-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GDhhLWzNP1t2k4ZEKsJvH+Iw7vV1e9QPN0Xl0nhBNKQq8u/yLuRNZO6bwc4NQXx7 AdnAcreiaCuOGuXpw/WIrg== 0000912057-94-002076.txt : 19940617 0000912057-94-002076.hdr.sgml : 19940617 ACCESSION NUMBER: 0000912057-94-002076 CONFORMED SUBMISSION TYPE: 424B5 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940616 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PROTECTIVE LIFE CORP CENTRAL INDEX KEY: 0000355429 STANDARD INDUSTRIAL CLASSIFICATION: 6311 IRS NUMBER: 952492236 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B5 SEC ACT: 1933 Act SEC FILE NUMBER: 033-52831 FILM NUMBER: 94534558 BUSINESS ADDRESS: STREET 1: 2801 HGWY 280 S CITY: BIRMINGHAM STATE: AL ZIP: 35223 BUSINESS PHONE: 2058799230 MAIL ADDRESS: STREET 1: PO BOX 2606 CITY: BIRMINGHAM STATE: AL ZIP: 35202 424B5 1 FORM 424B5 THE INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. Filed Pursuant to Rule 424B5 Registration No. 33-52831 SUBJECT TO COMPLETION, DATED JUNE 16, 1994 PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED JUNE 2, 1994 $75,000,000 PROTECTIVE LIFE CORPORATION % SENIOR NOTES DUE , 2004 ----------- Interest on the Senior Notes is payable semiannually on and of each year, commencing , 1994. The Senior Notes are not redeemable by Protective Life Corporation prior to maturity and will not be entitled to any sinking fund. The Senior Notes will be issued only in fully registered form in denominations of $1,000 and integral multiples thereof. See "Description of the Senior Notes." The Senior Notes will be represented by one or more global Senior Notes registered in the name of the nominee of The Depository Trust Company. Beneficial interests in the global Senior Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depository, its nominee and its participants. Except as described herein, Senior Notes in definitive form will not be issued. The Senior Notes will trade in the Depository's Same-Day Funds Settlement System until maturity, and secondary market trading activity for the Senior Notes will therefore settle in immediately available funds. All payments of principal and interest will be made by Protective Life Corporation in immediately available funds. See "Description of the Senior Notes--Same-Day Funds Settlement System." -------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. --------------
INITIAL PUBLIC UNDERWRITING PROCEEDS TO OFFERING PRICE (1) DISCOUNT (2) COMPANY (1)(3) --------------------- --------------------- --------------------- Per Senior Note........................... % % % Total..................................... $ $ $ - ------------------------ (1) Plus accrued interest, if any, from , 1994. (2) Protective Life Corporation has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. (3) Before deducting estimated expenses of $ payable by Protective Life Corporation.
-------------- The Senior Notes are offered severally by the Underwriters, as specified herein, subject to receipt and acceptance by them and subject to their right to reject any order in whole or in part. It is expected that the Senior Notes will be ready for delivery in book-entry form only through the facilities of the Depository in New York, New York, on or about , 1994, against payment therefor in immediately available funds. GOLDMAN, SACHS & CO. ALEX. BROWN & SONS INCORPORATED ---------------- The date of this Prospectus Supplement is June __, 1994. IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OFFERED HEREBY AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. -------------- FOR NORTH CAROLINA PURCHASERS: THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. -------------- S-2 PROTECTIVE LIFE CORPORATION Protective Life Corporation, a Delaware corporation incorporated in 1981 ("Protective Life"), is an insurance holding company that owns a group of life insurance companies that provide financial services through the production, distribution and administration of insurance and investment products. Protective Life Insurance Company ("Protective Life Insurance"), founded in 1907, is Protective Life's principal operating subsidiary. Protective Life Insurance has five marketing divisions: Agency, Group, Guaranteed Investment Contracts, Financial Institutions, and Investment Products. Protective Life Insurance has two additional business segments: Acquisitions and Corporate and Other. Unless the context otherwise requires, as used in this section "Protective Life" refers to the consolidated group of Protective Life Corporation and its subsidiaries. Protective Life's principal executive offices are located at 2801 Highway 280 South, Birmingham, Alabama 35223 (Telephone: (205) 879-9230). During 1993, Protective Life reported revenues of $760 million and net income of $57 million. During the three months ended March 31, 1994, Protective Life reported revenues of $196 million and net income of $17 million. At March 31, 1994, Protective Life had total assets of $5.4 billion, stockholders' equity of $319 million and life insurance in force of $43.3 billion. Protective Life's insurance subsidiaries generated approximately 94% of its revenues in 1993 and 98% of its revenues for the three months ended March 31, 1994. Protective Life Insurance is currently rated A+ (Superior) by A.M. Best Company, Inc. ("A.M. Best"). A.M. Best, an independent insurance industry rating organization, assigns fifteen letter ratings to insurance companies, ranging from "A++ (Superior)" to "C-(Fair)." A.M. Best's ratings are based on factors of relevance primarily to policyholders and are not directed to the protection of investors, such as holders of the Senior Notes. Such ratings do not apply to the Senior Notes offered hereby. AGENCY DIVISION Since 1983, the Agency Division has utilized a distribution system based on experienced independent personal producing general agents who are recruited by regional sales managers. At December 31, 1993, there were 26 regional sales managers located throughout the United States and approximately 12,850 independent personal producing general agents, brokers, and other agents under contract. In 1993 the Division began distributing certain insurance products through securities broker-dealers. Current marketing efforts in the Agency Division are directed toward universal life products and products designed to compete in the term marketplace. Protective Life currently emphasizes back-end loaded universal life policies which reward the continuing policyholder and which are designed to enhance the persistency of its universal life business. The products designed to compete in the term marketplace are term-like policies with guaranteed level premiums for the first 10-20 years which provide a competitive net cost to the insured. GROUP DIVISION Protective Life markets its group insurance products primarily in the southeastern and southwestern United States using the services of brokers who specialize in group products. Sales offices in Alabama, Florida, Georgia, Illinois, Missouri, North Carolina, Ohio, Oklahoma, Tennessee and Texas are maintained to serve these brokers. The Group Division offers substantially all forms of group insurance customary in the industry, making available complete packages of life and accident and health insurance to employers. The life and accident and health insurance packages include hospital and medical coverages as well as dental and disability coverages. To address rising health care costs, the Group Division provides cost containment services such as utilization review and catastrophic case management. Group policies are directed primarily towards employers and associations with between 25 and 1,000 employees. The group accident and health insurance business is generally considered to be cyclical. Profits rise or fall as competitive forces allow or prevent rate increases to keep pace with changes in group health medical costs. Protective Life is placing marketing emphasis on other specialty health insurance products which are less affected by medical cost inflation, including dental insurance policies, hospital indemnity policies and individual cancer insurance policies. Sales of both the cancer and the dental S-3 products have expanded rapidly and now represent a substantial portion of the Group Division's premiums and operating income. It is anticipated that a significant part of the growth in Protective Life's health insurance premium income in the next several years will be from such specialty products. In October 1993, the Clinton Administration submitted to Congress draft legislation proposing major reform of the nation's basic health care system. While it is impossible to predict the specifics of any reforms that may emerge from the legislative process, because of Protective Life's increasing focus on specialty health products such as dental and cancer coverage, Protective Life does not believe that such basic health care legislation will have a material adverse effect on its results of operations. FINANCIAL INSTITUTIONS DIVISION The Financial Institutions Division specializes in marketing insurance products through commercial banks, savings and loan associations, and mortgage bankers. It markets an array of credit and mortgage life and health products; the majority of these policies cover consumer and mortgage loans made by financial institutions located primarily in the southeastern United States. The Financial Institutions Division also markets life and health products through the consumer finance industry and through automobile dealerships. The Division markets through both employee field representatives and brokers. The Financial Institutions Division also offers certain products through direct mail solicitation to customers of financial institutions. INVESTMENT PRODUCTS DIVISION The Investment Products Division manufactures, sells, and supports annuity products. These products are sold through the Agency Division, financial institutions, and broker-dealer distribution channels. The Investment Products Division was formed to respond to an increased consumer demand for savings vehicles. The Investment Products Division also includes Protective Equity Services, Inc. ("PES"), a securities broker-dealer subsidiary. Through PES, licensed members of Protective Life Insurance's field force can sell stocks, bonds, mutual funds, and other financial instruments that may be manufactured or issued by companies other than Protective Life Insurance. GUARANTEED INVESTMENT CONTRACTS DIVISION In 1989, Protective Life Insurance began selling guaranteed investment contracts ("GICs"). Protective Life Insurance's GICs are contracts, generally issued to a 401(k) or other retirement savings plan, which guarantee a fixed return on deposits with such a plan for a specified period and often provide flexibility for withdrawals, in keeping with the benefits provided by the plan. Protective Life Insurance also offers a related product which is purchased primarily as a temporary investment vehicle by the trustees of escrowed municipal bond proceeds. GIC sales are affected by the claims paying and financial strength ratings of Protective Life Insurance. Any downgrade in such ratings of Protective Life Insurance could have an adverse effect on its ability to sell GICs. ACQUISITIONS DIVISION Protective Life actively seeks to acquire blocks of insurance policies. These acquisitions may be accomplished through acquisitions of companies or through the assumption or reinsurance of policies. Reinsurance transactions may be made with court-administered insolvent companies or with companies otherwise divesting themselves of blocks of business. Generally, such acquisitions do not include the acquisition of an active sales force. Blocks of policies acquired through the Acquisitions Division are generally administered as "closed" blocks; I.E., no new policies are sold. Therefore, the amount of insurance in force for a particular block of acquired business is expected to decline with time due to lapses and deaths of the insureds. The experience of Protective Life has been that acquired or reinsured business has usually been administered more efficiently by Protective Life than by previous management or court administrators. CORPORATE AND OTHER The Corporate and Other segment consists of several small insurance lines of business and the operations of several small noninsurance subsidiaries. INVESTMENT PORTFOLIO At March 31,1994, Protective Life had approximately $4.8 billion of invested assets. Protective Life seeks to maintain a conservative investment portfolio, yet deliver attractive returns to its policyholders and shareholders. The portfolio of invested assets is managed to support the liabilities of Protective Life's lines of business. Protective Life invests its assets giving consideration to such factors as liquidity S-4 needs, investment quality, investment return, matching of assets and liabilities and the composition of the portfolio by asset type and credit exposure. At March 31, 1994, Protective Life's invested assets consisted of the following: 65% in fixed maturity investments (corporate bonds, mortgage-backed securities, and bank loan participations); 28% in commercial mortgages; 3% in policy loans; and 4% in other assets including short-term investments. At March 31, 1994, Protective Life's consolidated holdings of unrated or below investment grade fixed maturity investments amounted to 8.6% of its fixed maturity investments. In the early 1990's the life insurance industry attracted intense scrutiny due to mortgage loan problems. Many of these mortgage loan problems related to loans made on speculative, multi-tenant office buildings and on hotels -- market segments to which Protective Life, despite the investment of a large percentage of its portfolio in commercial mortgages, has little exposure. At March 31,1994, loans to shopping centers anchored by K-Mart, Food Lion and Wal-Mart constituted 7%, 6% and 4%, respectively, of Protective Life's commercial mortgage portfolio. INVESTMENT CONSIDERATION HOLDING COMPANY STRUCTURE Protective Life is a holding company that derives substantially all of its operating income and cash flow from its insurance company subsidiaries. Protective Life's ability to pay principal and interest on the Senior Notes is affected by the ability of its insurance company subsidiaries to declare and distribute dividends and to make payments on surplus notes (I.E., deeply subordinated inter-company notes owed by insurance company subsidiaries to Protective Life that are treated as equity capital for statutory accounting purposes), both of which may be limited by regulatory restrictions and, in the case of payments on surplus notes, by certain financial covenants. Protective Life's cash flow is also dependent on revenues from investment, data processing, legal and management services rendered to its subsidiaries. Insurance company subsidiaries of Protective Life are subject to various state statutory and regulatory restrictions, applicable to insurance companies generally, that limit the amount of cash dividends, loans and advances that those subsidiaries may pay to Protective Life. Under Tennessee insurance laws, Protective Life Insurance may generally only pay dividends to Protective Life out of its unassigned surplus as reflected in its statutory financial statements filed in that State. In addition, the Tennessee Commissioner of Insurance must approve (or not disapprove within 30 days of notice) payment of an "extraordinary" dividend from Protective Life Insurance, which generally under Tennessee insurance laws is a dividend that exceeds, together with all dividends paid by Protective Life Insurance within the previous 12 months, the greater of (I) 10% of Protective Life Insurance's surplus as regards policyholders at the preceding December 31 or (II) the net gain from operations of Protective Life Insurance for the 12 months ended on such December 31. The maximum amount that would qualify as ordinary dividends to Protective Life by its insurance subsidiaries in 1994 is estimated to be $57 million. No assurance can be given that more stringent restrictions will not be adopted from time to time by states in which Protective Life's insurance subsidiaries are domiciled, which restrictions could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable to Protective Life by such subsidiaries without affirmative prior approval by state insurance regulatory authorities. In the event of the insolvency, liquidation, reorganization, dissolution or other winding-up of a subsidiary of Protective Life, all creditors of such subsidiary, including holders of life and health insurance policies, would be entitled to payment in full out of the assets of such subsidiary before Protective Life, as shareholder or holder of surplus notes, would be entitled to any payment, and thus such creditors would have to be paid in full before the creditors of Protective Life (including the holders of the Senior Notes) would be entitled to receive any payment from the assets of such subsidiary. RECENT DEVELOPMENTS In the ordinary course of business, Protective Life regularly considers acquisitions of smaller insurance companies or blocks of policies. See "Protective Life Corporation -- Acquisitions Division." Acquisitions of blocks of policies are sometimes accomplished through 100% coinsurance arrangements under which the contractual benefits and risks, and policy reserves, associated with the block are transferred to Protective Life in return for the payment of a ceding commission by Protective Life to the transferor. On May 3, 1994, Protective Life entered into such a 100% coinsurance transaction involving a block of payroll deduction life policies in which associated reserves of approximately $45 million were transferred. Protective Life has recently been advised that it is the lead bidder on a second 100% coinsurance transaction that would involve a block of ordinary and universal life policies in which S-5 associated reserves of approximately $100 million would be transferred. Among other potential transactions, Protective Life is currently discussing the possible purchase of a closely-held stock life insurance company having assets in excess of $300 million that is primarily involved in ordinary and universal life, annuities and accident and health insurance. Protective Life intends to finance such acquisitions in a manner that will not significantly adversely effect Protective Life's current debt-equity ratio. Completion of these transactions is contingent on resolution of outstanding business issues with the prospective transferors, satisfactory completion of due diligence, negotiation of definitive documentation, receipt of board of directors and regulatory approvals, and other conditions, and no assurances can be given that the transactions will be consummated. CAPITALIZATION OF PROTECTIVE LIFE The following table sets forth the unaudited summary capitalization of Protective Life and its consolidated subsidiaries at March 31, 1994 and as adjusted to give effect to (A) the sale of the Senior Notes offered hereby and the planned application of the proceeds therefrom as described under "Use of Proceeds" herein (but without giving effect to the underwriting discount and the payment of expenses) and (B) the issuance by PLC Capital L.L.C., a Delaware limited liability company all the outstanding common limited liability company interests of which are held by Protective Life ("PLC Capital"), on June 9, 1994 of 9% Cumulative Monthly Income Preferred Securities, Series A ("MIPS"), in an aggregate principal amount of $55 million, and the planned application of the proceeds therefrom to repay bank borrowings. In connection with the issuance of the MIPS, Protective Life entered into two interest rate swap contracts which, in effect, converted all payment obligations relating to the MIPS to floating rate obligations for at least five years. The table should be read in conjunction with Protective Life's consolidated financial statements and notes thereto and other financial data incorporated by reference herein. See "Incorporation of Certain Documents by Reference" in the accompanying Prospectus.
