As filed with the Securities and Exchange Commission on March 25, 1998.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------
PENNCORP FINANCIAL GROUP, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 13-3543540
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
590 Madison Avenue, 38th Floor SCOTT D. SILVERMAN, ESQ.
New York, New York 10022 Senior Vice President,
(Address, Including Zip Code, of General Counsel and Secretary
Registrant's Principal Executive PennCorp Financial Group, Inc.
Offices) 590 Madison Avenue, 38th Floor
New York, New York 10022
(212) 896-2700
(Name, Address, Including Zip Code, and
Telephone Number, Including Area Code, of
Agent for Service)
1996 Stock Award and Stock Option Plan
(Full Title of the Plan)
CALCULATION OF REGISTRATION FEE
<TABLE>
===================================================================================================
Proposed Maximum Proposed Maximum
Title of Securities Amount to be Offering Price Aggregate Amount of
to be Registered(1) Registered(1) Per Share(2) Offering Price(2) Registration Fee
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock,
$.01 Par Value 2,800,000 Shares $30.63 $87,750,000.00 $25,300.38
===================================================================================================
<FN>
(1) Shares of common stock, $.01 par value per share ("Common Stock"), of
PennCorp Financial Group, Inc. (the "Company") being registered hereby
relate to the 1996 Stock Award and Stock Option Plan, as amended (the
"Plan"). Pursuant to Rule 416 promulgated under the Securities Act of
1933, as amended (the "Securities Act"), there is also being registered an
indeterminate amount of additional shares of Common Stock as may become
issuable as a result of stock splits, stock dividends or similar
transactions.
(2) In accordance with section (c) of Rule 457 promulgated under the
Securities Act, calculated on the basis of the average of the high and low
sales price for Common Stock as reported on the New York Stock Exchange on
March 23, 1998.
</FN>
</TABLE>
1
<PAGE>
PENNCORP FINANCIAL GROUP, INC.
CROSS REFERENCE SHEET
Item Number and Caption Caption in Prospectus
----------------------- ---------------------
1. Forepart of Registration Statement
and Outside Front Cover Page of
Prospectus............................. Outside Front Cover Page
2. Inside Front and Outside Back Cover
Pages of Prospectus.................... Table of Contents; Available
Information; Incorporation of
Certain Documents by Reference
3. Summary Information, Risk Factors
and Ratio of Earnings to Fixed
Charges................................ The Company
4. Use of Proceeds........................ Use of Proceeds
5. Determination of Offering Price........ Not applicable
6. Dilution............................... Not applicable
7. Selling Security Holders............... Selling Stockholders
8. Plan of Distribution................... Plan of Distribution
9. Description of Securities to be
Registered............................. Not applicable
10. Interests of Named Experts
and Counsel............................ Legal Matters
11. Material Changes....................... Not applicable
12. Incorporation of Certain Information
by Reference........................... Incorporation of Certain
Documents by Reference
13. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities............................ Not applicable
<PAGE>
Reoffer Prospectus
PennCorp Financial Group, Inc.
Common Stock
420,178 shares of Common Stock under the
PennCorp Financial Group, Inc. 1996 Stock Award and Stock Option Plan
This Prospectus is being used in connection with the offering from time to
time by certain employees, officers and directors (the "Selling Stockholders")
of PennCorp Financial Group, Inc., a Delaware corporation (the "Company"), of
shares of common stock, par value $.01 per share, of the Company (the "Common
Stock") that have been or may be acquired by them pursuant to the Company's 1996
Stock Award and Stock Option Plan, as amended (the "Plan"). The shares of Common
Stock offered hereby are "restricted securities" under the Securities Act of
1933, as amended (the "Securities Act"), prior to their sale hereunder. This
Prospectus has been prepared for the purpose of registering the shares of Common
Stock under the Securities Act to allow for future resale by the Selling
Stockholders to the public without restriction.
The shares of Common Stock may be sold from time to time to purchasers
directly by any of the Selling Stockholders. Alternatively, the Selling
Stockholders may sell the shares of Common Stock in one or more transactions
(which may involve one or more block transactions) on the New York Stock
Exchange (the "NYSE"), in sales occurring in the public market off the NYSE, in
separately negotiated transactions, or in a combination of such transactions.
Each sale may be made either at market prices prevailing at the time of such
sale or at negotiated prices; some or all of the shares of Common Stock may be
sold through brokers acting on behalf of the Selling Stockholders or to dealers
for resale by such dealers; and in connection with such sales, such brokers or
dealers may receive compensation in the form of discounts or commissions from
the Selling Stockholders and/or the purchasers of such shares for whom they may
act as broker or agent (which discounts or commissions may be less than or in
excess of those customary in the types of transactions involved). However, any
securities covered by this Prospectus which qualify for sale pursuant to Rule
144 under the Securities Act may be sold under Rule 144 rather than pursuant to
this Prospectus. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all brokerage commissions and other
expenses incurred by individual Selling Stockholders will be borne by each such
Selling Stockholder. The Company will not receive any of the proceeds from such
sales.
The Selling Stockholders and any dealer participating in the distribution
of any shares of Common Stock or any broker executing selling orders on behalf
of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any profit on the sale of any or
all of the shares of Common Stock by them and any discounts or commissions
received by any such brokers or dealers may be deemed to be underwriting
discounts and commissions under the Securities Act.
The Common Stock is traded on the NYSE under the symbol "PFG". On March 23,
1998, the last reported sale price of the Common Stock as reported by the NYSE
was $29.50 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION, NOR HAS THE 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 25, 1998.
<PAGE>
TABLE OF CONTENTS
Page
Available Information.................................................. 2
Incorporation of Certain Documents by Reference........................ 3
The Company............................................................ 3
Use of Proceeds........................................................ 4
Selling Stockholders................................................... 4
Plan of Distribution................................................... 7
Legal Matters.......................................................... 7
No person has been authorized to give any information or to make any
representation not contained in this Prospectus in connection with any offering
made hereby and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company or any other person.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy, nor shall there be any offer to sell, solicitation of an offer to
buy or sale of these securities by any person in any jurisdiction in which it is
unlawful for such person to make such offer, solicitation or sale. Neither the
delivery of this Prospectus at any time nor any sale made hereunder shall under
any circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof or that the information contained
herein is correct as of any time subsequent to such date.
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 statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the Commission at its offices located at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices located at 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661, and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can also be obtained at prescribed rates
from the Public Reference Section of the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549. The Commission also maintains a Web
site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.
The address of such site is http://www.sec.gov. In addition, the Common Stock
and the $3.375 Convertible Preferred Stock, par value $.01 per share, of the
Company are traded on the NYSE, and the foregoing material is also available for
inspection at its offices at 20 Broad Street, New York, New York 10005.
This Prospectus constitutes part of a Registration Statement filed by the
Company with the Commission under the Securities Act. This Prospectus omits
certain of the information contained in the Registration Statement in accordance
with the rules and regulations of the Commission. Reference is hereby made to
the Registration Statement and related exhibits for further information with
respect to the Company and the Common Stock. Statements contained herein
concerning the provisions of any documents are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference. Copies of
the Registration Statement and the exhibits thereto are on file at the offices
of the Commission and may be
2
<PAGE>
obtained upon payment of the fee prescribed by the Commission, or may be
examined without change at the public reference facilities of the Commission
described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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), filed by the
Company with the Commission is incorporated herein by reference.
All other reports filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act since the end of the fiscal year covered by the Annual
Report referred to in (a) above are incorporated herein by reference.
The description of the Company's Common Stock, which is contained in the
Company's Registration Statement on Form 8-A (File No. 1-11422) filed under
Section 12(b) of the Exchange Act, including any amendments or reports filed for
the purpose of updating such description, is incorporated herein by reference.
All documents filed by the Company pursuant to Sections 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 of such documents. Any
statement contained in a document incorporated or deemed to be incorporated
herein by reference 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 herein
by reference 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. All information appearing in this
Prospectus is qualified in its entirety by the information and financial
statements (including notes thereto) appearing in the documents incorporated
herein by reference, except to the extent set forth in the immediately preceding
statement.
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 or all of the documents
which have been or may be incorporated herein by reference, except that exhibits
to such documents will not be provided unless such exhibits are specifically
incorporated by reference into such documents. Requests should be directed to:
PennCorp Financial, Inc., 3 Bethesda Metro Center, Suite 1600, Bethesda,
Maryland, 20814, Attention: Investor Relations, telephone number (301) 656-1777.
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 offices are located at 590 Madison
Avenue, New York, New York 10022, and its telephone number is (212) 896-2700.
The Company's insurance and related support operations are headquartered in
Raleigh, North Carolina and Dallas, Texas.
3
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the shares of
the Company's Common Stock by the Selling Stockholders pursuant to this
Prospectus.
SELLING STOCKHOLDERS
The following table sets forth the names of the Selling Stockholders, the
aggregate number of shares of Common Stock beneficially owned by each Selling
Stockholder as of the date hereof and the aggregate number of shares of Common
Stock that each Selling Stockholder may offer and sell pursuant to this
Prospectus. Because the Selling Stockholders may sell all, a portion or none of
their shares of Common Stock at any time and from time to time after the date
hereof, no estimate can be made of the number of shares of Common Stock that
each Selling Stockholder may retain upon completion of the offering to which
this Prospectus relates. Unless otherwise indicated, each of the Selling
Stockholders has sole investment and voting power with respect to shares
beneficially owned.
Number of
Name of Number of Shares Shares
Selling Stockholder Beneficially Owned Registered(1)
------------------- ------------------ -------------
John Collins (2) 10,250 (2) 3,500
J. Paul Edmondson (3) 10,439 (3) 3,189
Arthur Evans (4) 8,750 (4) 2,500
Steven W. Fickes (5) 869,645 (5) 179,425
Charles Lubochinski (6) 41,707 (6) 17,107
Elizabeth Malone (7) 3,450 (7) 2,200
James P. McDermott (8) 41,699 (8) 17,266
Thomas A. Player (9) 8,642 (9) 2,514
Michael J. Prager (10) 47,618 (10) 23,068
Alice Robison (11) 1,000 (11) 1,000
Kenneth Roman (12) 9,439 (12) 1,979
Bruce W. Schnitzer (13) 44,190 (13) 1,987
Scott D. Silverman (14) 42,581 (14) 16,581
Maurice W. Slayton (15) 7,424 (15) 3,041
David C. Smith (16) 9,815 (16) 2,355
Carol Spencer (17) 1,052 (17) 1,000
David J. Stone (18) 1,435,578 (18) 141,466
- -------------------
(1) Represents grants of Common Stock (a "Stock Award") that have been granted
pursuant to the Plan.
4
<PAGE>
(2) Mr. Collins became an officer of the Company in September 1996, and
currently serves as a Vice President of the Company. The number of shares
of Common Stock indicated as beneficially owned consists of (i) 4,000
shares of Common Stock owned of record by Mr. Collins and (ii) 6,250 shares
of Common Stock subject to a presently exercisable stock option.
(3) Mr. Edmondson has been an officer of various Company subsidiaries since
January 1993, and currently serves as an officer of various of the
Company's subsidiaries, including serving as President of Pennsylvania Life
Insurance Company. The number of shares of Common Stock indicated as
beneficially owned consists of (i) 7,250 shares of Common Stock owned of
record by Mr. Edmondson and (ii) 3,189 shares of restricted Common Stock.
