Exhibit 4(y)
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PROTECTIVE LIFE CORPORATION
AND
THE BANK OF NEW YORK,
AS PURCHASE CONTRACT AGENT
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PURCHASE CONTRACT AGREEMENT
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DATED AS OF NOVEMBER 26, 1997
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TABLE OF CONTENTS
Page
RECITALS........................................................... 1
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions......................................... 1
Section 1.2. Compliance Certificates and Opinions................ 13
Section 1.3. Form of Documents Delivered to Agent................ 14
Section 1.4. Acts of Holders; Record Dates....................... 14
Section 1.5. Notices............................................. 16
Section 1.6. Notice to Holders; Waiver........................... 18
Section 1.7. Effect of Headings and Table of
Contents........................................ 18
Section 1.8. Successors and Assigns.............................. 18
Section 1.9. Separability Clause................................. 19
Section 1.10. Benefits of Agreement............................... 19
Section 1.11. Governing Law....................................... 19
Section 1.12. Legal Holidays...................................... 19
Section 1.13. Counterparts........................................ 20
Section 1.14. Inspection of Agreement............................. 20
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally..................... 20
Section 2.2. Form of Agent's Certificate of
Authentication................................... 21
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Page
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations...................... 22
Section 3.2. Rights and Obligations Evidenced by
the Certificates................................ 22
Section 3.3. Execution, Authentication, Delivery
and Dating...................................... 23
Section 3.4. Temporary Certificates.............................. 25
Section 3.5. Registration; Registration of
Transfer and Exchange........................... 25
Section 3.6. Book-Entry Interests................................ 27
Section 3.7. Notices to Holders.................................. 28
Section 3.8. Appointment of Successor Clearing
Agency.......................................... 29
Section 3.9. Definitive Certificates............................. 29
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.................................... 29
Section 3.11. Persons Deemed Owners............................... 31
Section 3.12. Cancellation........................................ 32
Section 3.13. Substitution of Securities.......................... 32
Section 3.14. Reestablishment of Income PRIDES.................... 34
Section 3.15. Transfer of Collateral upon
Occurrence of Termination Event................. 35
Section 3.16. No Consent to Assumption............................ 36
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Page
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distributions; Rights to
Distributions Preserved;
Distribution Rate Reset; Notice................. 37
Section 4.2. Notice and Voting................................... 39
Section 4.3. Liquidation of the Trust............................ 40
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.................. 40
Section 5.2. Contract Adjustment Payments........................ 43
Section 5.3. Deferral of Payment Dates for Contract
Adjustment Payments............................. 44
Section 5.4. Payment of Purchase Price........................... 46
Section 5.5. Issuance of Shares of Common Stock.................. 49
Section 5.6. Adjustment of Settlement Rate....................... 50
Section 5.7. Notice of Adjustments and Certain
Other Events.................................... 58
Section 5.8. Termination Event; Notice........................... 59
Section 5.9. Early Settlement.................................... 59
Section 5.10. No Fractional Shares................................ 62
Section 5.11. Charges and Taxes................................... 62
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to
Receive Contract Adjustment
Payments and to Purchase
Common Stock.................................... 63
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Page
Section 6.2. Restoration of Rights and Remedies.................. 63
Section 6.3. Rights and Remedies Cumulative...................... 64
Section 6.4. Delay or Omission Not Waiver........................ 64
Section 6.5. Undertaking for Costs............................... 64
Section 6.6. Waiver of Stay or Extension Laws.................... 65
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities................. 65
Section 7.2. Notice of Default................................... 66
Section 7.3. Certain Rights of Agent............................. 66
Section 7.4. Not Responsible for Recitals or
Issuance of Securities.......................... 68
Section 7.5. May Hold Securities................................. 68
Section 7.6. Money Held in Custody............................... 68
Section 7.7. Compensation and Reimbursement...................... 68
Section 7.8. Corporate Agent Required; Eligibility............... 69
Section 7.9. Resignation and Removal; Appointment
of Successor.................................... 69
Section 7.10. Acceptance of Appointment by
Successor....................................... 71
Section 7.11. Merger, Conversion, Consolidation or
Succession to Business.......................... 72
Section 7.12. Preservation of Information;
Communications to Holders....................... 72
Section 7.13. No Obligations of Agent............................. 73
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Page
Section 7.14. Tax Compliance...................................... 73
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without
Consent of Holders.............................. 74
Section 8.2. Supplemental Agreements with Consent
of Holders...................................... 75
Section 8.3. Execution of Supplemental Agreements................ 76
Section 8.4. Effect of Supplemental Agreements................... 76
Section 8.5. Reference to Supplemental Agreements................ 77
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate,
Sell or Convey Property Except
Under Certain Conditions........................ 77
Section 9.2. Rights and Duties of Successor
Corporation..................................... 78
Section 9.3. Opinion of Counsel to Agent......................... 78
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts................ 79
Section 10.2. Maintenance of Office or Agency..................... 79
Section 10.3. Company to Reserve Common Stock..................... 80
Section 10.4. Covenants as to Common Stock........................ 80
Section 10.5. Statements of Officers of the Company
as to Default................................... 80
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Page
EXHIBIT A Form of Income PRIDES Certificate...................A-1
EXHIBIT B Form of Growth PRIDES Certificate...................B-1
EXHIBIT C Instruction to Collateral Agent.....................C-1
EXHIBIT D Instruction to Purchase Contract Agent..............D-1
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PURCHASE CONTRACT AGREEMENT, dated as of November 26, 1997, between
Protective Life Corporation, a Delaware corporation (the "Company"), and The
Bank of New York, a New York banking corporation, acting as purchase contract
agent for the Holders of Securities from time to time (the "Agent").
RECITALS
The Company has duly authorized the execution and delivery of this
Agreement and the Certificates evidencing the Securities.
All things necessary to make the Purchase Contracts, when the
Certificates are executed by the Company and authenticated, executed on
behalf of the Holders and delivered by the Agent, as provided in this
Agreement, the valid obligations of the Company, and to constitute these
presents a valid agreement of the Company, in accordance with its terms, have
been done.
WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed as follows:
ARTICLE I
Definitions and Other Provisions
of General Applications
Section 1.1. Definitions.
For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular;
(b) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles
in the United States;
(c) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(d) the following terms have the meanings given to them in the
Declaration: (i) Authorized Newspaper; (ii) Coupon Rate; (iii) Indenture,
(iv) Liquidation Distribution; (v) Reset Agent; (vi) Reset Announcement Date;
(vii) Reset Rate; (viii) Reset Spread; and (ix) Two-Year Benchmark Treasury;
and
(e) the following terms have the meanings given to them in this Section
1.1(e).
"Act" when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" with respect to any specified Person means the power to direct the
management and policies of such Person, directly or indirectly, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means the Person named as the "Agent" in the first paragraph of
this instrument until a successor Agent shall have become such pursuant to
the applicable provisions of this Agreement, and thereafter "Agent" shall
mean such Person.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
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"Applicable Market Value" has the meaning specified in Section 5.1.
"Bankruptcy Code" means title 11 of the United States Code, or any other
law of the United States that from time to time provides a uniform system of
bankruptcy laws.
"Beneficial Owner" means, with respect to a Book-Entry Interest, a
Person, who is the beneficial owner of such Book-Entry Interest, as reflected
on the books of the Clearing Agency, or on the books of a Person maintaining
an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with
the rules of such Clearing Agency).
"Board of Directors" means the board of directors of the Company or a
duly authorized committee of that board.
"Board Resolution" means one or more resolutions of the Board of
Directors, a copy of which has been certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such
certification and delivered to the Agent.
"Book-Entry Interest" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 3.6.
"Business Day" means any day which is not a Saturday or Sunday or a day
on which banking institutions in ▇▇▇ ▇▇▇▇ ▇▇▇▇ (▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇) are
permitted or required by any applicable law to close.
"Cash Settlement" has the meaning set forth in Section 5.4(a)(i).
"Certificate" means an Income PRIDES Certificate or a Growth PRIDES
Certificate.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as a
depositary for the Securities and in whose name or in the name of a nominee
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of that organization, shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Securities.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time the Clearing
Agency effects book entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Price" has the meaning specified in Section 5.1.
"Collateral" has the meaning specified in Section 2.1 of the Pledge
Agreement.
"Collateral Agent" means The Chase Manhattan Bank, as Collateral Agent
under the Pledge Agreement until a successor Collateral Agent shall have
become such pursuant to the applicable provisions of the Pledge Agreement,
and thereafter "Collateral Agent" shall mean the Person who is then the
Collateral Agent thereunder.
"Collateral Substitution" has the meaning specified in Section 3.13.
"Common Stock" means the Common Stock, par value $.50 per share, of the
Company.
"Company" means the Person named as the "Company" in the first paragraph
of this instrument until a successor shall have become such pursuant to the
applicable provision of this Agreement, and thereafter "Company" shall mean
such successor.
"Contract Adjustment Payments", if any, means the fee payable by the
Company in respect of each Purchase Contract, equal to 0% per annum of the
Stated Amount (provided that if such percentage is 0%, then no such payment
shall be payable by the Company), computed on the basis of a 360 day year of
twelve 30 day months, plus any Deferred Contract Adjustment Payments accrued
pursuant to Section 5.3.
"Corporate Trust Office" means the principal corporate trust office of
the Agent at which, at any particular time, its corporate trust business
shall be adminis-
4
tered, which office at the date hereof is located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Administration,
Derivative Products Unit, except that for purposes of Section 10.2, such term
shall mean the office or agency of the Agent in the Borough of Manhattan, the
City of New York, which office at the date hereof is located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
"Current Market Price" has the meaning specified in Section 5.6(a)(8).
"Debentures" means the series of debentures of the Company designated
the 6 1/2% Debentures due February 16, 2003, Series C to be issued under the
Indenture.
"Declaration" means the Amended and Restated Declaration of Trust of PLC
Capital Trust II, dated November 20, 1997, among the Company, as the sponsor,
the trustees named therein and the holders from time to time of individual
beneficial interests in the assets of the Trust.
"Deferred Contract Adjustment Payments" has the meaning specified in
Section 5.3.
"Depositary" means, initially, DTC until another Clearing Agency becomes
its successor.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Early Settlement" has the meaning specified in Section 5.9(a).
"Early Settlement Amount" has the meaning specified in Section 5.9(a).
"Early Settlement Date" has the meaning specified in Section 5.9(a).
"Early Settlement Rate" has the meaning specified in Section 5.9(b).
"Exchange Act" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time, and the rules
and regulations promulgated thereunder.
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"Expiration Date" has the meaning specified in Section 1.4.
"Expiration Time" has the meaning specified in Section 5.6(a)(6).
"Global Certificate" means a Certificate that evidences all or part of
the Securities and is registered in the name of a Clearing Agency or a
nominee thereof.
"Global Preferred Security Certificate" means a certificate evidencing
the rights and obligations of a holder in respect of the number of Preferred
Securities specified on such certificate and which is registered in the name
of a Clearing Agency or a nominee thereof.
"Growth PRIDES" means, following the substitution of one or more
Treasury Securities for Preferred Securities as collateral to secure a
Holder's obligations under a Purchase Contract, the collective rights and
obligations of a Holder of a Growth PRIDES Certificate in respect of such
Treasury Securities, subject to the Pledge thereof, and the related Purchase
Contract.
"Growth PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in respect of the number of Growth PRIDES
specified on such certificate.
"Growth PRIDES Register" and "Growth PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Holder," when used with respect to a Security, means the Person in
whose name the Security evidenced by an Income PRIDES Certificate and/or a
Growth PRIDES Certificate is registered in the related Income PRIDES Register
and/or the Growth PRIDES Register, as the case may be.
"Income PRIDES" means the collective rights and obligations of a Holder
of an Income PRIDES Certificate in respect of a Preferred Security, subject
to the Pledge thereof, and the related Purchase Contract.
"Income PRIDES Certificate" means a certificate evidencing the rights
and obligations of a Holder in
6
respect of the number of Income PRIDES specified on such certificate.
"Income PRIDES Register" and "Income PRIDES Registrar" have the
respective meanings specified in Section 3.5.
"Indenture" has the meaning set forth in Section 1.1 of the Declaration.
"Indenture Trustee" means AmSouth Bank (as successor by merger to
AmSouth Bank of Alabama, successor by conversion of Charter to AmSouth Bank
N.A.), as trustee under the Indenture, or any successor thereto.
"Institutional Trustee" means Wilmington Trust Company, as institutional
trustee under the Declaration, or any successor thereto that is a financial
institution unaffiliated with the Company.
"Issuer Order" or "Issuer Request" means a written order or request
signed in the name of the Company by its Chief Executive Officer, Chief
Financial Officer, its President, any Executive Vice President, any Senior
Vice President, any Vice President, its Treasurer, any Assistant Treasurer,
or its Secretary and delivered to the Agent.
"Liquidation Distribution" has the meaning set forth in Annex I of the
Declaration.
"NYSE" has the meaning specified in Section 5.1.
"Officer's Certificate" means a certificate signed by the Chief
Executive Officer, the Chief Financial Officer, the President, any Executive
Vice President, any Senior Vice President, any Vice President, the Treasurer,
any Assistant Treasurer, or the Secretary of the Company and delivered to the
Agent.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company and who shall be
reasonably acceptable to the Agent.
"Outstanding Securities," with respect to any Income PRIDES and/or
Growth PRIDES, means, as of the date of
7
determination, all Income PRIDES and/or Growth PRIDES evidenced by
Certificates theretofore authenticated, executed and delivered under this
Agreement, except:
(i) If a Termination Event has occurred, (A) Growth
PRIDES and (B) Income PRIDES for which the Stated Amount of
the related Preferred Security or a Liquidation Distribution
in respect of such Preferred Security has been theretofore
deposited with the Agent in trust for the Holders of such
Income PRIDES;
(ii) Income PRIDES and Growth PRIDES evidenced by
Certificates theretofore cancelled by the Agent or delivered
to the Agent for cancellation or deemed cancelled pursuant
to the provisions of this Agreement; and
(iii) Income PRIDES and Growth PRIDES evidenced by
Certificates issued in exchange for or in lieu of which
other Certificates have been authenticated, executed on
behalf of the Holder and delivered pursuant to this
Agreement, other than any such Certificate in respect of
which there shall have been presented to the Agent proof
satisfactory to it that such Certificate is held by a bona
fide purchaser in whose hands the Income PRIDES or Growth
PRIDES evidenced by such Certificate are valid obligations
of the Company;
provided, however, that in determining whether the Holders of the requisite
number of the Income PRIDES or Growth PRIDES have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Income PRIDES
or Growth PRIDES owned by the Company or any Affiliate of the Company shall
be disregarded and deemed not to be outstanding, except that, in determining
whether the Agent shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Income
PRIDES or Growth PRIDES which a Responsible Officer of the Agent knows to be
so owned shall be so disregarded. Income PRIDES or Growth PRIDES so owned
which have been pledged in good faith may be regarded as Outstanding
Securities if the pledgee establishes to the satisfaction of the Agent the
pledgee's right so to act with respect to such Income
8
PRIDES or Growth PRIDES and that the pledgee is not the Company or any
Affiliate of the Company.
"Payment Date" means each March 31, June 30, September 30, and December
31, commencing December 31, 1997.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or other entity or government or any agency or
political subdivision thereof.
"Permitted Investments" has the meaning set forth in Section 1 of the
Pledge Agreement.
"Pledge" means the pledge under the Pledge Agreement of the Preferred
Securities (or the Debentures in the event of a Liquidation Distribution) or
the Treasury Securities, as the case may be, in each case constituting a part
of the Securities.
"Pledge Agreement" means the Pledge Agreement, dated as of the date
hereof, by and among the Company, the Collateral Agent and the Agent, on its
own behalf and as attorney-in-fact for the Holders from time to time of the
Securities.
"Predecessor Certificate" means a Predecessor Income PRIDES Certificate
or a Predecessor Growth PRIDES Certificate.
"Predecessor Growth PRIDES Certificate" of any particular Growth PRIDES
Certificate means every previous Growth PRIDES Certificate evidencing all or
a portion of the rights and obligations of the Company and the Holder under
the Growth PRIDES evidenced thereby; and, for the purposes of this
definition, any Growth PRIDES Certificate authenticated and delivered under
Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Growth PRIDES Certificate shall be deemed to evidence the same rights
and obligations of the Company and the Holder as the mutilated, destroyed,
lost or stolen Growth PRIDES Certificate.
"Predecessor Income PRIDES Certificate" of any particular Income PRIDES
Certificate means every previous Income PRIDES Certificate evidencing all or
a portion of
9
the rights and obligations of the Company and the Holder under the Income
PRIDES evidenced thereby; and, for the purposes of this definition, any
Income PRIDES Certificate authenticated and delivered under Section 3.10 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Income
PRIDES Certificate shall be deemed to evidence the same rights and
obligations of the Company and the Holder as the mutilated, destroyed, lost
or stolen Income PRIDES Certificate.
"Preferred Securities" means the 6 1/2% Trust Originated Preferred
Securities of the Trust, each having a stated liquidation amount of $50,
representing preferred undivided beneficial interests in the assets of the
Trust.
"Proceeds" has the meaning set forth in Section 1 of the Pledge
Agreement.
"Purchase Contract," when used with respect to any Security, means the
contract obligating the Company to (i) sell and the Holder of such Security
to purchase Common Stock and (ii) pay the Holder Contract Adjustment
Payments, if any, in each case, on the terms and subject to the conditions
set forth in Article Five hereof.
"Purchase Contract Settlement Date" means February 16, 2001.
"Purchase Contract Settlement Fund" has the meaning specified in Section
5.5.
"Purchase Price" has the meaning specified in Section 5.1.
"Purchased Shares" has the meaning specified in Section 5.6(a)(6).
"Record Date" for the distribution of Contract Adjustment Payments, if
any, payable on any Payment Date means, as to any Global Certificate, the
Business Day next preceding such Payment Date, and as to any other
Certificate, the 15th day of the month in which such Payment Date occurs.
"Register" means the Income PRIDES Register and the Growth PRIDES
Register.
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"Registrar" means the Income PRIDES Registrar and the Growth PRIDES
Registrar.
"Reorganization Event" has the meaning specified in Section 5.6(b).
"Repayment Price" means, with respect to a Preferred Security, the
liquidation amount plus any accumulated and unpaid distributions thereon to
the date of repayment (subject to the rights of holders of record on the
relevant record date to receive distributions due on the related Payment
Date).
"Responsible Officer," when used with respect to the Agent, means any
officer of the Agent assigned by the Agent to administer its corporate trust
matters.
"Rights Agreement" has the meaning specified in Section 5.3.
"Security" means an Income PRIDES or a Growth PRIDES.
"Senior Indebtedness" has the meaning specified in the Indenture.
"Settlement Rate" has the meaning specified in Section 5.1.
"Stated Amount" means $50.
"Termination Date" means the date, if any, on which a Termination Event
occurs.
"Termination Event" means the occurrence of any of the following events:
(i) at any time on or prior to the Purchase Contract Settlement Date, a
judgment, decree or court order shall have been entered granting relief under
the Bankruptcy Code, adjudicating the Company to be insolvent, or approving
as properly filed a petition seeking reorganization or liquidation of the
Company under the Bankruptcy Code or any other similar applicable Federal or
State law, and, unless such judgment, decree or order shall have been entered
within 60 days prior to the Purchase Contract Settlement Date, such decree or
order shall have continued undischarged and unstayed for a period of 60 days;
or (ii) a judgment, decree or court
11
order for the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of the Company or of its property, or for the
winding up or liquidation of its affairs, shall have been entered, and,
unless such judgment, decree or order shall have been entered within 60 days
prior to the Purchase Contract Settlement Date, such judgment, decree or
order shall have continued undischarged and unstayed for a period of 60 days;
or (iii) at any time on or prior to the Purchase Contract Settlement Date,
the Company shall file a petition for relief under the Bankruptcy Code, or
shall consent to the filing of a bankruptcy proceeding against it, or shall
file a petition or answer or consent seeking reorganization or liquidation of
the Company under the Bankruptcy Code or any other similar applicable Federal
or State law, or shall consent to the filing of any such petition, or shall
consent to the appointment of a receiver or liquidator or trustee or assignee
in bankruptcy or insolvency of it or of its property, or shall make an
assignment for the benefit of creditors.
"Threshold Appreciation Price" has the meaning specified in Section 5.1.
"TIA" means the Trust Indenture Act of 1939, as amended, or any
successor statute.
"Trading Day" has the meaning specified in Section 5.1.
"Treasury Security" means a zero-coupon U.S. Treasury Security due
February 15, 2001 (Cusip Number 912820 A20) which is the principal strip of
the 7 3/4% U.S. Treasury Security which matures on February 15, 2001.
"Trust" means PLC Capital Trust II, a statutory business trust formed
under the laws of the State of Delaware.
"Underwriting Agreement" means the Underwriting Agreement dated November
20, 1997 between the Company and the Trust, on the one hand, and ▇▇▇▇▇▇▇
Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇-▇▇▇▇,
▇▇▇▇▇▇ Inc., and The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, LLC, as representatives of
the several Underwriters named therein, on the other hand.
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"Vice President" means any vice president, whether or not designated by
a number or a word or words added before or after the title "vice president."
Section 1.2. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Agreement, upon any
application or request by the Company to the Agent to take any action under
any provision of this Agreement, the Agent shall at its request, be entitled
to receive an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Agreement relating to the proposed action have been
complied with and an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with,
except that in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of
this Agreement relating to such particular application or request, no
additional certificate or opinion need be furnished.
Except as otherwise provided by this Agreement, every certificate or
opinion with respect to compliance with a condition or covenant provided for
in this Agreement shall include:
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as
is necessary to enable him to express an informed opinion
as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each
such individual, such condition or covenant has been
complied with.
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Section 1.3. Form of Documents Delivered to Agent.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of any Person may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Person knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company unless the Person executing such certificate or
such counsel knows, or in the exercise of reasonable care should know, that
the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Agreement, they may, but need not, be consolidated and
form one instrument.
Section 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Agreement to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
deliv-
14
ered to the Agent and, where it is hereby expressly required, to the Company.
Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Agreement and (subject to Section 7.1) conclusive in
favor of the Agent and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner which the Agent deems
sufficient.
(c) The ownership of Securities shall be proved by the Income PRIDES
Register or the Growth PRIDES Register, as the case may be.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Agent or the Company in reliance thereon, whether or not notation of such
action is made upon such Certificate.