AS OF MARCH 31, 1994 ------------------------- ACTUAL AS ADJUSTED ----------- ------------ (IN THOUSANDS) Short-term debt Current portion of long-term debt............................................... $ 9,500 $ -- ----------- ------------ Total short-term debt......................................................... 9,500 -- ----------- ------------ ----------- ------------ Long-term debt Notes payable to banks.......................................................... 136,500 18,702 Mortgage and other notes payable less current portion........................... 99 99 % Senior Notes due , 2004........................................... -- 75,000 ----------- ------------ Total long-term debt.......................................................... 136,599 93,801 Series A Preferred Securities of PLC Capital (minority interest in consolidated subsidiary)...................................................................... -- 55,000 Stockholders' equity Preferred Stock ($1 par value shares authorized: 850,000; issued: none)......... -- -- Junior Participating Cumulative Preferred Stock ($1 par value shares authorized: 150,000; issued: none)......................................................... -- -- Common equity ($.50 par value shares authorized: 20,000,000; issued and outstanding: 13,693,244)....................................................... 318,905 318,905 ----------- ------------ Total stockholders' equity.................................................... 318,905 318,905 ----------- ------------ Total capitalization........................................................ $ 465,004 467,706 ----------- ------------ ----------- ------------
USE OF PROCEEDS The proceeds from the sale of the Senior Notes will be used to repay bank borrowings under a three year revolving line of credit bearing interest at rates ranging from 4.5% to 5.1% at June 1, 1994. Pending such application, such proceeds will be invested in short-term securities. Protective Life may over time enter into one or more interest rate swap contracts which would, in effect, convert a portion of its payment obligations with respect to the Senior Notes to floating rate obligations. S-6 SELECTED CONSOLIDATED FINANCIAL DATA OF PROTECTIVE LIFE CORPORATION The following selected financial information for the years ended as of December 31, 1993, 1992, 1991, 1990 and 1989 has been derived from previously published audited consolidated financial statements of Protective Life, prepared in accordance with generally accepted accounting principles, which have been examined and reported upon by Coopers & Lybrand, independent auditors. The selected financial information for the three months ended March 31, 1993, and 1994 is unaudited but in the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 1994 are not necessarily indicative of the results that may be expected for the year ending December 31, 1994. The selected financial information should be read in conjunction with, and is qualified in its entirety by reference to, the consolidated financial statements from which it has been derived and the accompanying notes thereto incorporated by reference herein.
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31, --------------------------- --------------------------------------------------------------------------------- 1994 1993 1993 1992 1991 1990 1989 ------------- ----------- ------------- ------------- ------------- ------------- ----------- (IN THOUSANDS EXCEPT PER SHARE AMOUNTS) INCOME STATEMENT DATA Premiums and Policy Fees... $ 89,437 $ 85,848 $ 370,758 $ 323,136 $ 273,975 $ 248,448 $ 236,830 Net Investment Income........ 100,248 81,196 362,130 284,069 233,502 136,995 82,453 Realized Investment Gains (Losses)...... 2,297 125 5,054 (14) (3,085) (3,154) 209 Other Income... 3,562 4,930 21,695 18,835 11,556 8,197 5,231 ------------- ----------- ------------- ------------- ------------- ------------- ----------- Total Revenues...... 195,544 172,099 759,637 626,026 515,948 390,486 324,723 Benefits and Expenses...... 171,165 154,804 674,593 566,079 464,245 350,204 292,437 ------------- ----------- ------------- ------------- ------------- ------------- ----------- Income Before Income Tax.... 24,379 17,295 85,044 59,947 51,703 40,282 32,286 Net Income..... 16,578 11,919 56,550(1) 41,420(2) 35,789 28,133 21,793 PRE-TAX INCOME BY BUSINESS SEGMENT Agency......... 5,042 4,278 20,064(3) 12,985 12,087 9,877 3,703 Group.......... 1,865 2,464 10,394 7,731 8,146 6,193 6,059 Financial Institutions... 2,316 2,069 8,196 5,411 4,447 3,120 2,964 Investment Products...... 1,173 890 2,931(3) 4,601 391 (1,351) (1,423) Guaranteed Investment Contracts..... 9,361 4,900 25,405 14,533 9,933(4) 2,919(4) (289) Acquisitions... 8,966 5,931 29,845(3) 20,031 23,494 17,659 17,736 Corporate and Other......... (4,487) (3,658) (13,667)(3)(4) (3,896)(4) (4,110)(4) 3,624 3,327 Unallocated and Realized Investment Gains......... 143 421 1,876 (1,449) (2,685) (1,759) 209 ------------- ----------- ------------- ------------- ------------- ------------- ----------- Total Pre-tax income........ 24,379 17,295 85,044 59,947 51,703 40,282 32,286 BALANCE SHEET DATA Invested Assets: Fixed Maturities... 3,101,454(5) 2,386,538 3,051,292(5) 2,185,015 1,541,991 1,035,176 421,165 Equity Securities... 72,458 32,805 40,596 26,588 31,235 23,222 20,657 Mortgage Loans on Real Estate...... 1,357,324 1,227,177 1,407,744 1,178,164 985,159 666,150 388,913 Investment Real Estate...... 28,591 19,330 22,061 17,020 22,240 16,713 10,651 Policy Loans....... 139,284 117,353 141,135 117,873 120,527 127,253 107,594 Other Long-term Investments.. 16,744 22,243 20,191 19,618 29,259 34,676 20,527 Short-term Investments... 83,268 54,148 83,692 52,792 65,344 126,046 36,412 ------------- ----------- ------------- ------------- ------------- ------------- ----------- Total Invested Assets........ 4,799,123 3,859,594 4,766,711 3,597,070 2,795,755 2,029,236 1,005,919 Total Assets... 5,350,255 4,348,525 5,316,005 4,006,667 3,120,290 2,331,197 1,232,280 Total Debt..... 146,099 143,840 147,118 88,248 57,579 81,145 27,831 Total Liabilities... 5,031,350 4,058,020 4,955,272 3,725,267 2,868,545 2,108,871 1,020,611 Stockholders' Equity........ 318,905(5) 290,505 360,733(5) 281,400 251,745 222,326 211,669 PER SHARE DATA Net Income..... 1.21 0.87 4.13(1) 3.03(2) 2.62 2.07 1.58 Stockholders' Equity........ 23.27(5) 21.22 26.34(5) 20.56 18.44 16.29 15.50 STATUTORY FINANCIAL DATA(6) Net Income..... 13,459 6,096 53,138 32,426 35,196 25,335 20,483 Total Capital and Surplus... $ 274,896 $ 207,623 $ 265,075 $ 208,476 $ 189,473 $ 167,325 $ 150,636 OTHER DATA Ratio of Consolidated Earnings to Fixed Charges(7).... 13.4 13.9 14.4 13.5 9.7 8.2 25.3 Ratio of Consolidated Earnings to Interest on Debt and Interest Credited on Investment Products(8)... 1.4 1.3 1.4 1.3 1.4 1.6 3.1 - ------------------------ 1. Reduced by one-time adjustment of income tax expense of $1,261 or $.09 per share due to increase in the corporate income tax rate from 34% to 35%.
S-7 2. Reflects the adoption of SFAS No. 106, "Employers' Accounting For Postretirement Benefits Other Than Pensions," which decreased net income $1,053 or $.08 per share. 3. In 1993 Protective Life changed the method used to apportion net investment income within Protective Life. The change resulted in increased income attributable to the Agency, Investment Products, and Acquisitions business segments of $3,000, $2,000 and $2,600, respectively, while decreasing income of the Corporate and Other segment. 4. Pre-tax income for the Guaranteed Investment Contracts business segment has not been reduced by pre-tax minority interest of $1,631 in 1991 and $1,326 in 1990. Pre-tax income for the Corporate and Other business segment has not been reduced by pre-tax minority interest of $19 in 1993 and $90 in 1992 and 1991. 5. Reflects the adoption of SFAS No. 115, "Accounting For Certain Investments in Debt and Equity Securities." The effect of adopting SFAS No. 115 at December 31, 1993 (compared to financial statements prepared under previous accounting standards) was to increase fixed maturities by $65,622, decrease deferred policy acquisition costs by $12,450, increase the liability for deferred income taxes by $18,610, and increase Stockholders' Equity by $34,562 or $2.52 per share. The effect of adopting SFAS No. 115 at March 31, 1994 was to decrease fixed maturities by $28,667, decrease the liability for deferred income taxes by $10,033 and decrease Stockholders' Equity by $18,634 or $1.36 per share. 6. Of Protective Life's insurance subsidiaries prepared in conformity with statutory accounting practices prescribed or permitted by insurance regulatory authorities. Statutory accounting practices differ in some respects from generally accepted accounting principles. For example, (a) acquisition costs of obtaining new businesses are expensed as incurred, (b) benefit liabilities are computed using methods statutorily mandated and are not adjusted for actual experience, (c) income tax expenses is computed on taxable earnings and (d) furniture and equipment, agents' debit balances and prepaid expenses are charged directly against surplus rather than reported as assets. 7. The ratio of consolidated earnings to fixed charges is calculated by dividing the sum of income before income tax (excluding pretax minority interest) and interest expense on debt, by interest expense on debt. Giving effect to the issuance of the Senior Notes at an assumed interest rate of 8.5%, and the application of the proceeds therefrom as described under "Use of Proceeds," the ratio of consolidated earnings to fixed charges for the year ended December 31, 1993 and the three months ended March 31, 1994 would have been 9.4 and 9.5, respectively. 8. The ratio of consolidated earnings to interest on debt and interest credited on investment products is calculated by dividing the sum of income before income tax (excluding pre-tax minority interest), interest expense on debt and interest credited on investment products, by the sum of interest expense on debt and interest credited on investment products. Investment products include products such as guaranteed investment contracts and annuities.