(4) Mr. Evans became an officer of the Company in September 1996, and currently
serves as a Vice President of the Company. The number of shares of Common
Stock indicated as beneficially owned consists of (i) 2,500 shares of
Common Stock owned of record by Mr. Evans and (ii) 6,250 shares of Common
Stock subject to a presently exercisable stock option.
(5) Mr. Fickes has served as Chief Financial Officer and as a director of the
Company since August 1990, as President since March 21, 1996, and a Vice
Chairman of the Board from August 1990 until March 21, 1996. The number of
shares of Common Stock indicated as beneficially owned consists of (i)
192,726 shares of Common Stock owned of record by Mr. Fickes, (ii) 179,425
shares of restricted Common Stock, (iii) 279,500 shares of Common Stock
that may be purchased pursuant to presently exercisable stock options
awarded to Mr. Fickes pursuant to his Employment Agreement effective April
15, 1996, (iv) 173,160 shares of Common Stock which will be issued to Mr.
Fickes on April 15, 2001, in consideration for Mr. Fickes' interest in
Knightsbridge Capital, L.L.C. and its related entities, (v) 43,106 shares
of Common Stock held of record by Mr. Fickes' wife and (vi) 1,728 shares of
Common Stock held of record by Mr. Fickes' children. Mr. Fickes disclaims
beneficial ownership of Common Stock not held of record by him.
(6) Mr. Lubochinski became an officer of the Company on May 18, 1993, and
currently serves as a Senior Vice President of the Company. The number of
shares of Common Stock indicated as beneficially owned consists of (i)
22,000 shares of Common Stock owned of record by Mr. Lubochinski, (ii)
7,107 shares of restricted Common Stock, (iii) 12,500 shares of Common
Stock subject to a presently exercisable stock option, and (iv) 100 shares
of Common Stock held of record in a trust for the benefit of Mr.
Lubochinski's son.
(7) Ms. Malone became an officer of the Company in March 1996, and currently
serves as a Vice President of the Company. The number of shares of Common
Stock indicated as beneficially owned consists of (i) 2,200 shares of
Common Stock owned as of record by Ms. Malone and (ii) 1,250 shares of
Common Stock subject to a presently exercisable stock option.
(8) Mr. McDermott became an executive officer of the Company in September 1995,
and currently serves as a Senior Vice President of the Company. The number
of shares of Common Stock indicated as beneficially owned consists of (i)
21,933 shares of Common Stock owned of record by Mr. McDermott, (ii) 7,266
shares of restricted Common Stock and (iii) 12,500 shares of Common Stock
subject to a presently exercisable stock option.
(9) Mr. Player has been a director of the Company since August 1990. The number
of shares of Common Stock indicated as beneficially owned consists of (i)
6,128 shares of Common Stock owned of record by Mr. Player, (ii) 1,987
shares of restricted Common Stock and (iii) 527
5
<PAGE>
shares of Common Stock owned of record by Mr. Player's wife. Mr. Player
disclaims beneficial ownership of Common Stock not held of record by him.
(10) Mr. Prager became an executive officer of the Company in September 1995,
and currently serves as a Senior Vice President and Senior Financial
Officer of the Company. The number of shares of Common Stock indicated as
beneficially owned consists of (i) 22,050 shares of Common Stock owned of
record by Mr. Prager, (ii) 13,068 shares of restricted Common Stock and
(iii) 12,500 shares of Common Stock subject to a presently exercisable
stock option.
(11) Ms. Robison has been an employee of the Company since August 1992, and is
currently employed in the Bethesda, Maryland office of the Company. The
number of shares of Common Stock indicated as beneficially owned consists
of 1,000 shares of Common Stock owned of record by Ms. Robison.
(12) Mr. Roman has been a director of the Company since April 1993. The number
of shares of Common Stock indicated as beneficially owned consists of (i)
7,987 shares of Common Stock owned of record by Mr. Roman and (ii) 1,452
shares of restricted Common Stock.
(13) Mr. Schnitzer has been a director of the Company since August 1990. The
number of shares of Common Stock indicated as beneficially owned consists
of (i) 23,497 shares of Common Stock owned of record by Mr. Schnitzer, (ii)
18,706 shares owned of record by Magical Corporation, of which Mr.
Schnitzer is the sole owner and (iii) 1,987 shares of restricted Common
Stock.
(14) Mr. Silverman became an executive officer of the Company in September 1995,
and currently serves as Senior Vice President, General Counsel and
Secretary of the Company. The number of shares of Common Stock indicated as
beneficially owned consists of (i) 23,500 shares of Common Stock owned of
record by Mr. Silverman, (ii) 6,581 shares of restricted Common Stock and
(iii) 12,500 shares of Common Stock subject to a presently exercisable
stock option.
(15) Mr. Slayton has been a director of the Company since August 1990. The
number of shares of Common Stock indicated as beneficially owned consists
of (i) 5,437 shares of Common Stock owned of record by Mr. Slayton and (ii)
1,987 shares of restricted Common Stock.
(16) Mr. Smith has been a director of the Company since September 1994. The
number of shares of Common Stock indicated as beneficially owned consists
of (i) 7,987 shares of Common Stock owned of record jointly by Mr. Smith
and his wife and (ii) 1,828 shares of restricted Common Stock.
(17) Ms. Spencer has been an employee of the Company since February 1991, and is
currently employed in the Bethesda, Maryland office of the Company. The
number of shares of Common Stock indicated as beneficially owned consists
of (i) 1,000 shares of Common Stock owned of record by Ms. Spencer and (ii)
52 shares of Common Stock owned of record jointly by Ms. Spencer and her
spouse.
(18) Mr. Stone has served as Chairman of the Board and as a director of the
Company since its formation in 1989, as Chief Executive Officer since July
1, 1995, as President from July 1, 1995 until March 21, 1996 and as Chief
Marketing Officer from August 1990 until May 1993. The number of shares of
Common Stock indicated as beneficially owned consists of (i) 520,647 shares
of Common Stock held of record by Mr. Stone, (ii) 141,466 shares of
restricted Common Stock, (iii) 279,500 shares of Common Stock that may be
purchased pursuant to presently
6
<PAGE>
exercisable stock options awarded to Mr. Stone pursuant to his Employment
Agreement effective April 15, 1996, (iv) 173,160 shares of Common Stock
which will be issued to Mr. Stone on April 15, 2001, in consideration for
Mr. Stone's interest in Knightsbridge Capital, L.L.C. and its related
entities and (v) 320,805 shares of Common Stock held of record by Mr.
Stone's wife. Mr. Stone disclaims beneficial ownership of Common Stock not
held of record by him.
PLAN OF DISTRIBUTION
The shares of Common Stock may be sold from time to time to purchasers
directly by any of the Selling Stockholders. Alternatively, the Selling
Stockholders may sell the shares of Common Stock in one or more transactions
(which may involve one or more block transactions) on the NYSE, in sales
occurring in the public market off the NYSE, in separately negotiated
transactions, or in a combination of such transactions. Each sale may be made
either at market prices prevailing at the time of such sale or at negotiated
prices; some or all of the shares of Common Stock may be sold through brokers
acting on behalf of the Selling Stockholders or to dealers for resale by such
dealers; and in connection with such sales, such brokers or dealers may receive
compensation in the form of discounts or commissions from the Selling
Stockholders and/or the purchasers of such shares for whom they may act as
broker or agent (which discounts or commissions are not anticipated to exceed
those customary in the types of transactions involved). However, any securities
covered by this Prospectus which qualify for sale pursuant to Rule 144 under the
Securities Act may be sold under Rule 144 rather than pursuant to this
Prospectus. All expenses of registration incurred in connection with this
offering are being borne by the Company, but all brokerage commissions and other
expenses incurred by individual Selling Stockholders will be borne by each such
Selling Stockholder. The Company will not receive any of the proceeds from such
sales.
The Selling Stockholders and any dealer participating in the distribution
of any of the shares of Common Stock or any broker executing selling orders on
behalf of the Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, in which event any profit on the sale of any or
all of the shares of Common Stock by them and any discounts or commissions
received by any such brokers or dealers may be deemed to be underwriting
discounts and commissions under the Securities Act.
In order to comply with the securities laws of certain states, if
applicable, the shares of Common Stock will be sold only through registered or
licensed brokers or dealers. In addition, in certain states, the shares of
Common Stock may not be sold unless they have been registered or qualified for
sale in such state or an exemption from such registration or qualification
requirement is available and is complied with.
There is no assurance that any of the Selling Stockholders will sell all
or any portion of the shares of Common Stock offered hereby.
LEGAL MATTERS
The validity of the Common Stock has been passed upon for the Company by
Scott D. Silverman, Senior Vice President, General Counsel and Secretary of the
Company. As of March 25, 1998, Mr. Silverman held 23,500 shares of Common Stock,
6,581 shares of restricted Common Stock and options to purchase an aggregate of
60,000 shares of Common Stock.
7
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents are incorporated by reference in this Registration
Statement:
(a) The Company's Annual Report on Form 10-K (File No. 1-11422) for the
year ended December 31, 1996, as amended by Forms 10-K/A (Amendments Nos. 1, 2,
3 and 4), filed pursuant to Section 13 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), which contains audited financial statements for
the year ended December 31, 1996.
(b) All other reports filed by the Company pursuant to Section 13(a) or
15(d) of the Exchange Act since the end of the fiscal year covered by the Annual
Report referred to in (a) above.
(c) The description of the Company's Common Stock, which is contained in
the Company's Registration Statement on Form 8-A (File No. 1-11422) filed under
Section 12(b) of the Exchange Act, including any amendments or reports filed for
the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment to this Registration Statement that indicates that all
of the shares of Common Stock offered have been sold or which deregisters all of
such shares then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained herein or in any other subsequently filed document modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Registration Statement.
Item 4. Description of Securities.
Not applicable.
II-1
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Certain legal matters in connection with the shares of Common Stock
offered pursuant to the Plan have been passed upon for the Company by Scott D.
Silverman, Senior Vice President, General Counsel and Secretary of the Company.
As of March 25, 1998, Mr. Silverman held 23,500 shares of Common Stock, 6,581
shares of restricted Common Stock and options to purchase an aggregate of 60,000
shares of Common Stock.
Item 6. Indemnification of Directors and Officers.
Delaware law authorizes corporations to limit or to eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The Company's
Certificate of Incorporation limits the liability of the Company's directors to
the Company or its stockholders to the fullest extent permitted by the Delaware
statute as in effect from time to time. Specifically, directors of the Company
will not be personally liable for monetary damages for breach of a director's
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Company or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in the Delaware law, or (iv) for any
transaction from which the director derived an improper personal benefit.
The Certificate of Incorporation of the Company provides that the Company
shall indemnify its officers and directors and former officers and directors to
the fullest extent permitted by the General Corporation Law of the State of
Delaware. Pursuant to the provisions of Section 145 of the General Corporation
Law of the State of Delaware, the Company has the power to indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Company) by reason of the fact that the person is or was a director, officer,
employee, or agent of the Company, or is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by the person in connection with such action,
suit or proceeding if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interest of the Company,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe the person's conduct was unlawful. The termination of any action,
suit or proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which the person
reasonable believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that the person's conduct was unlawful.
II-2
<PAGE>
The power to indemnify applies to actions brought by or in the right of
the Company as well, but only to the extent of defense and settlement expenses
and not to any satisfaction of a judgment or settlement of the claim itself, and
with the further limitation that in such actions no indemnification shall be
made in the event such person shall have been adjudged to be liable to the
Company unless and only to the extent that the court determines that, in view of
all the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses the court shall deem proper.