(e) The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Agreement to be given, made or
taken by Holders of Securities. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities on such record date, and no
other Holders, shall be entitled to give, make or take the relevant request,
demand, authorization, direction, notice, consent, waiver or other action,
whether or not such Holders remain Holders after such record date; provided
that no such action shall be effective hereunder unless taken on or prior to
the applicable Expiration Date by Holders of the requisite number of
Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Company from setting a new record date for any
action for which a
15
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any
Person be cancelled and of no effect), and nothing in this paragraph shall be
construed to render ineffective any action taken by Holders of the requisite
number of Outstanding Securities on the date such action is taken. Promptly
after any record date is set pursuant to this paragraph, the Company, at its
own expense, shall cause notice of such record date, the proposed request,
demand, authorization, direction, notice, consent, waiver or other action by
Holders and the applicable Expiration Date to be given to the Agent in
writing and to each Holder of Securities in the manner set forth in Section
1.6.
With respect to any record date set pursuant to this Section, the
Company may designate any date as the "Expiration Date" and from time to time
may change the Expiration Date to any earlier or later day; provided that no
such change shall be effective unless notice of the proposed new Expiration
Date is given to the Agent in writing, and to each Holder of Securities in
the manner set forth in Section 1.6, on or prior to the existing Expiration
Date. If an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the Company shall be deemed to have
initially designated the 180th day after such record date as the Expiration
Date with respect thereto, subject to its right to change the Expiration Date
as provided in this paragraph. Notwithstanding the foregoing, no Expiration
Date shall be later than the 180th day after the applicable record date.
Section 1.5. Notices.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Agreement
to be made upon, given or furnished to, or filed with,
(1) the Agent by any Holder or by the Company shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or
filed in writing and personally delivered or mailed,
first-class postage prepaid, to the Agent at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate
Trust
16
Administration, Derivative Products Unit or at any other address
previously furnished in writing by the Agent to the Holders and
the Company, or
(2) the Company by the Agent or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid, to
the Company at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel, or at any other address previously
furnished in writing to the Agent by the Company.
(3) the Collateral Agent by the Agent, the Company or any Holder
shall be sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if made, given, furnished or filed in
writing and personally delivered or mailed, first-class postage
prepaid, addressed to the Collateral Agent at The Chase Manhattan
Bank, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Corporate Trustee Administration, or at any other address
previously furnished in writing by the Collateral Agent to the Agent,
the Company and the Holders; or
(4) the Institutional Trustee by the Company shall be sufficient
for every purpose hereunder (unless otherwise herein expressly
provided) if made, given, furnished or filed in writing and
personally delivered or mailed, first-class postage prepaid,
addressed to the Institutional Trustee at ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Corporate
Trust Office, or at any other address previously furnished in writing
by the Institutional Trustee to the Company; or
(5) the Indenture Trustee by the Company shall be sufficient for
every purpose hereunder (unless otherwise herein expressly provided)
if made, given, furnished or filed in writing and personally
delivered or mailed, first-class postage prepaid, addressed to the
Indenture Trustee at AmSouth Bank, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
Corpo-
17
rate Trust Department, or at any other address previously furnished
in writing by the Indenture Trustee to the Company.
Section 1.6. Notice to Holders; Waiver.
Where this Agreement provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at its address as it appears in the applicable
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this
Agreement provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Agent, but such filing shall not
be a condition precedent to the validity of any action taken in reliance
upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Agent shall
constitute a sufficient notification for every purpose hereunder.
Section 1.7. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 1.8. Successors and Assigns.
All covenants and agreements in this Agreement by the Company shall bind
its successors and assigns, whether so expressed or not.
18
Section 1.9. Separability Clause.
In case any provision in this Agreement or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions hereof and thereof shall not in any way be
affected or impaired thereby.
Section 1.10. Benefits of Agreement.
Nothing in this Agreement or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefits or any legal or equitable right,
remedy or claim under this Agreement. The Holders from time to time shall be
beneficiaries of this Agreement and shall be bound by all of the terms and
conditions hereof and of the Securities evidenced by their Certificates by
their acceptance of delivery of such Certificates.
Section 1.11. Governing Law.
This Agreement and the Securities shall be governed by and construed in
accordance with the laws of the State of New York.
Section 1.12. Legal Holidays.
In any case where any Payment Date shall not be a Business Day, then
(notwithstanding any other provision of this Agreement or the Income PRIDES
Certificates or the Growth PRIDES Certificates) payment of the Contract
Adjustment Payments, if any, shall not be made on such date, but such
payments shall be made on the next succeeding Business Day with the same
force and effect as if made on such Payment Date, provided that no interest
shall accrue or be payable by the Company or any Holder for the period from
and after any such Payment Date, except that, if such next succeeding
Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day with the same force and effect
as if made on such Payment Date.
In any case where the Purchase Contract Settlement Date shall not be a
Business Day, then (notwithstanding any other provision of this Agreement,
the Income PRIDES Certificates or the Growth PRIDES Certificates), the Pur-
19
chase Contracts shall not be performed on such date, but the Purchase
Contracts shall be performed on the immediately preceding Business Day with
the same force and effect as if performed on the Purchase Contract Settlement
Date.
Section 1.13. Counterparts.
This Agreement may be executed in any number of counterparts by the
parties hereto on separate counterparts, each of which, when so executed and
delivered, shall be deemed an original, but all such counterparts shall
together constitute one and the same instrument.
Section 1.14. Inspection of Agreement.
A copy of this Agreement shall be available at all reasonable times
during normal business hours at the Corporate Trust Office for inspection by
any Holder.
ARTICLE II
Certificate Forms
Section 2.1. Forms of Certificates Generally.
The Income PRIDES Certificates (including the form of Purchase Contract
forming part of the Income PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit A hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Income PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company executing such Income PRIDES Certificates, as
evidenced by their execution of the Income PRIDES Certificates.
The definitive Income PRIDES Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Income PRIDES
evidenced by such Income PRIDES Certificates,
20
consistent with the provisions of this Agreement, as evidenced by their
execution thereof.
The Growth PRIDES Certificates (including the form of Purchase Contract
forming part of the Growth PRIDES evidenced thereby) shall be in
substantially the form set forth in Exhibit B hereto, with such letters,
numbers or other marks of identification or designation and such legends or
endorsements printed, lithographed or engraved thereon as may be required by
the rules of any securities exchange on which the Growth PRIDES may be listed
or any depositary therefor, or as may, consistently herewith, be determined
by the officers of the Company executing such Growth PRIDES Certificates, as
evidenced by their execution of the Growth PRIDES Certificates.
The definitive Growth PRIDES Certificates shall be printed, lithographed
or engraved on steel engraved borders or may be produced in any other manner,
all as determined by the officers of the Company executing the Growth PRIDES
evidenced by such Growth PRIDES Certificates, consistent with the provisions
of this Agreement, as evidenced by their execution thereof.
Every Global Certificate authenticated, executed on behalf of the
Holders and delivered hereunder shall bear a legend in substantially the
following form:
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED)
AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A
NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN
WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE
REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH
CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT.
Section 2.2. Form of Agent's Certificate of Authentication.
The form of the Agent's certificate of authentication of the Income
PRIDES shall be in substantially the form set forth on the form of the Income
PRIDES Certificates.
21
The form of the Agent's certificate of authentication of the Growth
PRIDES shall be in substantially the form set forth on the form of the Growth
PRIDES Certificates.
ARTICLE III
The Securities
Section 3.1. Title and Terms; Denominations.
The aggregate number of Income PRIDES evidenced by Certificates
authenticated, executed on behalf of the Holders and delivered hereunder is
limited to 2,300,000 except for Certificates authenticated, executed and
delivered upon registration of transfer of, in exchange for, or in lieu of,
other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9 or 8.5.
The Certificates shall be issuable only in registered form and only in
denominations of a single Income PRIDES or Growth PRIDES and any integral
multiple thereof.
Section 3.2. Rights and Obligations Evidenced by the
Certificates.
Each Income PRIDES Certificate shall evidence the number of Income
PRIDES specified therein, with each such Income PRIDES representing the
ownership by the Holder thereof of a beneficial interest in a Preferred
Security with a stated liquidation amount equal to the Stated Amount, subject
to the Pledge of such Preferred Security by such Holder pursuant to the
Pledge Agreement, and the rights and obligations of the Holder thereof and
the Company under one Purchase Contract. The Agent as attorney-in-fact for,
and on behalf of, each Holder of Income PRIDES shall pledge, pursuant to the
Pledge Agreement, each Preferred Security relating to such Holder's Income
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title, and interest of such Holder in such Preferred
Security, for the benefit of the Company, to secure the obligation of the
Holder under the related Purchase Contract to purchase Common Stock. Prior
to the purchase of shares of
22
Common Stock under a Purchase Contract, such Purchase Contract shall not
entitle the Holder of the related Income PRIDES Certificate to any of the
rights of a holder of shares of Common Stock, including, without limitation,
the right to vote or receive any dividends or other payments or to consent or
to receive notice as stockholders in respect of the meetings of stockholders
or for the election of directors of the Company or for any other matter, or
any other rights whatsoever as stockholders of the Company.
Each Growth PRIDES Certificate shall evidence the number of Growth
PRIDES specified therein, with each such Growth PRIDES representing the
ownership by the Holder thereof of a 1/20 undivided beneficial interest in a
Treasury Security with a principal amount equal to $1,000, subject to the
Pledge of such Treasury Security by such Holder pursuant to the Pledge
Agreement, and the rights and obligations of the Holder thereof and the
Company under one Purchase Contract. The Agent as attorney-in-fact for, and
on behalf of, each Holder of Growth PRIDES shall pledge, pursuant to the
Pledge Agreement, each Treasury Security related to such Holder's Growth
PRIDES, to the Collateral Agent and grant to the Collateral Agent a security
interest in the right, title and interest of such Holder in such Treasury
Security, for the benefit of the Company, to secure the obligation of such
Holder under the related Purchase Contract to purchase Common Stock. Prior
to the purchase, if any, of shares of Common Stock under a Purchase Contract,
such Purchase Contract shall not entitle the Holder of the related Growth
PRIDES Certificate to any of the rights of a holder of shares of Common
Stock, including, without limitation, the right to vote or receive any
dividends or other payments or to consent or to receive notice as
stockholders in respect of the meetings of stockholders or for the election
of directors of the Company or for any other matter, or any other rights
whatsoever as stockholders of the Company.
Section 3.3. Execution, Authentication, Delivery and Dating.
Upon the execution and delivery of this Agreement, and at any time and
from time to time thereafter, the Company may deliver Certificates executed
by the Company to the Agent for authentication, execution on behalf of
23
the Holders and delivery, together with its Issuer Order for authentication
of such Certificates, and the Agent in accordance with such Issuer Order
shall authenticate, execute on behalf of the applicable Holders and deliver
such Certificates, provided, that the Company shall not be required to
deliver an Issuer Order for authentication of Certificates issued pursuant to
the second paragraph of Section 3.4 or Section 3.5, 3.10, 3.13, 3.14, 5.9 or
8.5.
The Certificates shall be executed on behalf of the Company by its Chief
Executive Officer, its Chief Financial Officer, its President, any of its
Executive Vice Presidents, any of its Senior Vice Presidents, any of its Vice
Presidents, its Treasurer, any Assistant Treasurer or its Secretary. The
signature of any of these officers on the Certificates may be manual or
facsimile.
Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the
Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of such Certificates.
No Purchase Contract evidenced by a Certificate shall be valid until
such Certificate has been executed on behalf of the Holder by the manual
signature of an authorized signatory of the Agent, as such Holder's
attorney-in-fact. Such signature by an authorized signatory of the Agent
shall be conclusive evidence that the Holder of such Certificate has entered
into the Purchase Contracts evidenced by such Certificate.
Each Certificate shall be dated the date of its authentication.
No Certificate shall be entitled to any benefit under this Agreement or
be valid or obligatory for any purpose unless there appears on such
Certificate a certificate of authentication substantially in the form
provided for herein executed by an authorized signatory of the Agent by
manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been
duly authenticated and delivered hereunder.
24
Section 3.4. Temporary Certificates.
Pending the preparation of definitive Certificates, the
Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holders, and
deliver, in lieu of such definitive Certificates, temporary
Certificates which are in substantially the form set forth in
Exhibit A or Exhibit B hereto, as the case may be, with such
letters, numbers or other marks of identification or designation
and such legends or endorsements printed, lithographed or
engraved thereon as may be required by the rules of any
securities exchange on which the Income PRIDES or Growth PRIDES
may be listed, or as may, consistently herewith, be determined by
the officers of the Company executing such Certificates, as
evidenced by their execution of the Certificates.
If temporary Certificates are issued, the Company will cause
definitive Certificates to be prepared without unreasonable
delay. After the preparation of definitive Certificates, the
temporary Certificates shall be exchangeable for definitive
Certificates upon surrender of the temporary Certificates at the
Corporate Trust Office, at the expense of the Company and without
charge to the Holder. Upon surrender for cancellation of any one
or more temporary Certificates, the Company shall execute and
deliver to the Agent, and the Agent shall authenticate, execute
on behalf of the Holder, and deliver in exchange therefor, one or
more definitive Certificates of like tenor, in authorized
denominations and evidencing a like number of Income PRIDES or
Growth PRIDES, as the case may be, as the temporary Certificate
or Certificates so surrendered. Until so exchanged, the
temporary Certificates shall in all respects evidence the same
benefits and the same obligations with respect to the Income
PRIDES or Growth PRIDES, as the case may be, evidenced thereby as
definitive Certificates.
Section 3.5. Registration; Registration of Transfer and
Exchange.
The Agent, as agent for the Company, shall keep at the
Corporate Trust Office a register (the "Income PRIDES Register")
in which, subject to such reasonable regulations as it may
prescribe, the Agent shall provide for the registration of Income
PRIDES Certificates and of
25
transfers of Income PRIDES Certificates (the Agent, in such
capacity, the "Income PRIDES Registrar") and a Register (the
"Growth PRIDES Register") in which, subject to such reasonable
regulations as it may prescribe, the Agent shall provide for the
registration of the Growth PRIDES Certificates following
Collateral Substitutions and transfers of Growth PRIDES
Certificates (the Agent, in such capacity, the "Growth PRIDES
Registrar").
Upon surrender for registration of transfer of any
Certificate at the Corporate Trust Office, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the designated transferee or
transferees, and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of any
authorized denominations, like tenor, and evidencing a like
number of Income PRIDES or Growth PRIDES, as the case may be.
At the option of the Holder, Certificates may be exchanged
for other Certificates, of any authorized denominations and
evidencing a like number of Income PRIDES or Growth PRIDES, as
the case may be, upon surrender of the Certificates to be
exchanged at the Corporate Trust Office. Whenever any
Certificates are so surrendered for exchange, the Company shall
execute and deliver to the Agent, and the Agent shall
authenticate, execute on behalf of the Holder, and deliver the
Certificates which the Holder making the exchange is entitled to
receive.
All Certificates issued upon any registration of transfer or
exchange of a Certificate shall evidence the ownership of the
same number of Income PRIDES or Growth PRIDES, as the case may
be, and be entitled to the same benefits and subject to the same
obligations, under this Agreement as the Income PRIDES or Growth
PRIDES, as the case may be, evidenced by the Certificate
surrendered upon such registration of transfer or exchange.
Every Certificate presented or surrendered for registration
of transfer or for exchange shall (if so required by the Agent)
be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Agent duly
executed, by the Holder thereof or his attorney duly authorized
in writing.
26
No service charge shall be made for any registration of
transfer or exchange of a Certificate, but the Company and the
Agent may require payment from the Holder of a sum sufficient to
cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of
Certificates, other than any exchanges pursuant to Sections 3.6,
5.9 and 8.5 not involving any transfer.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder and deliver any Certificate presented or surrendered for
registration of transfer or for exchange on or after the Early
Settlement Date, if any, with respect to the Securities evidenced
by such Certificate, the Business Day immediately preceding the
Purchase Contract Settlement Date or the Termination Date. In
lieu of delivery of a new Certificate, upon satisfaction of the
applicable conditions specified above in this Section and receipt
of appropriate registration or transfer instructions from such
Holder, the Agent shall (i) if the Early Settlement Date or the
Purchase Contract Settlement Date, as applicable, has occurred,
deliver the shares of Common Stock issuable in respect of the
Purchase Contracts forming a part of the Securities evidenced by
such Certificate, (ii) in the case of Income PRIDES, if a
Termination Event shall have occurred prior to the Early
Settlement Date or the Purchase Contract Settlement Date, as
applicable, transfer the stated liquidation amount of the
Preferred Securities related thereto, or (iii) in the case of
Growth PRIDES, if a Termination Event shall have occurred prior
to the Early Settlement Date or the Purchase Contract Settlement
Date, as applicable, transfer the Treasury Securities related
thereto, in each case subject to the applicable conditions and in
accordance with the applicable provisions of Article Five hereof.
Section 3.6. Book-Entry Interests.
One or more of the Certificates, on or after their original
issuance, may be issued in the form of one or more, fully
registered Global Certificates, to be delivered to the
Depositary. Each such Global Certificate shall initially be
registered on the Income PRIDES Register or the Growth PRIDES
Register, as the case may be, in
27
the name of Cede & Co., the nominee of the Depositary, and no
Beneficial Owner will receive a definitive Certificate
representing such Beneficial Owner's interest in such Global
Certificate, except as provided in Section 3.9. The Agent shall
enter into an agreement with the Clearing Agency if so requested
by the Company. With respect to each Certificate issued in the
form of one or more Global Certificates, unless and until
definitive, fully registered Certificates have been issued to
Beneficial Owners pursuant to Section 3.9:
(a) the provisions of this Section 3.6 shall be in
full force and effect;
(b) the Company shall be entitled to deal with the
Clearing Agency for all purposes of this Agreement (including the
payment of Contract Adjustment Payments, if any, and receiving
approvals, votes or consents hereunder) as the Holder of the
Securities and the sole holder of the Global Certificate(s) and
shall have no obligation to the Beneficial Owners;
(c) to the extent that the provisions of this Section
3.6 conflict with any other provisions of this Agreement, the
provisions of this Section 3.6 shall control; and
(d) the rights of the Beneficial Owners shall be
exercised only through the Clearing Agency and shall be limited
to those established by law and agreements between such
Beneficial Owners and the Clearing Agency and/or the Clearing
Agency Participants. The Clearing Agency will make book entry
transfers among Clearing Agency Participants and receive and
transmit payments of Contract Adjustment Payments to such
Clearing Agency Participants.
Section 3.7. Notices to Holders.
Whenever a notice or other communication to the Holders is
required to be given under this Agreement, the Company, the
Company's agent or the Agent shall give such notices and
communications to the Holders and, with respect to any Securities
registered in the name of a Clearing Agency, the nominee of a
Clearing Agency, the Company or the Company's agent and the Agent
shall,
28
except as set forth herein, have no obligations to the Beneficial
Owners.
Section 3.8. Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to all or a portion of the
Securities, the Company may, in its sole discretion, appoint a
successor Clearing Agency with respect to all or a portion of the
Securities.
Section 3.9. Definitive Certificates.
If (i) a Clearing Agency elects to discontinue its services
as securities depositary with respect to all or a portion of the
Securities and a successor Clearing Agency is not appointed
within 90 days after such discontinuance pursuant to Section 3.8,
(ii) the Company elects to terminate the book-entry system
through the Clearing Agency with respect to all or a portion of
the Securities, or (iii) there shall have occurred and be
continuing a default by the Company in respect of its obligations
under one or more Purchase Contracts, then upon surrender by the
Clearing Agency of the Global Certificates representing the
Book-Entry Interests with respect to the applicable Securities,
accompanied by registration instructions, the Company shall cause
definitive Certificates to be delivered to Beneficial Owners in
accordance with the instructions of the Clearing Agency. The
Company shall not be liable for any delay in delivery of such
instructions and may conclusively rely on and shall be protected
in relying on, such instructions.
Section 3.10. Mutilated, Destroyed, Lost and Stolen
Certificates.
If any mutilated Certificate is surrendered to the Agent,
the Company shall execute and deliver to the Agent, and the Agent
shall authenticate, execute on behalf of the Holder, and deliver
to the Holder in exchange therefor, a new Certificate, of like
tenor and evidencing the same number of Income PRIDES or Growth
PRIDES, as the case may be, and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Agent (i)
evidence to their satisfaction of the destruc-
29
tion, loss or theft of any Certificate, and (ii) such security or
indemnity as may be required by them to hold each of them and any
agent of any of them harmless, then, in the absence of notice to
the Company or the Agent that such Certificate has been acquired
by a bona fide purchaser, the Company shall execute and deliver
to the Agent, and the Agent shall authenticate, execute on behalf
of the Holder, and deliver to the Holder, in lieu of any such
destroyed, lost or stolen Certificate, a new Certificate, of like
tenor and evidencing the same number of Income PRIDES or Growth
PRIDES, as the case may be, and bearing a number not
contemporaneously outstanding.
Notwithstanding the foregoing, the Company shall not be
obligated to execute and deliver to the Agent, and the Agent
shall not be obligated to authenticate, execute on behalf of the
Holder, and deliver to the Holder, a Certificate on or after the
Early Settlement Date, if any, with respect to the Securities
evidenced by the applicable Certificate, the Business Day
immediately preceding the Purchase Contract Settlement Date or
the Termination Date. In lieu of delivery of a new Certificate,
upon satisfaction of the applicable conditions specified above in
this Section, the Agent shall (i) if the Early Settlement Date or
the Purchase Contract Settlement Date, as applicable, has
occurred, deliver the shares of Common Stock issuable in respect
of the Purchase Contracts forming a part of the Securities
evidenced by such Certificate, or (ii) if a Termination Event
shall have occurred prior to the Early Settlement Date or the
Purchase Contract Settlement Date, as applicable, transfer the
Preferred Securities or the Treasury Securities, as the case may
be, related thereto, in each case subject to the applicable
conditions and in accordance with the applicable provisions of
Article Five hereof.
Upon the issuance of any new Certificate under this Section,
the Company and the Agent may require the payment by the Holder
of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Agent) connected
therewith.
Every new Certificate issued pursuant to this Section in
lieu of any destroyed, lost or stolen Certificate shall
constitute an original additional contractual obligation of the
Company and of the Holder in respect of
30
the Security evidenced thereby, whether or not the destroyed,
lost or stolen Certificate (and the Securities evidenced thereby)
shall be at any time enforceable by anyone, and shall be entitled
to all the benefits and be subject to all the obligations of this
Agreement equally and proportionately with any and all other
Certificates delivered hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Certificates.