S-8 DESCRIPTION OF THE SENIOR NOTES GENERAL The Senior Notes offered hereby will be issued under a Senior Indenture, dated as of June 1, 1994 (the "Senior Indenture"), between Protective Life and The Bank of New York, as Trustee, as supplemented from time to time, including by a certain Indenture Supplement, to be dated as of , 1994, to be entered into by Protective Life and the Trustee in respect of the Senior Notes (the Senior Indenture as so amended and supplemented, the "Indenture"). The form of the Senior Indenture has been filed, and a copy of the Indenture Supplement referred to above will be filed, as exhibits to the Registration Statement of which the accompanying Prospectus is a part. The following summary of certain provisions of the Indenture and of the Senior Notes (referred to in the accompanying Prospectus as the "Debt Securities") supplements, and to the extent inconsistent therewith replaces, the summary of certain provisions of the Debt Securities set forth in the accompanying Prospectus, to which reference is hereby made. These summaries together address the material terms of the Senior Notes and the Indenture but are subject to, and are qualified in their entirety by reference to, the text of the Senior Notes and the Indenture, including the definitions therein of certain terms capitalized in this Prospectus Supplement. The Senior Notes will be limited to $75,000,000 aggregate principal amount. The Senior Notes will be issued only in fully registered form in denominations of $1,000 and any integral multiple thereof. The Senior Notes will mature on , 2004. Reference is made to the accompanying Prospectus for a detailed summary of additional provisions of the Senior Notes and of the Indenture under which the Senior Notes are issued. The Senior Notes will bear interest at the rate of per annum, in each case from , 1994, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, payable semi-annually on and , commencing , 1994, to the persons in whose names the Senior Notes are registered at the close of business on the Regular Record Date relating thereto, which will be the and , as the case may be, next preceding such Interest Payment Date. The Senior Notes will not be redeemable by Protective Life prior to maturity and will not be entitled to any sinking fund. The provisions of Article 4 of the Indenture relating to defeasance, which are described in the accompanying Prospectus, will apply to the Senior Notes. Registered Senior Notes may be transferred or exchanged without any service charge, other than any tax or other governmental charge imposed in connection therewith, at the corporate trust office of the Trustee in the City of New York, or at any other office or agency maintained by Protective Life for such purpose. GLOBAL SENIOR NOTES The Senior Notes will be issued in the form of one or more fully registered global securities, representing the aggregate principal amount of the Senior Notes (the "Global Senior Notes"), that will be deposited with, or on behalf of, The Depository Trust Company (the "Depository"), and registered in the name of Cede & Co., the nominee of the Depository, and, except under circumstances described in the Prospectus under "Description of Debt Securities of Protective Life--Global Debt Securities," Global Senior Notes will not be exchangeable for definitive Senior Notes and will not otherwise be issuable as definitive Senior Notes. The Depository has advised Protective Life as follows: the Depository is a limited purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of sections 17A of the Securities Exchange Act of 1934, as amended. The Depository holds securities that its participants ("Participants") deposit with it. The Depository also facilitates the settlement among Participants of securities transactions, such as transfers and pledges, in deposited securities through electronic computerized book-entry changes in Participants' accounts, thereby eliminating the need for physical movement of securities certificates. Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations ("Direct Participants"). The Depository is owned by a number of its Direct Participants and by the New York Stock S-9 Exchange, Inc., the American Stock Exchange, Inc., and the National Association of Securities Dealers, Inc. Access to the Depository's book-entry system is also available to others, such as securities brokers and dealers, banks, and trust companies that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ("Indirect Participants"). The Rules applicable to the Depository and its participants are on file with the Securities and Exchange Commission. Principal, premium and interest payments on the Senior Notes will be made to the Depository. The Depository's practice is to credit Direct Participants' accounts on the relevant payable date in accordance with their respective holdings shown on the Depository's records unless the Depository has reason to believe that it will not receive payment on such payable date. Payments by Participants to actual purchasers of each Senior Note ("Beneficial Owners") will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of the Depository, the Trustee, or Protective Life subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, premium and interest to the Depository is the responsibility of Protective Life, disbursement of such payments to Direct Participants shall be the responsibility of the Depository, and disbursement of such payments to the Beneficial Owners shall be the responsilibity of Direct and Indirect Participants. A further description of the Depository's procedures with respect to Global Senior Notes is set forth in the Prospectus under "Description of Debt Securities of Protective Life--Global Debt Securities." The Depository has confirmed to the Company and the Trustee that it intends to follow such procedures. SAME-DAY FUNDS SETTLEMENT SYSTEM Settlement by the purchasers of the Senior Notes will be made in immediately available funds. All payments by Protective Life to the Depository of principal and interest will be made in immediately available funds. The Senior Notes will trade in the Depositary's Same-Day Funds Settlement System until maturity. Therefore the Depository will require secondary trading activity in the Senior Notes to be settled in immediately available funds. Secondary trading in long-term notes and debentures of corporate issuers is generally settled in clearing-house or next-day funds. No assurance can be given as to the effect, if any, of settlement in immediately available funds on trading activity in the Senior Notes. CERTAIN RESTRICTIVE PROVISIONS The Indenture contains, among others, the following covenants: LIMITATIONS ON SALES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES Protective Life is restricted from disposing of in any way any shares of capital stock of a Restricted Subsidiary (other than directors' qualifying shares or dispositions to a Subsidiary), and Restricted Subsidiaries are restricted from disposing of in any way any shares of capital stock of any other Restricted Subsidiary (other than for directors' qualifying shares or dispositions to Protective Life or to a Subsidiary), except the entire capital stock of such Restricted Subsidiary owned directly or indirectly by Protective Life for a consideration which, in the opinion of its Board of Directors, is at least equal to the fair value thereof. The term "Restricted Subsidiary" means any Subsidiary of Protective Life with assets greater than or equal to 20% of all assets of Protective Life and its Subsidiaries, computed and consolidated in accordance with generally accepted accounting principles. LIMITATIONS ON LIENS ON RESTRICTED SUBSIDIARIES' CAPITAL STOCK Protective Life will not, and will not permit any Restricted Subsidiary at any time directly or indirectly to create, assume, incur or suffer to exist any indebtedness secured by a pledge, lien, or other encumbrance on the capital stock of any Restricted Subsidiary without making effective provision for securing the Senior Notes then outstanding (and if Protective Life so elects, any other indebtedness ranking on a parity with the Senior Notes) equally and ratably with such secured indebtedness as to such property for so long as such indebtedness will be so secured; PROVIDED HOWEVER, that this covenant will not be S-10 applicable to liens (as defined in the Indenture Supplement relating to the Senior Notes) (i) on the shares of stock of a subsidiary of a Person that is merged with or into Protective Life or a Subsidiary securing debt of such Person, which debt was outstanding prior to such merger, but only if such pledge and debt were not incurred in anticipation of such merger, (ii) in favor of Protective Life securing debt of a Restricted Subsidiary owed to Protective Life, (iii) for taxes or assessments or governmental charges or levies not then due and delinquent or the validity of which are being contested in good faith or which are less than $5,000,000, (iv) created by or resulting from any litigation or legal proceeding being contested in good faith or involving claims of less than $5,000,000, or (v) for deposits to secure (or in lieu of) surety, stay, appeals or custom bonds. EVENTS OF DEFAULT The Indenture Supplement relating to the Senior Notes modifies the Events of Defaults described in the Prospectus by defining as one such Event of Default a default in payment of principal relating to indebtedness of Protective Life and its consolidated subsidiaries for borrowed money having an aggregate principal amount exceeding $15 million, or other default resulting in acceleration of indebtedness of Protective Life and its consolidated subsidiaries for borrowed money where the aggregate principal amount so accelerated exceeds $15 million and such acceleration is not rescinded or annulled within 30 days after the written notice thereof to Protective Life by the Trustee or to Protective Life and the Trustee by the holders of 25% in aggregate principal amount of the Senior Notes then outstanding; provided that such Event of Default will be remedied, cured or waived if the default that caused such Event of Default is remedied, cured or waived. UNDERWRITING Subject to the terms and conditions set forth in the Underwriting Agreement, Protective Life has agreed to sell to each of the Underwriters named below, and each of the Underwriters has severally agreed to purchase, the principal amount of the Senior Notes set forth opposite its name below.
PRINCIPAL AMOUNT UNDERWRITER OF SENIOR NOTES ----------- ----------------- Goldman, Sachs & Co........................................................................ Alex. Brown & Sons Incorporated............................................................ ----------------- Total.................................................................................. ----------------- -----------------
Under the terms and conditions of the Underwriting Agreement, the Underwriters are committed to take and pay for all the Senior Notes, if any are taken. The Underwriters propose to offer the Senior Notes in part directly to the public at the initial public offering price set forth on the cover page of this Prospectus Supplement and in part to certain securities dealers at such price less a concession of __% of the principal amount of the Senior Notes. The Underwriters may allow, and such dealers may reallow, a concession not to exceed __% of the principal amount of the Senior Notes to certain brokers and dealers. After the Senior Notes are released for sale to the public, the offering price and other selling terms may from time to time be varied by the Underwriters. The Senior Notes are a new issue of securities with no established trading market. Protective Life has been advised by the Underwriters that they intend to make a market for the Senior Notes, but are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the Senior Notes. Settlement for the Senior Notes will be made in immediately available funds and all secondary trading in the Senior Notes will settle in immediately available funds. See "Description of the Senior Notes -- Same-Day Funds Settlement System." Certain of the Underwriters are customers of, or engage in transactions with, and from time to time have performed services for, Protective Life and its subsidiaries and associated companies in the ordinary course of business. Protective Life has agreed to indemnify the several Underwriters against certain liabilities, including liabilities under the Securities Act of 1933. S-11 PROSPECTUS U.S. $175,000,000 PROTECTIVE LIFE CORPORATION DEBT SECURITIES PREFERRED STOCK PLC CAPITAL L.L.C. CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES ("MIPS"*) GUARANTEED TO THE EXTENT SET FORTH HEREIN BY PROTECTIVE LIFE CORPORATION --------------- Protective Life Corporation, a Delaware corporation ("Protective Life"), may from time to time offer (a) its debt securities, consisting of debentures, notes and/or other evidences of indebtedness representing unsecured obligations of Protective Life (the "Debt Securities"), and (b) shares of preferred stock, par value $1.00 per share ("Preferred Stock"), in each case in one or more series and in amounts, at prices and on terms to be determined at the time of offering. PLC Capital L.L.C., a limited liability company formed under the laws of the State of Delaware ("PLC Capital"), may from time to time offer, in one or more series, its Cumulative Monthly Income Preferred Securities (the "Preferred Securities") representing preferred limited liability company interests in PLC Capital. PLC Capital was formed by Protective Life solely to issue Preferred Securities and common limited liability company interests ("Common Securities") and loan the proceeds thereof to Protective Life. Accordingly, the proceeds of an offering of Preferred Securities, together with all capital contributions made in respect of Common Securities, will be loaned to Protective Life in exchange for subordinated Debt Securities of Protective Life ("Subordinated Debentures") having the terms described herein. Interest and principal payments on the Subordinated Debentures are intended to fund the payment of periodic distributions ("dividends") and redemption and liquidation distributions on the Preferred Securities and the Common Securities. The payment of dividends (but only if and to the extent declared out of moneys held by PLC Capital and legally available therefor), and payments on liquidation (but only to the extent of the remaining assets of PLC Capital) or redemption at the option of PLC Capital with respect to the Preferred Securities will be guaranteed by a subordinated guarantee (the "Guarantee") of Protective Life to the extent set forth herein. See "PLC Capital L.L.C." and "Description of Certain Contractual Back-Up Obligations of Protective Life" for a description of the various contractual backup obligations of Protective Life. Specific terms of the particular Debt Securities, Preferred Stock and Preferred Securities in respect of which this Prospectus is being