<PAGE>
As filed with the Securities and Exchange Commission on May 6, 1994
Registration No. 33-52831
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
<TABLE>
<S> <C>
PROTECTIVE LIFE
CORPORATION PLC CAPITAL L.L.C.
(Exact name of registrant as (Exact name of registrant as
specified in its charter) specified in its charter)
DELAWARE DELAWARE
(State or other jurisdiction (State or other jurisdiction of
of incorporation or incorporation or organization)
organization)
95-2492236 63-1114346
(I.R.S. Employer (I.R.S. Employer Identification
Identification No.) No.)
</TABLE>
C/O DEBORAH J. LONG, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
PROTECTIVE LIFE CORPORATION
2801 HIGHWAY 280 SOUTH
BIRMINGHAM, ALABAMA 35223
(205) 879-9230
(Address, including zip code and telephone number, including area
code, of registrants' principal executive offices and agent for service)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
MICHAEL W. BLAIR, ESQ. ALAN J. SINSHEIMER, ESQ.
DEBEVOISE & PLIMPTON SULLIVAN & CROMWELL
875 THIRD AVENUE 125 BROAD STREET
NEW YORK, NEW YORK 10022 NEW YORK, NEW YORK 10004
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time as determined by market conditions, after the effective date of this
registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SUPPLEMENT SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY
SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 6, 1994
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED MAY [ ], 1994
[ ] PREFERRED SECURITIES
PLC CAPITAL L.L.C.
% CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES, SERIES A ("MIPS"*)
(LIQUIDATION PREFERENCE $25 PER SERIES A PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
PROTECTIVE LIFE CORPORATION
---------
The % Cumulative Monthly Income Preferred Securities, Series A (the
"Series A Preferred Securities"), representing preferred limited liability
company interests offered hereby are being issued by PLC Capital L.L.C. ("PLC
Capital"), a Delaware limited liability company formed by Protective Life
Corporation, a Delaware corporation ("Protective Life"), solely to issue
securities and loan the proceeds thereof to Protective Life. Accordingly, the
proceeds from the sale of Series A Preferred Securities will be loaned by PLC
Capital to Protective Life in exchange for % subordinated debentures of
Protective Life (the "Series A Subordinated Debentures") having the terms
described herein, and payments on the Series A Preferred Securities will be
completely dependent on payments by Protective Life on the Series A Subordinated
Debentures. See "Terms of the Series A Preferred Securities" and "Description of
Series A Subordinated Debentures".
Holders of the Series A Preferred Securities will be entitled to receive, in
preference to holders of Common Securities (as defined herein), cumulative cash
distributions ("dividends"), at an annual rate of % of the liquidation
preference of $25 per Series A Preferred Security, accruing from the date of
original issuance and payable monthly in arrears on the last day of each
calendar month, commencing May , 1994. NO DIVIDENDS RECEIVED BY A HOLDER OF
SERIES A PREFERRED SECURITIES WILL BE ELIGIBLE FOR THE DIVIDENDS RECEIVED
DEDUCTION FOR U.S. FEDERAL INCOME TAX PURPOSES. The payment of dividends (but
only if and to the extent declared out of moneys held by PLC Capital and legally
available therefor and not otherwise) and payments on liquidation (but only to
the extent of the remaining assets of PLC Capital and not otherwise) or
redemption with respect to the Series A Preferred Securities are guaranteed for
as long as the Series A Preferred Securities are outstanding by a subordinated
guarantee (the "Guarantee") of Protective Life to the extent described herein.
See "Description of the Guarantee".
As of April 30, 1994, Protective Life had approximately $146 million of
outstanding consolidated indebtedness, all of which would rank senior to the
Series A Subordinated Debentures and the Guarantee.
The Series A Preferred Securities are redeemable, at the option of PLC
Capital, in whole or in part, at any time on or after May , 1999 and will be
redeemed, under certain circumstances, from the proceeds of any cash repayment
or permitted prepayment by Protective Life of the Series A Subordinated
Debentures, in each case at a cash redemption price of $25 per Series A
Preferred Security, plus accumulated and unpaid dividends (whether or not
declared) to the redemption date (the "Redemption Price"). In addition, at the
option of PLC Capital, following the occurrence of an Investment Company Act
Event or a Tax Event (each as defined herein), the Series A Preferred Securities
are redeemable, in whole but not in part, for cash at the Redemption Price or
exchangeable, in whole but not in part, for the Series A Subordinated Debentures
of Protective Life referred to above having an aggregate principal amount and
accrued and unpaid interest equal to the Redemption Price. If the Series A
Preferred Securities are exchanged for Series A Subordinated Debentures,
Protective Life has agreed to use its best efforts to have the Series A
Subordinated Debentures listed on the same exchange, if any, on which the Series
A Preferred Securities are listed. See "Terms of the Series A Preferred
Securities -- Redemption".