Section 3.11. Persons Deemed Owners.
Prior to due presentment of a Certificate for registration
of transfer, the Company and the Agent, and any agent of the
Company or the Agent, may treat the Person in whose name such
Certificate is registered as the owner of the Income PRIDES or
Growth PRIDES evidenced thereby, for the purpose of receiving
distributions on the related Preferred Securities, receiving
payments of Contract Adjustment Payments, if any, performance of
the related Purchase Contracts and for all other purposes
whatsoever, whether or not any distributions on such Preferred
Securities or the Contract Adjustment Payments, if any, payable
in respect of the Purchase Contracts forming a part of the Income
PRIDES or Growth PRIDES evidenced thereby shall be overdue and
notwithstanding any notice to the contrary, and neither the
Company nor the Agent, nor any agent of the Company or the Agent,
shall be affected by notice to the contrary.
Notwithstanding the foregoing, with respect to any Global
Certificate, nothing herein shall prevent the Company, the Agent
or any agent of the Company or the Agent, from giving effect to
any written certification, proxy or other authorization furnished
by any Clearing Agency (or its nominee), as a Holder, with
respect to such Global Certificate or impair, as between such
Clearing Agency and owners of beneficial interests in such Global
Certificate, the operation of customary practices governing the
exercise of rights of such Clearing Agency (or its nominee) as
Holder of such Global Certificate.
31
Section 3.12. Cancellation.
All Certificates surrendered for delivery of shares of
Common Stock on or after the Purchase Contract Settlement Date,
upon the transfer of Preferred Securities or Treasury Securities,
as the case may be, in connection with a Collateral Substitution
or the re-establishment of an Income PRIDES after the occurrence
of a Termination Event or pursuant to an Early Settlement, or
upon the registration of a transfer or exchange of a Security,
shall, if surrendered to any Person other than the Agent, be
delivered to the Agent and, if not already cancelled, shall be
promptly cancelled by it. The Company may at any time deliver to
the Agent for cancellation any Certificates previously
authenticated, executed and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Certificates
so delivered shall, upon delivery of cancellation instructions by
the Company, be promptly cancelled by the Agent. No Certificates
shall be authenticated, executed on behalf of the Holder and
delivered in lieu of or in exchange for any Certificates
cancelled as provided in this Section, except as expressly
permitted or required by this Agreement. All cancelled
Certificates held by the Agent shall be destroyed by the Agent
unless otherwise directed by Issuer Order.
If the Company or any Affiliate of the Company shall acquire
any Certificate, such acquisition shall not operate as a
cancellation of such Certificate unless and until such
Certificate is delivered to the Agent for cancellation or is
cancelled.
Section 3.13. Substitution of Securities.
A Holder may separate Preferred Securities from the related
Purchase Contracts in respect of one or more Income PRIDES by
substituting for such Preferred Securities, Treasury Securities
in an aggregate principal amount equal to the aggregate stated
liquidation amount of such Preferred Securities (a "Collateral
Substitution") at any time from and after the date of this
Agreement and on or prior to the second Business Day immediately
preceding the Purchase Contract Settlement Date by (a) depositing
with the Collateral Agent Treasury Securities having an aggregate
principal amount equal to the aggregate stated liquidation amount
of the Preferred
32
Securities relating to such Income PRIDES (and in any event
having an aggregate principal amount in an integral multiple of
$1,000) and (b) transferring the related Income PRIDES to the
Agent accompanied by a notice to the Agent, substantially in the
form of Exhibit D hereto, stating that the Holder has transferred
the relevant amount of Treasury Securities to the Collateral
Agent and requesting that the Agent instruct the Collateral Agent
to release to such Holder the Preferred Securities relating to
such Income PRIDES, whereupon the Agent shall promptly give such
instruction to the Collateral Agent, substantially in the form of
Exhibit C hereto. Upon receipt of the Treasury Securities
described in clause (a) above and the instruction described in
clause (b) above, in accordance with the terms of the Pledge
Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, Preferred Securities having a corresponding
aggregate stated liquidation amount from the Pledge, free and
clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Income PRIDES;
(ii) transfer such Preferred Securities to the Holder;
and
(iii) authenticate, execute on behalf of such Holder
and deliver a Growth PRIDES Certificate executed by the
Company in accordance with Section 3.3 evidencing the same
number of Purchase Contracts as were evidenced by the
cancelled Income PRIDES Certificates.
Holders who elect to separate Preferred Securities from the
related Purchase Contracts and to substitute Treasury Securities
for such Preferred Securities shall be responsible for any fees
or expenses payable to the Collateral Agent for its services as
Collateral Agent in respect of the substitution, and the Company
shall not be responsible for any such fees or expenses.
Holders may make Collateral Substitutions only in integral
multiples of 20 Income PRIDES.
In the event a Holder making a Collateral Substitution
pursuant to this Section 3.13 fails to effect a book-entry
transfer of the applicable Income PRIDES or
33
fails to deliver the requisite number Income PRIDES Certificates
to the Agent after depositing Treasury Securities with the
Collateral Agent, the Preferred Securities relating to such
Income PRIDES, and any distributions on such Preferred
Securities, shall be held in the name of the Agent or its nominee
in trust for the benefit of such Holder, until such Income PRIDES
are so transferred or such Income PRIDES Certificates are so
delivered, as the case may be, or, with respect to an Income
PRIDES Certificate, such Holder provides satisfactory evidence
that such Income PRIDES Certificate has been destroyed, lost or
stolen, together with any indemnity that may be required by the
Agent and the Company.
Except as described in this Section 3.13, for so long as the
Purchase Contract forming a part of an Income PRIDES remains in
effect, such Income PRIDES shall not be separable into its
constituent parts, and the rights and obligations of the Holder
of such Income PRIDES in respect of the related Preferred
Security and Purchase Contract forming a part of such Income
PRIDES may be acquired, and may be transferred and exchanged,
only as an Income PRIDES.
Section 3.14. Reestablishment of Income PRIDES.
A Holder of a Growth PRIDES may at any time on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, recreate Income PRIDES by (a)
depositing with the Collateral Agent Preferred Securities having
an aggregate stated liquidation amount equal to the aggregate
principal amount of the Treasury Securities relating to the
Growth PRIDES (and in any event having an aggregate stated
liquidation amount in an integral multiple of $1,000) and (b)
transferring the related Growth PRIDES to the Agent accompanied
by a notice to the Agent, substantially in the form of Exhibit D
hereto, stating that the Holder has deposited the relevant amount
of Preferred Securities with the Collateral Agent and requesting
that the Agent instruct the Collateral Agent to release the
Treasury Securities relating to such Growth PRIDES to such
Holder, whereupon the Agent shall promptly give such instruction
with the Collateral Agent, substantially in the form of Exhibit C
hereto. Upon receipt of the Preferred Securities described in
clause (a) above and the instruction described in clause (b)
above, in accordance with the terms of the Pledge
34
Agreement, the Collateral Agent will release to the Agent, on
behalf of the Holder, the Treasury Securities having a
corresponding aggregate principal amount from the Pledge, free
and clear of the Company's security interest therein, and upon
receipt thereof the Agent shall promptly:
(i) cancel the related Growth PRIDES;
(ii)transfer such Treasury Securities to the Holder;
and
(iii)authenticate, execute on behalf of such Holder and
deliver an Income PRIDES Certificate executed by the Company
in accordance with Section 3.3 evidencing the same number of
Purchase Contracts as were evidenced by the cancelled Growth
PRIDES.
Holders who elect to recreate Income PRIDES and to
substitute Preferred Securities for the related Treasury
Securities shall be responsible for any fees or expenses payable
in connection with such substitution, including any fees or
expenses payable to the Collateral Agent in respect of such
substitution, and the Company shall not be responsible for any
such fees or expenses.
Holders of Growth PRIDES may reestablish Income PRIDES only
in integral multiples of 20 Growth PRIDES for 20 Income PRIDES.
Except as provided in this Section 3.14, for so long as the
Purchase Contract forming a part of a Growth PRIDES remains in
effect, such Growth PRIDES shall not be separable into its
constituent parts and the rights and obligations of the Holder of
such Growth PRIDES in respect of the related Treasury Security
and the Purchase Contract forming a part of such Growth PRIDES
may be acquired, and may be transferred and exchanged only as a
Growth PRIDES.
Section 3.15. Transfer of Collateral upon Occurrence of
Termination Event.
Upon the occurrence of a Termination Event and the transfer
to the Agent of the Preferred Securities or the Treasury
Securities, as the case may be, relating to the Income PRIDES and
the Growth PRIDES, respectively, pursu-
35
ant to the terms of the Pledge Agreement, the Agent shall request
transfer instructions with respect to such Preferred Securities
and/or Treasury Securities, as the case may be, from each Holder
by written request mailed to such Holder at its address as it
appears in the Income PRIDES Register or the Growth PRIDES
Register, as the case may be. Upon book-entry transfer of the
Income PRIDES or Growth PRIDES or delivery of an Income PRIDES
Certificate or Growth PRIDES Certificate to the Agent with such
transfer instructions, the Agent shall transfer the Preferred
Securities or Treasury Securities relating to such Income PRIDES
or Growth PRIDES, as the case may be, to such Holder by
book-entry transfer, or other appropriate procedures, in
accordance with such instructions. In the event a Holder of
Income PRIDES or Growth PRIDES fails to effect such transfer or
delivery, or to deliver such transfer instructions to the Agent,
the Preferred Securities or Treasury Securities relating to such
Income PRIDES or Growth PRIDES, as the case may be, and any
distributions thereon, shall be held in the name of the Agent or
its nominee in trust for the benefit of such Holder until such
transfer instructions are so delivered and until such Income
PRIDES or Growth PRIDES are transferred or the Income PRIDES
Certificate or Growth PRIDES Certificate is surrendered or such
Holder provides satisfactory evidence that such Income PRIDES
Certificate or Growth PRIDES Certificate has been destroyed, lost
or stolen, together with any indemnity that may be required by
the Agent and the Company.
Section 3.16. No Consent to Assumption.
Each Holder of a Security, by acceptance thereof, shall be
deemed expressly to have withheld any consent to the assumption
under Section 365 of the Bankruptcy Code or otherwise, of the
Purchase Contract by the Company, a receiver, liquidator or a
Person performing similar functions, or its trustee in the event
that the Company becomes the debtor under the Bankruptcy Code or
subject to other similar state or federal law providing for
reorganization or liquidation.
36
ARTICLE IV
The Preferred Securities
Section 4.1. Payment of Distributions; Rights to Distributions
Preserved; Distribution Rate Reset; Notice.
A distribution on any Preferred Security which is paid on
any Payment Date shall, subject to receipt thereof by the Agent
from the Collateral Agent as provided by the terms of the Pledge
Agreement, be paid to the Person in whose name the Income PRIDES
Certificate (or one or more Predecessor Income PRIDES
Certificates) to which such Preferred Security relates is
registered at the close of business on the Record Date for such
Payment Date.
Each Income PRIDES Certificate relating to Preferred
Securities delivered under this Agreement, upon registration of,
transfer of or in exchange for or in lieu of any other Income
PRIDES Certificate, shall carry the rights to distributions
accumulated and unpaid, and to accumulate distributions, which
were carried by the Preferred Securities relating to such other
Income PRIDES Certificate.
In the case of any Income PRIDES with respect to which Cash
Settlement of the related Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract
Settlement Date, or with respect to which Early Settlement of the
related Purchase Contract is effected on an Early Settlement
Date, or with respect to which a Collateral Substitution is
effected on any date, after any Record Date and on or prior to
the next succeeding Payment Date, distributions on the Preferred
Securities relating to such Income PRIDES otherwise payable on
such Payment Date shall be payable on such Payment Date
notwithstanding such Cash Settlement or Early Settlement or
Collateral Substitution, and such distributions shall, subject to
receipt thereof by the Agent, be paid to the Person in whose name
the Income PRIDES Certificate (or one or more Predecessor Income
PRIDES Certificates) was registered at the close of business on
the Record Date. Except as otherwise expressly provided in the
immediately preceding sentence, in the case of any
37
Income PRIDES with respect to which Cash Settlement or Early
Settlement of the related Purchase Contract is effected on the
Business Day immediately preceding the Purchase Contract
Settlement Date or an Early Settlement Date, as the case may be,
or with respect to which a Collateral Substitution has been
effected, distributions on the related Preferred Securities that
would otherwise be payable after the Purchase Contract Settlement
Date, the Early Settlement Date or the date on which such
Collateral Substitution is effected, as applicable shall not be
payable hereunder to the Holder of such Income PRIDES; provided,
however, that to the extent that such Holder continues to hold
the separated Preferred Securities that formerly related to such
Holder's Income PRIDES, such Holder shall be entitled to receive
the distributions on such separated Preferred Securities.
The Coupon Rate on the Preferred Securities will be reset on
the Purchase Contract Settlement Date to the Reset Rate. On the
Reset Announcement Date the Reset Spread and the Two-Year
Benchmark Treasury to be used to determine the Reset Rate will be
announced by the Company. On the Business Day immediately
following the Reset Announcement Date, the Preferred Securities
Holders will be notified of such Reset Spread and Two-Year
Benchmark Treasury by the Company. Such notice shall be
sufficiently given to Holders of Preferred Securities if
published in an Authorized Newspaper in The City of New York.
If any of the Certificates are then issued in the form of a
Global Certificate, not later than 7 calendar days nor more than
15 calendar days prior to the Reset Announcement Date, the
Company will request DTC or its nominee (or any successor
Clearing Agency or its nominee) by first-class mail, postage
prepaid, to notify the Beneficial Owners or Clearing Agency
Participants holding Income PRIDES or Growth PRIDES, of such
Reset Announcement Date and the procedures to be followed by such
Holders of Income PRIDES or Growth PRIDES who intend to settle
their obligations under the related Purchase Contracts with
separate cash on the Purchase Contract Settlement Date.
38
Section 4.2. Notice and Voting.
Under the terms of the Pledge Agreement, the Agent will be
entitled to exercise the voting and any other consensual rights
pertaining to the Preferred Securities pledged with the
Collateral Agent but only to the extent instructed by the Holders
as described below. Upon receipt of notice of any meeting at
which holders of Preferred Securities are entitled to vote or
upon any solicitation of consents, waivers or proxies of holders
of Preferred Securities, the Agent shall, as soon as practicable
thereafter, mail to the Holders of Income PRIDES a notice (a)
containing such information as is contained in such notice of a
meeting or such solicitation, (b) stating that each Holder on the
record date set by the Agent therefor (which, to the extent
possible, shall be the same date as the record date for
determining the holders of Preferred Securities entitled to vote
at such meeting or to act in respect to such solicitation) shall
be entitled to instruct the Agent as to the exercise of the
voting or other rights pertaining to the Preferred Securities
relating to their Income PRIDES and (c) stating the manner in
which such instructions may be given. Upon the written request
of the Holders on such record date, the Agent shall endeavor
insofar as practicable to vote or cause to be voted or to act or
to cause such action to be taken, in accordance with the
instructions set forth in such requests, the maximum number of
Preferred Securities as to which any particular voting
instructions are received. In the absence of specific
instructions from the Holder of an Income PRIDES, the Agent shall
abstain from voting the Preferred Security relating to such
Income PRIDES or from taking or causing to be taken any action in
respect thereof, as the case may be. The Company hereby agrees,
if applicable, to solicit Holders to timely instruct the Agent in
order to enable the Agent to vote such Preferred Securities or to
cause such Preferred Securities to be voted, or to take or cause
to be taken such action in respect of such Preferred Securities
as may be the subject of any such solicitation, and the Trust
shall covenant in the Declaration to take all reasonable actions
which may be deemed necessary by the Agent in order to enable the
Agent to vote such Preferred Securities or to cause such
Preferred Securities to be voted.
39
Section 4.3. Liquidation of the Trust.
Upon the occurrence of a liquidation of the Trust in
accordance with the Declaration, a principal amount of Debentures
constituting the assets of the Trust and relating to the
Preferred Securities equal to the aggregate stated liquidation
amount of the Pledged Preferred Securities shall be delivered to
the Collateral Agent in exchange for the Pledged Preferred
Securities. Thereafter, the Debentures will be held by the
Collateral Agent in accordance with the terms of the Pledge
Agreement to secure the obligations of each Holder of an Income
PRIDES to purchase Common Stock under the related Purchase
Contract forming a part of such Income PRIDES. Following the
occurrence of a liquidation of the Trust, the Holders and the
Collateral Agent shall have such security interests, rights and
obligations with respect to such Debentures as the Holders and
the Collateral Agent had in respect of the Preferred Securities
subject to the Pledge thereof as provided in Articles II, III,
IV, V and VI of the Pledge Agreement, and any reference herein to
the Preferred Securities shall be deemed to be a reference to
such Debentures. The Company may cause to be made in any Income
PRIDES Certificates thereafter to be issued such change in
phraseology and form (but not in substance) as may be appropriate
to reflect the liquidation of the Trust and the substitution of
Debentures for Preferred Securities as Collateral.
ARTICLE V
The Purchase Contracts
Section 5.1. Purchase of Shares of Common Stock.
Each Purchase Contract shall obligate the Holder of the
related Security to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated
Amount (the "Purchase Price"), a number of newly issued shares of
Common Stock equal to the Settlement Rate unless, on or prior to
the Purchase Contract Settlement Date, there shall have occurred
a Termination Event with respect to the Security of which such
Purchase Contract is a part. The "Settlement Rate" is equal to
(a) if the Applicable Market Value (as de-
40
fined below) is equal to or greater than $65.04 (the "Threshold
Appreciation Price"), .769 shares of Common Stock per Purchase
Contract, (b) if the Applicable Market Value is less than the
Threshold Appreciation Price, but is greater than $53 5/16, the
number of shares of Common Stock equal to the Stated Amount
divided by the Applicable Market Value and (c) if the Applicable
Market Value is less than or equal to $53 5/16, .938 shares of
Common Stock per Purchase Contract, in each case subject to
adjustment as provided in Section 5.6 (and in each case rounded
upward or downward to the nearest 1/10,000th of a share). As
provided in Section 5.10, no fractional shares of Common Stock
will be issued upon settlement of Purchase Contracts.
The "Applicable Market Value" means the average of the
Closing Prices per share of Common Stock on each of the 30
consecutive Trading Days ending on the second Trading Day
immediately preceding the Purchase Contract Settlement Date. The
"Closing Price" of the Common Stock on any date of determination
means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on
the New York Stock Exchange (the "NYSE") on such date or, if the
Common Stock is not listed for trading on the NYSE on any such
date, as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so
listed, or if the Common Stock is not so listed on a United
States national or regional securities exchange, as reported by
The Nasdaq Stock Market, or, if the Common Stock is not so
reported, the last quoted bid price for the Common Stock in the
over-the-counter market as reported by the National Quotation
Bureau or similar organization, or, if such bid price is not
available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company. A
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close
of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter
market that is the primary market for the trading of the Common
Stock.
41
Each Holder of an Income PRIDES or a Growth PRIDES, by its
acceptance thereof, irrevocably authorizes the Agent to enter
into and perform the related Purchase Contract on its behalf as
its attorney-in-fact, agrees to be bound by the terms and
provisions thereof, covenants and agrees to perform its
obligations under such Purchase Contract, and consents to the
provisions hereof, irrevocably authorizes the Agent as its
attorney-in-fact to enter into and perform the Pledge Agreement
on its behalf as its attorney-in-fact, and consents to and agrees
to be bound by the Pledge of the related Preferred Securities or
Treasury Securities pursuant to the Pledge Agreement; provided
that upon a Termination Event, the rights of the Holder of such
Security under such Purchase Contract may be enforced without
regard to any other rights or obligations. Each Holder of an
Income PRIDES or a Growth PRIDES, by its acceptance thereof,
further covenants and agrees, that, to the extent and in the
manner provided in Section 5.4 and the Pledge Agreement, but
subject to the terms thereof, payments in respect of the stated
liquidation amount of the related Preferred Securities or the
Proceeds of the related Treasury Securities shall be paid by the
Collateral Agent to the Company on the Purchase Contract
Settlement Date in satisfaction of such Holder's obligations
under the related Purchase Contract and such Holder shall acquire
no right, title or interest in such payments.
Each Holder of an Income PRIDES or a Growth PRIDES and each
Beneficial Owner thereof, by its acceptance thereof or of its
interest therein, further agrees to treat (i) itself as the owner
of the related Preferred Securities or Treasury Securities, as
the case may be, and (ii) the Debentures as indebtedness of the
Company, in each case, for United States federal, state and local
income and franchise tax purposes.
Upon registration of transfer of a Certificate, the
transferee shall be bound (without the necessity of any other
action on the part of such transferee), under the terms of this
Agreement, the Purchase Contracts forming a part of such
Certificate and the Pledge Agreement and the transferor shall be
released from the obligations under this Agreement, the Purchase
Contracts forming a part of the Certificates so transferred and
the Pledge Agreement. The Company covenants and agrees, and each
Holder of a Certificate, by its acceptance thereof, likewise
cove-
42
nants and agrees, to be bound by the provisions of this
paragraph.
Section 5.2. Contract Adjustment Payments.
In the event that the Contract Adjustment Payments
constitute a component of Income PRIDES or Growth PRIDES, subject
to Section 5.3, the Company shall pay, on each Payment Date, the
Contract Adjustment Payments payable in respect of each Purchase
Contract to the Person in whose name the related Certificate (or
one or more Predecessor Certificates) is registered at the close
of business on the Record Date next preceding such Payment Date.
The Contract Adjustment Payments, if any, will be payable at the
office of the Agent in The City of New York maintained for that
purpose or, at the option of the Company, by check mailed to the
address of the Person entitled thereto at such Person's address
as it appears on the Income PRIDES Register or Growth PRIDES
Register.
Upon the occurrence of a Termination Event, Contract
Adjustment Payments, if any, shall cease to accrue in respect of
any period from and after the date of such Termination Event
(unless the Company defaults in the payment of accrued Contract
Adjustment Payments). The Company's obligations to pay any
accrued Contract Adjustment Payments shall be deemed to be
fulfilled if the Company deposits with the Agent funds necessary
to pay accrued Contract Adjustment Payments, in trust with
irrevocable instructions and authorization that such funds shall
be delivered to the Holders.