delivered (the "Offered Securities") will be set forth in an accompanying Prospectus Supplement (the "Prospectus Supplement"), which will describe, without limitation and where applicable, the following: (x) in the case of Debt Securities, the specific designation, aggregate principal amount, denomination, maturity, premium, if any, interest rate (which may be fixed or variable) or method of calculating interest, if any, place or places where principal, premium, if any, and interest, if any, will be payable, currency in which principal, premium, if any, and interest, if any, will be payable, any terms of redemption, any sinking fund provisions, any listing on a securities exchange and other special terms, and (y) in the case of Preferred Stock and Preferred Securities, the specific designation, stated value and liquidation preference per share or security and number of shares or securities offered, dividend rate (which may be fixed or variable) or method of calculating dividends, place or places where dividends will be payable, any terms of redemption, any listing on a securities exchange and other special terms. The offering price to the public of the Offered Securities will be limited to U.S. $175,000,000 in the aggregate (or its equivalent (based on the applicable exchange rate at the time of issue), if Offered Securities are offered for consideration denominated in one or more foreign currencies or currency units as shall be designated by Protective Life). The Debt Securities may be denominated in United States dollars or, at the option of Protective Life if so specified in the applicable Prospectus Supplement, in one or more foreign currencies or currency units. The Debt Securities may be issued in registered form or bearer form, or both. If so specified in the applicable Prospectus Supplement, Debt Securities of a series may be issued in whole or in part in the form of one or more temporary or permanent global securities. The Offered Securities may be sold to or through underwriters, through dealers or agents or directly to purchasers. See "Plan of Distribution". The names of any underwriters, dealers or agents involved in the sale of the Offered Securities in respect of which this Prospectus is being delivered and any applicable fee, commission or discount arrangements with them will be set forth in a Prospectus Supplement. This Prospectus may not be used to consummate sales of offered securities unless accompanied by a Prospectus Supplement. -------------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. - -------------------------- *An application has been filed by Goldman, Sachs & Co. with the United States Patent and Trademark Office for the registration of the MIPS servicemark. The date of this Prospectus is June 2, 1994. AVAILABLE INFORMATION Protective Life is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith, files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549 and at the regional offices of the Commission located at 7 World Trade Center, 13th Floor, Suite 1300, New York, New York 10048 and Suite 1400, Northwestern Atrium Center, 14th Floor, 500 West Madison Street, Chicago, Illinois 60661. Copies of such material can also be obtained at prescribed rates by writing to the Public Reference Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549. In addition, such reports, proxy statements and other information concerning Protective Life can be inspected at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. This Prospectus constitutes a part of a registration statement on Form S-3 (together with all amendments and exhibits, the "Registration Statement") filed by Protective Life and PLC Capital with the Commission under the Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does not contain all the information set forth in the Registration Statement, certain portions of which have been omitted as permitted by the rules and regulations of the Commission. For further information with respect to Protective Life, PLC Capital and the Offered Securities, reference is made to the Registration Statement. The Registration Statement may be inspected by anyone without charge at the principal office of the Commission in Washington, D.C. and copies of all or part of it may be obtained from the Commission upon payment of the prescribed fees. No separate financial statements of PLC Capital have been included herein. Protective Life and PLC Capital do not consider that such financial statements would be material to holders of the Preferred Securities because PLC Capital is a newly organized special purpose entity, has no operating history and no independent operations and is not engaged in, and does not propose to engage in, any activity other than the issuance of the Preferred Securities and the Common Securities and the lending of the net proceeds thereof to Protective Life pursuant to loans to be evidenced by Subordinated Debentures. See "PLC Capital L.L.C". PLC Capital is a limited liability company formed under the laws of the State of Delaware and will be managed by Protective Life, in its capacity as a holder of Common Securities. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE Protective Life's Quarterly Report on Form 10-Q for the three month period ended March 31, 1994, its Annual Report on Form 10-K for the year ended December 31, 1993, its Form 10-K/A (amending its Annual Report on Form 10-K for the year ended December 31, 1993) dated May 19, 1994 and its Current Report on Form 8-K dated August 4, 1993, as filed with the Commission pursuant to the Exchange Act (file no. 0-9924), are incorporated herein by reference. Each document or report subsequently filed by Protective Life pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of the offering described herein shall be deemed to be incorporated by reference into this Prospectus and to be a part of this Prospectus from the date of filing of such document. Any statement contained herein, or in a document all or a portion of which is incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of the Registration Statement and this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of the Registration Statement or this Prospectus. 2 Protective Life will provide without charge to any person to whom this Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the foregoing documents incorporated by reference, other than certain exhibits to such documents. Requests should be directed to: Protective Life Corporation, P.O. Box 2606, Birmingham, Alabama 35202 (telephone: (205) 879-9230). PROTECTIVE LIFE CORPORATION Protective Life, a Delaware corporation incorporated in 1981, is an insurance holding company that owns a group of life insurance companies that provide financial services through the production, distribution and administration of insurance and investment products. Protective Life Insurance Company ("Protective Life Insurance"), founded in 1907, is Protective Life's principal operating subsidiary. During 1993, Protective Life reported revenues of $760 million and net income of $57 million. During the three months ended March 31, 1994, Protective Life reported revenues of $196 million and net income of $17 million. At March 31, 1994, Protective Life had total assets of $5.4 billion, stockholders' equity of $319 million and life insurance inforce of $43.3 billion. Protective Life's insurance subsidiaries generated approximately 94% of its revenues in 1993 and 98% of its revenues for the three months ended March 31, 1994. Protective Life Insurance is currently rated A+ (Superior) by A.M. Best Company, Inc. ("A.M. Best"). A.M. Best, an independent insurance industry rating organization, assigns fifteen letter ratings to insurance companies, ranging from "A++ (Superior)" to "C- (Fair)." A.M. Best's ratings are based on factors of relevance primarily to policyholders and are not directed to the protection of investors, such as holders of the Offered Securities. Such ratings do not apply to the Offered Securities. Protective Life's principal executive offices are located at 2801 Highway 280 South, Birmingham, Alabama 35223, and its telephone number is (205) 879-9230. Protective Life's ability to pay principal and interest on any Debt Securities, Preferred Stock or Subordinated Debentures is affected by the ability of its insurance company subsidiaries, Protective Life's principal sources of cash flow, to declare and distribute dividends and to make payments on surplus notes (i.e., deeply subordinated intercompany notes owed by insurance company subsidiaries to Protective Life that are treated as equity capital for statutory accounting purposes), both of which may be limited by regulatory restrictions and, in the case of payments on surplus notes, by certain financial covenants. Protective Life's cash flow is also dependent on revenues from investment, data processing, legal and management services rendered to its subsidiaries. Insurance company subsidiaries of Protective Life are subject to various state statutory and regulatory restrictions, applicable to insurance companies generally, that limit the amount of cash dividends, loans and advances that those subsidiaries may pay to Protective Life. Under Tennessee insurance laws, Protective Life Insurance may generally only pay dividends to Protective Life out of its unassigned surplus as reflected in its statutory financial statements filed in that State. In addition, the Tennessee Commissioner of Insurance must approve (or not disapprove within 30 days of notice) payment of an "extraordinary" dividend from Protective Life Insurance, which generally under Tennessee insurance laws is a dividend that exceeds, together with all dividends paid by Protective Life Insurance within the previous 12 months, the greater of (i) 10% of Protective Life Insurance's surplus as regards policyholders at the preceding December 31 or (ii) the net gain from operations of Protective Life Insurance for the 12 months ended on such December 31. The maximum amount that would qualify as ordinary dividends to Protective Life by its insurance subsidiaries in 1994 is estimated to be $57 million. No assurance can be given that more stringent restrictions will not be adopted from time to time by states in which Protective Life's insurance subsidiaries are domiciled, which restrictions could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable to Protective Life by such subsidiaries without affirmative prior approval by state insurance regulatory authorities. In the event of the insolvency, liquidation, reorganization, dissolution or other winding-up of a subsidiary of Protective Life, all creditors of such subsidiary, including holders of life and health insurance policies, would be entitled to payment in full out of the assets of such subsidiary before Protective Life, as shareholder or holder of surplus notes, would be entitled to any payment, and thus such 3 creditors would have to be paid in full before the creditors of Protective Life (including holders of Debt Securities or Subordinated Debentures) would be entitled to receive any payment from the assets of such subsidiary. PLC CAPITAL L.L.C. PLC Capital is a limited liability company formed under the laws of the State of Delaware. PLC Capital's offices are located at 2801 Highway 280 South, Birmingham, Alabama 35223 (Telephone: (205) 879-9230). Protective Life owns, directly and indirectly, all of the Common Securities of PLC Capital, which Common Securities are nontransferable. PLC Capital was formed by Protective Life and its wholly-owned subsidiary solely to issue Common Securities and Preferred Securities (collectively, the "Membership Securities") and to lend the proceeds thereof to Protective Life in exchange for Subordinated Debentures. Interest and principal payments on Subordinated Debentures are intended to fund the payment of dividends and redemption and liquidation distributions on the Membership Securities. Accordingly, PLC Capital's sole source of cash flow is Protective Life, and PLC Capital's ability to make dividend and other payments in respect of Preferred Securities will be dependent on interest and principal payments by Protective Life on the Subordinated Debentures. See "Protective Life Corporation". PLC Capital will be managed by Protective Life, in its capacity as a holder of Common Securities (in such capacity, the "Managing Member"). Holders of Membership Securities in PLC Capital are referred to herein as "Members." PLC Capital's Amended and Restated Limited Liability Company Agreement (the "L.L.C. Agreement") provides that Protective Life, in its capacity as a holder of Common Securities, shall be liable for all obligations and liabilities of PLC Capital (including tax obligations, but excluding obligations in respect of Preferred Securities). Under Delaware law, members who hold Series A Preferred Securities (other than Protective Life) will not be liable for the debts, obligations and liabilities of PLC Capital, whether arising in contract, tort or otherwise, solely by reason of being a member of PLC Capital (subject to any obligation such members may have to repay any funds that may have been wrongfully distributed to them). USE OF PROCEEDS The proceeds from the sale of any Preferred Securities (together with any capital contributed in respect of Common Securities) will be loaned to Protective Life in exchange for Subordinated Debentures. Protective Life will use borrowings from PLC Capital, and the net proceeds from any sale of Debt Securities or Preferred Stock, for general corporate purposes, including, but not limited to, repayments of indebtedness of Protective Life or its subsidiaries. A more detailed description of the use of proceeds of any specific offering of Offered Securities shall be set forth in the Prospectus Supplement pertaining to such offering. RATIOS OF CONSOLIDATED EARNINGS TO FIXED CHARGES The following table sets forth Protective Life's ratios of earnings to fixed charges:
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, MARCH 31, ---------------------------- ---------- 1989 1990 1991 1992 1993 1993 1994 ---- ---- ---- ---- ---- ---- ---- Ratio of Consolidated Earnings to Fixed Charges (1)................... 25.3 8.2 9.7 13.5 14.4 13.9 13.4 Ratio of Consolidated Earnings to Interest on Debt and Interest Credited on Investment Products (2).................................. 3.1 1.6 1.4 1.3 1.4 1.3 1.4 - ------------------------ (1) The ratio of consolidated earnings to fixed charges is calculated by dividing the sum of income before income tax (excluding pretax minority interest) and interest expense on debt, by interest expense on debt. (2) The ratio of consolidated earnings to interest on debt and interest credited on investment products is calculated by dividing the sum of income before income tax (excluding pre-tax minority interest), interest expense on debt and interest credited on investment products, by the sum of interest expense on debt and interest credited on investment products. Investment products include products such as guaranteed investment contracts and annuities.
