Document:

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                                                                    EXHIBIT 10.2

                                 March 20, 2000

PennCorp Financial Group, Inc.
717 North Harwood Street
Dallas, Texas 75201
Attention: The Board of Directors

Gentleman:

                  Reference is made to (i) that certain offer letter dated March
15, 2000 (the "Offer Letter") pursuant to which Inverness/Phoenix Capital LLC
("Inverness"), Vicuna Advisors, L.L.C., in its capacity as investment manager to
certain Delaware entities ("Vicuna"), Bernard Rapoport ("Rapoport") and John
Sharpe ("Sharpe" and together with Inverness, Vicuna and Rapoport, the
"Offerors") submitted an offer to recapitalize PennCorp Financial Group, Inc.
(the "Company") as outlined in the Summary of Terms and Conditions attached
thereto as Exhibit A, which is hereby revised and amended and attached hereto
(the "Terms Summary"), (ii) that certain equity commitment letter of Rapoport,
dated March 15, 2000 (the "Rapoport Letter"), (iii) that certain equity
commitment letter of Sharpe, dated March 15, 2000 (the"Sharpe Letter") and (iv)
that certain standby commitment letter of Inverness and Vicuna, dated March 15,
2000 (the "Standby Commitment Letter"). Capitalized terms not otherwise defined
in this letter shall have the meanings ascribed to them in the Terms Summary.
This letter is intended to amend and supplement the Offer Letter, the Rapoport
Letter, the Sharpe Letter and the Standby Commitment Letter.

                  The Offerors have conducted negotiations with the holders of
the Company's 9.25% Senior Subordinated Notes (the "Notes") in an effort to
garner their support for the Recapitalization. In furtherance thereof, the
Offerors hereby agree that if (i) the holders of the Notes endorse the
Recapitalization at the meeting of the Company's board of directors on March 21,
2000 and do not withdraw such support thereafter and (ii) the Company selects
the Recapitalization as the Final Accepted Offer (as defined in the Offer
Letter), then the initial deposit of $5,000,000 (the "Initial Deposit") paid by
Inverness into an escrow account with Citibank, N.A., as the Escrow Agent, on
March 15, 2000 pursuant to the terms of the Offer Letter and the Escrow
Agreement, shall, notwithstanding anything to the contrary contained in the
Offer Letter or the Escrow Agreement, be paid to the Company in the event that
the Recapitalization has not been consummated by July 31, 2000 due to a failure
of a condition set forth in the Terms Summary, the Rapoport Letter, the Sharpe
Letter or the Standby Commitment Letter, other than (1) the failure of the
Bankruptcy Court to approve the Recapitalization or (2) the failure of the
Company to receive the proceeds of the New Senior Facility because of a
"material adverse change" resulting from (A) the suspension of the trading in
securities generally on the New York Stock Exchange or the American Stock
Exchange, (B) the establishment of minimum or maximum prices on such exchange,
(C) declaration by the

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State of New York or United States authorities of a banking moratorium, (D) any
material change in the general financial markets of the United States that in
the reasonable judgement of the senior lenders under the New Senior Facility
would materially and adversely affect the consummation of the Recapitalization,
(E) an outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity or
emergency, or (F) an outbreak or escalation of hostilities between the United
States and any foreign power. If the Initial Deposit is paid to the Company
pursuant to this letter, such payment shall be deemed an expense of Inverness
incurred in connection with the Recapitalization, subordinate to all allowed
unsecured claims against the Company, including the Notes.

                  Notwithstanding the foregoing, in the event that the Initial
Deposit becomes payable to the Company pursuant to the terms of this letter as a
result of the failure of the Company to receive the proceeds of the New Senior
Facility, then, upon the election of the holders of a majority of the
outstanding principal amount of the Notes in their sole discretion, the terms of
the Notes will be revised to be consistent with the terms of the New Senior
Facility (i.e. maturity, rate of interest and senior secured position) and such
holders by delivery of a written notice thereof to the Offerors and the Company
and the condition precedent contained in each of the Terms Summary, the Rapoport
Letter, the Sharpe Letter and the Standby Commitment Letter that the Company
shall have received the proceeds from the New Senior Facility shall, in each
case, be deleted. In such event, the Initial Deposit shall be applied against
the purchase price for New Common Stock purchased by Inverness pursuant to the
Standby Underwriting Commitment upon consummation of the Recapitalization in
accordance with the terms of the Escrow Agreement.