In the event of the liquidation of PLC Capital, holders of Series A
Preferred Securities will be entitled to receive for each Series A Preferred
Security a liquidation preference of $25 plus accumulated and unpaid dividends
(whether or not declared) to the date of payment before any liquidation payments
are made in respect of Common Securities. See "Terms of the Series A Preferred
Securities -- Liquidation Distribution".
--------------------
SEE "CERTAIN INVESTMENT CONSIDERATIONS" FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES A
PREFERRED SECURITIES OFFERED HEREBY, INCLUDING THE PERIOD AND CIRCUMSTANCES
DURING AND UNDER WHICH PAYMENTS ON THE SERIES A PREFERRED SECURITIES AND SERIES
A SUBORDINATED DEBENTURES MAY BE DEFERRED AND RELATED FEDERAL INCOME TAX
CONSEQUENCES.
--------------------
Application will be made to list the Series A Preferred Securities on the
New York Stock Exchange (the "NYSE").
--------------------
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.
--------------
<TABLE>
<CAPTION>
INITIAL PUBLIC UNDERWRITING PROCEEDS TO PLC
OFFERING PRICE COMMISSIONS(1) CAPITAL(2)(3)
--------------------- --------------------- ---------------------
<S> <C> <C> <C>
Per Series A Preferred Security.......................... $25.00 (2) $25.00
Total(4)................................................. $[ ] (2) $[ ]
<FN>
- --------------------
(1) Protective Life and PLC Capital have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Protective Life has agreed to pay to the Underwriters, as compensation for
their services, a commission of $ per Series A Preferred Security (or
$ in the aggregate), except that such compensation will be $ per
Series A Preferred Security sold to certain institutions, thus reducing
the aggregate compensation specified above. See "Underwriting."
(3) Expenses of the offering, estimated at $ , are payable by Protective
Life.
(4) [PLC Capital has granted to the Underwriters a 30-day option to purchase,
on the same terms set forth above, up to [ ] additional Series A
Preferred Securities at the Initial Public Offering Price (with additional
underwriting compensation) solely to cover over-allotments, if any. If the
option is exercised in full, the total Initial Public Offering Price,
underwriting commissions (payable by Protective Life) and proceeds to PLC
Capital will be $ , $ and $ , respectively. See "Underwriting."]
</TABLE>
--------------------
The Series A Preferred Securities offered hereby 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 delivery of certificates for the Series A Preferred Securities
will be made only in book-entry form through the facilities of The Depository
Trust Company on or about May , 1994.
- --------------------
*An application has been filed by Goldman, Sachs & Co. with the United States
Patent and Trademark Office for the registration of the MIPS servicemark.
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
KIDDER, PEABODY & CO.
INCORPORATED
THE ROBINSON-HUMPHREY COMPANY, INC.
-----------
The date of this Prospectus Supplement is May , 1994.
<PAGE>
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 TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK
EXCHANGE OR OTHERWISE. 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
<PAGE>
PLC CAPITAL L.L.C.
PLC Capital is a limited liability company formed under the laws of the
State of Delaware. Protective Life owns, directly and indirectly, all the
outstanding common limited liability company interests ("Common Securities") of
PLC Capital, which Common Securities are nontransferable. PLC Capital was formed
by Protective Life and a wholly-owned subsidiary solely to issue preferred or
preference limited liability company interests ("Preferred Securities") and
Common Securities (collectively, the "Membership Securities") and to lend the
proceeds thereof to Protective Life in exchange for subordinated debentures
("Subordinated Debentures"). Interest and principal 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 the Series A Preferred Securities will
be dependent on interest and principal payments by Protective Life on the Series
A 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"). PLC Capital's principal executive
offices are located at 2801 Highway 280 South, Birmingham, Alabama 35223
(Telephone: (205) 879-9230).