4 DESCRIPTION OF DEBT SECURITIES OF PROTECTIVE LIFE The Debt Securities offered hereby are to be issued in one or more series under either (i) the Senior Indenture, dated as of June 1, 1994 (the "Senior Indenture"), between Protective Life and The Bank of New York, as Trustee (the "Trustee") or (ii) the Subordinated Indenture, dated as of June 1, 1994 (the "Subordinated Indenture" and, together with the Senior Indenture, the "Indentures"), between Protective Life and AmSouth Bank NA, as trustee (also, the "Trustee"), the forms of which have been filed as exhibits to the Registration Statement of which this Prospectus forms a part. The statements herein relating to the Debt Securities and the following summaries of certain provisions of the Indentures do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indentures (as they may be amended or supplemented from time to time), including the definitions therein of certain terms capitalized in this Prospectus. Whenever particular Sections or defined terms of the Indentures (as they may be amended or supplemented from time to time) are referred to herein or in a Prospectus Supplement, such Sections or defined terms are incorporated herein or therein by reference. GENERAL The Debt Securities will be unsecured obligations of Protective Life. The Debt Securities issued under the Senior Indenture will be unsecured and will rank PARI PASSU with all other unsecured and unsubordinated obligations of Protective Life. The Debt Securities issued under the Subordinated Indenture will be subordinate and junior in right of payment to the extent and in the manner set forth in the Subordinated Indenture to all Senior Indebtedness of Protective Life. See "-- Subordination under the Subordinated Indenture." The Indentures do not limit the aggregate amount of Debt Securities which may be issued thereunder, nor do they limit the incurrence or issuance of other secured or unsecured debt of Protective Life. Reference is made to the applicable Prospectus Supplement which will accompany this Prospectus for a description of the specific series of Debt Securities being offered thereby, including: (1) the title of such Debt Securities; (2) any limit upon the aggregate principal amount of such Debt Securities; (3) the date or dates on which the principal of and premium, if any, on such Debt Securities will mature or the method of determining such date or dates; (4) the rate or rates (which may be fixed or variable) at which such Debt Securities will bear interest, if any, or the method of calculating such rate or rates; (5) the date or dates from which interest, if any, will accrue or the method by which such date or dates will be determined; (6) the date or dates on which interest, if any, will be payable and the record date or dates therefor; (7) the place or places where principal of, premium, if any, and interest, if any, on such Debt Securities will be payable; (8) the period or periods within which, the price or prices at which, the currency or currencies (including currency unit or units) in which, and the terms and conditions upon which, such Debt Securities may be redeemed, in whole or in part, at the option of Protective Life; (9) the obligation, if any, of Protective Life to redeem or purchase such Debt Securities pursuant to any sinking fund or analogous provisions or upon the happening of a specified event and the period or periods within which, the price or prices at which and the other terms and conditions upon which, such Debt Securities shall be redeemed or purchased, in whole or in part, pursuant to such obligations; (10) the denominations in which such Debt Securities are authorized to be issued; (11) the currency or currency unit for which Debt Securities may be purchased or in which Debt Securities may be denominated and/ or the currency or currencies (including currency unit or units) in which principal of, premium, if any, and interest, if any, on such Debt Securities will be payable and whether Protective Life or the holders of any such Debt Securities may elect to receive payments in respect of such Debt Securities in a currency or currency unit other than that in which such Debt Securities are stated to be payable; (12) if other than the principal amount thereof, the portion of the principal amount of such Debt Securities which will be payable upon declaration of the acceleration of the maturity thereof or the method by which such portion shall be determined; (13) the person to whom any interest on any such Debt Security shall be payable if other than the person in whose name such Debt Security is registered on the applicable record date; (14) any addition to, or modification or deletion of, any Event of Default or any covenant of Protective Life 5 specified in the Indenture with respect to such Debt Securities; (15) the application, if any, of such means of defeasance or covenant defeasance as may be specified for such Debt Securities; (16) whether such Debt Securities are to be issued in whole or in part in the form of one or more temporary or permanent global securities and, if so, the identity of the depository for such global security or securities; and (17) any other special terms pertaining to such Debt Securities. (Section 3.1 of each Indenture.) Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities will not be listed on any securities exchange. Unless otherwise specified in the applicable Prospectus Supplement, Debt Securities will be issued in fully-registered form without coupons. Where Debt Securities of any series are issued in bearer form, the special restrictions and considerations, including special offering restrictions and special federal income tax considerations, applicable to any such Debt Securities and to payment on and transfer and exchange of such Debt Securities will be described in the applicable Prospectus Supplement. Bearer Debt Securities will be transferable by delivery. (Section 3.5 of each Indenture.) Debt Securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. Certain federal income tax consequences and special considerations applicable to any such Debt Securities will be described in the applicable Prospectus Supplement. If the purchase price of any of the Debt Securities is payable in one or more foreign currencies or currency units or if any Debt Securities are denominated in one or more foreign currencies or currency units or if the principal of, premium, if any, or interest, if any, on any Debt Securities is payable in one or more foreign currencies or currency units, the restrictions, elections, certain federal income tax considerations, specific terms and other information with respect to such issue of Debt Securities and such foreign currency or currency units will be set forth in the applicable Prospectus Supplement. The general provisions of the Indentures do not afford holders of the Debt Securities protection in the event of a highly leveraged or other transaction involving Protective Life that may adversely affect holders of the Debt Securities. PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE Unless otherwise provided in the applicable Prospectus Supplement, payments in respect of the Debt Securities will be made in the designated currency at the office or agency of Protective Life maintained for that purpose as Protective Life may designate from time to time, except that, at the option of Protective Life, interest payments, if any, on Debt Securities in registered form may be made (i) by checks mailed to the holders of Debt Securities entitled thereto at their registered addresses or (ii) by wire transfer to an account maintained by the person entitled thereto as specified in the Register. (Sections 3.7(a) and 9.2 of each Indenture.) Unless otherwise indicated in an applicable Prospectus Supplement, payment of any installment of interest on Debt Securities in registered form will be made to the person in whose name such Debt Security is registered at the close of business on the regular record date for such interest. (Section 3.7(a) of each Indenture.) Payment in respect of Debt Securities in bearer form will be made in the currency and in the manner designated in the Prospectus Supplement, subject to any applicable laws and regulations, at such paying agencies outside the United States as Protective Life may appoint from time to time. The paying agents outside the United States initially appointed by Protective Life for a series of Debt Securities will be named in the Prospectus Supplement. Protective Life may at any time designate additional paying agents or rescind the designation of any paying agents, except that, if Debt Securities of a series are issuable as Registered Securities, Protective Life will be required to maintain at least one paying agent in each Place of Payment for such series and, if Debt Securities of a series are issuable as Bearer Securities, Protective Life will be required to maintain a paying agent in a Place of Payment outside the United States where Debt Securities of such series and any coupons appertaining thereto may be presented and surrendered for payment. (Section 9.2 of each Indenture.) 6 Unless otherwise provided in the applicable Prospectus Supplement, Debt Securities in registered form will be transferable or exchangeable at the agency of Protective Life maintained for such purpose as designated by Protective Life from time to time. (Sections 3.5 and 9.2 of each Indenture.) Debt Securities may be transferred or exchanged without service charge, other than any tax or other governmental charge imposed in connection therewith. (Section 3.5 of each Indenture.) GLOBAL DEBT SECURITIES The Debt Securities of a series may be issued in whole or in part in the form of one or more fully registered global securities (a "Registered Global Security") that will be deposited with a depository (the "Depository") or with a nominee for the Depository identified in the applicable Prospectus Supplement. In such a case, one or more Registered Global Securities will be issued in a denomination or aggregate denominations equal to the portion of the aggregate principal amount of outstanding Debt Securities of the series to be represented by such Registered Global Security or Securities. (Section 3.3 of each Indenture.) Unless and until it is exchanged in whole or in part for Debt Securities in definitive certificated form, a Registered Global Security may not be transferred or exchanged except as a whole by the Depository for such Registered Global Security to a nominee of such Depository or by a nominee of such Depository to such Depository or another nominee of such Depository or by such Depository or any such nominee to a successor Depository for such series or a nominee of such successor Depository and except in the circumstances described in the applicable Prospectus Supplement. (Section 3.5 of each Indenture.) The specific terms of the depository arrangement with respect to any portion of a series of Debt Securities to be represented by a Registered Global Security will be described in the applicable Prospectus Supplement. Protective Life expects that the following provisions will apply to depository arrangements. Upon the issuance of any Registered Global Security, and the deposit of such Registered Global Security with or on behalf of the Depository for such Registered Global Security, the Depository will credit, on its book-entry registration and transfer system, the respective principal amounts of the Debt Securities represented by such Registered Global Security to the accounts of institutions ("participants") that have accounts with the Depository or its nominee. The accounts to be credited will be designated by the underwriters or agents engaging in the distribution of such Debt Securities or by Protective Life, if such Debt Securities are offered and sold directly by Protective Life. Ownership of beneficial interests in a Registered Global Security will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests by participants in such Registered Global Security will be shown on, and the transfer of such beneficial interests will be effected only through, records maintained by the Depository for such Registered Global Security or by its nominee. Ownership of beneficial interests in such Registered Global Security by persons that hold through participants will be shown on, and the transfer of such beneficial interests within such participants will be effected only through, records maintained by such participants. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in certificated form. The foregoing limitations and such laws may impair the ability to transfer beneficial interests in such Registered Global Securities. So long as the Depository for a Registered Global Security, or its nominee, is the registered owner of such Registered Global Security, such Depository or such nominee, as the case may be, will be considered the sole owner or holder of the Debt Securities represented by such Registered Global Security for all purposes under each Indenture. (Section 3.8 of each Indenture.) Unless otherwise specified in the applicable Prospectus Supplement and except as specified below, owners of beneficial interests in such Registered Global Security will not be entitled to have Debt Securities of the series represented by such Registered Global Security registered in their names, will not receive or be entitled to receive physical delivery of Debt Securities of such series in certificated form and will not be considered the holders thereof for any purposes under the relevant Indenture. (Section 3.5 of each Indenture.) Accordingly, each person owning a beneficial interest in such Registered Global Security must rely on 7 the procedures of the Depository and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the relevant Indenture. The Depository may grant proxies and otherwise authorize participants to give or take any request, demand, authorization, direction, notice, consent, waiver or other action which a holder is entitled to give or take under the relevant Indenture. Protective Life understands that, under existing industry practices, if Protective Life requests any action of holders or any owner of a beneficial interest in such Registered Global Security desires to give any notice or take any action a holder is entitled to give or take under the relevant Indenture, the Depository would authorize the participants to give such notice or take such action, and participants would authorize beneficial owners owning through such participants to give such notice or take such action or would otherwise act upon the instructions of beneficial owners owning through them. Unless otherwise specified in the applicable Prospectus Supplement, payments with respect to principal, premium, if any, and interest, if any, on Debt Securities represented by a Registered Global Security registered in the name of a Depository or its nominee will be made to such Depository or its nominee, as the case may be, as the registered owner of such Registered Global Security. Protective Life expects that the Depository for any Debt Securities represented by a Registered Global Security, upon receipt of any payment of principal, premium or interest, will immediately credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Registered Global Security as shown on the records of such Depository. Protective Life also expects that payments by participants to owners of beneficial interests in such Registered Global Security held through such participants will be governed by standing instructions and customary practices, as is now the case with the securities held for the accounts of customers registered in "street names", and will be the responsibility of such participants. None of Protective Life, the respective Trustees or any agent of Protective Life or the respective Trustees shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial interests of a Registered Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial interests. (Section 3.8 of each Indenture.) Unless otherwise specified in the applicable Prospectus Supplement, if the Depository for any Debt Securities represented by a Registered Global Security notifies Protective Life that it is unwilling or unable to continue as Depository and a successor Depository is not appointed by Protective Life within 90 days, Protective Life will issue such Debt Securities in definitive certificated form in exchange for such Registered Global Security. In addition, Protective Life may at any time and in its sole discretion determine not to have any of the Debt Securities of a series represented by one or more Registered Global Securities and, in such event, will issue Debt Securities of such series in definitive certificated form in exchange for all of the Registered Global Security or Securities representing such Debt