Each Certificate delivered under this Agreement upon
registration of transfer of or in exchange for or in lieu of
(including as a result of a Collateral Substitution or the
re-establishment of an Income PRIDES) any other Certificate shall
carry the rights to Contract Adjustment Payments, if any, accrued
and unpaid, and to accrue Contract Adjustment Payments, if any,
which were carried by the Purchase Contracts forming a part of
such other Certificate.
In the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, occurring after any Record Date and on or
prior to the next succeeding Payment Date, Contract Adjustment
Payments, if any, other-
43
wise payable in respect of such Purchase Contract on such Payment
Date shall be payable on such Payment Date notwithstanding such
Early Settlement, and such Contract Adjustment Payments shall be
paid to the Person in whose name the Certificate evidencing such
Security (or one or more Predecessor Certificates) is registered
at the close of business on such Record Date. Except as
otherwise expressly provided in the immediately preceding
sentence, in the case of any Security with respect to which Early
Settlement of the underlying Purchase Contract is effected on an
Early Settlement Date, Contract Adjustment Payments, if any, that
would otherwise be payable after the Early Settlement Date with
respect to such Purchase Contract shall not be payable.
The Company's obligations with respect to Contract
Adjustment Payments, the Preferred Securities Guarantee and
Subordinated Debt Securities, rank (i) subordinate and junior in
right of payment to all Senior Indebtedness, (ii) pari passu with
respect to the Company's guarantee of the Common Securities (the
"Common Securities Guarantee"), the Company's guarantee of PLC
Capital L.L.C.'s 9% Cumulative Monthly Income Preferred
Securities, Series A (the "Series A Guarantee"), the Company's 9%
Subordinated Debentures, due 2024, Series A (the "Series A
Subordinated Debentures"), the Company's guarantee of PLC Capital
Trust I's 81/4% Trust Originated Preferred Securities (the
"81/4% Preferred Securities Guarantee"), the Company's guarantee
of PLC Capital Trust I's 81/4% Trust Originated Common
Securities, (the "81/4% Common Securities Guarantee" and together
with the 81/4% Preferred Securities Guarantee, the "81/4% TOPrS
Guarantees") and the Company's 81/4% Subordinated Debentures due
2027, Series B (the "Series B Subordinated Debentures"), and with
all unsecured trade creditors of the Company and any other
liabilities or obligations that may be pari passu by their terms
and to any guarantee now or hereafter entered into by the Company
in respect of any preferred or preference stock of any affiliate
of the Company.
Section 5.3. Deferral of Payment Dates for Contract Adjustment
Payments.
The Company shall have the right, at any time prior to the
Purchase Contract Settlement Date, to defer the
44
payment of any or all of the Contract Adjustment Payments
otherwise payable on any Payment Date, but only if the Company
shall give the Holders and the Agent written notice of its
election to defer such payment (specifying the amount to be
deferred) at least ten Business Days prior to the earlier of (i)
the next succeeding Payment Date or (ii) the date the Company is
required to give notice of the Record Date or Payment Date with
respect to payment of such Contract Adjustment Payments to the
NYSE or other applicable self-regulatory organization or to
Holders of the Securities, but in any event not less than two
Business Days prior to such Record Date. Any Contract Adjustment
Payments so deferred shall bear additional Contract Adjustment
Payments thereon at the rate of 61/2% per annum (computed on the
basis of 360 day year of twelve 30 day months), compounding on
each succeeding Payment Date, until paid in full (such deferred
installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, being
referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments shall be due
on the next succeeding Payment Date except to the extent that
payment is deferred pursuant to this Section. No Contract
Adjustment Payments may be deferred to a date that is after the
Purchase Contract Settlement Date. If the Purchase Contracts are
terminated upon the occurrence of a Termination Event, the
Holder's right to receive Contract Adjustment Payments (other
than any accrued but unpaid Contract Adjustment Payments that
have not been deferred) and Deferred Contract Adjustment
Payments, if any, will terminate.
In the event that the Company elects to defer the payment of
Contract Adjustment Payments, if any, on the Purchase Contracts
until the Purchase Contract Settlement Date, each Holder will
receive on the Purchase Contract Settlement Date in respect of
Deferred Contract Adjustment Payments, in lieu of a cash payment,
a number of shares of Common Stock equal to (x) the aggregate
amount of Deferred Contract Adjustment Payments payable to such
Holder divided by (y) the Applicable Market Value.
No fractional shares of Common Stock will be issued by the
Company with respect to the payment of Deferred Contract
Adjustment Payments, if any, on the Purchase Contract Settlement
Date. In lieu of fractional shares
45
otherwise issuable (calculated on an aggregate basis after taking
into account all of the Securities held by
the applicable Holder) with respect to such payment of Deferred
Contract Adjustment Payments, the Holder will be entitled to
receive an amount in cash as provided in Section 5.10.
In the event the Company exercises its option to defer the
payment of Contract Adjustment Payments, then, until the Deferred
Contract Adjustment Payments have been paid, the Company shall
not declare or pay dividends on, or make a distribution with
respect to, or redeem, purchase or acquire, or make a liquidation
payment with respect to, any of its capital stock or make
guarantee payments with respect to the foregoing (other than (i)
purchases or acquisitions of shares of Protective Life's capital
stock in connection with the satisfaction by Protective Life of
its obligations under any employee benefit plans or the
satisfaction by the Company of its obligations pursuant to any
contract or security requiring the Company to purchase shares of
its capital stock, (ii) as a result of a reclassification of
Protective Life capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another
class or series of Protective Life capital stock, (iii) the
purchase of fractional interests in shares of the Company's
capital stock pursuant to an acquisition or the conversion or
exchange provisions of such Protective Life capital stock or the
securities being converted or exchanged, (iv) dividends or
distributions in capital stock of the Company and (v) redemptions
of purchases pursuant to Protective Life's Rights Agreement
(together with any successor thereto the "Rights Agreement"),
dated as of August 7, 1995, between Protective Life and Amsouth
Bank (as successor by merger to AmSouth Bank of Alabama successor
by conversion of charter to AmSouth Bank N.A.) ("AmSouth Bank")
as Rights Agent).
Section 5.4. Payment of Purchase Price.
(a) Unless a Holder settles the related Purchase Contract
through the early delivery of cash to the Agent in the manner
described in Section 5.9 or otherwise, the Purchase Price for the
shares of Common Stock purchased pursuant to such Purchase
Contract shall be paid by application of payments received by the
Company on the Purchase Contract Settlement Date from the
Collateral
46
Agent pursuant to the Pledge Agreement, payable at the office of
the Collateral Agent in the City of New York maintained for such
purpose, as follows:
(i) A Holder may effect a "Cash Settlement" of a
Purchase Contract by (A) providing the Agent with notice of
its election to effect a Cash Settlement on or prior to 5:00
p.m., New York City time, on the second Business Day
immediately preceding the Purchase Contract Settlement Date
and (B) making a payment of the Purchase Price to the
Collateral Agent prior to 12:00 p.m., New York City time, on
the Business Day immediately preceding the Purchase Contract
Settlement Date in lawful money of the United States by
certified or cashiers' check or wire transfer in immediately
available funds payable to or upon the order of the Company.
Upon receipt of notice from a Holder electing a Cash
Settlement, the Agent promptly shall notify the Collateral
Agent of such Holder's election. Any cash received by the
Collateral Agent will be invested promptly by the Collateral
Agent in overnight Permitted Investments and an amount equal
to the Purchase Price will be paid to the Company on the
Purchase Contract Settlement Date in settlement of the
Purchase Contract in accordance with the terms of the Pledge
Agreement. Any funds received by the Collateral Agent in
respect of the investment earnings from the investment in
such Permitted Investments, will be distributed to the Agent
when received for payment to the Holder.
(ii) A Holder of Income PRIDES who does not make an
effective Cash Settlement or an Early Settlement under
Section 5.9 hereof shall be deemed to have instructed the
Purchase Contract Agent, without any further instruction
from the Holder of the Income PRIDES: (a) to the extent that
the Trust is still the holder of the Debentures, to direct
the Institutional Trustee to exercise the Trust's right as a
holder to put the Debentures to the Company on the Purchase
Contract Settlement Date in accordance with Section 2.8(2)
of the Indenture or (b) to the extent that the Purchase
Contract Agent has become the holder of the Debentures (as a
result of the termination of the Trust or otherwise), to
exercise the Purchase Contract Agent's right as a holder to
47
put the Debentures to the Company on the Purchase Contract
Settlement Date in accordance with Section 2.8(2) of the
Indenture. The consideration received with respect to the
put of the Debentures shall be considered to be proceeds of the
Preferred Securities and as such will be paid to the Collateral
Agent as secured party with respect to the Preferred Securities
and shall be automatically applied by the Collateral Agent to pay
the Purchase Price for the Purchase Contract to the Company on
the Purchase Contract Settlement Date as provided in subparagraph
(a)(i) above; and
(iii) A Holder of Growth PRIDES who does not make an
effective Cash Settlement or an Early Settlement under
Section 5.9 hereof shall pay for the shares of Common Stock
to be issued under the related Purchase Contract from the
Proceeds of the related Pledged Treasury Securities (as
defined in Section 2.1 of the Pledge Agreement) held by the
Collateral Agent, which will be applied automatically by the
Collateral Agent to pay the Purchase Price for the Purchase
Contract to the Company on the Purchase Contract Settlement
Date without receiving any instruction from the Holder.
Upon the maturity of the Pledged Treasury Securities (as
defined in Section 2.1 of the Pledge Agreement) held by the
Collateral Agent on the Business Day immediately preceding
the Purchase Contract Settlement Date, the principal amount
of such Treasury Securities received by the Collateral Agent
will be invested promptly in overnight Permitted
Investments. In the event the sum of the proceeds from the
related Pledged Treasury Securities and the investment
earnings earned from such investments is in excess of the
aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent will distribute such
excess to the Agent when received for payment to the Holder
of the related Growth PRIDES.
Any distribution to Holders of excess funds and interest
described in subparagraph (i), (ii) or (iii) above, shall be
payable at the office of the Agent in The City of New York
maintained for that purpose or, at the option of the Holder, by
check mailed to the address of
48
the Person entitled thereto at such address as it appears on the
Register.
(b) The Company shall not be obligated to issue any
shares of Common Stock in respect of a Purchase Contract or
deliver any certificate therefor to the Holder unless it shall
have received payment in full of the Purchase Price for the
shares of Common Stock to be purchased thereunder in the manner
herein set forth.
(c) Upon Cash Settlement of any Purchase Contract, (i)
the Collateral Agent will in accordance with the terms of the
Pledge Agreement cause the Pledged Preferred Securities or the
Pledged Treasury Securities relating to the relevant Security to
be released from the Pledge by the Collateral Agent free and
clear of any security interest of the Company and transferred to
the Agent for delivery to the Holder thereof or its designee as
soon as practicable and (ii) subject to the receipt thereof from
the Collateral Agent, the Agent shall, by book-entry transfer, or
other appropriate procedures, in accordance with instructions
provided by the Holder thereof, transfer such Pledged Preferred
Securities or such Pledged Treasury Securities (or, if no such
instructions are given to the Agent by the Holder, the Agent
shall hold such Pledged Preferred Securities or such Pledged
Treasury Securities, and any distributions thereon, in the name
of the Agent or its nominee in trust for the benefit of such
Holder).
Section 5.5. Issuance of Shares of Common Stock.
Unless a Termination Event shall have occurred on or prior
to the Purchase Contract Settlement Date, on the Purchase
Contract Settlement Date, upon its receipt of payment in full of
the Purchase Price for the shares of Common Stock purchased by
the Holders pursuant to the foregoing provisions of this Article,
and in payment of Deferred Contract Adjustment Payments, if any,
owed by the Company to the Holders and subject to Section 5.6(b),
the Company shall issue and deposit with the Agent, for the
benefit of the Holders of the Outstanding Securities, one or more
certificates representing the newly issued shares of Common Stock
registered in the name of the Agent (or its nominee) as custodian
for such Holders (such certificates for shares of Common Stock,
together with any dividends or distributions with respect
thereto,
49
being hereinafter referred to as the "Purchase Contract
Settlement Fund") to which the Holders are entitled hereunder.
Subject to the foregoing, upon surrender of a Certificate to the
Agent on or after the Purchase Contract Settlement Date, together
with settlement instructions thereon duly completed and executed,
the Holder of such Certificate shall be entitled to receive in
exchange therefor a certificate representing that number of whole
shares of Common Stock which such Holder is entitled to receive
pursuant to the provisions of this Article Five (after taking
into account all Securities then held by such Holder) together
with cash in lieu of fractional shares as provided in Section
5.10 and any dividends or distributions with respect to such
shares constituting part of the Purchase Contract Settlement
Fund, but without any interest thereon, and the Certificate so
surrendered shall forthwith be cancelled. Such shares shall be
registered in the name of the Holder or the Holder's designee as
specified in the settlement instructions provided by the Holder
to the Agent. If any shares of Common Stock issued in respect of
a Purchase Contract and in payment of any Deferred Contract
Adjustment Payments are to be registered to a Person other than
the Person in whose name the Certificate evidencing such Purchase
Contract is registered, no such registration shall be made unless
the Person requesting such registration has paid any transfer and
other taxes required by reason of such registration in a name
other than that of the registered Holder of the Certificate
evidencing such Purchase Contract or has established to the
satisfaction of the Company that such tax either has been paid or
is not payable.
Section 5.6. Adjustment of Settlement Rate.
(a) Adjustments for Dividends, Distributions, Stock Splits,
Etc.
(1) In case the Company shall pay or make a dividend or
other distribution on any class of Common Stock of the Company in
Common Stock, the Settlement Rate in effect at the opening of
business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend
or other distribution shall be increased by dividing such
Settlement Rate by a fraction of which the numerator shall be the
number of shares of Common Stock outstanding at the close of
business on the
50
date fixed for such determination and the denominator shall be
the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase
to become effective immediately after the opening of business on
the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common
Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of
shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the
treasury of the Company.
(2) In case the Company shall issue rights, options or
warrants to all holders of its Common Stock (not being available
on an equivalent basis to Holders of the Securities upon
settlement of the related Purchase Contracts) entitling them, for
a period expiring within 45 days after the record date for the
determination of stockholders entitled to receive such rights,
options or warrants, to subscribe for or purchase shares of
Common Stock at a price per share less than the Current Market
Price per share of the Common Stock on the date fixed for the
determination of stockholders entitled to receive such rights,
options or warrants (other than pursuant to a dividend
reinvestment plan), the Settlement Rate in effect at the opening
of business on the day following the date fixed for such
determination shall be increased by dividing such Settlement Rate
by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on
the date fixed for such determination plus the number of shares
of Common Stock which the aggregate of the offering price of the
total number of shares of Common Stock so offered for
subscription or purchase would purchase at such Current Market
Price and the denominator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such increase to become
effective immediately after the opening of business on the day
following the date fixed for such determination. For the
purposes of this paragraph (2), the number of shares of Common
Stock at any time outstanding shall not include shares held in
the treasury of the Company but shall
51
include shares issuable in respect of scrip certificates issued
in lieu of fractions of shares of Common Stock. The Company
shall not issue any such rights, options or warrants in respect
of shares of Common Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common
Stock, the Settlement Rate in effect at the opening of business
on the day following the day upon which such subdivision or split
becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock shall each
be combined into a smaller number of shares of Common Stock, the
Settlement Rate in effect at the opening of business on the day
following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as
the case may be, to become effective immediately after the
opening of business on the day following the day upon which such
subdivision, split or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock evidences of its
indebtedness or assets (including securities, but excluding any
rights, options or warrants referred to in paragraph (2) of this
Section, any dividend or distribution paid exclusively in cash
and any dividend or distribution referred to in paragraph (1) of
this Section), the Settlement Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to
receive such distribution by a fraction of which the numerator
shall be the Current Market Price per share of the Common Stock
on the date fixed for such determination less the then fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution filed with the Agent) of the portion of the assets or
evidences of indebtedness so distributed applicable to one share
of Common Stock and the denominator shall be such Current Market
Price per share of the Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders
entitled to receive such distribution. In any case in
52
which this paragraph (4) is applicable, paragraph (2) of this
Section shall not be applicable.
(5) In case the Company shall, (I) by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding any
cash that is distributed in a Reorganization Event to which
Section 5.6(b) applies or as part of a distribution referred to
in paragraph (4) of this Section) in an aggregate amount that,
combined together with (II) the aggregate amount of any other
distributions to all holders of its Common Stock (excluding any
cash that is distributed in a Reorganization Event to which
Section 5.6(6) applies or as part of a distribution referred to
in paragraph (4) of this Section) made exclusively in cash within
the 12 months preceding the date of payment of such distribution
and in respect of which no adjustment pursuant to this paragraph
(5) or paragraph (6) of this Section has been made and (III) the
aggregate of any cash plus the fair market value (as determined
by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution) of consideration
payable in respect of any tender or exchange offer by the Company
or any of its subsidiaries for all or any portion of the Common
Stock (excluding any cash that is distributed in a Reorganization
Event to which Section 5.6(6) applies or as part of a
distribution referred to in paragraph (4) of this Section)
concluded within the 12 months preceding the date of payment of
the distribution described in clause (I) above and in respect of
which no adjustment pursuant to this paragraph (5) or paragraph
(6) of this Section has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock on the
date for the determination of holders of shares of Common Stock
entitled to receive such distribution times the number of shares
of Common Stock outstanding on such date, then, and in each such
case, immediately after the close of business on such date for
determination, the Settlement Rate shall be increased so that the
same shall equal the rate determined by dividing the Settlement
Rate in effect immediately prior to the close of business on the
date fixed for determination of the stockholders entitled to
receive such distribution by a fraction (i) the numerator of
which shall be equal to the Current Market Price per share of the
Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the combined amount
distributed or payable in the trans-
53
actions described in clauses (I), (II) and (III) above and (y)
the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to
the Current Market Price per share of the Common Stock on such
date for determination.
(6) In case (I) a tender or exchange offer made by the
Company or any subsidiary of the Company for all or any portion
of the Common Stock shall expire and such tender or exchange
offer (as amended upon the expiration thereof) shall require the
payment to stockholders (based on the acceptance (up to any
maximum specified in the terms of the tender or exchange offer)
of Purchased Shares) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board
Resolution) that combined together with (II) the aggregate of the
cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described
in a Board Resolution), as of the expiration of such tender or
exchange offer, of consideration payable in respect of any other
tender or exchange offer, by the Company or any subsidiary of the
Company for all or any portion of the Common Stock (excluding any
cash that is distributed in a Reorganization Event to which
Section 5.6(b) applies or as part of a distribution referred to
in paragraph (4) of this Section) concluded within the 12 months
preceding the expiration of such tender or exchange offer and in
respect of which no adjustment pursuant to paragraph (5) of this
Section or this paragraph (6) has been made and (III) the
aggregate amount of any distributions to all holders of the
Company's Common Stock (excluding any cash that is distributed in
a Reorganization Event to which Section 5.6(b) applies or as part
of a distribution referred to in paragraph (4) of this Section)
made exclusively in cash within the 12 months preceding the
expiration of such tender or exchange offer and in respect of
which no adjustment pursuant to paragraph (5) of this Section or
this paragraph (6) has been made, exceeds 15% of the product of
the Current Market Price per share of the Common Stock as of the
last time (the "Expiration Time") tenders could have been made
pursuant to such tender or exchange offer (as it may be amended)
times the number of shares of Common Stock outstanding (including
any tendered shares) on the Expiration Time, then, and in each
such case, immediately prior to the opening of business
54
on the day after the date of the Expiration Time, the Settlement
Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Settlement Rate in effect immediately
prior to the close of business on the date of the Expiration Time
by a fraction (i) the numerator of which shall be equal to (A)
the product of (I) the Current Market Price per share of the
Common Stock on the date of the Expiration Time and (II) the
number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less (B) the amount of
cash plus the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the
transactions described in clauses (I), (II) and (III) above
(assuming in the case of clause (I) the acceptance, up to any
maximum specified in the terms of the tender or exchange offer,
of Purchased Shares), and (ii) the denominator of which shall be
equal to the product of (A) the Current Market Price per share of
the Common Stock as of the Expiration Time and (B) the number of
shares of Common Stock outstanding (including any tendered
shares) as of the Expiration Time less the number of all shares
validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred
to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities
including securities other than Common Stock (other than any
reclassification upon a Reorganization Event to which Section
5.6(b) applies) shall be deemed to involve (a) a distribution of
such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution" and the "date
fixed for such determination" within the meaning of paragraph (4)
of this Section), and (b) a subdivision, split or combination, as
the case may be, of the number of shares of Common Stock
outstanding immediately prior to such reclassification into the
number of shares of Common Stock outstanding immediately
thereafter (and the effective date of such reclassification shall
be deemed to be "the day upon which such subdivision or split
becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which
such subdivision, split or combination becomes
55
effective" within the meaning of paragraph (3) of this Section).
(8) The "Current Market Price" per share of Common Stock on
any day means the average of the daily Closing Prices for the 5
consecutive Trading Days selected by the Company commencing not
more than 30 Trading Days before, and ending not later than, the
earlier of the day in question and the day before the "ex date"
with respect to the issuance or distribution requiring such
computation. For purposes of this paragraph, the term "ex date",
when used with respect to any issuance or distribution, shall
mean the first date on which the Common Stock trades regular way
on such exchange or in such market without the right to receive
such issuance or distribution.
(9) All adjustments to the Settlement Rate shall be
calculated to the nearest 1/10,000th of a share of Common Stock
(or if there is not a nearest 1/10,000th of a share to the next
lower 1/10,000th of a share). No adjustment in the Settlement
Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. If an
adjustment is made to the Settlement Rate pursuant to paragraph
(1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a),
an adjustment shall also be made to the Applicable Market Value
solely to determine which of clauses (a), (b) or (c) of the
definition of Settlement Rate in Section 5.1 will apply on the
Purchase Contract Settlement Date. Such adjustment shall be made
by multiplying the Applicable Market Value by a fraction of which
the numerator shall be the Settlement Rate immediately after such
adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6),
(7) or (10) of this Section 5.6(a) and the denominator shall be
the Settlement Rate immediately before such adjustment.