The statute further specifically provides that the indemnification
authorized thereby shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any bylaw, agreement, vote of stockholders or disinterested directors, or
otherwise.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the provisions referred to above, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer, or controlling person of the Company 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 Company 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
Item 7. Exemption from Registration Claimed.
The 420,178 shares of Common Stock that were issued as restricted
securities to be reoffered or resold pursuant to this Registration Statement
were issued in transactions completed without registration in reliance upon the
exemption provided by Section 4(2) of the Securities Act for transactions not
involving a public offering.
Item 8. Exhibits.
4.1 Third Restated Certificate of Incorporation of PennCorp Financial Group,
Inc.*
4.2 Certificate of Designation of $3.375 Convertible Preferred Stock of
PennCorp Financial Group, Inc. (Incorporated by reference to the Company's
Annual Report on Form 10- K for the year ended December 31, 1995).
II-3
<PAGE>
4.3 Certificate of Designation of Series C Preferred Stock of PennCorp
Financial Group, Inc. (Incorporated by reference to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995).
4.4 Certificate of Designation of $3.50 Series II Convertible Preferred Stock
of PennCorp Financial Group, Inc. (Incorporated by reference to the
Company's Registration Statement on Form S-3 (Registration No. 333-13285),
as filed with the Securities and Exchange Commission on October 2, 1996).
4.5 Restated By-laws of PennCorp Financial Group, Inc. (Incorporated by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1992).
4.6 PennCorp Financial Group, Inc. 1996 Stock Award and Stock Option Plan.
(Incorporated by reference to the Company's Annual Report on Form 10-K for
the year ended December 31, 1996).
4.7 Amendment Number One to the PennCorp Financial Group, Inc. 1996 Stock Award
and Stock Option Plan.*
5.1 Opinion of Scott D. Silverman.*
15.1 Letter from KPMG Peat Marwick LLP regarding unaudited interim financial
information.*
23.1(a) Consent of KPMG Peat Marwick LLP.*
23.1(b) Consent of KPMG Peat Marwick LLP.*
23.2 Consent of Scott D. Silverman (included in Exhibit 5.1).
24.1 Power of Attorney (see pages II-6 and II-7 of this Registration Statement).
- ----------------
* Filed herewith.
Item 9. Undertakings.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration
Statement to include any
II-4
<PAGE>
material information with respect to the plan of distribution
not previously disclosed in this Registration Statement or any
material change to such information in this Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment 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.
(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) The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or 15(d) of the Exchange Act that is incorporated by
reference in this Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company pursuant to the foregoing provisions, or otherwise, the Company
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer, or controlling person of the Company 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 Company 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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
II-5
<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-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, State of New York, on this 23rd day of
March, 1998.
PENNCORP FINANCIAL GROUP, INC.
By: /s/ David J. Stone
--------------------------------------------
David J. Stone
Chairman of the Board and
Chief Executive Officer
Each person whose signature to this Registration Statement appears below
hereby appoints Scott D. Silverman as his attorney-in-fact to sign on his behalf
individually and in the capacity stated below and to file all post-effective
amendments to this Registration Statement, which amendments may make such
changes in and additions to this Registration Statement as such attorney-in-fact
may deem necessary or appropriate.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ David J. Stone
- ---------------------- Chairman of the Board, Chief March 23, 1998
David J. Stone Executive Officer and Director
(Principal Executive Officer of
the Registrant)
/s/ Steven W. Fickes
- ---------------------- President, Chief Financial Officer March 23, 1998
Steven W. Fickes Director (Principal Financial and
Accounting Officer of the Registrant)
/s/ Allan D. Greenberg
- ---------------------- Director March 23, 1998
Allan D. Greenberg
/s/ Thomas A. Player
- ---------------------- Director March 23, 1998
Thomas A. Player
II-6
<PAGE>
/s/ Kenneth Roman
- ---------------------- Director March 23, 1998
Kenneth Roman
/s/ Bruce W. Schnitzer
- ---------------------- Director March 23, 1998
Bruce W. Schnitzer
/s/ Maurice W. Slayton
- ---------------------- Director March 23, 1998
Maurice W. Slayton
/s/ David C. Smith
- ---------------------- Director March 23, 1998
David C. Smith
</TABLE>
II-7
<PAGE>
Exhibit Index
Sequentially
Exhibit Numbered
No. Description Page
- ------- ----------- ------------
4.1 Third Restated Certificate of Incorporation of PennCorp Financial
Group, Inc.
4.2 Certificate of Designation of $3.375 Convertible Preferred Stock
of PennCorp Financial Group, Inc. (Incorporated by reference to
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
4.3 Certificate of Designation of Series C Preferred Stock of
PennCorp Financial Group, Inc. (Incorporated by reference to the
Company's Annual Report on Form 10-K for the year ended December
31, 1995).
4.4 Certificate of Designation of $3.50 Series II Convertible
Preferred Stock of PennCorp Financial Group, Inc. (Incorporated
by reference to the Company's Registration Statement on Form S-3
(Registration No. 333-13285), as filed with the Securities and
Exchange Commission on October 2, 1996).
4.5 Restated By-laws of PennCorp Financial Group, Inc. (Incorporated
by reference to the Company's Annual Report on Form 10-K for the
year ended December 31, 1992).
4.6 PennCorp Financial Group, Inc. 1996 Stock Award and Stock Option
Plan. (Incorporated by reference to the Company's Annual Report
on Form 10-K for the year ended December 31, 1996).
4.7 Amendment Number One to the PennCorp Financial Group, Inc. 1996
Stock Award and Stock Option Plan.
5.1 Opinion of Scott D. Silverman.
15.1 Letter from KPMG Peat Marwick LLP regarding unaudited interim
financial information.
23.1(a) Consent of KPMG Peat Marwick LLP.
23.1(b) Consent of KPMG Peat Marwick LLP.
23.2 Consent of Scott D. Silverman (included in Exhibit 5.1).
24.1 Power of Attorney (see pages II-6 and II-7 of this Registration
Statement).
EXHIBIT 4.1
THIRD RESTATED CERTIFICATE OF INCORPORATION
OF
PENNCORP FINANCIAL GROUP, INC.
The undersigned, being the President and Chief Executive officer of
PennCorp Financial Group, Inc., a Delaware corporation, hereby certifies that:
1. (a) The name of the corporation is PENNCORP FINANCIAL GROUP, INC. (the
"Corporation").
(b) The name under which the Corporation was originally incorporated is PCF
Acquisition Company and the date of filing the original certificate of
Incorporation of the Corporation with the Secretary of State of the State of
Delaware was September 18, 1989.
2. This Third Restated Certificate of Incorporation restates and
integrates, but does not further amend, the provisions of the Second Restated
Certificate of Incorporation of the Corporation, as amended, and was duly
adopted by the Board of Directors of the Corporation in accordance with the
provisions of Section 245 of the General Corporation Law of the State of
Delaware. There are no discrepancies between those provisions of the Second
Restated Certificate of Incorporation, as amended, and this Third Restated
Certificate of Incorporation.
3. The Certificate of Incorporation of the Corporation, as restated hereby,
shall, upon its filing with the Secretary of State of the State of Delaware,
read in its entirety as follows:
ARTICLE I
Name
SECTION 1.1 Name. The name of the corporation is PennCorp Financial Group,
Inc.
ARTICLE II
Registered Office and Registered Agent
SECTION 2.1 Office and Agent. The registered office of the Corporation in
the State of Delaware is located at 1013 Centre Road, in the City of Dover,
County of
<PAGE>
Kent. The name of the registered agent of the Corporation at such address is The
Prentice-Hall Corporation System, Inc.
ARTICLE III
Corporate Purposes
SECTION 3.1 Purpose. The purpose for which the Corporation is organized is
to engage in any and all lawful acts and activities for which corporations may
be organized under the General Corporation Law of the State of Delaware. The
Corporation will have perpetual existence.
ARTICLE IV
Capitalization
SECTION 4.1 (a) Authorized Capital. The total number of shares of all
classes of stock which the Corporation shall have the authority to issue is:
(1) 10,000,000 shares of preferred stock, par value $.01 per
share, of the Corporation (the "Preferred Stock"); and
(2) 100,000,000 shares of common stock, par value $.01 per share
(the "Common Stock").
SECTION 4.2 Preferred Stock. (a) The Preferred Stock may be issued from
time to time in one or more classes or series, the shares of such class or
series to have such designations, powers, preferences, rights, qualifications,
limitations, and restrictions as shall hereafter be stated and expressed herein
or in the resolution or resolutions providing for the issue of such Preferred
Stock from time to time adopted by the board of directors of the Corporation
pursuant to authority so to do which is hereby granted to and vested in the
board of directors to the fullest extent permitted by the Delaware General
Corporation Law, as amended from time to time.
(b) The shares of each class or series of the Preferred Stock may vary from
the shares of any other class or series thereof in any or all of the foregoing
respects. The board of directors of the Corporation may increase the number of
shares of the Preferred Stock designated for any existing class or series by a
resolution adding to such class or series authorized and unissued shares of the
Preferred Stock not designated for any other class or series. The board of
directors of the Corporation may decrease the number of shares of the Preferred
Stock designated for any existing class or series (but not below the number of
shares
2
<PAGE>
of such class or series then outstanding) by a resolution subtracting from such
class or series authorized and unissued shares of the Preferred Stock designated
for such existing class or series, and the shares so subtracted shall become
authorized, unissued, and undesignated shares of the Preferred Stock.
SECTION 4.3 Designation of Convertible Preferred Stock. (a) Pursuant to the
foregoing, there is hereby designated a series of Preferred Stock designated as
"Mandatory Redeemable Convertible Preferred Stock" and the number of shares
constituting such series shall be 600,000. Such series is referred to herein as
the "Convertible Preferred Stock" and shall have the terms set forth below.
(b) Rank. All shares of Convertible Preferred Stock shall rank prior, both
as to payment of dividends and as to distributions of assets upon liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
to all the Corporation's now or hereafter issued Common Stock and to any other
shares of stock of the Corporation ranking junior to the Convertible Preferred
Stock with respect to dividends (the "Junior Dividend Stock") or with respect to
liquidation rights ("Junior Liquidation Stock" and, together with Common Stock
and the Junior Dividend Stock, the "Junior Stock").
(c) Dividends. The holders of Convertible Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds at
the time legally available therefor, an annual cash dividend of $1.84375 per
share, and no more, which shall be fully cumulative, shall accrue without
interest from the date of first issuance of any shares of Convertible Preferred
Stock and shall be payable quarterly in arrears on March 31, June 30, September
30 and December 31 of each year, commencing December 31, 1992, except that if
any such date is a Saturday, Sunday or legal holiday, then such dividend shall
be payable on the next day that is not a Saturday, Sunday or legal holiday, to
holders of record as they appear on the stock transfer books of the Corporation
on such record dates, not more than 60 days nor less than 10 days preceding the
payment dates for such dividends, as are fixed by the board of directors (or, to
the extent permitted by applicable law, a duly authorized committee thereof).
For purposes hereof, the term "legal holiday" means any day on which banking
institutions are authorized to close in New York City, New York or in Raleigh,
North Carolina. Subject to the next paragraph of this Section 4.3, dividends in
arrears for any past dividend period may be declared and paid at any time,
without reference to any regular dividend payment date. The amount of dividends
payable per share of Convertible Preferred Stock for each quarterly dividend
period shall be computed by dividing the annual dividend amount by four. The
amount of dividends payable for the period from the first date of issuance and
registration of the shares of Convertible Preferred Stock by the transfer agent
and registrar therefor through
3
<PAGE>
December 31, 1992, and any period shorter than a full quarterly dividend period
shall be computed on the basis of a 360-day year of twelve 30-day months.