Securities. (Section 3.5 of each Indenture.) The Debt Securities of a series may also be issued in whole or in part in the form of one or more bearer global securities (a "Bearer Global Security") that will be deposited with a depository, or with a nominee for such depository, identified in the applicable Prospectus Supplement. Any such Bearer Global Securities may be issued in temporary or permanent form. (Section 3.4 of each Indenture.) The specific terms and procedures, including the specific terms of the depository arrangement, with respect to any portion of a series of Debt Securities to be represented by one or more Bearer Global Securities will be described in the applicable Prospectus Supplement. CONSOLIDATION, MERGER OR SALE BY PROTECTIVE LIFE Protective Life shall not consolidate with or merge into any other corporation or sell its assets substantially as an entirety, unless (i) the corporation formed by such consolidation or into which Protective Life is merged or the corporation which acquires its assets is organized in the United States and expressly assumes all of the obligations of Protective Life under each Indenture, (ii) immediately after giving effect to such transaction, no Default or Event of Default shall have happened and be continuing and (iii) if, as a result of such transaction, properties or assets of Protective Life would 8 become subject to a mortgage, pledge, lien, security interest or other encumbrance not permitted by the Debt Securities of any series, Protective Life or its successor shall take steps necessary to secure such Debt Securities equally and ratably with all indebtedness secured thereby. Upon any such consolidation, merger or sale, the successor corporation formed by such consolidation, or into which Protective Life is merged or to which such sale is made, shall succeed to, and be substituted for Protective Life under each Indenture. (Section 7.1 of each Indenture.) EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT Each Indenture provides that, if an Event of Default specified therein occurs with respect to the Debt Securities of any series and is continuing, the Trustee for such series or the holders of 25% in aggregate principal amount of all of the outstanding Debt Securities of that series, by written notice to Protective Life (and to the Trustee for such series, if notice is given by such holders of Debt Securities), may declare the principal of (or, if the Debt Securities of that series are Original Issue Discount Securities or Indexed Securities, such portion of the principal amount specified in the Prospectus Supplement) and accrued interest on all the Debt Securities of that series to be due and payable (provided, with respect to any Debt Securities (including Subordinated Debentures) issued under the Subordinated Indenture, that the payment of principal and interest on such Debt Securities shall remain subordinated to the extent provided in Article 12 of the Subordinated Indenture). (Section 5.2 of each Indenture.) Events of Default with respect to Debt Securities of any series are defined in each Indenture as being: (a) default for 30 days in payment of any interest on any Debt Security of that series or any coupon appertaining thereto or any additional amount payable with respect to Debt Securities of such series as specified in the applicable Prospectus Supplement when due; (b) default in payment of principal, or premium, if any, at maturity or on redemption or otherwise, or in the making of a mandatory sinking fund payment of any Debt Securities of that series when due; (c) default for 60 days after notice to Protective Life by the Trustee for such series, or by the holders of 25% in aggregate principal amount of the Debt Securities of such series then outstanding, in the performance of any other agreement in the Debt Securities of that series, in the Indenture or in any supplemental indenture or board resolution referred to therein under which the Debt Securities of that series may have been issued; (d) default in payment of principal relating to indebtedness of Protective Life and its consolidated subsidiaries for borrowed money having an aggregate principal amount exceeding $25 million, or other default resulting in acceleration of indebtedness of Protective Life and its consolidated subsidiaries for borrowed money where the aggregate principal amount so accelerated exceeds $25 million and such acceleration is not rescinded or annulled within 30 days after the written notice thereof to Protective Life by the Trustee or to Protective Life and the Trustee by the holders of 25% in aggregate principal amount of the Debt Securities of such series then outstanding, PROVIDED that such Event of Default will be remedied, cured or waived if the default that resulted in the acceleration of such indebtedness is remedied, cured or waived; and (e) certain events of bankruptcy, insolvency or reorganization of Protective Life or Protective Life Insurance. (Section 5.1 of each Indenture.) Events of Default with respect to a specified series of Debt Securities may be added to the Indenture and, if so added, will be described in the applicable Prospectus Supplement. (Sections 3.1 and 5.1(7) of each Indenture.) Each Indenture provides that the Trustee will, within 90 days after the occurrence of a Default with respect to the Debt Securities of any series, give to the holders of the Debt Securities of that series notice of all Defaults known to it unless such Default shall have been cured or waived; PROVIDED that except in the case of a Default in payment on the Debt Securities of that series, the Trustee may withhold the notice if and so long as the board of directors of Protective Life, the executive committee thereof or a committee of its Responsible Officers in good faith determines that withholding such notice is in the interests of the holders of the Debt Securities of that series. (Section 6.6 of each Indenture.) "Default" means any event which is, or after notice or passage of time or both, would be, an Event of Default. (Section 1.1 of each Indenture.) Each Indenture provides that the holders of a majority in aggregate principal amount of the Debt Securities of each series affected (with each such series voting as a class) may, subject to certain limited 9 conditions, direct the time, method and place of conducting any proceeding for any remedy available to the Trustee for such series, or exercising any trust or power conferred on such Trustee. (Section 5.8 of each Indenture.) Each Indenture includes a covenant that Protective Life will file annually with the Trustee a certificate as to Protective Life's compliance with all conditions and covenants of such Indenture. (Section 9.5 of each Indenture.) The holders of a majority in aggregate principal amount of any series of Debt Securities by written notice to the Trustee for such series may waive, on behalf of the holders of all Debt Securities of such series, any past Default or Event of Default with respect to that series and its consequences except a Default or Event of Default in the payment of the principal of, premium, if any, or interest, if any, on any Debt Security. (Section 5.7 of each Indenture.) MODIFICATION OF THE INDENTURES Each Indenture contains provisions permitting Protective Life and the Trustee to enter into one or more supplemental indentures without the consent of the holders of any of the Debt Securities in order (i) to evidence the succession of another corporation to Protective Life and the assumption of the covenants of Protective Life by a successor to Protective Life; (ii) to add to the covenants of Protective Life or surrender any right or power of Protective Life; (iii) to add additional Events of Default with respect to any series of Debt Securities; (iv) to add or change any provisions to such extent as necessary to permit or facilitate the issuance of Debt Securities in bearer form; (v) to change or eliminate any provision affecting only Debt Securities not yet issued; (vi) to secure the Debt Securities; (vii) to establish the form or terms of Debt Securities; (viii) to evidence and provide for successor Trustees; (ix) if allowed without penalty under applicable laws and regulations, to permit payment in respect of Debt Securities in bearer form in the United States; (x) to correct any defect or supplement any inconsistent provisions or to make any other provisions with respect to matters or questions arising under such Indenture or to cure any ambiguity or correct any mistake, PROVIDED that any such action does not adversely affect the interests of any holder of Debt Securities of any series; or (xi) in the case of the Subordinated Indenture, to modify the subordination provisions thereof in a manner not adverse to the holders of Subordinated Debentures of any series (and in the case of Subordinated Debentures issued in return for the proceeds of Preferred Securities of any series, not adverse to the holders of such Preferred Securities). (Section 8.1 of each Indenture.) Each Indenture also contains provisions permitting Protective Life and the Trustee, with the consent of the holders of a majority in aggregate principal amount of the outstanding Debt Securities affected by such supplemental indenture (with the Debt Securities of each series voting as a class), to execute supplemental indentures adding any provisions to or changing or eliminating any of the provisions of such Indenture or any supplemental indenture or modifying the rights of the holders of Debt Securities of such series, except that, without the consent of the holder of each Debt Security so affected, no such supplemental indenture may: (i) change the time for payment of principal or premium, if any, or interest on any Debt Security; (ii) reduce the principal of, or any installment of principal of, or premium, if any, or interest on any Debt Security, or change the manner in which the amount of any of the foregoing is determined; (iii) reduce the amount of premium, if any, payable upon the redemption of any Debt Security; (iv) reduce the amount of principal payable upon acceleration of the maturity of any Original Issue Discount or Indexed Security; (v) change the currency or currency unit in which any Debt Security or any premium or interest thereon is payable; (vi) impair the right to institute suit for the enforcement of any payment on or with respect to any Debt Security; (vii) reduce the percentage in principal amount of the outstanding Debt Securities affected thereby the consent of whose holders is required for modification or amendment of such Indenture or for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults; (viii) change the obligation of Protective Life to maintain an office or agency in the places and for the purposes specified in such Indenture; (ix) in the case of the Subordinated Indenture, modify the subordination provisions thereof in a manner adverse to the holders of Subordinated Debentures of any series (and in the case of Subordinated Debentures issued in return for 10 the proceeds of Preferred Securities of any series, adverse to the holders of such Preferred Securities); or (x) modify the provisions relating to waiver of certain defaults or any of the foregoing provisions. (Section 8.2 of each Indenture.) SUBORDINATION UNDER THE SUBORDINATED INDENTURE In the Subordinated Indenture, Protective Life will covenant and agree that any Debt Securities (including Subordinated Debentures) issued thereunder ("Subordinated Debt Securities") are subordinate and junior in right of payment to all Senior Indebtedness to the extent provided in the Subordinated Indenture. The Subordinated Indenture defines the term "Senior Indebtedness" as the principal, premium, if any, and interest on (i) all indebtedness of Protective Life, whether outstanding on the date of the issuance of Subordinated Debt Securities or thereafter created, incurred or assumed, which is for money borrowed, or evidenced by a note or similar instrument given in connection with the acquisition of any business, properties or assets, including securities, (ii) any indebtedness of others of the kinds described in the preceding clause (i) for the payment of which Protective Life is responsible or liable as guarantor or otherwise and (iii) amendments, renewals, extensions and refundings of any such indebtedness, unless in any instrument or instruments evidencing or securing such indebtedness or pursuant to which the same is outstanding, or in any such amendment, renewal, extension or refunding, it is expressly provided that such indebtedness is not superior in right of payment to Subordinated Debt Securities. The Senior Indebtedness shall continue to be Senior Indebtedness and entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of the Senior Indebtedness or extension or renewal of the Senior Indebtedness. If (i) Protective Life defaults in the payment of any principal, or premium, if any, or interest on any Senior Indebtedness when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or declaration or otherwise or (ii) an event of default occurs with respect to any Senior Indebtedness permitting the holders thereof to accelerate the maturity thereof and written notice of such event of default (requesting that payments on Subordinated Debt Securities cease) is given to Protective Life by the holders of Senior Indebtedness, then unless and until such default in payment or event of default shall have been cured or waived or shall have ceased to exist, no direct or indirect payment (in cash, property or securities, by set-off or otherwise) shall be made or agreed to be made on account of the Subordinated Debt Securities or interest thereon or in respect of any repayment, redemption, retirement, purchase or other acquisition of Subordinated Debt Securities. In the event of (i) any insolvency, bankruptcy, receivership, liquidation, reorganization, readjustment, composition or other similar proceeding relating to Protective Life, its creditors or its property, (ii) any proceeding for the liquidation, dissolution or other winding-up of Protective Life, voluntary or involuntary, whether or not involving insolvency or bankruptcy proceedings, (iii) any assignment by Protective Life for the benefit of creditors or (iv) any other marshalling of the assets of Protective Life, all Senior Indebtedness (including, without limitation, interest accruing after the commencement of any such proceeding, assignment or marshalling of assets) shall first be paid in full before any payment or distribution, whether in cash, securities or other property, shall be made by Protective Life on account of Subordinated Debt Securities. In any such event, any payment or distribution, whether in cash, securities or other property (other than securities of Protective Life or any other corporation provided for by a plan of reorganization or a readjustment, the payment of which is subordinate, at least to the extent provided in the subordination provisions of the Subordinated Indenture with respect to the indebtedness evidenced by Subordinated Debt Securities, to the payment of all Senior Indebtedness at the time outstanding and to any securities issued in respect thereof under any such plan of reorganization or readjustment), which would otherwise (but for the subordination provisions) be payable or deliverable in respect of Subordinated Debt Securities (including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of Protective Life being subordinated to the payment of Subordinated Debt Securities) shall be paid or delivered directly to the holders of Senior Indebtedness, or to their representative or trustee, in accordance with the priorities then existing among such holders until all Senior Indebtedness shall have been paid in full. No present 11 or future holder of any Senior Indebtedness shall be prejudiced in the right to enforce subordination of the indebtedness evidenced by Subordinated Debt Securities by any act or failure to act on the part of Protective Life. Senior Indebtedness shall not be deemed to have been paid in full unless the holders thereof shall have received cash, securities or other property equal to the amount of such Senior Indebtedness then outstanding. Upon the payment in full of all Senior Indebtedness, the holders of Subordinated Debt Securities shall be subrogated to all the rights of any holders of Senior Indebtedness to receive any further payments or distributions applicable to the Senior Indebtedness until all Subordinated Debt Securities shall have been paid in full, and such payments or distributions received by any holder of Subordinated Debt Securities, by reason of such subrogation, of cash, securities or other property which otherwise would be paid or distributed to the holders of Senior Indebtedness, shall, as between Protective Life and its creditors other than the