PLC Capital is a legal entity under the laws of the State of Delaware and is
distinct from its owners, who are known as "members". A Delaware limited
liability company provides limited liability to its members in a manner similar
to that provided to stockholders of a Delaware corporation. Therefore, unless
expressly provided in a limited liability company agreement or otherwise agreed,
under Delaware law no general liability exists for members or managers of a
limited liability company. The Amended and Restated Limited Liability Company
Agreement of PLC Capital (the "L.L.C. Agreement") provides that Protective Life
will have general liability for the debts and obligations of PLC Capital
(including tax obligations, but excluding obligations in respect of Series A
Preferred Securities) in the same manner as a general partner of a Delaware
limited partnership. 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).
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. 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. At December 31, 1993, Protective Life had total assets of
$5.3 billion, stockholders' equity of $361 million and life insurance in force
of $42.5 billion. Protective Life's insurance subsidiaries generated
approximately 94% of its revenues in 1993. 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 Series A Preferred Securities. Such ratings do not apply to the
Series A Preferred Securities offered hereby.
S-3
<PAGE>
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
maintain 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 15 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 at
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 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 business.
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 life and health products designed to repay
consumer and mortgage loans upon the occurrence of certain covered events. 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
S-4
<PAGE>
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 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 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 December 31, 1993, 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 needs, investment quality, investment
return, matching of assets and liabilities and the composition of the portfolio
by asset type and credit exposure. At year end 1993, Protective Life's invested
assets consisted of the following: 64% in fixed maturity investments (corporate
bonds, mortgage-backed securities, and bank loan participations); 30% in
commercial mortgages; 3% in policy loans; and 3% in other assets including
short-term investments. At December 31, 1993, Protective Life's consolidated
holdings of unrated or below investment grade fixed maturity investments
amounted to 6.3% 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 December 31, 1993, loans to
shopping centers anchored by K-Mart, Food Lion and Wal-Mart constituted 7%, 5%
and 4%, respectively, of Protective Life's commercial mortgage portfolio.
S-5
<PAGE>
CERTAIN INVESTMENT CONSIDERATIONS
Prospective purchasers of Series A Preferred Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and in
the accompanying Prospectus and should particularly consider the following
matters.
DEPENDENCE ON SERIES A SUBORDINATED DEBENTURE PAYMENTS
The proceeds from the sale of the Series A Preferred Securities offered
hereby, together with the capital contributions made in respect of the Common
Securities, will be loaned by PLC Capital to Protective LIfe in exchange for
Series A Subordinated Debentures of Protective Life. After giving effect
thereto, PLC Capital will have no assets other than such Series A Subordinated
Debentures. Thus, payments by PLC Capital on the Series A Preferred Securities
will be completely dependent on payments by Protective Life on the Series A
Subordinated Debentures, which in turn may be affected by the other matters
referred to below and elsewhere in this Prospectus Supplement and the
Prospectus.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Protective Life has the right under the Series A Subordinated Debentures to
extend interest payment periods to up to 60 months, and, as a consequence,
monthly dividends on the Series A Preferred Securities may be deferred (but will
continue to accumulate, together with additional dividends on any such
accumulated but unpaid dividends at the dividend rate) by PLC Capital during any
such extended interest payment period. In the event that Protective Life
exercises this right, Protective Life may not declare dividends on or
repurchase, except as described herein, any shares of its capital stock. See
"Description of the Series A Subordinated Debentures -- Interest".
TAX CONSEQUENCES OF EXTENDED INTEREST PERIOD
Should an extended interest payment period occur, PLC Capital will continue
to accrue income for U.S. federal income tax purposes which will be allocated,
but not distributed, to record holders of Series A Preferred Securities. As a
result, such holders should include such amounts in income for U.S. federal
income tax purposes in advance of the receipt of cash, and any such holders who
dispose of Series A Preferred Securities prior to the record date for payment of
dividends following such extended period will therefore have included such
amounts in income but will not have received the cash dividends related thereto.
See "Certain Federal Income Tax Considerations -- Potential Extension of Payment
Period" and "-- Exchange of Series A Preferred Securities for Series A
Subordinated Debentures".
SUBORDINATION OF SERIES A SUBORDINATED DEBENTURES AND THE GUARANTEE
Protective Life's obligations under the Series A Subordinated Debentures and
the Guarantee are subordinate and junior in right of payment to all Senior
Indebtedness of Protective Life. See "Description of the Series A Subordinated
Debentures -- Subordination". At April 30, 1994, Protective Life had
approximately $146 million of outstanding consolidated indebtedness, all of
which would rank senior to the Series A Subordinated Debentures and the
Guarantee. The terms of the Series A Preferred Securities and the Series A
Subordinated Debentures do not limit Protective Life's ability to incur
additional indebtedness, including indebtedness that ranks senior to the Series
A Subordinated Debentures and the Guarantee.