The Corporation shall not declare, pay or set apart for payment any
dividends or other distributions on, and the Corporation shall not purchase,
redeem or acquire, or set apart funds for the purchase or redemption (through a
sinking fund or otherwise), of, any shares of Junior Stock unless and until 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. Nothing herein to
the contrary, however, shall prohibit the Corporation from declaring, paying or
setting apart for payment any dividend or distribution in respect of Junior
Stock payable solely in shares of Junior Stock or options, warrants or rights to
subscribe for or purchase, or securities convertible into or exchangeable for
shares of Junior Stock.
If at any time the Corporation shall fail to pay or declare and set apart
for payment the full amount of accrued and unpaid dividends on any class or
series of capital stock of the Corporation ranking senior as to dividends to the
Convertible Preferred Stock (the "Senior Dividend Stock") then (except to the
extent allowed by the terms of such Senior Dividend Stock) no dividend shall be
paid or declared and set apart for payment on the Convertible Preferred Stock
unless and until all accrued and unpaid dividends with respect to the Senior
Dividend Stock, including the full dividend for the then current dividend
period, shall have been paid or declared and set apart for payment, without
interest.
No full dividends shall be paid or declared and set apart for payment on
any class or series of the Corporation's capital stock ranking, as to dividends,
on a parity with the Convertible Preferred Stock (the "Parity Dividend Stock")
for any period unless the Corporation has paid or declared and set apart for
payment or contemporaneously pays or declares and sets apart for payment all
accrued and unpaid dividends on the Convertible Preferred Stock for all dividend
payment periods terminating on or prior to the date of payment of such full
cumulative dividends on the Parity Dividend Stock. No full dividends shall be
paid or declared and set apart for payment on the Convertible Preferred Stock
for any period unless the Corporation has paid or declared and set apart for
payment or contemporaneously pays or declares and sets apart for payment on the
Parity Dividend Stock for all dividend periods terminating on or prior to the
date of payment of such full cumulative dividends on the Convertible Preferred
Stock. When accrued and unpaid dividends are not paid in full upon the
Convertible Preferred Stock or any Parity Dividend Stock, dividends may be
declared on the Convertible Preferred Stock and such Parity Dividend stock
provided such dividends are paid or declared and set aside for payment upon
shares of Convertible Preferred Stock and the Parity Dividend Stock pro rata so
that the amount of dividends paid or declared and set aside
4
<PAGE>
for payment per share on the Convertible Preferred Stock and the Parity Dividend
Stock shall in all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the shares of Convertible Preferred Stock and the
Parity Dividend Stock bear to each other.
Any reference to "distribution" contained in this Section 4.3 shall not be
deemed to include any distribution made in connection with any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary.
(d) Liquidation Preference. In the event of a liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Convertible Preferred Stock shall be entitled to receive out of the assets of
the Corporation, whether such assets are stated capital or surplus of any
nature, an amount equal to the dividends accrued and unpaid thereon to the date
of payment to such holders, whether or not declared, without interest, and a sum
equal to $25.00 per share, and no more, before any payment shall be made or
any-assets distributed to the holders of Common Stock or any other class or
series of Junior Stock; provided, however, that holders of Convertible Preferred
Stock shall be entitled to receive such liquidation preference only after the
Corporation pays in full the liquidation preferences of the holders of any other
class or series of capital stock of the Corporation ranking senior as to
liquidation rights to the Convertible Preferred Stock (the "Senior Liquidation
Stock"). The entire assets of the corporation available for distribution after
the liquidation preferences of the Senior Liquidation Stock have been paid in
full shall be distributed ratably among the holders of the Convertible Preferred
Stock and any other class or series of the Corporation's capital stock which may
hereafter be created having parity as to liquidation rights with the Convertible
Preferred Stock (the "Parity Liquidation Stock") in proportion to the respective
preferential amounts to which each such class or series is entitled (but only to
the extent of such preferential amounts). After payment in full of the
liquidation preference of the shares of Convertible Preferred Stock, the holders
of Convertible Preferred stock will not be entitled to any further participation
in any distribution of assets of the Corporation and shall cease to have any
further rights as stockholders of the Corporation. Neither a consolidation or
merger of the Corporation with one or more corporations or other entities nor a
sale, lease, exchange or transfer of all or any part of the Corporation's assets
for cash, securities or other property will be considered a liquidation,
dissolution or winding up of the Corporation.
(e) Redemption at Option of the Corporation. The Corporation may not redeem
the Convertible Preferred Stock prior to October 1, 1995. The Corporation, at
its option, may at any time on or after October 1, 1995, redeem in whole at any
time, or from time to time in part, the Convertible Preferred Stock on any date
set by the board of directors,
5
<PAGE>
at the following cash redemption prices per share if redeemed during the
twelve-month period beginning October 1 of the year specified below:
Year Redemption Price
1995 $26.00
1996 25.75
1997 25.50
1998 25.25
1999 and thereafter 25.00
plus, in each case, an amount in cash equal to all dividends on the Convertible
Preferred Stock accrued and unpaid thereon, whether or not declared, to the date
fixed for redemption, such sum being hereinafter referred to as the "Redemption
Price."
In case of the redemption of less than all the then outstanding shares of
Convertible Preferred Stock, the Corporation shall designate by lot, or in such
other manner as the board of directors may determine, the shares to be redeemed,
or shall effect such redemption pro rata among the then outstanding shares.
Notwithstanding the foregoing, the Corporation shall not redeem less than all
the Convertible Preferred Stock at any time outstanding until all dividends
accrued and in arrears upon all Convertible Preferred Stock then outstanding
shall have been paid in full.
Not more than 60 nor less than 30 days prior to the redemption date, notice
by first class mail, postage.prepaid, shall be given to the holders of record of
the Convertible Preferred Stock to be redeemed, addressed to such stockholders
at their last addresses as shown on the stock transfer books of the Corporation.
Each such notice of redemption shall specify the date fixed for redemption; the
Redemption Price; the place or places of payment; that payment will be made upon
presentation and surrender of the shares of Convertible Preferred Stock; that on
and after the redemption date, dividends will cease to accumulate on such
shares; the then effective conversion rate pursuant to paragraph (g); that the
right of holders to convert shall terminate at the close of business on the
redemption date; and that on and after the redemption date, all other rights of
the holders of shares of Convertible Preferred Stock to be redeemed shall cease,
except the right to receive the Redemption Price without interest (unless the
Company defaults in the payment of the Redemption Price).
Any notice which is mailed as herein provided shall be conclusively
presumed to have been duly given, whether or not the holder of the Convertible
Preferred Stock receives
6
<PAGE>
such notice; and failure to give such notice by mail, or any defect in such
notice, to the holders of any shares designated for redemption shall not affect
the validity of the proceedings for the redemption of any other shares of
Convertible Preferred Stock. On or after the redemption date as stated in such
notice, each holder of the shares called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the place designated in
such notice and shall thereupon be entitled to receive payment of the Redemption
Price. If less than all the shares evidenced by any such surrendered certificate
are to be redeemed, a new certificate shall be issued evidencing the unredeemed
shares. If, on the redemption date, funds necessary for the redemption shall
have been irrecoverably deposited or set aside, then, notwithstanding that the
certificates evidencing any shares so called for redemption shall not have been
surrendered, the dividends with respect to the shares so called shall cease to
accrue after the redemption date, the shares shall no longer be deemed
outstanding, the holders thereof shall cease to be stockholders and all rights
whatsoever with respect to the shares so called for redemption (except the right
of the holders to receive the Redemption Price without interest upon surrender
of their certificates therefor) shall terminate.
(f) Mandatory Redemption. On October 1, 2000, the Corporation shall redeem
the entire number of shares of Convertible Preferred Stock then outstanding at a
redemption price per share of $25.00 plus an amount per share equal to the full
accumulated dividends (whether or not earned or declared) to the mandatory date
of redemption.
The redemption of the Convertible Preferred Stock pursuant to this
paragraph (f) shall be accomplished in a similar manner and with a similar
effect as set forth in paragraph (e).
(g) Conversion Privilege.
(1) Right of Conversion. Each share of Convertible Preferred Stock
shall be convertible at the option of the holder thereof, at any time prior
to the close of business on any redemption date fixed for such share as
herein provided (unless the Corporation defaults in the payment of the
Redemption Price, in which case the right of conversion shall be
reinstated), into fully paid and nonassessable shares of Common Stock and
such other securities and property as hereinafter provided, initially at
the rate of 1.488095 shares of common Stock for each full share of
Convertible Preferred Stock. The initial conversion price per share of
Common Stock is $16.80.
For the purpose of this Section 4.3, the term "Common Stock" shall
initially mean the Common Stock of the Corporation, subject to adjustment
as hereinafter provided.
7
<PAGE>
(2) Conversion Procedures. Any holder of shares of Convertible
Preferred Stock desiring to convert such shares into Common Stock
shall surrender the certificate or certificates evidencing such shares
of Convertible Preferred Stock at the office of the transfer agent for
the Convertible Preferred Stock, which certificate or certificates, if
the Corporation shall so require, shall be duly endorsed to the
Corporation or in blank, or accompanied by proper instruments of
transfer to the Corporation or in blank, accompanied by irrevocable
written notice to the Corporation that the holder elects so to convert
such number of shares of Convertible Preferred Stock and specifying
the name or names (with address) in which a certificate or
certificates evidencing shares of Common Stock are to be issued.
In the case of any share of Convertible Preferred Stock that is
converted after any record date with respect to the payment of a
dividend on the Convertible Preferred Stock and on or prior to the
corresponding dividend payment date, the dividend due on such dividend
payment date shall be payable to the holder of record of such share as
of such record date notwithstanding such conversion on or prior to the
dividend payment date. Except as provided in this paragraph, no
payment or adjustment shall be made upon any conversion on account of
any dividends accrued on shares of Convertible Preferred Stock
surrendered for conversion or on account of any dividends on the
Common Stock issued upon conversion.
The Corporation shall, as soon as practicable after such
surrender of certificates evidencing shares of Convertible Preferred
Stock accompanied by the written notice of conversion and compliance
with any other conditions herein contained, deliver at the office of
such transfer agent to the person for whose account such shares of
Convertible Preferred Stock were so surrendered, or to the nominee or
nominees of such person, certificates evidencing the number of full
shares of Common Stock to which such person shall be entitled as
aforesaid, together with a payment in cash in respect of any
fractional share of Common Stock to which such person otherwise would
be entitled, as hereinafter provided. Subject to the following
provisions of this paragraph, such conversion shall be deemed to have
been made as of the date of such surrender of the shares of
Convertible Preferred Stock to be converted so that the rights of the
holder thereof as to the shares being converted shall cease except for
the right to receive shares of Common Stock in accordance herewith,
and the person entitled to receive the Common Stock shall be treated
for all purposes as the record holder or holders of such Common Stock
on such date; provided, however, that the Corporation shall not be
required to convert any shares of Convertible Preferred stock while
the stock transfer books of the Corporation are closed for any
purpose, but the surrender of Convertible Preferred Stock for
conversion during any period while such books are so closed shall
become effective for conversion immediately upon the reopening of such
books as if the surrender had been made on the date of such reopening,
and the conversion shall be at the conversion rate in effect on such
date.