                  Please execute this letter in the space provided below to
indicate the Company's acceptance of the offer of the Offerors, as set forth in
the Offer Letter and as amended and modified by this letter.

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                                          Very truly yours,

                                          Inverness/Phoenix Capital, LLC

                                          By: /s/ JAMES C. COMIS
                                             ---------------------
                                          Its: Managing Director
                                              --------------------

                                          Vicuna Advisors, L.L.C.,
                                          as investment advisor

                                          By: /s/ JOSH WELCH
                                             ---------------------
                                          Its: Managing Member
                                              --------------------

                                              /s/ JOHN SHARPE
                                              -------------------------
                                              John Sharpe

                                              /s/ BERNARD RAPOPORT
                                              -------------------------
                                              Bernard Rapoport

Acknowledged:
------------

PennCorp Financial Group, Inc.

By: /s/ KEITH A. MAIB
   ---------------------
Its: President and Chief
     Executive Officer
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                                                                    EXHIBIT 10.3

                                 March 15, 2000

PennCorp Financial Group, Inc.
717 North Harwood Street
Dallas, Texas 75201
Attention: The Board of Directors

Gentleman:

                  In connection with the proposed recapitalization (the
"Recapitalization") of PennCorp Financial Group, Inc. (the "Company") on the
terms set forth in Exhibit A attached hereto (the "Terms Summary"), the Company
will offer the undersigned the opportunity to purchase 1,600,000 shares of New
Common (as defined in the Term Summary) for a purchase price of $12.50 per share
and an aggregate purchase price of $20,000,000, in each case payable in
immediately available funds. The undersigned, subject to the terms and
conditions set forth herein and in Exhibit A, hereby agrees that at the closing
of the Recapitalization he will purchase such shares of New Common. Capitalized
terms not otherwise defined in this letter shall have the meanings ascribed to
them in the Terms Summary. In connection therewith, the undersigned has agreed
to deposit such $20,000,000 into an escrow account pursuant to the terms and
conditions set forth in an Escrow Agreement, dated as of the date hereof, among
the Company, the undersigned, Inverness/Phoenix Capital, LLC ("Inverness"),
Vicuna Advisors, L.L.C., in its capacity as investment manager to certain
Delaware entities ("Vicuna") and John Sharpe (the "Escrow Agreement"). The funds
deposited by the undersigned pursuant to the Escrow Agreement will be credited
toward the purchase price for the New Common to be acquired by the undersigned
hereunder upon delivery of such funds to the Company.

                  Such purchase of New Common is subject the following
conditions: (i) the New Senior Facility shall have been funded and the
Reinsurance Transaction shall have been consummated; (ii) all conditions imposed
by the Texas Department of Insurance with respect to the payment by SW Life and
SLT of the Extraordinary Dividend shall have been satisfied; (iii) the approval
of the Texas Department of Insurance shall have been received and the expiration
or early termination of the applicable waiting periods under the Hart Scott
Rodino Anti-Trust Improvements Act of 1976, as amended, shall have occurred;
(iv) the board of directors of PFG shall have approved the Recapitalization and
shall not have terminated it in response to a superior proposal; (v) with
respect to the Bankruptcy, an order confirming the plan of reorganization that
incorporates the Recapitalization shall have been entered by the Bankruptcy
Court and such order shall be unstayed and in full force and effect; and (vi)
the closing of the Recapitalization occurring not later than December 31, 2000.
Upon satisfaction of each of the conditions set forth above, the undersigned
shall deliver a written notice to the Escrow Agent under the Escrow Agreement
authorizing the release of the Escrow Funds (as defined therein) to the Company
pursuant to the terms thereof.

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                  This letter shall be governed by and construed under the laws
of the State of New York, without regard to the conflict of law principles
thereof except to the extent pre-empted by the United States Bankruptcy Code.
Any judicial proceeding brought against the undersigned relating to a dispute
arising out of this letter will be brought exclusively in the Bankruptcy Court
and by its execution and delivery of this letter, the undersigned accepts the
exclusive jurisdiction of the Bankruptcy Court.

                  This letter shall terminate, and the undersigned shall have no
further obligations hereunder, (i) if an order approving the sale of SW Life and
SLT has been entered by the Bankruptcy Court, and such order has become final or
(ii) in the event the Recapitalization has not been consummated on or prior to
December 31, 2000.

                                               Very truly yours,

                                               /s/ BERNARD RAPOPORT

                                               Bernard Rapoport

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