SCOPE OF GUARANTEE
The Guarantee is not a guarantee that any particular dividend or amount on
dissolution, liquidation 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 legally available therefor, of the redemption price payable, out of
funds held by PLC Capital and legally available therefor, with regard to any
Series A Preferred Securities called for redemption by PLC Capital and of
amounts, if any, available for distribution to the holders of Series A Preferred
Securities upon dissolution, liquidation or winding-up after payment to all
creditors of PLC Capital of all amounts due them.
S-6
<PAGE>
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 Senior Indebtedness
and the Series A Subordinated Debentures 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 Series A Subordinated
Debentures) would be entitled to receive any payment from the assets of such
subsidiary.
REDEMPTION OR EXCHANGE UPON OCCURRENCE OF CERTAIN EVENTS
Under certain circumstances relating to changes in law, the Series A
Preferred Securities may be subject to redemption or exchange at the option of
Protective Life. See "Terms of the Series A Preferred Securities -- Redemption"
and "Certain Federal Income Tax Considerations -- Exchange of Series A Preferred
Securities for Series A Subordinated Debentures".
REDUCTION OF PAYMENTS TO NON-U.S. HOLDERS BECAUSE OF WITHHOLDING REQUIREMENTS
In the event that any U.S. taxes, duties or other governmental charges are
required to be deducted or withheld from any payments to non-U.S. holders of the
Series A Preferred Securities, neither Protective Life nor PLC Capital would be
required to pay any additional amounts to such holders and, therefore, any such
taxes, duties or charges would reduce the amounts received by such holders.
S-7
<PAGE>
CAPITALIZATION OF PROTECTIVE LIFE
The following table sets forth the unaudited summary capitalization of
Protective Life and its consolidated subsidiaries at December 31, 1993 and as
adjusted to give effect to the sale of the Series A Preferred Securities offered
hereby and the application of the proceeds therefrom as described under "Use of
Proceeds" herein. 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.
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1993
-------------------------
ACTUAL AS ADJUSTED
----------- ------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt
Current portion of long-term debt.................................................... $ 9,520 $
----------- ------------
Total short-term debt.............................................................. 9,520
----------- ------------
----------- ------------
Long-term debt
Notes payable to banks............................................................... 137,500
Mortgage and other notes payable less current portion................................ 98
----------- ------------
Total long-term debt............................................................... 137,598
Series A Preferred Securities of PLC Capital (minority interest in consolidated
subsidiary)........................................................................... --
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)......................................................................... 360,733 360,733
----------- ------------
Total stockholders' equity......................................................... 360,733 360,733
----------- ------------
Total capitalization............................................................. $ 498,331 $
----------- ------------
----------- ------------
</TABLE>
USE OF PROCEEDS
The proceeds from the sale of the Series A Preferred Securities (together
with capital contributed in respect of Common Securities) will be loaned to
Protective Life in exchange for Series A Subordinated Debentures. Protective
Life will use the net proceeds of such loans (after paying commissions to the
underwriters and other offering expenses) to repay bank borrowings under a
variable rate term note and a three year revolving line of credit bearing
interest at rates ranging from 4.0% to 4.4% at December 31, 1993.
