.75 2005........................... 50.35
2002........................... 51.40 2006 and thereafter............ 50.00
</TABLE>
plus in each case accrued and unpaid dividends, whether or not declared, to the
redemption date.
If fewer than all the outstanding shares of Convertible Preferred Stock are
to be redeemed, the Company will select those shares to be redeemed pro rata or
in such other manner as the Board of Directors may determine. There is no
mandatory redemption or sinking fund obligation for the Convertible Preferred
Stock. In the event that the Company has failed to pay accrued and unpaid
dividends on the Convertible Preferred Stock, it may not redeem less than all of
the outstanding shares of the Convertible Preferred Stock until all accrued and
unpaid dividends have been paid in full.
Notice of redemption will be mailed at least 15 days but not more than 60
days before the redemption date to each holder of record of Convertible
Preferred Stock to be redeemed at the address shown on the stock transfer books.
After the redemption date, dividends will cease to accrue on the shares of
Convertible Preferred Stock called for redemption and all rights of the holders
of those shares will terminate, except the conversion rights to the extent
described below and the right to receive the redemption price plus accrued and
unpaid dividends, whether or not declared, to the redemption date, without
interest.
CONVERSION RIGHTS
Each holder of Convertible Preferred Stock has the right any time, at the
holder's option, to convert any or all shares into Common Stock at any time at a
conversion price (subject to adjustment as described below) of $34.90 per share
of underlying Common Stock. If the Convertible Preferred Stock is called for
redemption, the conversion right will terminate at the close of business on the
redemption date fixed by the Board of Directors.
If shares of Convertible Preferred Stock not called for redemption are
surrendered for conversion during the period between the close of business on
any dividend record date and the opening of business on any
13
<PAGE> 14
corresponding dividend payment date such shares so surrendered must be
accompanied by payment of an amount equal to the dividend payable on such shares
on such dividend payment date. No such payment will be required to accompany
shares of Convertible Preferred Stock called for redemption and surrendered
during such period. A holder of shares of Convertible Preferred Stock on a
dividend record date who (or whose transferee) tenders any such shares for
conversion into shares of Common Stock on such dividend payment date will
receive the dividend payable by the Company on such shares of Convertible
Preferred Stock on such date, and the converting holder need not include payment
of the amount of such dividend upon surrender of shares of Convertible Preferred
Stock for conversion. Except for shares of Convertible Preferred Stock
surrendered for conversion on a dividend payment date, the Company will make no
payment or allowance for accrued and unpaid dividends, whether or not in
arrears, on converted shares or for dividends on the shares of Common Stock
issued upon such conversion. No fractional shares of Common Stock will be issued
upon conversion but, in lieu thereof, an appropriate amount will be paid in cash
based on the last reported sale price for the Common Stock on the day of
conversion.
The conversion price is subject to adjustment in certain events, including
(i) the payment of a dividend on any class of the Company's capital stock in
shares of Common Stock; (ii) subdivisions or combinations of the Common Stock;
(iii) the issuance to all holders of Common Stock of certain rights or warrants
(expiring within 45 days after the record date for determining stockholders
entitled to receive them) to subscribe for or purchase Common Stock at a less
than current market price; or (iv) the payment of a dividend to all holders of
Common Stock of any shares of capital stock of the Company or its subsidiaries
(other than Common Stock) or evidences of indebtedness, cash (excluding cash
dividends payable solely in cash that may from time to time be fixed by the
Board of Directors, or dividends or distributions in connection with
liquidation, dissolution or winding up of the Company), other assets or rights
or warrants to subscribe for or purchase any securities (other than those
referred to above); or (v) the issuance of all holders of Common Stock of
securities convertible into or exchangeable for Common Stock (other than
pursuant to transactions described above) for a consideration per share of
Common Stock deliverable upon a conversion or exchange of the securities less
than the current market price per share on the date of issuance of the
securities. No adjustment of the conversion price will be required to be made
until cumulative adjustments amount to 1% or more of the conversion price as
last adjusted, and any adjustment below 1% will be carried forward.
The Company from time to time may reduce the conversion price by any amount
for any period of time if the period is at least 20 days and if the reduction is
irrevocable during the period. Whenever the conversion price is so reduced, the
Company shall mail to holders of record of the Convertible Preferred Stock a
notice of the reduction at least 15 days before the date the reduced conversion
price takes effect, stating the reduced conversion price and the period it will
be in effect.