8
<PAGE>
(3) Adjustment of Conversion Rate. The number of shares of Common
Stock and number and amount of any other securities and/or property as
hereinafter provided into which a share of Convertible Preferred Stock
is convertible (the "conversion rate") shall be subject to adjustment
from time to time as follows:
(i) In case the Corporation shall pay a dividend or make a
distribution on its Common Stock that is paid or made in shares
of Common Stock, (2) subdivide its outstanding shares of Common
Stock into a greater number of shares or (3) combine its
outstanding shares of Common Stock into a smaller number of
shares, then in each such case the conversion rate in effect
immediately prior thereto shall be adjusted by multiplying the
conversion rate immediately prior to such transaction by a
fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which shall be number of shares of Common Stock
that were outstanding immediately before such event. An
adjustment made pursuant to this clause (i) shall become
effective (a) in the case of any such dividend or distribution,
immediately after the close of business of the record date for
the determination of holders of shares of Common Stock entitled
to receive such dividend or distribution or (b) in the case of
any such subdivision, reclassification or combination, at the
close of business on the day upon which such corporate action
becomes effective.
(ii) In case the Corporation shall issue rights or warrants
to all holders of its Common Stock entitling them to subscribe
for or purchase shares of Common Stock at a price per share less
than the current market price per share (determined as provided
below) of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights or
warrants, then the conversion rate in effect at the opening of
business on the day following the date fixed for such
determination shall be increased by multiplying such conversion
rate by a fraction of which (A) the numerator shall be the sum of
(i) the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus (ii)
the number of shares of Common Stock so offered for subscription
or purchase and (B) the denominator shall be the sum of (i) the
number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus (ii) the
number of shares of Common Stock which the aggregate of the
offering price of the total number of shares of Common Stock so
offered for subscription or purchase would purchase at such
current market price, such increase to become effective
immediately after the opening of business on the day following
the date fixed for such determination; provided, however, that in
the event that all the shares of Common Stock offered for
subscription or purchase are not delivered upon
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the exercise of such rights or warrants, upon the expiration of
such rights or warrants the conversion rate shall be readjusted
to the conversion rate which would have been in effect had the
numerator and the denominator of the foregoing fraction and the
resulting adjustment been made based upon the number of shares of
Common Stock actually delivered upon the exercise of such rights
or warrants, rather than upon the number of shares of Common
Stock offered for subscription or purchase. For the purposes of
this subparagraph (ii), the number of shares of Common stock at
any time outstanding shall not include shares held in the
treasury of the Corporation. Notwithstanding anything herein to
the contrary, the issuance of any shares of Common Stock (whether
treasury shares or newly issued shares), or rights or warrants to
purchase Common Stock, pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of
the Corporation, and the investment of additional optional
amounts, in shares of Common stock or pursuant to any employee
benefit or stock option plan or program of the Corporation or
pursuant to any option, warrant, or right outstanding on the date
hereof, shall not be deemed to constitute an issuance of Common
Stock or rights or warrants to purchase Common Stock to which
this clause (ii) applies.
(iii) In case the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness, cash (excluding ordinary cash
dividends paid out of retained earnings of the Corporation),
other assets or rights or warrants to subscribe for or purchase
any security (excluding those referred to in subparagraphs (i)
and (ii) above), then in each such case the conversion rate shall
be adjusted retroactively so that the adjusted conversion rate
shall equal the rate determined by multiplying the conversion
rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator
shall be the current market price per share (determined as
provided below) of the Common Stock on the date fixed for such
determination and the denominator shall be such current market
price per share of the Common Stock less the amount of cash and
the then fair market value (as determined by the board of
directors, whose determination shall be conclusive and described
in a resolution of the board of directors) of the portion of the
assets, rights or evidences of indebtedness so distributed
applicable to one share of Common Stock, such adjustment to
become effective immediately prior to the opening of business on
the day following the date fixed for the determination of
stockholders entitled to receive such distribution.
(iv) For the purpose of any computation under subparagraphs
(ii) and (iii), the current market price per share of Common
stock on any date shall be deemed to be the average of the daily
closing prices for the 20 consecutive trading days selected
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by the Board of Directors commencing no more than 30 trading days
before the day in question. The closing price for each day shall
be the last reported sale price, or, in case no such reported
sale takes place on such day, the closing bid price, in either
case on the New York Stock Exchange or, if the Common Stock is
not listed or admitted to trading on such exchange, on the
principal national securities exchange on which the Common Stock
is listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the NASDAQ
National Market System or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted
on the NASDAQ National Market System, the closing bid price in
the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the
Corporation for that purpose or, if such prices are not
available, the fair market value set by, or in a manner
established by, the board of directors of the Corporation in good
faith. "Trading day" means a day on which the national securities
exchange or the NASDAQ National Market System used to determine
the closing price is open for the transaction of business or the
reporting of trades or, if the closing price is not so
determined, a day on which the New York Stock Exchange is open
for the transaction of business.
(v) No adjustment in the conversion rate shall be required
unless such adjustment would require an increase or decrease of
at least 1% in such rate; provided, however, that the Corporation
may make any such adjustment at its election; and provided,
further, that any adjustments which by reason of this
subparagraph (v) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this paragraph (3) shall be made to the
nearest cent or to the nearest one-hundredth of a share, as the
case may be.
(vi) The Corporation may make such increases in the
conversion rate, in addition to those required or allowed by this
paragraph (3), as shall be determined by it, as evidenced by a
resolution of the board of directors, to be advisable to avoid or
diminish any income tax to holders of Common Stock resulting from
any dividend or distribution of stock or issuance of rights or
warrants to purchase or subscribe for stock or from any event
treated as such for income tax purposes.
(vii) Whenever the conversion rate is required to be
adjusted as provided in any provision of this paragraph 3:
a. the Corporation shall compute the adjusted
conversion rate in accordance with this paragraph 3 and
shall prepare a certificate signed by the principal
financial officer of the Corporation
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setting forth the adjusted conversion rate and showing in
reasonable detail the facts upon which such adjustment is
based and such certificate shall forthwith be filed with the
transfer agent of the Convertible Preferred Stock; and
b. the Corporation shall prepare as promptly as
practicable after such adjustment, and shall mail a notice
stating that the conversion rate has been adjusted and
setting forth the adjusted conversion rate to all record
holders of Convertible Preferred Stock at their last
addresses as they shall appear in the stock transfer books
of the Corporation.
(viii) In the event that at any time, as a result of any
adjustment made pursuant to this paragraph (3), the holder of any
shares of Convertible Preferred Stock thereafter surrendered for
conversion shall become entitled to receive any shares of the
Corporation other than shares of Common Stock or to receive any
other securities, the number of such other shares or securities
so receivable upon conversion of any share of Convertible
Preferred Stock shall be subject to adjustment from time to time
in a manner and on terms as nearly equivalent as practicable to
the provisions contained in this paragraph (3) with respect to
the Common Stock.
(4) No Fractional Shares. No fractional shares or scrip
representing fractional shares of Common Stock shall be issued upon
conversion of Convertible Preferred Stock. If more than one
certificate evidencing shares of Convertible Preferred Stock shall be
surrendered for conversion at one time by the same holder, the number
of full shares issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of Convertible Preferred
Stock so surrendered. Instead of any fractional share of Common Stock
which would otherwise be issuable upon conversion of any shares of
Convertible Preferred Stock, the Corporation shall pay a cash
adjustment in respect of such fractional interest in an amount equal
to the same fraction of the market price per share of Common Stock (as
determined by the Board of Directors or in any manner prescribed by
the Board of Directors, which, so long as the Common Stock is listed
on the New York Stock Exchange, shall be the last reported sale price
on the New York Stock Exchange) at the close of business on the date
of conversion.
(5) Reclassification, Consolidation, Merger or Sale of Assets. In
case of any reclassification of the Common Stock, any consolidation of
the Corporation with, or merger of the Corporation into, any other
person, any merger of another person into the Corporation (other than
a merger which does not result in any reclassification, conversion,
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exchange or cancellation of outstanding shares of Common Stock of the
Corporation), any sale, lease, exchange or transfer of all or
substantially all the assets of the Corporation, then lawful provision
shall be made as part of the terms of such transaction whereby the
holder of each share of Convertible Preferred Stock then outstanding
shall have the right thereafter, during the period such share of
Convertible Preferred Stock shall be convertible, to convert such
share only into the kind and amount of securities, cash and other
property receivable upon such reclassification, consolidation, merger,
sale, or transfer by a holder of the number of shares of Common Stock
of the Corporation into which such share of convertible Preferred
Stock might have been converted immediately prior to such
reclassification, consolidation, merger, sale or transfer. The
Corporation, the person formed by such consolidation or resulting from
such merger or which acquires such assets or which acquires the
Corporation's shares, as the case may be, shall make provision in its
certificate or articles of incorporation or other constituent document
to establish the right set forth in the immediately preceding
sentence. Such certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events
subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be as nearly
equivalent as may be practicable to the adjustments provided for in
this paragraph (5). The above provisions shall similarly apply to
successive reclassifications, consolidations, mergers, sales or
transfers.
(6) Reservation of Shares; Transfer Taxes; Etc. The Corporation
shall at all times reserve and keep available, out of its authorized
stock, solely for the purpose of effecting the conversion of the
Convertible Preferred Stock, such number of shares of its Common Stock
free of preemptive or similar rights as shall from time to time be
sufficient to effect the conversion of all shares of Convertible
Preferred Stock from time to time outstanding. The Corporation shall
from time to time, in accordance with the laws of the State of
Delaware, increase the authorized number of shares of Common Stock if
at any time the number of authorized and unissued shares of Common
Stock shall not be sufficient to permit the conversion of all the then
outstanding shares of Convertible Preferred Stock.
The Corporation shall pay any and all documentary stamp or
similar issue or transfer taxes that may be payable in respect of the
issue or delivery of shares of Common Stock on conversion of the
Convertible Preferred Stock. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Stock (or other
securities or assets) in a name other than that of the record holder
of the shares to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has
paid to the Corporation the amount of such tax or has established, to
the satisfaction of the Corporation, that such tax has been paid.
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(7) Prior Notice of Certain Events. In case
(i) the Corporation shall take any action that would result
in an adjustment to the conversion rate; or
(ii) of any consolidation, merger or share exchange to which
the Corporation is a party and for which approval of any
stockholders of the Corporation is required, or of the sale or
transfer of all or substantially all the assets of the
Corporation; or
(iii) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent
for the Convertible Preferred Stock, and shall cause to be mailed to
the holders of record of the Convertible Preferred Stock, at their
last addresses as they shall appear upon the stock transfer books of
the Corporation, at least 15 days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record
(if any) is to be taken for the purpose of determining the holders of
Common Stock entitled to such dividend, distribution, redemption,
repurchase or granting of rights or warrants or, if a record is not to
be taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution, redemption, repurchase
or granting of rights or warrants are to be determined or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up (but no failure to mail such notice or any
defect therein or in the mailing thereof shall affect the validity of
the corporate action required to be specified in such notice).
(h) Optional Repurchase Rights of Holders Upon Change of Control.
(1) Change in Control. Upon the occurrence of a Change of Control (as
defined in subparagraph (5)(ii) below) with respect to the Corporation,
each holder of Convertible Preferred Stock shall have the right, at the
holder's option, for a period of 45 days after the mailing of the
Repurchase Notice described in paragraph (2) below, to require the
Corporation to redeem all or any portion of such holder's Convertible
Preferred Stock at the Repurchase Price (as defined in subparagraph (5)(iv)
below) (the "Repurchase Right").