holders of Senior Indebtedness, on the one hand, and the holders of Subordinated Debt Securities, on the other, be deemed to be a payment by Protective Life on account of Senior Indebtedness, and not on account of Subordinated Debt Securities. The Subordinated Indenture provides that the foregoing subordination provisions, insofar as they relate to any particular issue of Subordinated Debt Securities, may be changed prior to such issuance. Any such change would be described in the Prospectus Supplement relating to such Subordinated Debt Securities. DEFEASANCE AND COVENANT DEFEASANCE If indicated in the applicable Prospectus Supplement, Protective Life may elect either (i) to defease and be discharged from any and all obligations with respect to the Debt Securities of or within any series (except as otherwise provided in the relevant Indenture) ("defeasance") or (ii) to be released from its obligations with respect to certain covenants applicable to the Debt Securities of or within any series ("covenant defeasance"), upon the deposit with the relevant Trustee (or other qualifying trustee), in trust for such purpose, of money and/or Government Obligations which through the payment of principal and interest in accordance with their terms will provide money in an amount sufficient, without reinvestment, to pay the principal of and any premium or interest on such Debt Securities to Maturity or redemption, as the case may be, and any mandatory sinking fund or analogous payments thereon. As a condition to defeasance or covenant defeasance, Protective Life must deliver to the Trustee an Officer's Certificate and an Opinion of Counsel to the effect that the Holders of such Debt Securities will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred. Such Opinion of Counsel, in the case of defeasance under clause (i) above, must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable federal income tax law occurring after the date of the relevant Indenture. Additional conditions to defeasance include (x) delivery by Protective Life to the Trustee of an Officer's Certificate to the effect that neither such Debt Securities nor any other Debt Securities of the same series, if then listed on any securities exchange, will be delisted as a result of such defeasance, (y) no Event of Default with respect to such Debt Securities or any other Debt Securities occurring or continuing at the time of such defeasance or, in the case of certain bankruptcy Events of Default, at any time on or prior to the 90th day after the date of such defeasance and (z) such defeasance not resulting in the trust arising from the deposit of any moneys in respect of such defeasance constituting an "investment company" within the meaning of the Investment Company Act unless such trust shall be registered under such Act or exempt from registration thereunder. (Article 4 of each Indenture.) If indicated in the applicable Prospectus Supplement, in addition to obligations of the United States or an agency or instrumentality thereof, Government Obligations may include obligations of the government or an agency or instrumentality of the government issuing the currency or currency unit in which Debt Securities of such series are payable. (Sections 1.1 and 3.1 of each Indenture.) In addition, with respect to the Subordinated Indenture, in order to be discharged no event or condition shall exist that, pursuant to certain provisions described under "-- Subordination under the 12 Subordinated Indenture" above, would prevent Protective Life from making payments of principal of (and premium, if any) and interest on Subordinated Debt Securities and coupons appertaining thereto at the date of the irrevocable deposit referred to above. (Section 4.6 of the Subordinated Indenture.) Protective Life may exercise its defeasance option with respect to such Debt Securities notwithstanding its prior exercise of its covenant defeasance option. If Protective Life exercises its defeasance option, payment of such Debt Securities may not be accelerated because of a Default or an Event of Default. If Protective Life exercises its covenant defeasance option, payment of such Debt Securities may not be accelerated by reason of a Default or an Event of Default with respect to the covenants to which such covenant defeasance is applicable. However, if such acceleration were to occur by reason of another Event of Default, the realizable value at the acceleration date of the money and Government Obligations in the defeasance trust could be less than the principal and interest then due on such Debt Securities, in that the required deposit in the defeasance trust is based upon scheduled cash flow rather than market value, which will vary depending upon interest rates and other factors. THE TRUSTEES The Bank of New York is the Trustee under the Senior Indenture. AmSouth Bank N.A. is the Trustee under the Subordinated Indenture. Protective Life may also maintain banking and other commercial relationships with each of the Trustees and their affiliates in the ordinary course of business. DESCRIPTION OF CAPITAL STOCK OF PROTECTIVE LIFE AUTHORIZED AND OUTSTANDING CAPITAL STOCK The authorized capital stock of Protective Life is 84,000,000 shares, consisting of: (a) 3,850,000 shares of Preferred Stock, par value $1.00 per share, of which no shares are outstanding; (b) 150,000 shares of Junior Participating Cumulative Preferred Stock, par value $1.00 per share (the "Junior Preferred Stock"), of which no shares are outstanding; and (c) 80,000,000 shares of Common Stock, par value $.50 per share (the "Common Stock"), of which 13,702,958 shares were outstanding as of March 31, 1994. In general, the classes of authorized capital stock are afforded preferences with respect to dividends and liquidation rights in the order listed above. The Board of Directors of Protective Life is empowered, without approval of the stockholders, to cause the Preferred Stock to be issued in one or more series, with the numbers of shares of each series and the rights, preferences and limitations of each series to be determined by it. The specific matters that may be determined by the Board of Directors include the dividend rights, conversion rights, redemption rights and liquidation preferences, if any, of any wholly unissued series of Preferred Stock (or of the entire class of Preferred Stock if none of such shares have been issued), the number of shares constituting any such series and the terms and conditions of the issue thereof. The descriptions set forth below do not purport to be complete and are qualified in their entirety by reference to the Restated Certificate of Incorporation of Protective Life, as amended (the "Restated Certificate of Incorporation"). No holders of any class of Protective Life's capital stock are entitled to preemptive rights. PREFERRED STOCK The particular terms of any series of Preferred Stock offered hereby ("Offered Preferred Stock") will be set forth in the Prospectus Supplement relating thereto. The rights, preferences, privileges and restrictions, including dividend rights, voting rights, terms of redemption and liquidation preferences, of the Offered Preferred Stock of each series will be fixed or designated pursuant to a certificate of designation adopted by the Board of Directors or a duly authorized committee thereof. The description of the terms of a particular series of Offered Preferred Stock that will be set forth in a Prospectus Supplement does not purport to be complete and is qualified in its entirety by reference to the certificate of designation relating to such series. 13 JUNIOR PREFERRED STOCK The Junior Preferred Stock may be issued to holders of the Common Stock under certain circumstances pursuant to rights granted under Protective Life's Rights Agreement, dated July 13, 1987, entered into with AmSouth Bank N.A. (the "Share Purchase Rights Plan"). Protective Life can redeem the rights at $.01 per right (subject to adjustment to reflect any stock split, stock dividend or similar transaction) until the earlier of July 28, 1997 (expiration date of rights) or ten business days following a public announcement that 20% or more of the Common Stock has been acquired by one or more associated or affiliated persons. If, after the rights become exercisable, Protective Life becomes involved in a merger or certain other major corporate transactions, each right then outstanding (other than those held by the 20% holder) would entitle its holder to buy from Protective Life or its successor Common Stock of the acquiror or Protective Life or its successor worth twice the exercise price. CERTAIN OTHER PROVISIONS OF PROTECTIVE LIFE'S RESTATED CERTIFICATE OF INCORPORATION Protective Life's Restated Certificate of Incorporation contains a "fair price" provision which generally requires that certain "Business Combinations" with a "Related Person" (generally the beneficial owner of at least 20 percent of Protective Life's voting stock) be approved by the holders of at least 80 percent of Protective Life's voting stock and the holders of at least 67 percent of the voting stock held by stockholders other than such Related Person, unless (a) the transaction is approved by at least a majority of the "Continuing Directors" of Protective Life, or (b) the Business Combination is either a "Reorganization" or a Business Combination in which Protective Life is the surviving corporation and, in either event, the cash or fair market value of the property, securities or other consideration to be received per share as a result of the Business Combination by holders of the Common Stock of Protective Life other than the Related Person is not less than the highest per share price (with appropriate adjustments for recapitalizations and for stock splits, stock dividends and like distributions) paid by such Related Person in acquiring any holdings of Protective Life's Common Stock either in or subsequent to the transaction or series of transactions by reason of which the Related Person became a Related Person. Protective Life's Restated Certificate of Incorporation defines "Business Combination" as (i) any Reorganization of Protective Life or a subsidiary of Protective Life, (ii) any sale, lease, exchange, transfer or other disposition, including without limitation a pledge, mortgage or any other security device, of all or any "Substantial Part" of the assets either of Protective Life or of a subsidiary of Protective Life, (iii) any sale, lease, exchange, transfer or other disposition of all or any "Substantial Part" of the assets of an entity to Protective Life or a subsidiary of Protective Life, (iv) the issuance of any securities of Protective Life or any subsidiary of Protective Life except if such issuance were a stock split, stock dividend or other distribution pro rata to all holders of the same class of voting stock, (v) any recapitalization or reclassification of Protective Life's securities (including any reverse stock split) that would have the effect of increasing the voting power of an entity and (vi) any agreement, contract, plan or other arrangement providing for any of the transactions described in the definition of Business Transaction. "Continuing Director" is defined to mean a director who was a member of the Board of Directors of Protective Life immediately prior to the time such Related Person became a Related Person. "Substantial Part" is defined as more than 20 percent of the fair market value of the total assets of the corporation in question, as determined in good faith by a majority of the Continuing Directors as of the end of its most recent fiscal year ending prior to the time the determination is being made. "Reorganization" is defined to mean a merger, consolidation, plan of exchange, sale of all or substantially all of the assets (including, as pertains to a subsidiary of Protective Life, bulk reinsurance or cession of substantially all of its policies and contracts) or other form of corporate reorganization pursuant to which shares of voting stock, or other securities of the subject corporation, are to be converted or exchanged into cash or other property, securities or other consideration. GENERAL The foregoing statements are summaries of certain provisions contained in the Restated Certificate of Incorporation of Protective Life, the form of which is filed as an exhibit to the Registration Statement of 14 which this Prospectus is a part. They do not purport to be complete statements of all the terms and provisions of the Restated Certificate of Incorporation, and reference is hereby made to the Restated Certificate of Incorporation for full and complete statements of such terms and provisions, including the definitions of certain terms used herein. Whenever reference has been made to the Restated Certificate of Incorporation, such Restated Certificate of Incorporation shall be deemed to be incorporated in such statements as a part thereof and such statements are qualified in their entirety by such reference. The transfer agent and registrar of the Common Stock is AmSouth Bank NA. DESCRIPTION OF PREFERRED SECURITIES OF PLC CAPITAL PLC Capital is authorized to issue from time to time Preferred Securities in one or more series, with such dividend rights, liquidation preferences, redemption provisions, voting rights and other rights, powers and duties as shall be established by the L.L.C. Agreement and written actions (the "Actions") taken, or to be taken, by the Managing Member establishing such rights, powers and duties (which Actions, when taken, constitute an amendment and supplement to, and become a part of, the L.L.C. Agreement). The L.L.C. Agreement has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part, and a copy of the Action relating to Preferred Securities of any series will be filed with the Commission at or prior to the time of the sale of the Preferred Securities of such series. Preferred Securities will be issued in registered form only. The Managing Member is authorized, subject to the provisions of the L.L.C. Agreement, to establish by Actions for each series of Preferred Securities, and the applicable Prospectus Supplement shall set forth with respect to such series: (i) the maximum number of Preferred Securities to constitute such series and the distinctive designation thereof; (ii) the dividend rate, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any other class of Membership Securities or on any other series of Preferred Securities, and whether such dividends shall be cumulative or noncumulative; (iii) whether the Preferred Securities of such series shall be subject to redemption, and, if so, the times, prices and other terms and conditions thereof; (iv) the rights of the holders of Preferred Securities of such series upon the dissolution, liquidation or winding-up of PLC Capital; (v) whether the Preferred Securities of such series shall be subject to a retirement or sinking fund, and, if so, the extent, terms and provisions relative to the operation thereof; (vi) whether the Preferred Securities of any series shall be convertible into, or exchangeable for, Membership Securities of any other class or series or securities of any other kind, including securities issued by Protective Life or any of its affiliates, and, if so, the price or rate of conversion or exchange and any method of adjusting the same; (vii) the limitations and restrictions, if any, to be applicable while any Preferred Securities of such series are outstanding upon the payment of dividends or making of other distributions on, and upon the purchase, redemption or other acquisition by PLC Capital of, Common Securities or any other class of Membership Securities or any other series of Preferred Securities ranking junior to the Preferred Securities of such series either as to dividends or upon liquidation; (viii) the conditions or restrictions, if any, upon the creation of indebtedness of PLC Capital or upon the issue of any additional Membership Securities (including additional Preferred Securities of such series or of any other series) ranking on a parity with or prior to the Preferred Securities of such series as to dividends or distributions of assets upon liquidation; (ix) the voting rights, if any, of Preferred Securities of such series; and (x) any other relative rights, powers and duties as shall not be inconsistent with the L.L.C. Agreement. In connection with the foregoing the Managing Member is authorized to take any action, including amendment of the L.L.C. Agreement, without the vote or approval of any holder of Preferred Securities (other than the requisite vote or approval, if any, of holders of any outstanding series of Preferred Securities to the extent provided in the Action relating to such series), including any Action to create under the provisions of the L.L.C. Agreement a class (or series of a class) or group