(10) The Company may make such increases in the Settlement
Rate, in addition to those required by this Section, as it
considers to be advisable in order to avoid or diminish any
income tax to any holders of shares of Common Stock resulting
from any dividend or distribution of stock or issuance of rights,
options or warrants to purchase or subscribe for stock or from
any event
56
treated as such for income tax purposes or for any other reasons.
(b)Adjustment for Consolidation, Merger or Other
Reorganization Event. In the event of (i) any consolidation or
merger of the Company, with or into another Person (other than a
merger or consolidation in which the Company is the continuing
corporation and in which the Common Stock outstanding immediately
prior to the merger or consolidation is not exchanged for cash,
securities or other property of the Company or another Person),
(ii) any sale, transfer, lease or conveyance to another Person of
the property of the Company as an entirety or substantially as an
entirety, (iii) any statutory exchange of securities of the
Company with another Person (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or
winding up of the Company other than as a result of or after the
occurrence of a Termination Event (any such event, a
"Reorganization Event"), the Settlement Rate will be adjusted to
provide that each Holder of Securities will receive on the
Purchase Contract Settlement Date with respect to each Purchase
Contract forming a part thereof, the kind and amount of
securities, cash and other property receivable upon such
Reorganization Event by a Holder of the number of shares of
Common Stock issuable on account of such Purchase Contract if the
Purchase Contract Settlement Date had occurred immediately prior
to such Reorganization Event, assuming such Holder of Common
Stock is not a Person with which the Company consolidated or into
which the Company merged or which merged into the Company or to
which such sale or transfer was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person,
and failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property receivable
upon such Reorganization Event (provided that if the kind or
amount of securities, cash and other property receivable upon
such Reorganization Event is not the same for each share of
Common Stock held immediately prior to such Reorganization Event
by other than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been
exercised ("non-electing share"), then for the purpose of this
Section the kind and amount of securities, cash and other
property receivable upon such Reorganization Event by each
non-electing share shall be deemed to be the kind and amount so
receivable per share
57
by a plurality of the non-electing shares). In the event of such
a Reorganization Event, the Person formed by such consolidation,
merger or exchange or the Person which acquires the assets of the
Company or, in the event of a liquidation or dissolution of the
Company, the Company or a liquidating trust created in connection
therewith, shall execute and deliver to the Agent an agreement
supplemental hereto providing that the Holders of each
Outstanding Security shall have the rights provided by this
Section 5.6. Such supplemental agreement shall provide for
adjustments which, for events subsequent to the effective date of
such supplemental agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section.
The above provisions of this Section shall similarly apply to
successive Reorganization Events.
Section 5.7. Notice of Adjustments and Certain Other Events.
(a) Whenever the Settlement Rate is adjusted as herein
provided, the Company shall:
(i)forthwith compute the adjusted Settlement Rate in
accordance with Section 5.6 and prepare and transmit to the
Agent an Officer's Certificate setting forth the
Settlement Rate, the method of calculation thereof in
reasonable detail, and the facts requiring such adjustment
and upon which such adjustment is based; and
(ii)within 10 Business Days following the occurrence of
an event that permits or requires an adjustment to the
Settlement Rate pursuant to Section 5.6 (or if the Company
is not aware of such occurrence, as soon as practicable
after becoming so aware), provide a written notice to the
Holders of the Securities of the occurrence of such event
and a statement in reasonable detail setting forth the
method by which the adjustment to the Settlement Rate was
determined and setting forth the adjusted Settlement Rate.
(b) The Agent shall not at any time be under any duty or
responsibility to any Holder of Securities to determine whether
any facts exist which may require any adjustment of the
Settlement Rate, or with respect to the
58
nature or extent or calculation of any such adjustment when made,
or with respect to the method employed in making the same. The
Agent shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or
of any securities or property, which may at the time be issued or
delivered with respect to any Purchase Contract; and the Agent
makes no representation with respect thereto. The Agent shall
not be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock pursuant to a
Purchase Contract or to comply with any of the duties,
responsibilities or covenants of the Company contained in this
Article.
Section 5.8. Termination Event; Notice.
The Purchase Contracts and the obligations and rights of the
Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment
Payments, if the Company shall have such obligation, shall
immediately and automatically terminate, without the necessity of
any notice or action by any Holder, the Agent or the Company, if,
on or prior to the Purchase Contract Settlement Date, a
Termination Event shall have occurred. Upon and after the
occurrence of a Termination Event, the Securities shall
thereafter represent the right to receive the Preferred
Securities forming a part of such Securities in the case of
Income PRIDES, or Treasury Securities in the case of Growth
PRIDES, in accordance with the provisions of Section 4.3 of the
Pledge Agreement. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as they
appear in the Register.
Section 5.9. Early Settlement.
(a) Subject to and upon compliance with the provisions of
this Section 5.9, at the option of the Holder thereof, Purchase
Contracts underlying Securities, having an aggregate Stated
Amount equal to $1,000 or an integral multiple thereof, may be
settled early ("Early Settlement") as provided herein. In order
to exercise the right to effect Early Settlement with respect to
any
59
Purchase Contracts, the Holder of the Certificate evidencing such
Purchase Contracts shall deliver such Certificate to the Agent at
the Corporate Trust Office duly endorsed for transfer to the
Company or in blank with the form of Election to Settle Early on
the reverse thereof duly completed and accompanied by payment in
the form of a certified or cashier's check or wire transfer in
immediately available funds payable to or upon the order of the
Company in an amount (the "Early Settlement Amount") equal to (i)
the product of (A) the Stated Amount times (B) the number of
Purchase Contracts with respect to which the Holder has elected
to effect Early Settlement plus (ii) if such delivery is made
with respect to any Purchase Contracts during the period from the
close of business on any Record Date next preceding any Payment
Date to the opening of business on such Payment Date, an amount
equal to the sum of (x) the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase
Contracts plus (y) in the case of an Income PRIDES Certificate,
the distributions on the related Preferred Securities payable on
such Payment Date. Except as provided in the immediately
preceding sentence and subject to the second to last paragraph of
Section 5.2, no payment or adjustment shall be made upon Early
Settlement of any Purchase Contract on account of any Contract
Adjustment Payments accrued on such Purchase Contract or on
account of any dividends on the Common Stock issued upon such
Early Settlement. If the foregoing requirements are first
satisfied with respect to Purchase Contracts underlying any
Securities at or prior to 5:00 p.m., New York City time, on a
Business Day, such day shall be the "Early Settlement Date" with
respect to such Securities and if such requirements are first
satisfied after 5:00 p.m., New York City time, on a Business Day
or on a day that is not a Business Day, the "Early Settlement
Date" with respect to such Securities shall be the next
succeeding Business Day.
(b) Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Company shall issue, and the
Holder shall be entitled to receive, .769 newly issued shares of
Common Stock on account of each Purchase Contract as to which
Early Settlement is effected (the "Early Settlement Rate");
provided, however, that upon the Early Settlement of such
Purchase Contracts, the Holder of such related Securities will
forfeit the right to receive any Deferred Contract Adjustment
Payments.
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The Early Settlement Rate shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted. As
promptly as practicable after Early Settlement of Purchase
Contracts in accordance with the provisions of this Section 5.9,
the Company shall issue and shall deliver to the Agent at the
Corporate Trust Office a certificate or certificates for the full
number of shares of Common Stock issuable upon such Early
Settlement together with payment in lieu of any fraction of a
share, as provided in Section 5.10.
(c) The Company shall cause the shares of Common Stock
issuable upon Early Settlement of Purchase Contracts, and the
related Preferred Securities, in the case of Income PRIDES, or
the related Treasury Securities, in the case of Growth PRIDES,
deliverable, to be issued and delivered, in the case of such
shares of Common Stock, and released from the Pledge by the
Collateral Agent and transferred, in the case of such Preferred
Securities or Treasury Securities, to the Agent, for delivery to
the Holder thereof or its designee, no later than the third
Business Day after the applicable Early Settlement Date.
(d) Upon Early Settlement of any Purchase Contracts, and
subject to receipt of shares of Common Stock from the Company and
the related Preferred Securities or Treasury Securities, as the
case may be, from the Collateral Agent, as applicable, the Agent
shall, in accordance with the instructions provided by the Holder
thereof on the applicable form of Election to Settle Early on the
reverse of the Certificate evidencing the related Securities, (i)
transfer to the Holder such Preferred Securities or Treasury
Securities, as the case may be, and (ii) deliver to the Holder a
certificate or certificates for the full number of shares of
Common Stock issuable upon such Early Settlement together with
payment in lieu of any fraction of a share, as provided in
Section 5.10.
(e) In the event that Early Settlement is effected with
respect to Purchase Contracts underlying less than all the
Securities evidenced by a Certificate, upon such Early Settlement
the Company shall execute and the Agent shall authenticate,
execute on behalf of the Holder and deliver to the Holder
thereof, at the expense of the Company, a Certificate evidencing
the Securities as to which Early Settlement was not effected.
61
(f) Holders may settle Securities early only in integral
multiples of 20 Income PRIDES or 20 Growth PRIDES.
Section 5.10. No Fractional Shares.
No fractional shares or scrip representing fractional shares
of Common Stock shall be issued or delivered upon settlement on
the Purchase Contract Settlement Date or upon Early Settlement of
any Purchase Contracts or with respect to the payment of Deferred
Contract Adjustment Payments, if any, on the Purchase Contract
Settlement Date. If Certificates evidencing more than one
Purchase Contract shall be surrendered for settlement at one time
by the same Holder, the number of full shares of Common Stock
which shall be delivered upon settlement shall be computed on the
basis of the aggregate number of Purchase Contracts evidenced by
the Certificates so surrendered. Instead of any fractional share
of Common Stock which would otherwise be deliverable upon
settlement of any Purchase Contracts on the Purchase Contract
Settlement Date or upon Early Settlement or with respect to the
payment of any Deferred Contract Adjustment Payments, if any, the
Company, through the Agent, shall make a cash payment in respect
of such fractional interest in an amount equal to the value of
such fractional shares times the Applicable Market Value. The
Company shall provide the Agent from time to time with sufficient
funds to permit the Agent to make all cash payments required by
this Section 5.10 in a timely manner.
Section 5.11. Charges and Taxes.
The Company will pay all stock transfer and similar taxes
attributable to the initial issuance and delivery of the shares
of Common Stock pursuant to the Purchase Contracts and in payment
of any Deferred Contract Adjustment Payments; provided, however,
that the Company shall not be required to pay any such tax or
taxes which may be payable in respect of any exchange of or
substitution for a Certificate evidencing a Purchase Contract or
any issuance of a share of Common Stock in a name other than that
of the registered Holder of the Certificate surrendered in
respect of the Purchase Contracts evidenced thereby or of the
Agent, as custodian for such Holder, and the Company shall not be
required to issue or deliver such share certificates or
Certificates unless or until the
62
Person or Persons requesting the transfer or issuance thereof
shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax
has been paid.
ARTICLE VI
Remedies
Section 6.1. Unconditional Right of Holders to Receive Contract
Adjustment Payments and to Purchase Common Stock.
In the event that Contract Adjustment Payments shall
constitute a component of Income PRIDES or Growth PRIDES, the
Holder of any Income PRIDES or Growth PRIDES shall have the
right, which is absolute and unconditional (subject to the right
of the Company to defer payment thereof pursuant to Section 5.3
and subject to the forfeiture of any Deferred Contract Adjustment
Payments, if any, upon Early Settlement pursuant to Section
5.9(b) or upon the occurrence of a Termination Event), to receive
payment of each installment of the Contract Adjustment Payments,
if any, with respect to the Purchase Contract forming a part of
such Security payable on the respective Payment Date for such
Security and to purchase Common Stock pursuant to such Purchase
Contract and, in each such case, to institute suit for the
enforcement of any such payment and right to purchase Common
Stock, and such rights shall not be impaired without the consent
of such Holder.
Section 6.2. Restoration of Rights and Remedies.
If any Holder has instituted any proceeding to enforce any
right or remedy under this Agreement and such proceeding has been
discontinued or abandoned for any reason, or has been determined
adversely to such Holder, then and in every such case, subject to
any determination in such proceeding, the Company and such Holder
shall be restored severally and respectively to their former
positions hereunder and thereafter all rights and remedies of
such Holder shall continue as though no such proceeding had been
instituted.
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Section 6.3. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Certificates
in the last paragraph of Section 3.10, no right or remedy herein
conferred upon or reserved to the Holders is intended to be
exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 6.4. Delay or Omission Not Waiver.
No delay or omission of any Holder to exercise any right or
remedy upon a default shall impair any such right or remedy or
constitute a waiver of any such right. Every right and remedy
given by this Article or by law to the Holders may be exercised
from time to time, and as often as may be deemed expedient, by
such Holders.
Section 6.5. Undertaking for Costs.
All parties to this Agreement agree, and each Holder of
Income PRIDES or Growth PRIDES, by its acceptance of such Income
PRIDES or Growth PRIDES shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in
any suit against the Agent for any action taken, suffered or
omitted by it as Agent, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant
in such suit, having due regard to the merits and good faith of
the claims or defenses made by such party litigant; provided that
the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Agent,
to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% of the Outstanding
Securities, or to any suit instituted by any Holder for the
enforcement of distributions on any Preferred Securities
64
or Contract Adjustment Payments, if any, on any Purchase Contract
after the respective Payment Date therefor in respect of any
Security held by such Holder, or for enforcement of the right to
purchase shares of Common Stock under the Purchase Contracts
constituting part of any Security held by such Holder.
Section 6.6. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any
stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the
performance of this Agreement; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Agent or the Holders, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
ARTICLE VII
The Agent
Section 7.1. Certain Duties and Responsibilities.
(a)(1) The Agent undertakes to perform, with respect to the
Securities, such duties and only such duties as are specifically
set forth in this Agreement and the Pledge Agreement, and no
implied covenants or obligations shall be read into this
Agreement against the Agent; and
(2) in the absence of bad faith or negligence on its
part, the Agent may, with respect to the Securities,
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Agent and
conforming to the requirements of this Agreement, but in the
case of any certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Agent, the Agent shall be under a duty to exam-
65
ine the same to determine whether or not they conform to the
requirements of this Agreement.
(b) No provision of this Agreement shall be construed to
relieve the Agent from liability for its own negligent action,
its own negligent failure to act, or its own wilful misconduct,
except that
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Agent shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless
it shall be proved that the Agent was negligent in
ascertaining the pertinent facts; and
(3) no provision of this Agreement shall require the
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or
powers, if adequate indemnity is not provided to it.
(c) Whether or not therein expressly so provided, every
provision of this Agreement relating to the conduct or affecting
the liability of or affording protection to the Agent shall be
subject to the provisions of this Section.
(d) The Agent is authorized to execute and deliver the
Pledge Agreement in its capacity as Agent.
Section 7.2. Notice of Default.
Within 30 days after the occurrence of any default by the
Company hereunder, of which a Responsible Officer of the Agent
has actual knowledge, the Agent shall transmit by mail to the
Company and the Holders of Securities, as their names and
addresses appear in the Register, notice of such default
hereunder, unless such default shall have been cured or waived.
Section 7.3. Certain Rights of Agent.
Subject to the provisions of Section 7.1:
66
(a) the Agent may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party
or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by an Officer's
Certificate, Issuer Order or Issuer Request, and any resolution
of the Board of Directors of the Company shall be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Agreement the
Agent shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Agent (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officer's Certificate of the Company;
(d) the Agent may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Agent shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Agent, in its
discretion, may make reasonable further inquiry or investigation
into such facts or matters related to the execution, delivery and
performance of the Purchase Contracts as it may see fit, and, if
the Agent shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records
and premises of the Company, personally or by agent or attorney
during normal business hours and upon reasonable notice; and
(f) the Agent may execute any of the powers hereunder or
perform any duties hereunder either directly or by or through
agents or attorneys or an Affiliate and the
67
Agent shall not be responsible for any misconduct or negligence
on the part of any agent or attorney or an Affiliate appointed
with due care by it hereunder.
Section 7.4. Not Responsible for Recitals or Issuance of
Securities.
The recitals contained herein and in the Certificates shall
be taken as the statements of the Company and the Agent assumes
no responsibility for their accuracy. The Agent makes no
representations as to the validity or sufficiency of either this
Agreement or of the Securities, or of the Pledge Agreement or the
Pledge. The Agent shall not be accountable for the use or
application by the Company of the proceeds in respect of the
Purchase Contracts.
Section 7.5. May Hold Securities.
Any Registrar or any other agent of the Company, or the
Agent and its Affiliates, in their individual or any other
capacity, may become the owner or pledgee of Securities and may
otherwise deal with the Company, the Collateral Agent or any
other Person with the same rights it would have if it were not
Registrar or such other agent, or the Agent.
Section 7.6. Money Held in Custody.
Money held by the Agent in custody hereunder need not be
segregated from the other funds except to the extent required by
law. The Agent shall be under no obligation to invest or pay
interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 7.7. Compensation and Reimbursement.
The Company agrees:
(1) to pay to the Agent from time to time reasonable
compensation for all services rendered by it hereunder;
(2) except as otherwise expressly provided herein, to
reimburse the Agent upon its request for all reasonable
expenses, disbursements and advances
68
incurred or made by the Agent in accordance with any provision of
this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any
such expense, disbursement or advance as may be attributable to
its negligence or bad faith; and
(3) to indemnify the Agent and any predecessor Agent
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or
administration of its duties hereunder, including the costs
and expenses of defending itself against any claim or
liability in connection with the exercise or performance of
any of its powers or duties hereunder.
Section 7.8. Corporate Agent Required; Eligibility.
There shall at all times be an Agent hereunder which shall
be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District
of Columbia, authorized under such laws to exercise corporate
trust powers, having (or being a member of a bank holding company
having) a combined capital and surplus of at least $50,000,000,
subject to supervision or examination by Federal or State
authority and having a Corporate Trust Office in the Borough of
Manhattan, The City of New York, if there be such a corporation
in the Borough of Manhattan, The City of New York qualified and
eligible under this Article and willing to act on reasonable
terms. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at
any time the Agent shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in
the manner and with the effect hereinafter specified in this
Article.
Section 7.9. Resignation and Removal; Appointment of Successor.
69
(a) No resignation or removal of the Agent and no
appointment of a successor Agent pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Agent in accordance with the applicable requirements of
Section 7.10.
(b) The Agent may resign at any time by giving written
notice thereof to the Company 60 days prior to the effective date
of such resignation. If the instrument of acceptance by a
successor Agent required by Section 7.10 shall not have been
delivered to the Agent within 30 days after the giving of such
notice of resignation, the resigning Agent may petition any court
of competent jurisdiction for the appointment of a successor
Agent.
(c) The Agent may be removed at any time by Act of the
Holders of a majority in number of the Outstanding Securities
delivered to the Agent and the Company.
(d) if at any time
(1) the Agent fails to comply with Section 310(b) of
the TIA, as if the Agent were an indenture trustee under an
indenture qualified under the TIA, after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for at least six months, or
(2) the Agent shall cease to be eligible under Section
7.8 and shall fail to resign after written request therefor
by the Company or by any such Holder, or
(3) the Agent shall become incapable of acting or shall
be adjudged a bankrupt or insolvent or a receiver of the
Agent or of its property shall be appointed or any public
officer shall take charge or control of the Agent or of its
property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may
remove the Agent, or (ii) any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of
competent jurisdiction
70
for the removal of the Agent and the appointment of a successor
Agent.
(e) If the Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of
Agent for any cause, the Company, by a Board Resolution, shall
promptly appoint a successor Agent and shall comply with the
applicable requirements of Section 7.10. If no successor Agent
shall have been so appointed by the Company and accepted
appointment in the manner required by Section 7.10, any Holder
who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the
appointment of a successor Agent.
(f) The Company shall give, or shall cause such successor
Agent to give, notice of each resignation and each removal of the
Agent and each appointment of a successor Agent by mailing
written notice of such event by first-class mail, postage
prepaid, to all Holders as their names and addresses appear in
the applicable Register. Each notice shall include the name of
the successor Agent and the address of its Corporate Trust
Office.
Section 7.10. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor
Agent, every such successor Agent so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Agent
an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Agent shall become
effective and such successor Agent, without any further act, deed
or conveyance, shall become vested with all the rights, powers,
agencies and duties of the retiring Agent; but, on the request of
the Company or the successor Agent, such retiring Agent shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Agent all the rights, powers and
trusts of the retiring Agent and shall duly assign, transfer and
deliver to such successor Agent all property and money held by
such retiring Agent hereunder.
(b) Upon request of any such successor Agent, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such
71
successor Agent all such rights, powers and agencies referred to
in paragraph (a) of this Section.
(c) No successor Agent shall accept its appointment unless
at the time of such acceptance such successor Agent shall be
qualified and eligible under this Article.
Section 7.11. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Agent may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Agent shall be a party, or any
corporation succeeding to all or substantially all the corporate
trust business of the Agent, shall be the successor of the Agent
hereunder, provided such corporation shall be otherwise qualified
and eligible under this Article, without the execution or filing
of any paper or any further act on the part of any of the parties
hereto. In case any Certificates shall have been authenticated
and executed on behalf of the Holders, but not delivered, by the
Agent then in office, any successor by merger, conversion or
consolidation to such Agent may adopt such authentication and
execution and deliver the Certificates so authenticated and
executed with the same effect as if such successor Agent had
itself authenticated and executed such Securities.
Section 7.12. Preservation of Information; Communications to
Holders.
(a) The Agent shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders
received by the Agent in its capacity as Registrar.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Agent, and furnish to the
Agent reasonable proof that each such applicant has owned a
Security for a period of at least six months preceding the date
of such application, and such application states that the
applicants desire to communicate with other Holders with respect
to their rights under this Agreement or under the Securities and
is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the
Agent
72
shall, within five Business Days after the receipt of such
application, afford such applicants access to the information
preserved at the time by the Agent in accordance with Section
7.12(a).
(c) Every Holder agrees with the Company and the Agent that
none of the Company, the Agent nor any agent of any of them shall
be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders in
accordance with Section 7.12(b), regardless of the source from
which such information was derived.
Section 7.13. No Obligations of Agent.
Except to the extent otherwise provided in this Agreement,
the Agent assumes no obligations and shall not be subject to any
liability under this Agreement, the Pledge Agreement or any
Purchase Contract in respect of the obligations of the Holder of
any Security thereunder. The Company agrees, and each Holder of a
Certificate, by his acceptance thereof, shall be deemed to have
agreed, that the Agent's execution of the Certificates on behalf
of the Holders shall be solely as agent and attorney-in-fact for
the Holders, and that the Agent shall have no obligation to
perform such Purchase Contracts on behalf of the Holders, except
to the extent expressly provided in Article Five hereof.