In case of any reclassification of the Common Stock, any consolidation of
the Company with, or merger of the Company into, any other entity, any merger of
any entity into the Company (other than a merger that does not result in a
reclassification, conversion, exchange or cancellation of the outstanding shares
of Common Stock), any sale or transfer of all or substantially all of the assets
of the Company or any compulsory share exchange whereby the Common Stock is
converted into other certain securities, cash or other property, then the holder
of each share of Convertible Preferred Stock then outstanding shall have the
right thereafter, during the period that the Convertible Preferred Stock shall
be convertible, to convert that share only into the kind and amount of
securities, cash and other property receivable upon the reclassification,
consolidation, merger, sale, transfer or share exchange by a holder of the
number of shares of Common Stock into which one share of Convertible Preferred
Stock would have been convertible immediately prior to the reclassification,
consolidation, merger, sale, transfer or share exchange.
OTHER PROVISIONS
The shares of Convertible Preferred Stock have been duly and validly issued
and are fully paid and nonassessable.
The holders of shares of Convertible Preferred Stock have no preemptive
rights with respect to any securities of the Company.
14
<PAGE> 15
The registrar, transfer agent, conversion agent, and dividend disbursing
agent for the Convertible Preferred Stock and the transfer agent and registrar
for the Common Stock issuable upon conversion thereof is First Chicago Trust
Company of New York.
SERIES C PREFERRED STOCK
The Company has mailed a notice of redemption with respect to its Series C
Preferred Stock, par value $0.01 per share, specifying March 31, 1998 as the
redemption date.
LEGAL MATTERS
The validity of the Convertible Preferred Stock and the shares of Common
Stock issuable upon conversion thereof will be passed upon for the Company by
Weil, Gotshal & Manges LLP.
EXPERTS
The consolidated financial statements and the related financial statement
schedules of the Company and its subsidiaries as of December 31, 1996 and 1995,
and for each of the years in the three year period ended December 31, 1996; the
consolidated financial statements of Southwestern Financial Corporation and
subsidiaries as of December 31, 1996, and the year then ended; and the
consolidated financial statements of United Life & Annuity Insurance Company and
subsidiary as of December 31, 1996, and the periods from July 24, 1996 to
December 31, 1996 (Successor period), and from January 1, 1996 to July 23, 1996
(Predecessor period); have been audited by KPMG Peat Marwick LLP, independent
certified public accountants. Such financial statements and the related
financial statement schedules have been incorporated by reference herein in
reliance upon the reports of KPMG Peat Marwick LLP and upon the authority of
said firm as experts in accounting and auditing.
With respect to the Company's unaudited interim financial information for
the periods ended September 30, 1997 and 1996, June 30, 1997 and 1996 and March
31, 1997 and 1996, incorporated by reference herein, KPMG Peat Marwick LLP has
reported that they applied limited procedures in accordance with professional
standards for a review of such information. However, their separate reports
included in the Company's quarterly reports on Form 10-Q for the quarter ended
September 30, 1997, on Form 10-Q/A for the quarter ended June 30, 1997, and on
Form 10-Q/A for the quarter ended March 31, 1997, incorporated by reference
herein, 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 in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of section 11 of the Securities Act for their reports on
the unaudited interim financial information because those reports are not a
"report" or a "part" of the registration statement prepared or certified by the
accountants within the meaning of sections 7 and 11 of the Securities Act.
The financial statements of United Companies Life Insurance Company
(subsequently renamed United Life & Annuity Insurance Company) and subsidiary as
of December 31, 1995 and 1994 and for each of the two years in the period ended
December 31, 1995 have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report, which is incorporated herein by reference,
and has been so incorporated in reliance upon the report of such firm given upon
their authority as experts in accounting and auditing.
15
<PAGE> 16
======================================================
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE HEREBY, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR ANY OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, OTHER THAN THOSE TO WHICH IT RELATES, IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH JURISDICTION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN A CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF.
---------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
The Company........................... 3
Recent Developments................... 3
Risk Factors.......................... 3
Use of Proceeds....................... 5
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends........... 6
Selling Securityholders............... 6
Plan of Distribution.................. 10
Description of the Convertible
Preferred Stock..................... 11
Legal Matters......................... 15
Experts............................... 15
</TABLE>
======================================================
======================================================
PENNCORP FINANCIAL
GROUP, INC.
2,875,000 SHARES
$3.50 SERIES II CONVERTIBLE
PREFERRED STOCK
4,118,911 SHARES
COMMON STOCK
-----------------
PROSPECTUS
-----------------
MARCH 9, 1998
======================================================