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(2) Notice. Within 30 days after the occurrence of a Change of Control
with respect to the Corporation, the Corporation shall mail (first class,
postage prepaid) to each registered holder of Convertible Preferred Stock,
addressed to such holder at its last address as shown on the stock transfer
books of the Corporation, a notice of such occurrence (the "Repurchase
Notice") stating the following:
(i) that a Change of Control has occurred and that each holder of
outstanding shares of Convertible Preferred Stock has the right, for a
45-day period commencing on the date on which the Repurchase Notice is
sent (the last day of such 45-day period being the "Demand Date"), to
require the Corporation to repurchase, subject to the legal
availability of surplus of the Corporation, all or any part of the
Convertible Preferred Stock owned by such holder for the Repurchase
Price;
(ii) such other information as may be required by applicable law
and regulations; and
(iii) the instructions determined by the Corporation that a
holder must follow in order to require repurchase of the Convertible
Preferred Stock on the Repurchase Date (as defined in subparagraph
(5)(iii) below).
(3) Payment of Repurchase Price. The Repurchase Price for shares of
Convertible Preferred Stock to be repurchased on any Repurchase Date shall
be payable in cash. The Corporation shall, at least one Business Day prior
to the Repurchase Date, deliver at the office of the transfer agent for the
Convertible Preferred Stock (or any paying agent appointed by the
Corporation) to the person for whose account such shares of Convertible
Preferred Stock were so surrendered, or to the nominee or nominees of such
person, the Repurchase Price to which such person shall be entitled as
aforesaid.
(4) Exercise Procedures. A holder of Convertible Preferred Stock must
exercise the Repurchase Right by the Demand Date or such Repurchase Right
shall expire. Not later than the Demand Date, any holder of shares of
Convertible Preferred Stock desiring to exercise the Repurchase Right must
surrender the certificate or certificates evidencing all of such holder's
shares of Convertible Preferred Stock at the office of the transfer agent
(or paying agent if so required by the Corporation) for the Convertible
Preferred Stock, which certificate or certificates, if the Corporation so
requires, shall be duly endorsed to the Corporation or in blank, or
accompanied by proper instruments of transfer to the Corporation or in
blank and specifying the name or names (with address) of the Person to whom
the Repurchase Price is to be paid. On the Demand Date, the Corporation
shall accept for payment those shares of Convertible Preferred Stock
tendered (and not subsequently
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withdrawn), and thereupon the Repurchase Price shall be payable to the
order of the Person whose name appears on such shares of certificate or
certificates as the owner thereof and each surrendered certificate shall be
cancelled. Notwithstanding the foregoing, in redeeming Convertible
Preferred Stock pursuant to this paragraph (4), the Corporation will comply
with all applicable tender offer rules under the Securities Exchange Act of
1934, as amended (the "Exchange Act"). From and after the Demand Date,
unless the Company defaults in the payment of the Repurchase Price, all
rights of the holders of shares of Convertible Preferred Stock properly
tendered for repurchase, except the right to receive the Repurchase Price,
shall cease with respect to such shares, and such shares shall not
thereafter be transferred on the books of the Corporation or be deemed to
be outstanding for any purpose whatsoever.
(5) Definitions. The following definitions shall apply to terms used
in this paragraph (5):
(i) "Business Day" means a day that is not a Saturday, Sunday or
on which banking institutions are authorized to close in New York
City, New York or in Raleigh, North Carolina.
(ii) A "Change of Control" with respect to the Corporation means
either a. or b. below:
a. any Person or group (within the meaning of Section
13(d)(3) of the Exchange Act), together with any affiliates and
associates thereof, shall beneficially own (within the meaning of
Rule 13d-3 under the Exchange Act) at least a majority of the
total voting power of all classes of capital stock of the
Corporation entitled to vote generally in the election of
directors of the Corporation; or
b. the Corporation consolidates with, merges into or sells,
leases or conveys all or substantially all its assets to, any
other Person, unless in connection with such consolidation,
merger, sale, lease or conveyance, the holders of all the
outstanding shares of Common Stock shall be entitled to receive
cash consideration in an amount per share of Common Stock at
least equal to the conversion price in effect at the date of
consummation of such consolidation, merger, sale, lease or
conveyance; provided, however, that a Change of Control shall not
be deemed to have occurred in the event that the Corporation
merges into another Person for the sole purpose of changing the
Corporation's domicile within the United States.
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(iii) "Repurchase Date" means the 90th day following the
Change of Control (unless such day is not a Business Day, in
which event on the next following Business Day).
(iv) "Repurchase Price" mean $25.00 per share of Convertible
Preferred Stock plus an amount equal to all dividends accrued and
unpaid thereon, whether or not declared, to the Repurchase Date.
(v) "Person" means any individual, corporation, partnership,
joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or
political subdivision thereof.
(i) Voting Rights.
(1) General. The holders of Convertible Preferred Stock will not have
any voting rights except as set forth below or as otherwise from time to
time required by law. In connection with any right to vote, each holder of
Convertible Preferred Stock will have one vote for each share held. Any
shares of Convertible Preferred Stock held by the Corporation or any entity
controlled by the Corporation shall not have voting rights hereunder and
shall not be counted in determining the presence of a quorum.
(2) Default Voting Rights. Whenever dividends on the Convertible
Preferred Stock shall be in arrears for such number of dividend periods
(whether or not consecutive) containing not less than 360 days, (i) the
number of members of the board of directors of the Corporation shall be
increased by one, effective as of the time of election of such director as
hereinafter provided, and (ii) the holders of the Convertible Preferred
Stock (voting separately as a class with all other affected classes or
series of Parity Dividend Stock upon which like voting rights have been
conferred and are exercisable) will have the exclusive right to vote for
and elect one additional director of the Corporation at any meeting of
stockholders of the Corporation at which directors are to be elected held
during the period such dividends remain in arrears. The right of the
holders of the Convertible Preferred Stock to vote for such additional
director shall terminate when all accrued and unpaid dividends on the
Convertible Preferred Stock have been paid or declared and set apart for
payment and the term of any director so elected shall thereupon cease.
The foregoing right of the holders of the Convertible Preferred Stock
with respect to the election of one director may be exercised at any annual
meeting of stockholders or at any special meeting of stockholders held for
such purpose. If the event giving rise to the right of the holders of
Preferred Stock (including, but not limited to, the
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Convertible Preferred Stock) to elect directors shall have occurred more
than 90 days preceding the date established for the next annual meeting of
stockholders, the President of the Corporation shall, within 20 days after
the delivery to the Corporation at its principal office of a written
request for a special meeting signed by the holders of at least 10% of the
Preferred Stock then outstanding and having exercisable voting rights, call
a special meeting of the holders of the Preferred Stock then having
exercisable voting rights to be held within 60 days after the delivery of
such request for the purpose of electing such additional director.
The holders of the Convertible Preferred Stock voting as a class with
any other class or series of Parity Dividend Stock then having exercisable
voting rights shall have the right to remove without cause at any time and
replace any director such holders shall have elected pursuant to this
paragraph (2).
(3) Class Voting Rights. So long as the Convertible Preferred Stock is
outstanding, the Corporation shall not, without the affirmative vote of the
holders of at least 66-2/3% of the outstanding shares of Convertible
Preferred Stock, voting separately as a class, (i) amend, alter or repeal
any provision of the Third Restated Certificate of Incorporation of the
Corporation, to alter or change the powers, preferences, or special rights
of the holders of Convertible Preferred Stock so as to adversely affect
them; provided, however, that any increase in the authorized amount of
preferred stock, or any increase in the authorized amount of, any Parity
Dividend Stock or Junior Dividend Stock, or any Parity Liquidation Stock or
Junior Liquidation Stock shall not be deemed to alter or change the powers,
preferences or special rights of holders of Convertible Preferred Stock so
as to adversely affect them; (ii) authorize or issue, or increase the
authorized amount of, any class or series of any Senior Dividend Stock or
any Senior Liquidation Stock, or (iii) effect any reclassification of the
Convertible Preferred Stock.
(j) Outstanding Shares. For purposes of this second Restated Certificate of
Incorporation, all shares of Convertible Preferred Stock shall be deemed
outstanding except (i) from the date fixed for redemption pursuant to paragraph
(e) hereof or the date fixed for repurchase pursuant to paragraph (h) (in each
case assuming that the Corporation does not default in payment in full of the
redemption price or repurchase price, as the case may be), all shares of
Convertible Preferred Stock that have been so called for redemption under
paragraph (3) or that have been accepted for repurchase pursuant to paragraph
(h); (ii) from the date of surrender of certificates evidencing shares of
Convertible Preferred Stock, all shares of Convertible Preferred Stock converted
into Common Stock; and (iii) from the date of registration of transfer, all
shares of Convertible Preferred Stock held of record by the Corporation or any
subsidiary of the Corporation.
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(k) Status of Acquired Shares. Shares of Convertible Preferred Stock that
have been issued and have been redeemed, repurchased or otherwise acquired by
the Corporation will be restored to the status of authorized but unissued shares
of Preferred Stock, without designation as to class, and may thereafter be
issued, but not as shares of Convertible Preferred Stock.
(l) Severability of Provisions. Whenever possible, each provision hereof
shall be interpreted in a manner as to be effective and valid under applicable
law, but if any provision hereof is held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions hereof. If a court of competent jurisdiction should
determine that a provision hereof would be valid or enforceable if a period of
time were extended or shortened or a particular percentage were increased or
decreased, then such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.
SECTION 4.4 Common Stock. (a) General. Each share of Common Stock of the
Corporation shall have identical rights and privileges in every respect. The
holders of shares of Common Stock shall be entitled to vote upon all matters
submitted to a vote of the stockholders of the Corporation and shall be entitled
to one vote for each share held.
(b) Dividends and Distributions. Subject to the prior rights and
preferences, if any, applicable to shares of Preferred Stock, the holders of
shares of Common Stock shall be entitled to receive such dividends or other
distributions, payable in cash, property, stock, or otherwise, as may be
declared thereon by the board of directors at any time and from time to time out
of any funds of the Corporation legally available therefor.
(c) Dissolution. In the event of any voluntary or involuntary liquidation,
dissolution, or winding-up of the affairs of the Corporation, after distribution
in full of the preferential amounts, if any, to be distributed to the holders of
shares of the Preferred Stock, the holders of shares of Common Stock shall be
entitled to receive all of the remaining assets of the Corporation available for
distribution to its stockholders, ratably in proportion to the number of shares
of Common Stock held by them. Neither the consolidation with nor the merger of
the Corporation into any other corporation or corporations or other entity or
entities, nor the merger of any other corporation or other entity into the
Corporation, nor a reorganization of the Corporation, nor the purchase or
redemption of all or any part of the outstanding shares of any class or classes
of the capital stock of the Corporation, nor a voluntary sale or transfer of the
property and business of the Corporation as, or substantially
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as, an entirety, shall be deemed a liquidation, dissolution, or winding-up of
the affairs of the Corporation within the meaning of any of the provisions of
this Section 4.3.
SECTION 4.5 General. (a) Subject to the foregoing provisions of this Third
Restated Certificate of Incorporation, the Corporation may issue shares of its
Preferred Stock and Common Stock from time to time for such consideration (not
less than the par value thereof) as may be fixed by the board of directors of
the Corporation, which is expressly authorized to fix the same in its absolute
and uncontrolled discretion subject to the foregoing conditions. Shares so
issued for which the consideration shall have been paid or delivered to the
Corporation shall be deemed fully paid stock and shall not be liable to any
further call or assessment thereon, and the holders of such shares shall not be
liable for any further payments in respect of such shares.