Section 7.14. Tax Compliance.
(a) The Agent, on its own behalf and on behalf of the
Company, will comply with all applicable certification,
information reporting and withholding (including "backup"
withholding) requirements imposed by applicable tax laws,
regulations or administrative practice with respect to (i) any
payments made with respect to the Securities or (ii) the
issuance, delivery, holding, transfer, redemption or exercise of
rights under the Securities. Such compliance shall include,
without limitation, the preparation and timely filing of required
returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated
agent.
(b) The Agent shall comply with any written direction
received from the Company with respect to the appli-
73
cation of such requirements to particular payments or Holders or
in other particular circumstances, and may for purposes of this
Agreement rely on any such direction in accordance with the
provisions of Section 7.1(a)(2) hereof.
(c) The Agent shall maintain all appropriate records
documenting compliance with such requirements, and shall make
such records available, on written request, to the Company or its
authorized representative within a reasonable period of time
after receipt of such request.
ARTICLE VIII
Supplemental Agreements
Section 8.1. Supplemental Agreements Without Consent of
Holders.
Without the consent of any Holders, the Company and the
Agent, at any time and from time to time, may enter into one or
more agreements supplemental hereto, in form satisfactory to the
Company and the Agent, for any of the following purposes:
(1) to evidence the succession of another Person to
the Company, and the assumption by any such successor of the
covenants of the Company herein and in the Certificates; or
(2) to add to the covenants of the Company for the
benefit of the Holders, or to surrender any right or power
herein conferred upon the Company; or
(3) to evidence and provide for the acceptance of
appointment hereunder by a successor Agent; or
(4) to make provision with respect to the rights of
Holders pursuant to the requirements of Section 5.6(b); or
(5) except as provided for in Section 5.6, to cure any
ambiguity, to correct or supplement any provisions herein
which may be mistaken or incon-
74
sistent with any other provisions herein, or to make any other
provisions with respect to such matters or questions arising
under this Agreement, provided such action shall not materially
adversely affect the interests of the Holders.
Section 8.2. Supplemental Agreements with Consent of Holders.
With the consent of the Holders of not less than 66 2/3% of
the outstanding Purchase Contracts voting together as one class,
by Act of said Holders delivered to the Company and the Agent,
the Company, and the Agent may enter into an agreement or
agreements supplemental hereto for the purpose of modifying in
any manner the terms of the Purchase Contracts, or the Pledge
Agent provisions of this Agreement or the rights of the Holders
in respect of the Securities; provided, however, that no such
supplemental agreement shall, without the consent of the Holder
of each Outstanding Security affected thereby,
(1) change any Payment Date;
(2) change the amount or the type of Collateral
required to be Pledged to secure a Holder's obligations
under the applicable Purchase Contract, impair the right of
the Holder of any Security to receive distributions on the
related Collateral (except for the rights of Holders of
Income PRIDES to substitute Treasury Securities for the
Pledged Preferred Securities or the rights of holders of
Growth PRIDES to substitute Preferred Securities for the
Pledged Treasury Securities) or otherwise adversely affect
the Holder's rights in or to such Collateral or adversely
alter the rights in or to such Collateral;
(3) reduce any Contract Adjustment Payments or any
Deferred Contract Adjustment Payments, or change any place
where, or the coin or currency in which, any Contract
Adjustment Payment is payable;
(4) impair the right to institute suit for the
enforcement of any Purchase Contract;
(5) reduce the number of shares of Common Stock to be
purchased pursuant to any Purchase Contract, increase the
price to purchase shares of Common
75
Stock upon settlement of any Purchase Contract, change the
Purchase Contract Settlement Date or otherwise adversely affect
the Holder's rights under any Purchase Contract; or
(6) reduce the percentage of the outstanding Purchase
Contracts the consent of whose Holders is required for any
such supplemental agreement;
provided, that if any amendment or proposal referred to above
would adversely affect only the Income PRIDES or the Growth
PRIDES, then only the affected class of Holder will be entitled
to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the consent of
Holders of not less than 66 2/3% of such class.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed
supplemental agreement, but it shall be sufficient if such Act
shall approve the substance thereof.
Section 8.3. Execution of Supplemental Agreements.
In executing, or accepting the additional agencies created
by, any supplemental agreement permitted by this Article or the
modifications thereby of the agencies created by this Agreement,
the Agent shall be entitled to receive and (subject to Section
7.1) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental agreement
is authorized or permitted by this Agreement. The Agent may, but
shall not be obligated to, enter into any such supplemental
agreement which affects the Agent's own rights, duties or
immunities under this Agreement or otherwise.
Section 8.4. Effect of Supplemental Agreements.
Upon the execution of any supplemental agreement under this
Article, this Agreement shall be modified in accordance
therewith, and such supplemental agreement shall form a part of
this Agreement for all purposes; and every Holder of Certificates
theretofore or thereafter authenticated, executed on behalf of
the Holders and delivered hereunder shall be bound thereby.
76
Section 8.5. Reference to Supplemental Agreements.
Certificates authenticated, executed on behalf of the
Holders and delivered after the execution of any supplemental
agreement pursuant to this Article may, and shall if required by
the Agent, bear a notation in form approved by the Agent as to
any matter provided for in such supplemental agreement. If the
Company shall so determine, new Certificates so modified as to
conform, in the opinion of the Agent and the Company, to any such
supplemental agreement may be prepared and executed by the
Company and authenticated, executed on behalf of the Holders and
delivered by the Agent in exchange for Outstanding Certificates.
ARTICLE IX
Consolidation, Merger, Sale or Conveyance
Section 9.1. Covenant Not to Merge, Consolidate, Sell or Convey
Property Except Under Certain Conditions.
The Company covenants that it will not merge or consolidate
with any other Person or sell, assign, transfer, lease or convey
all or substantially all of its properties and assets to any
Person or group of affiliated Persons in one transaction or a
series of related transactions, unless (i) either the Company
shall be the continuing corporation, or the successor (if other
than the Company) shall be a corporation organized and existing
under the laws of the United States of America or a State thereof
or the District of Columbia and such corporation shall expressly
assume all the obligations of the Company under the Purchase
Contracts, this Agreement and the Pledge Agreement by one or more
supplemental agreements in form satisfactory to the Agent and the
Collateral Agent, executed and delivered to the Agent and the
Collateral Agent by such corporation, and (ii) the Company or
such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale,
assignment, transfer, lease or conveyance, be in default in the
performance of any covenant or condition hereunder, under any of
the Securities or under the Pledge Agreement.
77
Section 9.2. Rights and Duties of Successor Corporation.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance and upon any such assumption by the
successor corporation in accordance with Section 9.1, such
successor corporation shall succeed to and be substituted for the
Company with the same effect as if it had been named herein as
the Company. Such successor corporation thereupon may cause to
be signed, and may issue either in its own name or in the name of
Protective Life Corporation, any or all of the Certificates
evidencing Securities issuable hereunder which theretofore shall
not have been signed by the Company and delivered to the Agent;
and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations
in this Agreement prescribed, the Agent shall authenticate and
execute on behalf of the Holders and deliver any Certificates
which previously shall have been signed and delivered by the
officers of the Company to the Agent for authentication and
execution, and any Certificate evidencing Securities which such
successor corporation thereafter shall cause to be signed and
delivered to the Agent for that purpose. All the Certificates so
issued shall in all respects have the same legal rank and benefit
under this Agreement as the Certificates theretofore or
thereafter issued in accordance with the terms of this Agreement
as though all of such Certificates had been issued at the date of
the execution hereof.
In case of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance such change in phraseology and form
(but not in substance) may be made in the Certificates evidencing
Securities thereafter to be issued as may be appropriate.
Section 9.3. Opinion of Counsel to Agent.
The Agent, subject to Sections 7.1 and 7.3, shall receive an
Opinion of Counsel as conclusive evidence that any such
consolidation, merger, sale, assignment, transfer, lease or
conveyance, and any such assumption, complies with the provisions
of this Article and that all conditions precedent to the
consummation of any such consolidation, merger, sale, assignment,
transfer, lease or conveyance have been met.
78
ARTICLE X
Covenants
Section 10.1. Performance Under Purchase Contracts.
The Company covenants and agrees for the benefit of the
Holders from time to time of the Securities that it will duly and
punctually perform its obligations under the Purchase Contracts
in accordance with the terms of the Purchase Contracts and this
Agreement.
Section 10.2. Maintenance of Office or Agency.
The Company will maintain in the Borough of Manhattan, The
City of New York an office or agency where Certificates may be
presented or surrendered for acquisition of shares of Common
Stock upon settlement of the Purchase Contracts or Early
Settlement and for transfer of Collateral upon occurrence of a
Termination Event, where Certificates may be surrendered for
registration of transfer or exchange, for a Collateral
Substitution or re-establishment of an Income PRIDES and where
notices and demands to or upon the Company in respect of the
Securities and this Agreement may be served. The Company will
give prompt written notice to the Agent of the location, and any
change in the location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or
agency or shall fail to furnish the Agent with the address
thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office, and the Company
hereby appoints the Agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more
other offices or agencies where Certificates may be presented or
surrendered for any or all such purposes and may from time to
time rescind such designations; provided, however, that no such
designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough
of Manhattan, The City of New York for such purposes. The
Company will give prompt written notice to the Agent of any such
designation or rescission and of any change in the loca-
79
tion of any such other office or agency. The Company hereby
designates as the place of payment for the Securities the
Corporate Trust Office and appoints the Agent at its Corporate
Trust Office as paying agent in such city.
Section 10.3. Company to Reserve Common Stock.
The Company shall at all times prior to the Purchase
Contract Settlement Date reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common
Stock the full number of shares of Common Stock issuable (x)
against tender of payment in respect of all Purchase Contracts
constituting a part of the Securities evidenced by Outstanding
Certificates and (y) in payment of Deferred Contract Adjustment
Payments, if any, owed by the Company to the Holders.
Section 10.4. Covenants as to Common Stock.
The Company covenants that all shares of Common Stock which
may be issued against tender of payment in respect of any
Purchase Contract constituting a part of the Outstanding
Securities and in payment of any Deferred Contract Adjustment
Payments will, upon issuance, be duly authorized, validly issued,
fully paid and nonassessable.
Section 10.5. Statements of Officers of the Company as to
Default.
The Company will deliver to the Agent, within 120 days after
the end of each fiscal year of the Company ending after the date
hereof, an Officer's Certificate, stating whether or not to the
best knowledge of the signers thereof the Company is in default
in the performance and observance of any of the terms, provisions
and conditions hereof, and if the Company shall be in default,
specifying all such defaults and the nature and status thereof of
which they may have knowledge.
80
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
PROTECTIVE LIFE CORPORATION
Attested by
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------ -------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Assistant Secretary Title: Senior Vice President
Secretary and General Council
THE BANK OF NEW YORK
Attested by
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------ -------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President Title: Assistant Vice President
EXHIBIT A
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND
IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE
THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN
PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS
CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF
ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE
CONTRACT AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) to the Company or its agent for registration
of transfer, exchange or payment, any Certificate issued is
registered in the name of Cede & Co., or such other name as
requested by an authorized representative of The Depository Trust
Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL since the registered owner hereof, Cede & Co.,
has an interest herein.
No. _____ Number of Income PRIDES ___ Cusip No. ▇▇▇▇▇▇▇▇▇
Form of Face of Income PRIDES Certificate
6 1/2% Income PRIDES
This Income PRIDES Certificate certifies that Cede & Co. is
the registered Holder of the number of Income PRIDES set forth
above. Each Income PRIDES represents (i) beneficial ownership by
the Holder of one 6 1/2% Trust Originated Preferred Security (the
"Preferred Security") of PLC Capital Trust II, a Delaware
statutory business trust (the "Trust"), having a liquidation
amount of $50, subject to the Pledge of such Preferred Security
by such Holder pursuant to the Pledge Agreement, and (ii) the
rights and obligations of the Holder under one Purchase Contract
with Protective Life Corporation, a Delaware corporation (the
"Company"). All capitalized terms used herein which are defined
in the Purchase Contract Agreement have the meaning set forth
therein.
A-1
Pursuant to the Pledge Agreement, the Preferred Securities
relating to each Income PRIDES evidenced hereby have been pledged
to the Collateral Agent, for the benefit of the Company, to
secure the obligations of the Holder under the Purchase Contract
comprising a portion of such Income PRIDES.
The Pledge Agreement provides that all payments of the
liquidation amount of, or cash distributions on, any Pledged
Preferred Securities (as defined in the Pledge Agreement)
relating to an Income PRIDES received by the Collateral Agent
shall be paid by the Collateral Agent by wire transfer in same
day funds (i) in the case of (A) cash distributions with respect
to Pledged Preferred Securities and (B) any payments of the
liquidation amount with respect to any Preferred Securities that
have been released from the Pledge pursuant to the Pledge
Agreement, to the Agent, for the benefit of the Holders of the
related Income PRIDES, to the account designated by the Agent, no
later than 2:00 p.m., New York City time, on the Business Day
such payment is received by the Collateral Agent (provided that
in the event such payment is received by the Collateral Agent on
a day that is not a Business Day or after 12:30 p.m., New York
City time, on a Business Day, then such payment shall be made no
later than 10:30 a.m., New York City time, on the next succeeding
Business Day) and (ii) in the case of payments of the liquidation
amount of any Pledged Preferred Securities that have not been
released from the Pledge pursuant to the Pledge Agreement, to the
Company on the Purchase Contract Settlement Date (as defined
herein) in accordance with the terms of the Pledge Agreement, in
full satisfaction of the respective obligations of the Holders of
the Income PRIDES to which such Pledged Preferred Securities
relate under the Purchase Contracts forming a part of such Income
PRIDES. Distributions on any Preferred Security relating to an
Income PRIDES evidenced hereby which are payable quarterly in
arrears on March 31, June 30, September 30 and December 31 each
year, commencing December 31, 1997 (a "Payment Date"), shall,
subject to receipt thereof by the Agent from the Collateral
Agent, be paid to the Person in whose name this Income PRIDES
Certificate (or a Predecessor Income PRIDES Certificate) is
registered at the close of business on the Record Date for such
Payment Date.
A-2
Each Purchase Contract evidenced hereby obligates the Holder
of this Income PRIDES Certificate to purchase, and the Company to
sell, on February 16, 2001 (the "Purchase Contract Settlement
Date"), at a price equal to $50 (the "Stated Amount"), a number
of newly issued shares of Common Stock, par value $.50 per share
("Common Stock"), of the Company, equal to the Settlement Rate
unless on or prior to the Purchase Contract Settlement Date there
shall have occurred a Termination Event with respect to the
Income PRIDES of which such Purchase Contract is a part, all as
provided in the Purchase Contract Agreement and more fully
described on the reverse hereof. The purchase price (the
"Purchase Price") for the shares of Common Stock purchased
pursuant to each Purchase Contract evidenced hereby, if not paid
earlier, shall be paid on the Purchase Contract Settlement Date
by application of payment received in respect of the liquidation
amount of the Pledged Preferred Securities pledged to secure the
obligations under such Purchase Contract of the Holder of the
Income PRIDES of which such Purchase Contract is a part. A
Holder may cause the Preferred Security pledged to secure the
obligations under the Purchase Contract of the Holder of the
Income PRIDES of which such Purchase Contract is a part to be
repaid and the proceeds therefrom to be used to pay the Purchase
Price for shares of Common Stock under such Purchase Contract.
The Company shall pay, on each Payment Date, in respect of
each Purchase Contract forming part of an Income PRIDES evidenced
hereby an amount (the "Contract Adjustment Payments", if any,)
equal to 0% per annum of the Stated Amount (provided that if such
percentage is 0%, then no Contract Adjustment Payments will be
payable by the Company), computed on the basis of a 360 day year
of twelve 30 day months, subject to deferral at the option of the
Company as provided in the Purchase Contract Agreement and more
fully described on the reverse hereof. Such Contract Adjustment
Payments, if any, shall be payable to the Person in whose name
this Income PRIDES Certificate (or a Predecessor Income PRIDES
Certificate) is registered at the close of business on the Record
Date for such Payment Date.
Distributions on the Preferred Securities and Contract
Adjustment Payments, if any, will be payable at the office of the
Agent in The City of New York or, at the option of the Company,
by check mailed to the address of
A-3
the Person entitled thereto as such address appears on the Income
PRIDES Register.
Reference is hereby made to the further provisions set forth
on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Agent by manual signature, this Income PRIDES
Certificate shall not be entitled to any benefit under the Pledge
Agreement or the Purchase Contract Agreement or be valid or
obligatory for any purpose.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed.
PROTECTIVE LIFE CORPORATION
By:_________________________________________
Name:
Title:
By:_________________________________________
Name:
Title:
Attest:
______________________
Name:
Title:
HOLDER SPECIFIED ABOVE (as to
obligations of such Holder under the
Purchase Contracts evidenced hereby)
By: THE BANK OF NEW YORK, not individually
but solely as Attorney-in-Fact of such
Holder
By:__________________________________
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Income PRIDES Certificates referred to
in the within mentioned Purchase Contract Agreement.
By: THE BANK OF NEW YORK as Agent
By:__________________________________
Authorized Officer
A-5
(Form of Reverse of Income PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by
the Purchase Contract Agreement, dated as of November 26, 1997
(as supplemented from time to time, the "Purchase Contract
Agreement"), between the Company and The Bank of New York, as
Purchase Contract Agent (herein called the "Agent"), to which
Purchase Contract Agreement and supplemental agreements
thereto reference is hereby made for a description of the
respective rights, limitations of rights, obligations, duties
and immunities thereunder of the Agent, the Company, and the
Holders and of the terms upon which the Income PRIDES
Certificates are, and are to be, executed and delivered.
Each Purchase Contract evidenced hereby obligates the
Holder of this Income PRIDES Certificate to purchase, and the
Company to sell, on the Purchase Contract Settlement Date at a
price equal to the Stated Amount (the "Purchase Price"), a
number of shares of Common Stock of the Company equal to the
Settlement Rate unless, on or prior to the Purchase Contract
Settlement Date, there shall have occurred a Termination Event
with respect to the Security of which such Purchase Contract
is a part. The "Settlement Rate" is equal to (a) if the
Applicable Market Value (as defined below) is equal to or
greater than $65.04 (the "Threshold Appreciation Price"), .769
shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold
Appreciation Price but is greater than $53 5/16, the number of
shares of Common Stock per Purchase Contract equal to the
Stated Amount divided by the Applicable Market Value and (c)
if the Applicable Market Amount is less than or equal to
$53 5/16, .938 shares of Common Stock per Purchase Contract, in
each case subject to adjustment as provided in the Purchase
Contract Agreement. No fractional shares of Common Stock will
be issued upon settlement of Purchase Contracts, as provided
in the Purchase Contract Agreement.
Each Purchase Contract evidenced hereby, which is settled
either through Early Settlement or Cash Settlement, shall
obligate the Holder of the related Income PRIDES to purchase
at the Purchase Price, and the Company to sell, a number of
new shares of Common Stock equal to
A-6
the Early Settlement Rate or the Settlement Rate, as
applicable.
The "Applicable Market Value" means the average of the
Closing Prices per share of Common Stock on each of the 30
consecutive Trading Days ending on the second Trading Day
immediately preceding the Purchase Contract Settlement Date.
The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing
price is reported, the last reported sale price) of the Common
Stock on the New York Stock Exchange (the "NYSE") on such date
or, if the Common Stock is not listed for trading on the NYSE
on any such date, as reported in the composite transactions
for the principal United States securities exchange on which
the Common Stock is so listed, or if the Common Stock is not
so listed on a United States national or regional securities
exchange, as reported by The Nasdaq Stock Market, or, if the
Common Stock is not so reported, the last quoted bid price for
the Common Stock in the over-the-counter market as reported by
the National Quotation Bureau or similar organization, or, if
such bid price is not available, the market value of the
Common Stock on such date as determined by a nationally
recognized independent investment banking firm retained for
this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on
any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities
exchange or association or over-the-counter market that is the
primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract
Agreement, the Holder of this Income PRIDES Certificate shall
pay the Purchase Price for the shares of Common Stock
purchased pursuant to each Purchase Contract evidenced hereby
by effecting a Cash Settlement or an Early Settlement. A
Holder of an Income PRIDES who fails to make an effective Cash
Settlement or an Early Settlement in respect of a Purchase
Contract prior to the Purchase Contract Settlement Date will
be deemed to have elected to have requested the Institutional
Trustee or Collateral Agent, as applicable, to require the
Company to repurchase a principal amount of the Debenture
underlying the related Preferred Security equal to the Stated
A-7
Amount of such Purchase Contract, for application to the
Purchase Price of the Common Stock.
The Company shall not be obligated to issue any shares of
Common Stock in respect of a Purchase Contract or deliver any
certificates therefor to the Holder unless it shall have
received payment in full of the aggregate purchase price for
the shares of Common Stock to be purchased thereunder in the
manner herein set forth.
Each Purchase Contract evidenced hereby and the
obligations and rights of the Company and the Holder
thereunder shall terminate if a Termination Event shall have
occurred. Upon the occurrence of a Termination Event, the
Company shall give written notice to the Agent and to the
Holders, at their addresses as they appear in the Income
PRIDES Register. Upon and after the occurrence of a
Termination Event, the Collateral Agent shall release the
Pledged Preferred Security (as defined in the Pledge
Agreement) relating to each Income PRIDES, or the Liquidation
Distribution received in respect of such Pledged Preferred
Security, from the Pledge in accordance with the provisions of
the Pledge Agreement. An Income PRIDES shall thereafter
represent the right to receive the Preferred Security relating
to such Income PRIDES, or the Liquidation Distribution
received in respect of such Preferred Security, and any
accrued Contract Adjustment Payments on the Purchase Contract
forming a part of such Income PRIDES in accordance with the
terms of the Purchase Contract Agreement and the Pledge
Agreement. Contract Adjustment Payments shall cease to accrue
in respect of any period from and after the date of a
Termination Event.