of Membership Securities that was not previously outstanding. All Preferred Securities of any one series shall be identical with each other in all respects, except that Preferred Securities of any one series issued at different times may differ as to the dates from which dividends, if any, thereon shall be cumulative. All series of Preferred Securities shall rank equally and be 15 identical in all respects, except as permitted by the L.L.C. Agreement provisions summarized in the preceding paragraph, and all Preferred Securities shall rank senior to the Common Securities both as to dividends and upon liquidation. The Common Securities are also subject to all the rights, powers and duties of the Preferred Securities as are established in the L.L.C. Agreement and as shall be established in any Actions of the Managing Member pursuant to the authority summarized in the preceding paragraph. DESCRIPTION OF CERTAIN CONTRACTUAL BACK-UP OBLIGATIONS OF PROTECTIVE LIFE THE GUARANTEE OF CERTAIN PAYMENTS Protective Life, by an irrevocable and unconditional subordinated guarantee (the "Guarantee"), will agree, to the limited extent set forth herein and in the related Prospectus Supplement, to pay in full, to the holders of Preferred Securities of any series, the Guarantee Payments (as defined below), as and when due, regardless of any defense, right of set-off or counterclaim which PLC Capital may have or assert. The Guarantee will constitute a guarantee of payment and may be enforced by holders of Preferred Securities directly against Protective Life. The following payments to the extent not made by PLC Capital (the "Guarantee Payments") will be subject to the Guarantee (without duplication): (i) any accumulated and unpaid dividends which have theretofore been declared on the Preferred Securities of such series out of funds held by PLC Capital and legally available therefor; (ii) the redemption price (including all accumulated and unpaid dividends whether or not declared) payable, out of funds held by PLC Capital and legally available therefor, with respect to any Preferred Securities of such series called for redemption by PLC Capital; and (iii) in the event of any dissolution, liquidation or winding-up of PLC Capital, the lesser of (a) the aggregate of the liquidation preference of the Preferred Securities of such series and all accumulated and unpaid dividends (whether or not declared) to the date of payment and (b) the amount of remaining assets of PLC Capital legally available to holders of Preferred Securities of such series. In addition, Protective Life will unconditionally and irrevocably guarantee, in the event of any exchange by PLC Capital of Preferred Securities for Subordinated Debentures (to the extent permitted by the Action for such Preferred Securities), delivery of certificates representing the proper amount of such Subordinated Debentures in conformity with the Action for such series. Protective Life's obligation to make a Guarantee Payment may be satisfied by direct payment of the required amounts by Protective Life to the holders of Preferred Securities of such series or by causing PLC Capital to pay such amounts to such holders. The Prospectus Supplement relating to a series of Preferred Securities will describe any additional covenants or other terms of the Guarantee with respect to such series. The Guarantee will rank PARI PASSU with Subordinated Debentures and, accordingly, will be subordinate and junior in right of payment to all Senior Indebtedness in a manner identical to that described under "Description of Debt Securities of Protective Life -- Subordination under the Subordinated Indenture." THE GUARANTEE IS NOT A GUARANTEE THAT ANY PARTICULAR DIVIDEND OR AMOUNT ON LIQUIDATION, DISSOLUTION OR WINDING UP WILL BE PAID; RATHER, THE GUARANTEE IS SOLELY A GUARANTEE OF PAYMENT OF DIVIDENDS, IF ANY, THAT ARE IN FACT DECLARED OUT OF FUNDS HELD BY PLC CAPITAL AND LEGALLY AVAILABLE THEREFOR, OF THE REDEMPTION PRICE PAYABLE, OUT OF FUNDS HELD BY PLC CAPITAL AND LEGALLY AVAILABLE THEREFOR, WITH RESPECT TO THE PREFERRED SECURITIES OF ANY SERIES CALLED FOR REDEMPTION BY PLC CAPITAL AND OF AMOUNTS, IF ANY, AVAILABLE FOR DISTRIBUTION TO THE HOLDERS OF THE PREFERRED SECURITIES OF ANY SERIES UPON LIQUIDATION, DISSOLUTION OR WINDING UP AFTER SATISFACTION OF ALL CREDITORS OF PLC CAPITAL. SUBORDINATED DEBENTURES Protective Life will issue Subordinated Debentures to PLC Capital to evidence the loans to be made by PLC Capital of the proceeds of (i) Preferred Securities of each series and (ii) Common Securities and related capital contributions ("Common Securities Payments"). See "Description of Debt Securities of Protective Life" for a summary of the material provisions of the Subordinated Indenture, under which the Subordinated Debentures will be issued. References to provisions of the Subordinated Indenture in this Prospectus and in the relevant Prospectus Supplement are qualified in their entirety by reference to the text of the Subordinated Indenture, a form of which has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. The aggregate dollar amount of the Subordinated 16 Debentures relating to Preferred Securities of any series will be set forth in the Prospectus Supplement for such series and will equal the aggregate liquidation preference of the Preferred Securities of such series, together with the related Common Securities Payments. PLAN OF DISTRIBUTION Protective Life may sell any of the Debt Securities and Preferred Stock, and PLC Capital may sell any of the Preferred Securities, being offered hereby in any one or more of the following ways from time to time: (i) through agents; (ii) to or through underwriters; (iii) through dealers; and (iv) directly by Protective Life or PLC Capital, as the case may be, to purchasers. The distribution of the Offered Securities may be effected from time to time in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at negotiated prices. Offers to purchase Offered Securities may be solicited by agents designated by Protective Life or PLC Capital, as the case may be, from time to time. Any such agent involved in the offer or sale of the Offered Securities in respect of which this Prospectus is delivered will be named, and any commissions payable by Protective Life or PLC Capital to such agent will be set forth, in the applicable Prospectus Supplement. Unless otherwise indicated in such Prospectus Supplement, any such agent will be acting on a reasonable best efforts basis for the period of its appointment. Any such agent may be deemed to be an underwriter, as that term is defined in the Securities Act, of the Offered Securities so offered and sold. If Offered Securities are sold by means of an underwritten offering, Protective Life and/or PLC Capital will execute an underwriting agreement with an underwriter or underwriters at the time an agreement for such sale is reached, and the names of the specific managing underwriter or underwriters, as well as any other underwriters, and the terms of the transaction, including commissions, discounts and any other compensation of the underwriters and dealers, if any, will be set forth in the Prospectus Supplement which will be used by the underwriters to make resales of the Offered Securities in respect of which this Prospectus is delivered to the public. If underwriters are utilized in the sale of the Offered Securities in respect of which this Prospectus is delivered, the Offered Securities will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including negotiated transactions, at fixed public offering prices or at varying prices determined by the underwriter at the time of sale. Offered Securities may be offered to the public either through underwriting syndicates represented by managing underwriters or directly by the managing underwriters. If any underwriter or underwriters are utilized in the sale of the Offered Securities, unless otherwise indicated in the Prospectus Supplement, the underwriting agreement will provide that the obligations of the underwriters are subject to certain conditions precedent and that the underwriters with respect to a sale of Offered Securities will be obligated to purchase all such Offered Securities if any are purchased. If a dealer is utilized in the sale of the Offered Securities in respect of which this Prospectus is delivered, Protective Life or PLC Capital, as the case may be, will sell such Offered Securities to the dealer as principal. The dealer may then resell such Offered Securities to the public at varying prices to be determined by such dealer at the time of resale. Any such dealer may be deemed to be an underwriter, as such term is defined in the Securities Act, of the Offered Securities so offered and sold. The name of the dealer and the terms of the transaction will be set forth in the Prospectus Supplement relating thereto. Offers to purchase Offered Securities may be solicited directly by Protective Life or PLC Capital, as the case may be, and the sale thereof may be made by Protective Life or PLC Capital, as the case may be, directly to institutional investors or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any resale thereof. The terms of any such sales will be described in the Prospectus Supplement relating thereto. 17 Agents, underwriters and dealers may be entitled under relevant agreements with Protective Life and/or PLC Capital to indemnification by Protective Life and/or PLC Capital against certain liabilities, including liabilities under the Securities Act, or to contribution with respect to payments which such agents, underwriters and dealers may be required to make in respect thereof. Agents, underwriters and dealers may be customers of, engage in transactions with, or perform services for, Protective Life and its subsidiaries (including PLC Capital) in the ordinary course of business. Offered Securities may also be offered and sold, if so indicated in the Prospectus Supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more firms ("remarketing firms"), acting as principals for their own accounts or as agents for Protective Life or PLC Capital, as the case may be. Any remarketing firm will be identified and the terms of its agreement, if any, with Protective Life or PLC Capital and its compensation will be described in the Prospectus Supplement. Remarketing firms may be deemed to be underwriters, as such term is defined in the Securities Act, in connection with the Offered Securities remarketed thereby. Remarketing firms may be entitled under agreements which may be entered into with Protective Life to indemnification or contribution by Protective Life and/or PLC Capital against certain civil liabilities, including liabilities under the Securities Act, and may be customers of, engage in transactions with or perform services for Protective Life and its subsidiaries (including PLC Capital) in the ordinary course of business. If so indicated in the applicable Prospectus Supplement, Protective Life or PLC Capital, as the case may be, may authorize agents, underwriters or dealers to solicit offers by certain institutions to purchase Offered Securities from Protective Life or PLC Capital, as the case may be, at the public offering prices set forth in the applicable Prospectus Supplement pursuant to delayed delivery contracts ("Contracts") providing for payment and delivery on a specified date or dates. A commission indicated in the applicable Prospectus Supplement will be paid to underwriters, dealers and agents soliciting purchases of Offered Securities pursuant to Contracts accepted by Protective Life. LEGAL OPINIONS Unless otherwise indicated in the applicable Prospectus Supplement, the validity of any Offered Securities offered hereby and of the Guarantee and the Subordinated Debentures relating to any Preferred Securities of PLC Capital offered hereby will be passed upon for Protective Life and PLC Capital by Debevoise & Plimpton, 875 Third Avenue, New York, New York and for any underwriters or agents by Sullivan & Cromwell, 125 Broad Street, New York, New York. Debevoise & Plimpton and Sullivan & Cromwell may rely upon Richards, Layton & Finger, P.A., special Delaware counsel to Protective Life and PLC Capital, as to all matters of Delaware law relating to any Preferred Securities. EXPERTS The consolidated balance sheets of Protective Life as of December 31, 1993 and 1992 and the related consolidated statements of income, stockholder's equity and cash flows for each of the three years in the period ended December 31, 1993 and the related financial statement schedules which are incorporated by reference or included in Protective Life's Annual Report on Form 10-K for the year ended December 31, 1993 and which have been incorporated by reference in this Prospectus, have been incorporated herein in reliance on the report, which includes an explanatory paragraph with respect to changes in Protective Life's methods of accounting for certain investments in debt and equity securities in 1993 and postretirement benefits other than pensions in 1992, of Coopers & Lybrand, independent accountants, given on the authority of that firm as experts in accounting and auditing. With respect to the unaudited interim financial information for Protective Life Corporation and subsidiaries for the three-month periods ended March 31, 1994 and 1993 incorporated by reference in this Prospectus, the independent accountants have reported that they have applied limited procedures in accordance with professional standards for a review of such information. However, their separate report included in the Registration Statement of which this Prospectus forms a part states that they did not audit and they do not express an opinion on such interim financial information. Accordingly, the 18 degree of reliance on their report on such information should be restricted in light of the limited nature of the review procedures applied. The accountants are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited interim financial information because that report is not a "report" or a "part" of the Registration Statement prepared or certified by the accountants within the meaning of Sections 7 and 11 of the Act. The financial statements of Wisconsin National Life Insurance Company as of December 31, 1992 and 1991, and for each of the years in the two year period ended December 31, 1992, incorporated by reference in or included in Protective Life's Current Report on Form 8-K, dated August 4, 1993, have been incorporated herein by reference in reliance upon the report of KPMG Peat Marwick, independent certified public accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. 19 - ---------------------------------------------- ---------------------------------------------- - ---------------------------------------------- ---------------------------------------------- NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION. ------------------------ TABLE OF CONTENTS PROSPECTUS SUPPLEMENT
PAGE --------- Protective Life Corporation........................ S-3 Investment Consideration........................... S-5 Recent Developments................................ S-5 Capitalization of Protective Life.................. S-6 Use of Proceeds.................................... S-6 Selected Consolidated Financial Data of Protective Life Corporation.................................. S-7 Description of the Senior Notes.................... S-9 Underwriting....................................... S-11 PROSPECTUS Available Information.............................. 2 Incorporation of Certain Documents by Reference.... 2 Protective Life Corporation........................ 3 PLC Capital L.L.C.................................. 4 Use of Proceeds.................................... 4 Ratios of Consolidated Earnings to Fixed Charges... 4 Description of Debt Securities of Protective Life.............................................. 5 Description of Capital Stock of Protective Life.... 13 Certain Other Provisions of Protective Life's Restated Certificate of Incorporation..................................... 14 Description of Preferred Securities of PLC Capital........................................... 15 Description of Certain Contractual Back-Up Obligations of Protective Life.................... 16 Plan of Distribution............................... 17 Legal Opinions..................................... 18 Experts............................................ 18
$75,000,000 PROTECTIVE LIFE CORPORATION % SENIOR NOTES DUE ______________, 2004 ----------- PROSPECTUS SUPPLEMENT ----------- GOLDMAN, SACHS & CO. ALEX. BROWN & SONS INCORPORATED - ---------------------------------------------- ---------------------------------------------- - ---------------------------------------------- ---------------------------------------------- -----END PRIVACY-ENHANCED MESSAGE-----