(b) The Corporation shall have authority to create and issue rights and
options entitling their holders to purchase shares of the Corporation's capital
stock of any class or series or other securities of the Corporation, and such
rights and options shall be evidenced by instrument(s) approved by the board of
directors of the Corporation. The board of directors of the Corporation shall be
empowered to set the exercise price, duration, times for exercise, and other
terms of such options or rights; provided, however, that the consideration to be
received for any shares of capital stock subject thereto shall not be less than
the par value thereof.
SECTION 4.6 Stock Reclassification. (a) Each share of Class A Common Stock,
par value $.01 per share, issued and outstanding as of the opening of business
on the date the Second Restated Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware shall be converted into 2.5 shares
of Common Stock without further action by the Corporation or any stockholder
thereof. Each share of Class B Common Stock, par value $.01 per share, issued
and outstanding as of the opening of business on the date the Second Restated
Certificate of Incorporation was filed with the Secretary of State of the State
of Delaware shall be converted into 2.5 shares of Common Stock without further
action by the Corporation or any stockholder thereof. No fractional shares shall
be issued upon such conversion, and any fractional shares that otherwise would
be issuable upon such conversion, without further action, shall be cancelled.
The Company shall transfer from the surplus accounts of the Company an amount
sufficient so that such amount, when added to the capital of the Company with
respect to the shares of Class A Common Stock and Class B Common Stock
outstanding as of the opening of business on the date the Second Restated
Certificate of Incorporation was filed with the Secretary of State of the State
of Delaware, is equal to the aggregate par value of the shares of Common Stock
issuable upon conversion of the shares of Class A Common Stock and Class B
Common Stock as aforesaid.
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(b) Each share of Preferred Stock, par value $0.01 per share, issued and
outstanding (each share of Preferred Stock called for redemption on such date
specifically being deemed not to be outstanding for purposes hereof) as of the
opening of business on the date the Second Restated Certificate of Incorporation
was filed with the Secretary of State of the State of Delaware shall be
converted into 4 shares of Mandatory Redeemable Convertible Preferred Stock
without further action by the Corporation or any stockholder thereof. The
Company shall transfer from the surplus accounts of the Company an amount
sufficient so that such amount, when added to the capital of the Company with
respect to the shares of preferred stock outstanding (each share of Preferred
Stock called for redemption on the date the Second Restated Certificate of
Incorporation became effective specifically being deemed not to be outstanding
for purposes hereof) as of the opening of business on the date the Second
Restated Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware, is equal to the aggregate par value of the shares of
Mandatory Redeemable Convertible Preferred Stock issuable upon conversion of the
shares of Preferred Stock as aforesaid.
ARTICLE V
Certain Transactions
SECTION 5.1 Validity of Certain Transactions. No contract or transaction
between the Corporation and one or more of its directors, officers, or
stockholders or between the Corporation and any person (as used herein "person"
means any other corporation, partnership, association, firm, trust, joint
venture, political subdivision, or instrumentality) or other organization in
which one or more of its directors, officers, or stockholders are directors,
officers, or stockholders, or have a financial interest, shall be void or
voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the board or committee which
authorizes the contract or transaction, or solely because his, her, or their
votes are counted for such purpose, if: (i) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or
are known to the board of directors or the committee, and the board of
directions or committee in good faith authorizes the contract or transaction by
the affirmative votes of a majority of the disinterested directors, even though
the disinterested directors be less than a quorum; or (ii) the material facts as
to his or her relationship or interest and as to the contract or transaction are
disclosed or are known to the stockholders entitled to vote thereon, and the
contract or transaction is specifically approved in good faith by vote of the
stockholders; or (iii) the contract or transaction is fair as to the Corporation
as of the time it is authorized, approved, or ratified by the board of
directors, a committee thereof, or the stockholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the board of directors or of a committee which authorizes the contract or
transaction.
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ARTICLE VI
Indemnification
SECTION 6.1 Indemnification. (a) The Corporation shall indemnify any person
who was, is, or is threatened to be made a party to a proceeding (as hereinafter
defined) by reason of the fact that he or she (i) is or was a director or
officer of the Corporation or (ii) while a director or officer of the
Corporation, is or was serving at the request of the Corporation as a director,
officer, partner, venturer, proprietor, trustee, employee, agent, or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan, or other enterprise,
to the fullest extent permitted under the Delaware General Corporation Law, as
the same exists or may hereafter be amended. Such right shall be a contract
right and as such shall run to the benefit of any director or officer who is
elected and accepts the position of director or officer of the Corporation or
elects to continue to serve as a director or officer of the Corporation while
this Article VI is in affect. Any repeal or amendment of this Article VI shall
be prospective only and shall not limit the rights of any such director or
officer or the obligations of the Corporation with respect to any claim arising
from or related to the services of such director or officer in any of the
foregoing capacities prior to any such repeal or amendment to this Article VI.
Such right shall include the right to be paid by the Corporation expenses
incurred in defending any such proceeding in advance of its final disposition to
the maximum extent permitted under the Delaware General Corporation Law, as the
same exists or may hereafter be amended. If a claim for indemnification or
advancement of expenses hereunder is not paid in full by the Corporation within
sixty (60) days after a written claim has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim, and if successful in whole or in part,
the claimant shall also be entitled to be paid the expenses of prosecuting such
claim. It shall be a defense to any such action that such indemnification or
advancement of costs of defense is not permitted under the Delaware General
Corporation Law, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its board of
directors or any committee thereof, independent legal counsel, or stockholders)
to have made its determination prior to the commencement of such action that
indemnification of, or advancement of costs of defense to, the claimant is
permissible in the circumstances nor an actual determination by the Corporation
(including its board of directors or any committee thereof, independent legal
counsel, or stockholders) that such indemnification or advancement is not
permissible shall be a defense to the action or create a presumption that such
indemnification or advancement is not permissible. In the event of the death of
any person having a right to indemnification under the foregoing provisions,
such right shall inure to the benefit of his or her heirs, executors,
administrators, and personal representatives. The rights conferred above shall
not be exclusive of any other
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right which any person may have or hereafter acquire under any statute, bylaw,
resolution of stockholders or directors, agreement, or otherwise.
(b) The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
(c) As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.
ARTICLE VII
Liability of Directors
SECTION 7.1 Director Liability. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law, (iii) under Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which the director
derived an improper personal benefit. Any repeal or amendment of this Article
VII by the stockholders of the Corporation shall be prospective only, and shall
not adversely affect any limitation on the personal liability of a director of
the Corporation arising from an act or omission occurring prior to the time of
such repeal or amendment. In addition to the circumstances in which a director
of the Corporation is not personally liable as set forth in the foregoing
provisions of this Article VII, a director shall not be liable to the
Corporation or its stockholders to such further extent as permitted by any law
hereafter enacted, including without limitation any subsequent amendment to the
Delaware General Corporation Law.
ARTICLE VIII
Composition of the Board of Directors
SECTION 8.1 Composition of the board of Directors. (a) Election of
directors of the Corporation need not be by written ballot, except and to the
extent provided in the bylaws of the Corporation.
(b) The number of directors constituting the entire board of directors of
the Corporation shall be no less than seven and no more than eleven (plus such
number of directors as may be elected from time to time pursuant to the terms of
any Preferred Stock that
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may be issued and outstanding from time to time). Commencing on the date on
which the Second Restated Certificate of Incorporation became effective pursuant
to the Delaware General Corporation Law, the directors of the Corporation shall
be divided into three classes, designated Class I, Class II and Class III. Each
class shall consist as nearly as possible of one-third (1/3) of the total number
of directors making up the entire board of directors. The term of office of the
initial Class I directors shall expire at the 1993 annual meeting of
stockholders, the term of office of the initial Class II directors shall expire
at the 1994 annual meeting of stockholders and the term of office of the initial
Class III directors shall expire at the 1995 annual meeting of stockholders,
with each director to hold office until his or her successor shall have been
duly elected and qualified. At each annual meeting of stockholders, commencing
with the 1993 annual meeting, directors elected to succeed those directors whose
terms then expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until his or her successor shall have been duly elected
and qualified. If the number of directors is changed, any increase or decrease
shall be apportioned among the classes so as to maintain the number of directors
in each class as nearly equal as possible, but in no case will a decrease in the
number of directors shorten the term of any incumbent director.
(c) The term of a director elected to fill a newly created directorship or
other vacancy shall expire at the same time as the terms of the other directors
of the class for which the new directorship is created or in which the vacancy
occurred.
(d) Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock shall have the right, voting separately by
class or series, to elect directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies and other
features of such directorships shall be governed by the terms of this Third
Restated Certificate of Incorporation or the resolutions adopted by the Board of
Directors pursuant to Section 4.2 applicable thereto, and such directors so
elected shall not be divided into classes pursuant to this Section 8.1 unless
expressly provided by such terms.
ARTICLE IX
Management of the Affairs of the Corporation
SECTION 9.1 Management of the Affairs of the Corporation. All the powers of
the Corporation, insofar as the same may be lawfully vested by this Third
Restated Certificate of Incorporation in the board of directors, are hereby
conferred upon the board of directors. In furtherance and not in limitation of
that power the board of directors shall have the power to make, adopt, alter,
amend, and repeal from time to time the bylaws of the Corporation, subject to
the right of the stockholders entitled to vote with respect thereto to adopt,
alter, amend, and
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repeal bylaws made by the board of directors, or to make new bylaws; provided,
however, that the board of directors shall not adopt, alter, amend, or repeal
the bylaws of the Corporation except upon the affirmative vote of at least
two-thirds (2/3) of the members of the board of directors at any annual or
special meeting of the board, or by unanimous written consent of the directors;
provided, further, that bylaws shall not be adopted, altered, amended, or
repealed, or new bylaws made, by the stockholders of the Corporation except by
the affirmative vote of the holders of at least two-thirds (2/3) of the
outstanding shares of stock entitled to vote generally in the election of
directors.
ARTICLE X
Amendments
SECTION 10.1 Amendments. Subject to Section 4.3(i)(3), notwithstanding any
other provisions of this Third Restated Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, the
affirmative vote of the holders of at least two-thirds (2/3) of the outstanding
shares-of stock entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend, alter, or
repeal any provision of this Third Restated Certificate of Incorporation or
adopt any provision inconsistent with this Third Restated Certificate of
Incorporation.
ARTICLE XI
Stockholders Meetings
SECTION 11.1 Stockholders Meetings. Any action required or permitted to be
taken by the stockholders of the Corporation shall be effected at an annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders. Special meetings of stockholders of
the Corporation may be called only by (a) the board of directors pursuant to a
resolution adopted by a majority of the members of the board, (b) the Chairman
of the board of directors, or (c) by any holder or holders of at least
twenty-five percent (25%) of the outstanding shares of Common Stock.
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IN WITNESS WHEREOF, the undersigned has duly executed this Third Restated
Certificate of Incorporation on the 11th day of March, 1998.