Under the terms of the Pledge Agreement, the Agent will
be entitled to exercise the voting and any other consensual
rights pertaining to the Pledged Preferred Securities. Upon
receipt of notice of any meeting at which holders of Preferred
Securities are entitled to vote or upon any solicitation of
consents, waivers or proxies of holders of Preferred
Securities, the Agent shall, as soon as practicable
thereafter, mail to the Income PRIDES Holders a notice (a)
containing such information as is contained in such notice of
a meeting or such solicitation, (b) stating that each Income
PRIDES Holder on the record date set by the Agent therefor
(which, to the extent possible, shall be the same date as
A-8
the record date for determining the holders of Preferred
Securities entitled to vote at such meeting or to act in
respect of such solicitation) shall be entitled to instruct
the Agent as to the exercise of the voting or other rights
pertaining to the Preferred Securities relating to such
Holder's Income PRIDES and (c) stating the manner in which
such instructions may be given. Upon the written request of
the Income PRIDES Holders on such record date, the Agent shall
endeavor insofar as practicable to vote or cause to be voted
or to act or to cause such action to be taken, in accordance
with the instructions set forth in such requests, in respect
of the maximum number of Preferred Securities as to which any
particular voting instructions are received. In the absence
of specific instructions from the Holder of an Income PRIDES,
the Agent shall abstain from voting the Preferred Security
relating to such Income PRIDES or from taking or causing to be
taken any actions in respect thereof, as the case may be.
Upon the liquidation of the Trust, a principal amount of
the Debentures constituting the assets of the Trust and
underlying the Preferred Securities equal to the aggregate
liquidation amount of the Pledged Preferred Securities shall
be delivered to the Collateral Agent in exchange for Pledged
Preferred Securities. Thereafter, such Debentures shall be
held by the Collateral Agent to secure the obligations of each
Holder of an Income PRIDES to purchase Common Stock under the
related Purchase Contract forming a part of such Income
PRIDES. Following the liquidation of the Trust, the Holders
and the Collateral Agent shall have such security interests,
rights and obligations with respect to such Debentures as the
Holders and the Collateral Agent had in respect of the Pledged
Preferred Securities, and any reference in the Purchase
Contract Agreement or Pledge Agreement to the Preferred
Securities shall be deemed to be a reference to such
Debentures.
The Income PRIDES Certificates are issuable only in
registered form and only in denominations of a single Income
PRIDES and any integral multiple thereof. The transfer of any
Income PRIDES Certificate will be registered and Income PRIDES
Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Income PRIDES Registrar may require a
Holder, among other things, to furnish appropriate
endorsements and transfer
A-9
documents permitted by the Purchase Contract Agreement. No
service charge shall be required for any such registration of
transfer or exchange, but the Company and the Agent may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. A holder
who elects to substitute a Treasury Security for Preferred
Securities, thereby creating Growth PRIDES, shall be
responsible for any fees or expenses payable in connection
therewith. Except as provided in the Purchase Contract
Agreement, for so long as the Purchase Contract forming a part
of an Income PRIDES remains in effect, such Income PRIDES
shall not be separable into its constituent parts, and the
rights and obligations of the Holder of such Income PRIDES in
respect of the related Preferred Security and the Purchase
Contract forming a part of such Income PRIDES may be
transferred and exchanged only as an Income PRIDES. The
holder of an Income PRIDES may substitute for the Pledged
Preferred Securities securing its obligation under the related
Purchase Contract Treasury Securities in an aggregate
principal amount equal to the aggregate liquidation amount of
the Pledged Preferred Securities in accordance with the terms
of the Purchase Contract Agreement and the Pledge Agreement.
From and after such Collateral Substitution, the Security for
which such Pledged Treasury Securities secures the holder's
obligation under the related Purchase Contract shall be
referred to as a "Growth PRIDES." A Holder may make such
Collateral Substitution only in integral multiples of 20
Income PRIDES for 20 Growth PRIDES. Such Collateral
Substitution may cause the Stated Amount of this Certificate
to be increased or decreased; provided, however, the aggregate
Stated Amount outstanding under this Income PRIDES Certificate
shall not exceed $115,000,000. All such adjustments to the
aggregate Stated Amount of this Income PRIDES Certificate
shall be duly recorded by placing an appropriate notation on
the Schedule attached hereto.
A Holder of Growth PRIDES may at any time on or prior to
the second Business Day immediately preceding the Purchase
Contract Settlement Date, recreate Income PRIDES by (a)
delivering to the Collateral Agent Preferred Securities having
an aggregate liquidation amount equal to the aggregate
principal amount of the related Pledged Treasury Securities in
exchange for the release of such Pledged Treasury Securities
in accordance with
A-10
the terms of the Purchase Contract Agreement and the Pledge
Agreement and (b) transferring the related Growth PRIDES to
the Agent accompanied by a notice to the Agent substantially
in the form of Exhibit D to the Purchase Contract Agreement.
Subject to the next succeeding paragraph, the Company
shall pay, on each Payment Date, the Contract Adjustment
Payments, if any, payable in respect of each Purchase Contract
to the Person in whose name the Income PRIDES Certificate
evidencing such Purchase Contract is registered at the close
of business on the Record Date for such Payment Date.
Contract Adjustment Payments, if any, will be payable at the
office of the Agent in The City of New York or, at the option
of the Company, by check mailed to the address of the Person
entitled thereto at such address as it appears on the Income
PRIDES Register.
The Company shall have the right, at any time prior to
the Purchase Contract Settlement Date, to defer the payment of
any or all of the Contract Adjustment Payments otherwise
payable on any Payment Date, but only if the Company shall
give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred)
as provided in the Purchase Contract Agreement. Any Contract
Adjustment Payments so deferred shall bear additional Contract
Adjustment Payments thereon at the rate of 61/2% per annum
(computed on the basis of a 360 day year of twelve 30 day
months), compounding on each succeeding Payment Date, until
paid in full (such deferred installments of Contract
Adjustment Payments, if any, together with the additional
Contract Adjustment Payments, if any, accrued thereon, are
referred to herein as the "Deferred Contract Adjustment
Payments"). Deferred Contract Adjustment Payments, if any,
shall be due on the next succeeding Payment Date except to the
extent that payment is deferred pursuant to the Purchase
Contract Agreement. No Contract Adjustment Payments may be
deferred to a date that is after the Purchase Contract
Settlement Date.
In the event that the Company elects to defer the payment
of Contract Adjustment Payments, if any, on the Purchase
Contracts until the Purchase Contract Settlement Date, the
Holder of this Income PRIDES Certificate will receive on the
Purchase Contract Settlement Date in re-
A-11
spect of the Deferred Contract Adjustment Payments, in lieu of
a cash payment, a number of shares of Common Stock equal to
(x) the aggregate amount of Deferred Contract Adjustment
Payments payable to the Holder of this Income PRIDES
Certificate divided by (y) the Applicable Market Value. No
fractional shares of Common Stock will be issued with respect
to the payment of Deferred Contract Adjustment Payments on the
Purchase Contract Settlement Date, as provided in the Purchase
Contract Agreement.
In the event the Company exercises its option to defer
the payment of any Contract Adjustment Payments, then, until
the Deferred Contract Adjustment Payments have been paid, the
Company shall not declare or pay dividends on, or make a
distribution with respect to, or redeem, purchase or acquire,
or make a liquidation payment with respect to, any of its
capital stock or make guarantee payments with respect to the
foregoing (other than (i) purchases or acquisitions of shares
of the Company's capital stock in connection with the
satisfaction by the Company's of its obligations under any
employee benefit plans or the satisfaction by the Company of
its obligations pursuant to any contract or security requiring
the Company to purchase shares of its capital stock, (ii) as a
result of a reclassification of Protective Life capital stock
or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the
Company's capital stock, (iii) the purchase of fractional
interests in shares of the Company's capital stock pursuant to
an acquisition or the conversion or exchange provisions of
such Protective Life capital stock or the securities being
converted or exchanged, (iv) dividends or distributions in
capital stock of the Company and (v) redemptions of purchases
pursuant to Protective Life's Rights Agreement (or any
Successor Rights Agreement), dated as of August 7, 1995,
between Protective Life and AmSouth Bank (as successor by
merger to AmSouth Bank of Alabama, successor by conversion of
charter to Amsouth Bank N.A.) as Rights Agent).
The Purchase Contracts and the obligations and rights of
the Company and the Holders thereunder, including, without
limitation, the rights of the Holders to receive and the
obligation of the Company to pay any Contract Adjustment
Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically
A-12
terminate, without the necessity of any notice or action by
any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall
have occurred. Upon the occurrence of a Termination Event,
the Company shall promptly but in no event later than two
Business Days thereafter give written notice to the Agent, the
Collateral Agent and to the Holders, at their addresses as
they appear in the Income PRIDES Register. Upon and after the
occurrence of a Termination Event, the Collateral Agent shall
release the Preferred Securities from the Pledge in accordance
with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the
Purchase Contract Agreement at the option of the Holder
thereof, Purchase Contracts forming a part of Securities
having an aggregate Stated Amount equal to $1,000 or an
integral multiple thereof may be settled early ("Early
Settlement") as provided in the Purchase Contract Agreement.
In order to exercise the right to effect Early Settlement with
respect to any Purchase Contracts evidenced by this Income
PRIDES Certificate, the Holder of this Income PRIDES
Certificate shall deliver this Income PRIDES Certificate to
the Agent at the Corporate Trust Office duly endorsed for
transfer to the Company or in blank with the form of Election
to Settle Early set forth below duly completed and accompanied
by payment in the form of a certified or cashier's check or
wire transfer in immediately available funds payable to or
upon the order of the Company in an amount (the "Early
Settlement Amount") equal to (i) the product of (A) the Stated
Amount times (B) the number of Purchase Contracts with respect
to which the Holder has elected to effect Early Settlement,
plus (ii) if such delivery is made with respect to any
Purchase Contracts during the period from the close of
business on any Record Date next preceding any Payment Date to
the opening of business on such Payment Date, an amount equal
to the sum of (x) the Contract Adjustment Payments, if any,
payable on such Payment Date with respect to such Purchase
Contracts plus (y) the distributions with respect to the
related Pledged Preferred Securities payable on such Payment
Date. Upon Early Settlement of Purchase Contracts by a Holder
of the related Securities, the Pledged Preferred Securities
underlying such Securities shall be released from the Pledge
as provided in the Pledge Agreement and the Holder shall be
entitled to receive, a number of shares of
A-13
Common Stock on account of each Purchase Contract forming part
of an Income PRIDES as to which Early Settlement is effected
equal to the Early Settlement Rate; provided however, that
upon the Early Settlement of the Purchase Contracts, the
Holder thereof will forfeit the right to receive any Deferred
Contract Adjustment Payments, if any, on such Purchase
Contracts. The Early Settlement Rate shall initially be equal
to .769 shares of Common Stock and shall be adjusted in the
same manner and at the same time as the Settlement Rate is
adjusted as provided in the Purchase Contract Agreement.
Upon registration of transfer of this Income PRIDES
Certificate, the transferee shall be bound (without the
necessity of any other action on the part of such transferee,
except as may be required by the Agent pursuant to the
Purchase Contract Agreement), under the terms of the Purchase
Contract Agreement and the Purchase Contracts evidenced hereby
and the transferor shall be released from the obligations
under the Purchase Contracts evidenced by this Income PRIDES
Certificate. The Company covenants and agrees, and the
Holder, by his acceptance hereof, likewise covenants and
agrees, to be bound by the provisions of this paragraph.
The Holder of this Income PRIDES Certificate, by his
acceptance hereof, authorizes the Agent to enter into and
perform the related Purchase Contracts forming part of the
Income PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the
assumption (i.e., affirmance) of the Purchase Contracts by the
Company or its trustee in such event that the Company becomes
the subject of a case under the Bankruptcy Code, agrees to be
bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase
Contracts, consents to the provisions of the Purchase Contract
Agreement, authorizes the Agent to enter into and perform the
Pledge Agreement on his behalf as his attorney-in-fact, and
consents to the Pledge of the Preferred Securities underlying
this Income PRIDES Certificate pursuant to the Pledge
Agreement. The Holder further covenants and agrees, that, to
the extent and in the manner provided in the Purchase Contract
Agreement and the Pledge Agreement, but subject to the terms
thereof, payments in respect of the Stated Amount of the
related Pledged Preferred Securities on the Purchase Contract
Settlement Date shall be paid by the Col-
A-14
lateral Agent to the Company in satisfaction of such Holder's
obligations under such Purchase Contracts and such Holder
shall acquire no right, title or interest in such payments.
Each Holder of any Income PRIDES or a Growth PRIDES, and each
Beneficial Owner thereof, by its acceptance thereof or of its
interest therein, further agrees to treat (i) itself as the
owner of the related Preferred Securities or Treasury
Securities, as the case may be, and (ii) the Debentures as
indebtedness of the Company, in each case, for United States
federal, state and local income and franchise tax purposes.
Subject to certain exceptions, the provisions of the
Purchase Contract Agreement may be amended with the consent of
the Holders of at least 66 2/3% of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed
by, and construed in accordance with, the laws of the State of
New York.
The Company, the Agent and its Affiliates and any agent
of the Company or the Agent may treat the Person in whose name
this Income PRIDES Certificate is registered as the owner of
the Income PRIDES evidenced hereby for the purpose of
receiving payments of distributions payable quarterly on the
Preferred Securities, receiving payments of Contract
Adjustment Payments, if any, and any Deferred Contract
Adjustment Payments, performance of the Purchase Contracts and
for all other purposes whatsoever, whether or not any payments
in respect thereof be overdue and notwithstanding any notice
to the contrary, and neither the Company, the Agent nor any
such agent shall be affected by notice to the contrary.
The Purchase Contracts shall not, prior to the settlement
thereof, entitle the Holder to any of the rights of a holder
of shares of Common Stock.
A copy of the Purchase Contract Agreement is available
for inspection at the offices of the Agent.
A-15
ABBREVIATIONS
The following abbreviations, when used in the inscription
on the face of this instrument, shall be construed as though
they were written out in full according to applicable laws or
regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT --------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TENANT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not
as tenants in common
Additional abbreviations may also be used though not in the
above list.
______________________________________________
FOR VALUE RECEIVED, the undersigned hereby sell(s),
assign(s) and transfer(s) unto_________________________________
_______________________________________________________________
Please insert Social Security or Taxpayer I.D. or other
Identifying Number of Assignee_________________________________
_______________________________________________________________
_______________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code
_______________________________________________________________
the within Income PRIDES Certificates and all rights
_______________________________________________________________
thereunder, hereby irrevocably constituting and appointing
_______________________________________________________________
attorney to transfer said Income PRIDES Certificates on the books
of Protective Life Corporation with full power of substitution in
the premises.
Dated: _________________ ______________________________________
Signature
NOTICE: The signature to this
assignment must correspond with the
name as it appears upon the face of the
within Income PRIDES Certificate in
every particular, without alteration or
enlargement or any change whatsoever.
A-16
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares
of Common Stock deliverable upon settlement on or after the
Purchase Contract Settlement Date of the Purchase Contracts
underlying the number of Income PRIDES evidenced by this Income
PRIDES Certificate be registered in the name of, and delivered,
together with a check in payment for any fractional share, to the
undersigned at the address indicated below unless a different name
and address have been indicated below. If shares are to be
registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer or other tax payable incident
thereto.
Dated:_________________________ __________________________________
Signature
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address
of Registered Holder:
_______________________________ __________________________________
Name Name
_______________________________ __________________________________
Address Address
_______________________________ __________________________________
_______________________________ __________________________________
_______________________________ __________________________________
Social Security or other
Taxpayer Identification
Number, if any __________________________________
A-17
ELECTION TO SETTLE EARLY
The undersigned Holder of this Income PRIDES Certificate
hereby irrevocably exercises the option to effect Early Settlement
in accordance with the terms of the Purchase Contract Agreement
with respect to the Purchase Contracts underlying the number of
Income PRIDES evidenced by this Income PRIDES Certificate
specified below. The option to effect Early Settlement may be
exercised only with respect to Purchase Contracts underlying
Income PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that
a certificate for shares of Common Stock deliverable upon such
Early Settlement be registered in the name of, and delivered,
together with a check in payment for any fractional share and any
Income PRIDES Certificate representing any Income PRIDES evidenced
hereby as to which Early Settlement of the related Purchase
Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been
indicated below. Pledged Preferred Securities deliverable upon
such Early Settlement will be transferred in accordance with the
transfer instructions set forth below. If shares are to be
registered in the name of a Person other than the undersigned, the
undersigned will pay any transfer or other tax payable incident
thereto.
Dated:_________________ _______________________________
Signature
A-18
Number of Securities evidenced hereby as to which Early
Settlement of the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Income PRIDES Certificates
are to be registered in the name
of and delivered to and Pledged
Preferred Securities are to be
transferred to a Person other
than the Holder, please print
such Person's name and address:
Please print name and address
of Registered Holder:
_______________________________ ______________________________
Name Name
_______________________________ ______________________________
Address Address
_______________________________ ______________________________
_______________________________ ______________________________
Social Security or other
Taxpayer Identification
Number, if any _______________________________
Transfer Instructions for Pledged Preferred Securities
Transferable Upon Early Settlement or a Termination Event:
___________________________________________________________
___________________________________________________________
___________________________________________________________
A-19
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OF DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global
Certificate have been made:
-------------------------------------------------------------------------------
Stated
Amount of Amount of Amount of Signature of
Decrease in Increase in this Global authorized
Stated Stated Certificate officer of
Amount of Amount of following Trustee or
the Global the Global such decrease Securities
Date Certificate Certificate or increase Custodian
-------------------------------------------------------------------------------
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
▇-▇▇
▇▇▇▇▇▇▇ ▇
THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE
PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE
NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT
BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO
TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE
NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT
AGREEMENT.
Unless this Certificate is presented by an authorized
representative of The Depository Trust Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇) to the Company or its agent for registration of transfer, exchange
or payment, and any Certificate issued is registered in the name of Cede &
Co., or such other name as requested by an authorized representative of The
Depository Trust Company, and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.
No. ___ Number of Growth PRIDES _____ Cusip No. ▇▇▇▇▇▇▇▇▇
[Form of Face of Growth PRIDES Certificate]
This Growth PRIDES Certificate certifies that Cede & Co. is the
registered Holder of the number of Growth PRIDES set forth above. Each
Growth PRIDES represents (i) a 1/20 undivided beneficial ownership interest
in a Treasury Security having a principal amount at maturity equal to $1,000,
subject to the Pledge of such Treasury Security by such Holder pursuant to
the Pledge Agreement, and (ii) the rights and obligations of the Holder under
one Purchase Contract with Protective Life Corporation, a Delaware
Corporation (the "Company"). All capitalized terms used herein which are
defined in the Purchase Contract Agreement have the meaning set forth therein.
Pursuant to the Pledge Agreement, the Treasury Securities relating to
each Growth PRIDES evidenced hereby have been pledged to the Collateral
Agent, for the benefit of the Company, to secure the obligations of the
B-1
Holder under the Purchase Contract comprising a portion of such Growth PRIDES.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company, to sell, on February
16, 2001 (the "Purchase Contract Settlement Date"), at a price equal to $50
(the "Stated Amount"), a number of newly issued shares of Common Stock, par
value $.50 per share ("Common Stock"), of the Company equal to the Settlement
Rate unless on or prior to the Purchase Contract Settlement Date there shall
have occurred a Termination Event with respect to the Growth PRIDES of which
such Purchase Contract is a part, all as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. The purchase price
for the shares of Common Stock purchased pursuant to each Purchase Contract
evidenced hereby will be paid by application of the Proceeds from the
Treasury Securities pledged to secure the obligations under such Purchase
Contract in accordance with the terms of the Pledge Agreement.
The Company shall pay on each Payment Date in respect of each Purchase
Contract evidenced hereby an amount (the "Contract Adjustment Payments")
equal to 0% per annum of the Stated Amount (provided, that, if such
percentage is 0%, then no Contract Adjustment payments will be payable by the
Company), computed on the basis of the actual number of days elapsed in a
year of 360 day year of twelve 30 day months, as the case may be, subject to
deferral at the option of the Company as provided in the Purchase Contract
Agreement and more fully described on the reverse hereof. Such Contract
Adjustment Payments, if any, shall be payable to the Person in whose name
this Growth PRIDES Certificate (or a Predecessor Growth PRIDES Certificate)
is registered at the close of business on the Record Date for such Payment
Date.
Contract Adjustment Payments, if any, will be payable at the office of
the Agent in The City of New York or, at the option of the Company, by check
mailed to the address of the Person entitled thereto as such address appears
on the Growth PRIDES Register.
Reference is hereby made to the further provisions set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as if set forth at this place.
B-2
Unless the certificate of authentication hereon has been executed by the
Agent by manual signature, this Growth PRIDES Certificate shall not be
entitled to any benefit under the Pledge Agreement or the Purchase Contract
Agreement or be valid or obligatory for any purpose.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
PROTECTIVE LIFE CORPORATION
By:
-----------------------------------
Name:
Title:
By:
-----------------------------------
Name:
Title:
Attest:
--------------------------
Name:
Title:
HOLDER SPECIFIED ABOVE (as to obligations of
such Holder under the Purchase Contracts
evidenced hereby)
--------------------------------------------
By: THE BANK OF NEW YORK not individually
but solely as Attorney-in-Fact of such
Holder
By:
----------------------------------------
Name:
Title:
Dated:
AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the Growth PRIDES referred to in the within-mentioned
Purchase Contract Agreement.
By: THE BANK OF NEW YORK, as Agent
By:
-----------------------------------------
Authorized Officer
B-4
(Form of Reverse of
Growth PRIDES Certificate)
Each Purchase Contract evidenced hereby is governed by the Purchase
Contract Agreement, dated as of November 26, 1997 (as supplemented from time
to time, the "Purchase Contract Agreement") between the Company and The Bank
of New York as Purchase Contract Agent (including its successors thereunder,
herein called the "Agent"), to which the Purchase Contract Agreement and
supplemental agreements thereto reference is hereby made for a description of
the respective rights, limitations of rights, obligations, duties and
immunities thereunder of the Agent, the Company and the Holders and of the
terms upon which the Growth PRIDES Certificates are, and are to be, executed
and delivered.
Each Purchase Contract evidenced hereby obligates the Holder of this
Growth PRIDES Certificate to purchase, and the Company to sell, on the
Purchase Contract Settlement Date at a price equal to the Stated Amount (the
"Purchase Price"), a number of shares of Common Stock of the Company equal to
the Settlement Rate unless, on or prior to the Purchase Contract Settlement
Date, there shall have occurred a Termination Event or an Early Settlement
with respect to the Security of which such Purchase Contract is a part. The
"Settlement Rate" is equal to (a) if the Applicable Market Value (as defined
below) is equal to or greater than $65.04 (the "Threshold Appreciation
Price"), .769 shares of Common Stock per Purchase Contract, (b) if the
Applicable Market Value is less than the Threshold Appreciation Price but is
greater than $53 5/16, the number of shares of Common Stock per Purchase
Contract equal to the Stated Amount divided by the Applicable Market Value
and (c) if the Applicable Market Amount is less than or equal to $53 5/16,
.938 shares of Common Stock per Purchase Contract, in each case subject to
adjustment as provided in the Purchase Contract Agreement. No fractional
shares of Common Stock will be issued upon settlement of Purchase Contracts,
as provided in the Purchase Contract Agreement.
The "Applicable Market Value" means the average of the Closing Prices per
share of Common Stock on each of the thirty consecutive Trading Days ending
on the second Trading Day immediately preceding the Purchase Contract
Settlement Date. The "Closing Price" of the Common Stock on any date of
determination means the closing sale price (or, if no closing price is
reported, the last reported sale price) of the Common Stock on the New York
Stock Exchange (the "NYSE") on such date or, if the Common Stock is not
listed for trading on the NYSE on any such date, as reported in the composite
transactions for
B-5
the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed on a United States
national or regional securities exchange, as reported by The Nasdaq Stock
Market, or, if the Common Stock is not so reported, the last quoted bid price
for the Common Stock in the over-the-counter market as reported by the
National Quotation Bureau or similar organization, or, if such bid price is
not available, the market value of the Common Stock on such date as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Company. A "Trading Day" means a day on
which the Common Stock (A) is not suspended from trading on any national or
regional securities exchange or association or over-the-counter market at the
close of business and (B) has traded at least once on the national or
regional securities exchange or association or over-the-counter market that
is the primary market for the trading of the Common Stock.
In accordance with the terms of the Purchase Contract Agreement, the
Holder of this Growth PRIDES Certificate shall pay the Purchase Price for the
shares of Common Stock purchased pursuant to each Purchase Contract evidenced
hereby by effecting either an Early Settlement of each such Purchase Contract
or by applying a principal amount of the Pledged Treasury Securities
underlying such Holder's Growth PRIDES equal to the Stated Amount of such
Purchase Contract to the purchase of the Common Stock.
The Company shall not be obligated to issue any shares of Common Stock in
respect of a Purchase Contract or deliver any certificates therefor to the
Holder unless it shall have received payment in full of the aggregate
purchase price for the shares of Common Stock to be purchased thereunder in
the manner herein set forth.
Each Purchase Contract evidenced hereby and the obligations and rights of
the Company and the Holder thereunder shall terminate if a Termination Event
shall have occurred. Upon the occurrence of a Termination Event, the Company
shall give written notice to the Agent and to the Holders, at their addresses
as they appear in the Growth PRIDES Register. Upon and after the occurrence
of a Termination Event, the Collateral Agent shall release the Pledged
Treasury Securities (as defined in the Pledge Agreement) relating to each
Growth PRIDES in accordance with the provisions of the Pledge Agreement. A
Growth PRIDES shall thereafter represent the right to receive any accrued
Contract Adjustment Payments on the Purchase Contract relating to such Growth
PRIDES in accordance with the terms of the Purchase Contract Agreement and
the
B-6
Pledge Agreement. Contract Adjustment Payments, if any, shall cease to
accrue in respect of any period from and after the date of a Termination
Event.
The Growth PRIDES Certificates are issuable only in registered form and
only in denominations of a single Growth PRIDES and any integral multiple
thereof. The transfer of any Growth PRIDES Certificate will be registered
and Growth PRIDES Certificates may be exchanged as provided in the Purchase
Contract Agreement. The Growth PRIDES Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents
permitted by the Purchase Contract Agreement. No service charge shall be
required for any such registration of transfer or exchange, but the Company
and the Agent may require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith. A holder who
elects to substitute Preferred Securities for a Treasury Security, thereby
creating Income PRIDES, shall be responsible for any fees or expenses
associated therewith. Except as provided in the Purchase Contract Agreement,
for so long as the Purchase Contract forming a part of a Growth PRIDES
remains in effect, such Growth PRIDES shall not be separable into its
constituent parts, and the rights and obligations of the Holder of such
Growth PRIDES in respect of the related Treasury Security and the Purchase
Contract forming a part of such Growth PRIDES may be transferred and
exchanged only as a Growth PRIDES. The holder of a Growth PRIDES may
substitute for the Pledged Treasury Securities securing its obligations under
the related Purchase Contract Preferred Securities with an aggregate
liquidation amount equal to the aggregate principal amount of such Pledged
Treasury Securities in accordance with the terms of the Purchase Contract
Agreement and the Pledge Agreement. From and after such substitution, the
Holder's Security shall be referred to as an "Income PRIDES." Such
substitution may cause the aggregate Stated Amount of this Certificate to be
increased or decreased; provided, however, the aggregate Stated Amount
outstanding under this Growth PRIDES Certificate shall not exceed
$115,000,000. All such adjustments to the aggregate Stated Amount of this
Growth PRIDES Certificate shall be duly recorded by placing an appropriate
notation on the Schedule attached hereto.
A Holder of an Income PRIDES may, at any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement Date,
recreate a Growth PRIDES by (a) delivering to the Collateral Agent Treasury
Securities having an aggregate principal amount equal to the aggregate
liquidation amount of the related Pledged Preferred Securities in ex-
B-7
change for the release of such Pledged Preferred Securities in accordance
with the terms of the Purchase Contract Agreement and the Pledge Agreement
and (b) transferring the related Income PRIDES to the Agent accompanied by a
notice to the Agent, substantially in the form of Exhibit D to the Purchase
Contract Agreement. Any such recreation of a Growth PRIDES may be effected
only in multiples of 20 Income PRIDES for 20 Growth PRIDES.
Subject to the next succeeding paragraph, the Company shall pay, on each
Payment Date, the Contract Adjustment Payments, if any, payable in respect of
each Purchase Contract to the Person in whose name the Growth PRIDES
Certificate evidencing such Purchase Contract is registered at the close of
business on the Record Date for such Payment Date. Contract Adjustment
Payments will be payable at the office of the Agent in The City of New York
or, at the option of the Company, by check mailed to the address of the
Person entitled thereto at such address as it appears on the Growth PRIDES
Register.
The Company shall have the right, at any time prior to the Purchase
Contract Settlement Date, to defer the payment of any or all of the Contract
Adjustment Payments otherwise payable on any Payment Date, but only if the
Company shall give the Holders and the Agent written notice of its election
to defer such payment (specifying the amount to be deferred) as provided in
the Purchase Contract Agreement. Any Contract Adjustment Payments so
deferred shall bear additional Contract Adjustment Payments thereon at the
rate of 61/2% per annum (computed on the basis of a 360 day year of twelve 30
day months), compounding on each succeeding Payment Date, until paid in full
(such deferred installments of Contract Adjustment Payments together with the
additional Contract Adjustment Payments accrued thereon, are referred to
herein as the "Deferred Contract Adjustment Payments"). Deferred Contract
Adjustment Payments, if any, shall be due on the next succeeding Payment Date
except to the extent that payment is deferred pursuant to the Purchase
Contract Agreement. No Contract Adjustment Payments may be deferred to a
date that is after the Purchase Contract Settlement Date.
In the event that the Company elects to defer the payment of Contract
Adjustment Payments, if any, on the Purchase Contracts until the Purchase
Contract Settlement Date, the Holder of this Growth PRIDES Certificate will
receive on the Purchase Contract Settlement Date in respect of any Deferred
Contract Adjustment payments, in lieu of a cash payment, a number of shares
of Common Stock equal to (x) the aggregate amount of Deferred Contract
Adjustment Payments payable to the Holder of
B-8
the Growth PRIDES Certificate of Securities divided by (y) the Applicable
Market Value. No fractional shares of Common Stock will be issued with
respect to the payment of Deferred Contract Adjustment Payments, if any, on
the Purchase Contract Settlement Date, as provided in the Purchase Contract
Agreement.
In the event the Company exercises its option to defer the payment of any
Contract Adjustment Payments, then, until the Deferred Contract Adjustment
Payments have been paid, the Company shall not declare or pay dividends on,
or make a distribution with respect to, or redeem, purchase or acquire, or
make a liquidation payment with respect to, any of its capital stock or make
guarantee payments with respect to the foregoing (other than (i) purchases or
acquisitions of shares of the Company's capital stock in connection with the
satisfaction by the Company of its obligations under any employee benefit
plans or the satisfaction by the Company of its obligations pursuant to any
contract or security requiring the Company to purchase shares of its capital
stock, (ii) as a result of a reclassification of Protective Life capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock,
(iii) the purchase of fractional interests in shares of the Company's capital
stock pursuant to an acquisition or the conversion or exchange provisions of
such Protective Life capital stock or the securities being converted or
exchanged, (iv) dividends or distributions in capital stock of the Company
and (v) redemptions of purchases pursuant to Protective Life's Rights
Agreement, (or any Successor Rights Agreement), dated as of August 7, 1995,
between Protective Life and AmSouth Bank (as successor by merger to AmSouth
Bank of Alabama, successor by conversion of charter to Amsouth Bank N.A.)
("AmSouth Bank"), as Rights Agent.
The Purchase Contracts and the obligations and rights of the Company and
the Holders thereunder, including, without limitation, the rights of the
Holders to receive and the obligation of the Company to pay any Contract
Adjustment Payments or any Deferred Contract Adjustment Payments, shall
immediately and automatically terminate, without the necessity of any notice
or action by any Holder, the Agent or the Company, if, on or prior to the
Purchase Contract Settlement Date, a Termination Event shall have occurred.
Upon the occurrence of a Termination Event, the Company shall promptly but in
no event later than two Business Days thereafter give written notice to the
Agent, the Collateral Agent and to the Holders, at their addresses as they
appear in the Growth PRIDES Register. Upon and after the occurrence of a
Termination Event,
B-9
the Collateral Agent shall release the Treasury Securities from the Pledge in
accordance with the provisions of the Pledge Agreement.
Subject to and upon compliance with the provisions of the Purchase
Contract Agreement, at the option of the Holder thereof, Purchase Contracts
forming a part of Securities having an aggregate Stated Amount equal to
$1,000 or an integral multiple thereof may be settled early ("Early
Settlement") as provided in the Purchase Contract Agreement. In order to
exercise the right to effect Early Settlement with respect to any Purchase
Contracts evidenced by this Growth PRIDES Certificate, the Holder of this
Growth PRIDES Certificate shall deliver this Growth PRIDES Certificate to the
Agent at the Corporate Trust Office duly endorsed for transfer to the Company
or in blank with the form of Election to Settle Early set forth below duly
completed and accompanied by payment in the form of a certified or cashier's
check or wire transfer in immediately available funds payable to or upon the
order of the Company in an amount (the "Early Settlement Amount") equal to
(i) the product of (A) the Stated Amount times (B) the number of Purchase
Contracts with respect to which the Holder has elected to effect Early
Settlement, plus (ii) if such delivery is made with respect to any Purchase
Contracts during the period from the close of business on any Record Date
next preceding any Payment Date to the opening of business on such Payment
Date, an amount equal to the Contract Adjustment Payments, if any, payable,
if any, on such Payment Date with respect to such Purchase Contracts. Upon
Early Settlement of Purchase Contracts by a Holder of the related Securities,
the Pledged Treasury Securities underlying such Securities shall be released
from the Pledge as provided in the Pledge Agreement and the Holder shall be
entitled to receive, a number of shares of Common Stock on account of each
Purchase Contract forming part of a Growth PRIDES as to which Early
Settlement is effected equal to .769 shares of Common Stock per Purchase
Contract (the "Early Settlement Rate"); provided however, that upon the Early
Settlement of the Purchase Contracts, the Holder thereof will forfeit the
right to receive any Deferred Contract Adjustment Payments on such Purchase
Contracts. The Early Settlement Rate shall initially be equal to .769 shares
of Common Stock per Growth PRIDES and shall be adjusted in the same manner
and at the same time as the Settlement Rate is adjusted as provided in the
Purchase Contract Agreement.
Upon registration of transfer of this Growth PRIDES Certificate, the
transferee shall be bound (without the necessity of any other action on the
part of such transferee,
B-10
except as may be required by the Agent pursuant to the Purchase Contract
Agreement), under the terms of the Purchase Contract Agreement and the
Purchase Contracts evidenced hereby and the transferor shall be released from
the obligations under the Purchase Contracts evidenced by this Growth PRIDES
Certificate. The Company covenants and agrees, and the Holder, by his
acceptance hereof, likewise covenants and agrees, to be bound by the
provisions of this paragraph.
The Holder of this Growth PRIDES Certificate, by his acceptance hereof,
authorizes the Agent to enter into and perform the related Purchase Contracts
forming part of the Growth PRIDES evidenced hereby on his behalf as his
attorney-in-fact, expressly withholds any consent to the assumption (i.e.,
affirmance) of such Purchase Contracts by the Company or its trustee in the
event that the Company becomes the subject of a case under the Bankruptcy
Code, agrees to be bound by the terms and provisions thereof, covenants and
agrees to perform his obligations under such Purchase Contracts, consents to
the provisions of the Purchase Contract Agreement, authorizes the Agent to
enter into and perform the Pledge Agreement on his behalf as his
attorney-in-fact, and consents to the Pledge of the Treasury Securities
underlying this Growth PRIDES Certificate pursuant to the Pledge Agreement.
The Holder further covenants and agrees, that, to the extent and in the
manner provided in the Purchase Contract Agreement and the Pledge Agreement,
but subject to the terms thereof, payments in respect of the Stated Amount of
the related Pledged Treasury Securities on the Purchase Contract Settlement
Date shall be paid by the Collateral Agent to the Company in satisfaction of
such Holder's obligations under such Purchase Contracts and such Holder shall
acquire no right, title or interest in such payments. Each Holder of any
Income PRIDES or a Growth PRIDES, and each Beneficial Owner thereof, by its
acceptance thereof or of its interest therein, further agrees to treat (i)
itself as the owner of the related Trust Preferred Securities or Treasury
Securities, as the case may be, and (ii) the Debentures as indebtedness of
the Company, in each case, for United States federal, state and local income
and franchise tax purposes.
Subject to certain exceptions, the provisions of the Purchase Contract
Agreement may be amended with the consent of the Holders of at least 66 2/3%
of the Purchase Contracts.
The Purchase Contracts shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York.
B-11
The Company, the Agent and its Affiliates and any agent of the Company or
the Agent may treat the Person in whose name this Growth PRIDES Certificate
is registered as the owner of the Growth PRIDES evidenced hereby for the
purpose of receiving payments of interest on the Treasury Securities,
receiving payments of Contract Adjustment Payments, if any, and any Deferred
Contract Adjustment Payments, performance of the Purchase Contracts and for
all other purposes whatsoever, whether or not any payments in respect thereof
be overdue and notwithstanding any notice to the contrary, and neither the
Company, the Agent nor any such agent shall be affected by notice to the
contrary.
The Purchase Contracts shall not, prior to the settlement thereof,
entitle the Holder to any of the rights of a holder of shares of Common Stock.
A copy of the Purchase Contract Agreement is available for inspection at
the offices of the Agent.
B-12
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
UNIF GIFT MIN ACT - ------------Custodian------------
(cust) (minor)
Under Uniform Gifts to Minors Act
---------------------------------
(State)
TENANT - as tenants by the entireties
JT TEN - as joint tenants with right of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto: ____________________________________________________________
______________________________________________________________________________
Please insert Social Security or Taxpayer I.D. or other Identifying Number of
Assignee _____________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Please Print or Type Name and Address Including Postal Zip Code
______________________________________________________________________________
the within Growth PRIDES Certificates and all rights
______________________________________________________________________________
thereunder, hereby irrevocably constituting and appointing
______________________________________________________________________________
as attorney to transfer said Growth PRIDES Certificates on the books of
Protective Life Corporation with full power of substitution in the premises.
Dated: _____________________ ________________________________________
Signature
NOTICE: The signature to this assignment
must correspond with the name as it
appears upon the face of the within
Growth PRIDES Certificate in every
particular, without alteration or
enlargement or any change whatsoever.
B-13
SETTLEMENT INSTRUCTIONS
The undersigned Holder directs that a certificate for shares of Common
Stock deliverable upon settlement on or after the Purchase Contract
Settlement Date of the Purchase Contracts underlying the number of Growth
PRIDES evidenced by this Growth PRIDES Certificate be registered in the name
of, and delivered, together with a check in payment for any fractional share,
to the undersigned at the address indicated below unless a different name and
address have been indicated below. If shares are to be registered in the
name of a Person other than the undersigned, the undersigned will pay any
transfer or other tax payable incident thereto.
Dated: ________________________ ________________________________________
Signature
If shares are to be registered
in the name of and delivered to REGISTERED HOLDER
a Person other than the Holder,
please print such Person's name
and address:
Please print name and address of
Registered Holder:
----------------------------- ----------------------------------------
Name Name
----------------------------- ----------------------------------------
Address Address
----------------------------- ----------------------------------------
----------------------------- ----------------------------------------
----------------------------- ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ----------------------------------------
B-14
ELECTION TO SETTLE EARLY
The undersigned Holder of this Growth PRIDES Certificate hereby
irrevocably exercises the option to effect Early Settlement in accordance
with the terms of the Purchase Contract Agreement with respect to the
Purchase Contracts underlying the number of Growth PRIDES evidenced by this
Growth PRIDES Certificate specified below. The option to effect Early
Settlement may be exercised only with respect to Purchase Contracts
underlying Growth PRIDES with an aggregate Stated Amount equal to $1,000 or
an integral multiple thereof. The undersigned Holder directs that a
certificate for shares of Common Stock deliverable upon such Early Settlement
be registered in the name of, and delivered, together with a check in payment
for any fractional share and any Growth PRIDES Certificate representing any
Growth PRIDES evidenced hereby as to which Early Settlement of the related
Purchase Contracts is not effected, to the undersigned at the address
indicated below unless a different name and address have been indicated
below. Pledged Treasury Securities deliverable upon such Early Settlement
will be transferred in accordance with the transfer instructions set forth
below. If shares are to be registered in the name of a Person other than the
undersigned, the undersigned will pay any transfer or other tax payable
incident thereto.
Dated:
--------------------------- ----------------------------------
Signature
B-15
Number of Securities evidenced hereby as to which Early Settlement of
the related Purchase Contracts is being elected:
If shares of Common Stock REGISTERED HOLDER
or Growth PRIDES Certifi-
▇▇▇▇▇ are to be registered
in the name of and delivered
to and Pledged Treasury
Securities are to be
transferred to a Person
other than the Holder, please
print such Person's name and address:
Please print name and address
of Registered Holder:
----------------------------- ----------------------------------------
Name Name
----------------------------- ----------------------------------------
Address Address
----------------------------- ----------------------------------------
----------------------------- ----------------------------------------
----------------------------- ----------------------------------------
Social Security or other
Taxpayer Identification
Number, if any ----------------------------------------
Transfer Instructions for Pledged Treasury Securities Transferable
Upon Early Settlement or a Termination Event:
----------------------------------------------------------
----------------------------------------------------------
----------------------------------------------------------
B-16
[TO BE ATTACHED TO GLOBAL CERTIFICATES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE
The following increases or decreases in this Global Certificate have been
made:
Stated
Amount of Amount of Amount of Signature of
Decrease in Increase in this Global authorized
Stated Stated Certificate officer of
Amount of Amount of following such Trustee or
the Global the Global decrease Securities
Date Certificate Certificate or increase Custodian
---- ------------ ----------- -------------- ------------
B-17
EXHIBIT C
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
Attention:
Re: FELINE PRIDES of Protective Life Corporation (the "Company"),
and PLC Capital Trust II
We hereby notify you in accordance with Section 4.1 of the Pledge
Agreement, dated as of ________ __, 1997, among the Company, yourselves, as
Collateral Agent, and ourselves, as Purchase Contract Agent and as
attorney-in-fact for the holders of [Income PRIDES] [Growth PRIDES] from time
to time, that the holder of securities listed below (the "Holder") has
elected to substitute [$_____ aggregate principal amount of Treasury Securities]
[$_______Stated Amount of Preferred Securities] in exchange for an equal
value of the [Pledged Preferred Securities][Pledged Treasury Securities] held
by you in accordance with the Pledge Agreement and has delivered to us a
notice stating that the Holder has Transferred [Treasury Securities]
[Preferred Securities] to you, as Collateral Agent. We hereby instruct you,
upon receipt of such [Pledged Treasury Securities] [Pledged Preferred
Securities], to release the Preferred Securities][Treasury Securities]
related to such [Income PRIDES] [Growth PRIDES] to us in accordance with the
Holder's instructions. Capitalized terms used therein but not defined shall
have the meaning set forth in the Pledge Agreement.
Date:
------------------------------
By:
------------------------------
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities] for the
[Pledged Preferred Securities] [Pledged Treasury Securities]:
--------------------------- ---------------------------------
Name Social Security or other
Taxpayer Identification
--------------------------- Number, if any
Address
---------------------------
---------------------------
C-1
EXHIBIT D
INSTRUCTION TO PURCHASE CONTRACT AGENT
Attention:
Re: FELINE PRIDES of PROTECTIVE LIFE CORPORATION (the "Company"),
and PLC Capital Trust II
The undersigned Holder hereby notifies you that it has delivered to
, as Collateral Agent, $_______ aggregate principal
amount [Stated Amount] of [Treasury Securities] [Preferred Securities] in
exchange for an equal value of the [Pledged Preferred Securities]
[Pledged Treasury Securities] held by the Collateral Agent, in accordance
with Section 4.1 of the Pledge Agreement, dated __________ __, 1997, between
you, the Company and the Collateral Agent. The undersigned Holder hereby
instructs you to instruct the Collateral Agent to release to you on behalf of
the undersigned Holder the [Pledged Preferred Securities]
[Pledged Treasury Securities] related to such [Income PRIDES] [Growth PRIDES]
. Capitalized terms used herein but not defined shall have the meaning set
forth in the Pledge Agreement.
Dated:
--------------------------- -------------------------------
Signature
Please print name and address of Registered Holder:
---------------------------------- -------------------------------
Name Social Security or other
Taxpayer Identification
---------------------------------- Number, if any
Address
----------------------------------
----------------------------------
----------------------------------
D-1