/s/ James P. McDermott
--------------------------------------
Name: James P. McDermott
Title: Senior Vice President
ATTEST:
/s/ Scott D. Silverman
- --------------------------------------
Scott D. Silverman
Senior Vice President, General Counsel
and Secretary
26
EXHIBIT 4.7
AMENDMENT NUMBER ONE
WHEREAS, the stockholders of PennCorp Financial Group, Inc. (the
"Company") approved the Company's 1996 Stock Award and Stock Option Plan (the
"Plan") on July 11, 1996;
WHEREAS, the Board of Directors of the Company has approved amending the
Plan to allow certain Nonemployee Directors (as defined in the Plan) to obtain
certain Stock Options and Stock Awards as hereinafter described and to make
certain other amendments to the Plan, subject to the approval of the
stockholders of the Company at the 1997 Annual Meeting of Stockholders;
NOW THEREFORE, upon the approval of the stockholders of the Company, the
Plan shall be amended as set forth below:
1. Section 1 "DEFINITIONS" is hereby amended to add the following new
"Definitions":
a. "Exercise Date" shall mean the first date any Stock Option
granted pursuant to Section 10(c) shall become exercisable.
b. "Exercise Period" shall mean the 105-day period during which
any Stock Option granted pursuant to Section 10(c) and/or
10(d) may be exercised.
2. Section 1 "DEFINITIONS" is hereby amended to modify the following
"Definitions" as follows:
a. 1.17 "Participant" shall mean any Employee or Nonemployee
Director to whom an Award has been granted by the Committee
under the Plan.
b. 1.24 "Stock Option" shall mean the grant by the Company of an
option to purchase Common Stock to a Participant pursuant to
Section 9 below or pursuant to Section 10 below.
3. Section 8(a) is amended by changing the word "Employees" on line 1 to
"Participants."
4. Section 8(b) is hereby deleted in its entirety and the following is
substituted in lieu thereof:
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(b) Limited Rights as Shareholders. During the period in which any
shares of Common Stock are subject to the restrictions imposed under
Section 8(a) above, a Participant to whom such restricted shares have
been awarded shall not have the right (i) to vote such shares and (ii)
to receive dividends thereon, except to the extent and the manner
authorized by the Committee in connection with any Awards.
5. Section 9(a) is amended by changing the word "Employees" on line 1 to
"Participants".
6. Section 10(c) is hereby deleted in its entirety and the following is
substituted in lieu thereof:
(c) Annual Grants. Each Nonemployee Director who (i) does not, on the
date of each annual meeting of the Company's shareholders that occurs
after January 1, 1997, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, have or share a
direct or indirect Pecuniary Interest in more than 100,000 shares of
Common Stock and (ii) has not received a grant pursuant to Section
10(b) above during the 12-month period ending on the date of the
applicable annual meeting of the Company's shareholders, shall
automatically be granted on the date of such annual meeting of
shareholders a Stock Option to purchase 7,500 shares of Common Stock,
which shall be exercisable 18 months after the date of the grant,
which date of grant and Exercise Date shall be March 31, 1997 and
December 31, 1998, respectively, for the first grant. Such Stock
Option's exercise price shall be the Fair Market Value on the grant
date ($32.25 for the first grant), and the Stock Option may be
exercised only during the Exercise Period. During the Exercise Period,
the Nonemployee Director shall have the right to either exercise the
Stock Option at the exercise price or receive a restricted Stock Award
for that number of shares of Common Stock determined by (a)
multiplying the number of shares subject to the Stock
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Option by the difference between the Fair Market Value on the Exercise
Date and the exercise price, and (b) dividing the product resulting
from clause (a) above by 85 percent of the Fair Market Value on the
Exercise Date. Fractional shares shall be rounded (up or down) to the
nearest whole number. Any restricted Stock Award granted pursuant to
this Section 10(c) shall not vest for a period of three years from the
date of the Stock Award and shall be forfeited if the Nonemployee
Director ceases to be a director of the Company for any reason other
than as a result of a change of control or ownership of the Company,
the failure to obtain the required votes of the Company's shareholders
approving the election of the Nonemployee Director, or the Nonemployee
Director's death or Disability. Any Stock Award issued pursuant to
this Section 10(c) shall cancel the Stock Option underlying the Stock
Award.
7. A new Section 10(d) is hereby added as follows:
(d) Conversion of 1992 Warrants. Each of the following Nonemployee
Directors: Thomas A. Player, Kenneth Roman, Bruce W. Schnitzer,
Maurice W. Slayton, and David C. Smith, who holds exercisable warrants
for the purchase of Common Stock pursuant to the Company's 1992 Senior
Management Warrant Award Program shall have the option, in lieu of
exercising the warrants, to receive the appreciated value of such
warrants in a restricted Stock Award as set forth below. The election
to receive the appreciated value in a restricted Stock Award must be
made by the Nonemployee Director within ten days after shareholders
approve this amendment. In addition, each Nonemployee Director who
elects to receive the appreciated value of such warrants in a
restricted Stock Award shall receive a Stock Option to purchase 3,000
shares of Common Stock at the exercise price at $32.25 (Fair Market
Value on March 31, 1997). The number of shares underlying each such
Stock Award shall be determined by (a) multiplying the number of
exercisable warrants held by the
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Nonemployee Director on the date the amendment is approved by the
difference between $32.25 and the exercise price applicable to each
such warrant, and (b) dividing the product resulting pursuant to
clause (a) above by 85 percent of the Fair Market Value on March 31,
1997. The Stock Option granted pursuant to this Section 10(d) shall
become exercisable on December 31, 1998, and may be exercised only
during the Exercise Period. During the Exercise Period, the
Nonemployee Director shall have the right to either exercise the Stock
Option at the exercise price of $32.25 or receive a restricted Stock
Award for that number of shares of Common Stock determined by (a)
multiplying the number of shares subject to the Stock Option by the
difference between the Fair Market Value on December 31, 1998 and
$32.25, and (b) dividing the product resulting from clause (a) above
by 85 percent of the Fair Market Value on December 31, 1998.
Fractional shares shall be rounded (up or down) to the nearest whole
number. Any restricted Stock Award awarded pursuant to this Section
10(d) shall not vest for a period of three years from the date of the
Stock Award and shall be forfeited if the Nonemployee Director ceases
to be a director of the Company for any reason other than as a result
of a change of control or ownership of the Company, the failure to
obtain the required votes of the Company's shareholders approving the
election of the Nonemployee Director, or the Nonemployee Director's
death or Disability. Any Stock Award issued pursuant to this Section
10(d) shall cancel, as the case may be, any warrants issued to such
Nonemployee Director under the 1992 Senior Management Warrant Program
which such Nonemployee Director has elected to convert into a
restricted Stock Award, or the Stock Option underlying the Stock
Award.
8. Section 11(a) is hereby deleted in its entirety and the following is
substituted in lieu thereof:
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(a) A Nonemployee Director who does not, directly or indirectly,
through any contract, arrangement, understanding, relationship or
otherwise, have or share a direct or indirect Pecuniary Interest in
more than 100,000 shares of Common Stock, may elect to forgo up to 100
percent of the cash compensation attributable to the Nonemployee
Director's annual retainer fees and to receive in lieu thereof a Stock
Award as determined pursuant to Section 11(b) below. Any such election
shall be in writing and must be made at least six months before the
services are rendered giving rise to such compensation. Such election
may not be revoked or changed thereafter except as to compensation for
services rendered at least six months after any such election to
revoke or change is made in writing.
9. Section 14(c) is hereby deleted in its entirety and the following is
substituted in lieu thereof:
(c) Committee Discretion. Notwithstanding anything herein to the
contrary but subject to the provisions contained in Section 14(d)
below, in the event of a termination of a Participant's
employment or service for any reason, the Committee may, in its
sole discretion, provide that:
(1) any or all nontransferable Stock Awards held by the
Participant on the date of termination of employment or
service to become immediately transferable as of such date
and to remain transferable after such date;
(2) any or all unexercisable Stock Options held by the
Participant on the date of termination of employment or
service to become exercisable and to remain exercisable
until a date that occurs on or prior to the date the Stock
Option expires; and/or
(3) any or all exercisable Stock Options held by the Participant
on the date of
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termination of employment or service to remain exercisable
until a date that occurs on or prior to the date the Stock
Option expires.
In addition, the Option Committee shall have discretion to adopt a
different definition of Cause, Retirement or Disability in connection with any
particular Award under the Plan.
6
EXHIBIT 5.1
[PENNCORP FINANCIAL GROUP, INC.]
March 23, 1998
PennCorp Financial Group, Inc.
590 Madison Avenue, 38th Floor
New York, New York 10022
Ladies and Gentlemen:
I am General Counsel of PennCorp Financial Group, Inc., a Delaware
corporation (the "Company"). In such capacity, I have acted as counsel to the
Company in connection with the preparation and filing by the Company with the
Securities and Exchange Commission (the "Commission") of a Registration
Statement on Form S-8 to be filed with the Commission on or about March 25,
1998 (the "Registration Statement"), under the Securities Act of 1933, as
amended, with respect to the offer and sale by the Company of up to 2,800,000
shares (the "Registered Shares") of the common stock, par value $.01 per share,
of the Company issuable upon the grant of stock awards (the "Stock Awards") and
the exercise of stock options (the "Stock Options") granted pursuant to the
Company's 1996 Stock Award and Stock Option Plan (the "Plan").
In so acting, I have examined originals or copies, certified or otherwise
identified to my satisfaction, of the Registration Statement, the Plan, and such
corporate records, agreements, documents, and other instruments and such
certificates or comparable documents of public officials and of officers and
representatives of the Company, and have made such inquiries of such officers
and representatives, as I have deemed relevant and necessary as a basis for the
opinion hereinafter set forth.
In such examination, I have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents submitted
to me as originals, the conformity to original documents of documents submitted
to me as certified or photostatic copies and the authenticity of the originals
of such latter documents. As to all questions of fact material to this opinion
that have
1
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not been independently established, I have relied upon certificates of officers
and representatives of the Company.
Based on the foregoing, and subject to the qualifications stated herein, I
am of the opinion that when the Registered Shares are issued and delivered
against receipt of payment therefor (if any) in accordance with the terms of the
Plan and the Stock Awards and Stock Options, such Registered Shares will be
validly issued, fully paid and nonassessable.
The opinion herein is limited to the corporate laws of the State of
Delaware and I express no opinion as to the effect on the matters covered by
this opinion of the laws of any other jurisdiction.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ Scott D. Silverman
--------------------------------------------
Scott D. Silverman,
Senior Vice President,
General Counsel & Secretary
2
EXHIBIT 15.1
The Board of Directors
PennCorp Financial Group, Inc.:
Re: 1996 Stock Award and Stock Option Plan
With respect to the subject registration statement, we acknowledge our awareness
of the use therein of our reports dated May 15, 1997 (except as to note 8 which
is as of November 14, 1997), August 14, 1997 (except as to note 8 which is as of
November 14, 1997) and November 14, 1997, related to our reviews of interim
financial information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not
considered part of a registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant within the meaning
of sections 7 and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
--------------------------------------
KPMG PEAT MARWICK LLP
Raleigh, North Carolina
March 23, 1998
1
EXHIBIT 23.1(a)
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
PennCorp Financial Group, Inc.:
We consent to the use of our report dated February 28, 1997 (except as to note
19 which is as of November 14, 1997) on the consolidated financial statements of
PennCorp Financial Group, Inc. and subsidiaries as of December 31, 1996 and
1995, and for each of the years in the three-year period ended December 31,
1996, incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
--------------------------------------------
KPMG PEAT MARWICK LLP
Raleigh, North Carolina
March 23, 1998
1
EXHIBIT 23.1(b)
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our report dated March 14, 1997 (except as to note 19
which is as of November 14, 1997) on the consolidated financial statements of
Southwestern Financial Corporation and subsidiaries as of December 31, 1996, and
for the year then ended incorporated herein by reference.
/s/ KPMG Peat Marwick LLP
-----------------------------------
KPMG PEAT MARWICK LLP
Dallas, Texas
March 23, 1998
1