S-8
<PAGE>
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 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.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------------
1993 1992 1991 1990 1989
--------- --------- --------- --------- ---------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Premiums and Policy Fees..................... $ 370,758 $ 323,136 $ 273,975 $ 248,448 $ 236,830
Net Investment Income........................ 362,130 284,069 233,502 136,995 82,453
Realized Investment Gains (Losses)........... 5,054 (14) (3,085) (3,154) 209
Other Income................................. 21,695 18,835 11,556 8,197 5,231
--------- --------- --------- --------- ---------
Total Revenues............................... 759,637 626,026 515,948 390,486 324,723
Benefits and Expenses........................ 674,593 566,079 464,245 350,204 292,437
--------- --------- --------- --------- ---------
Income Before Income Tax..................... 85,044 59,947 51,703 40,282 32,286
Net Income................................... 56,550(1) 41,420(2) 35,789 28,133 21,793
PRE-TAX INCOME BY BUSINESS SEGMENT
Agency....................................... 20,064(3) 12,985 12,087 9,877 3,703
Group........................................ 10,394 7,731 8,146 6,193 6,059
Financial Institutions....................... 8,196 5,411 4,447 3,120 2,964
Investment Products.......................... 2,931(3) 4,601 391 (1,351) (1,423)
Guaranteed Investment Contracts.............. 25,405 14,533 9,933(4) 2,919(4) (289)
Acquisitions................................. 29,845(3) 20,031 23,494 17,659 17,736
Corporate and Other.......................... (13,667)(3),(4) (3,896)(4) (4,110)(4) 3,624 3,327
Unallocated and Realized Investment Gains.... 1,876 (1,449) (2,685) (1,759) 209
--------- --------- --------- --------- ---------
Total Pre-tax Income (5)..................... 85,044 59,947 51,703 40,282 32,286
BALANCE SHEET DATA
Invested Assets:
Fixed Maturities........................... 3,051,292(6) 2,185,015 1,541,991 1,035,176 421,165
Equity Securities.......................... 40,596 26,588 31,235 23,222 20,657
Mortgage Loans on Real Estate.............. 1,407,744 1,178,164 985,159 666,150 388,913
Investment Real Estate..................... 22,061 17,020 22,240 16,713 10,651
Policy Loans............................... 141,135 117,873 120,527 127,253 107,594
Other Long-term Investments................ 20,191 19,618 29,259 34,676 20,527
Short-term Investments..................... 83,692 52,792 65,344 126,046 36,412
--------- --------- --------- --------- ---------
Total Invested Assets........................ 4,766,711 3,597,070 2,795,755 2,029,236 1,005,919
Total Assets................................. 5,316,005 4,006,667 3,120,290 2,331,197 1,232,280
Total Debt................................... 147,118 88,248 57,579 81,145 27,831
Total Liabilities............................ 4,955,272 3,725,267 2,868,545 2,108,871 1,020,611
Stockholders' Equity......................... 360,733(6) 281,400 251,745 222,326 211,669
PER SHARE DATA
Net Income................................... 4.13(1) 3.03(2) 2.62 2.07 1.58
Stockholders' Equity......................... 26.34(6) 20.56 18.44 16.29 15.50
STATUTORY FINANCIAL DATA (7)
Net Income................................... 53,138 32,426 35,196 25,335 20,483
Total Capital and Surplus.................... $ 265,075 $ 208,476 $ 189,473 $ 167,325 $ 150,636
</TABLE>
- ------------------------------
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%.
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. For the ratio of consolidated earnings to fixed charges for each of the five
years ended as of December 31, 1993, see "Ratio of Consolidated Earnings to
Fixed Charges" in the accompanying Prospectus.
6. Reflects the adoption of SFAS No. 115, "Accounting For Certain Investments
in Debt and Equity Securities." The effect of adopting SFAS No. 115 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.
7. 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 expense 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.
S-9
<PAGE>
TERMS OF THE SERIES A PREFERRED SECURITIES
GENERAL
Preferred Securities of PLC Capital may be issued from time to time in one
or more series, as described in the accompanying Prospectus, with such dividend
rights, liquidation preferences, redemption or exchange provisions, voting
rights and other rights, powers and duties as are established by the L.L.C.
Agreement of PLC Capital and a written action (the "Action") taken, or to be
taken, by the Managing Member to amend and supplement the L.L.C. Agreement
(which Actions, when taken, constitute an amendment and supplement to, and
become a part of, the L.L.C. Agreement). The Series A Preferred Securities
constitute one such series of Preferred Securities of PLC Capital. The following
is a summary of certain terms of the Series A Preferred Securities. The summary
set forth below addresses the material terms of the Series A Preferred
Securities but does not purport to be complete and is subject to, and qualified
in its entirety by reference to, the text of the L.L.C. Agreement (including the
Action establishing the rights, powers and duties relating to the Series A
Preferred Securities, a copy of which Action will have been filed with the
Securities and Exchange Commission (the "Commission") at or prior to the time of
the sales of the Series A Preferred Securities).
DIVIDENDS
Cumulative dividends on the Series A Preferred Securities will accumulate at
a rate per annum of % on the liquidation preference thereof (or $ per
Series A Preferred Security per annum) from the date of original issuance
thereof and will be payable monthly in arrears on the last day of each calendar
month of each year, commencing May , 1994, when, as and if declared by the
Managing Member to holders of record on the record date therefor. Payment of
dividends is limited to the amount of funds held by PLC Capital and legally
available therefor. See "Description of the Series A Subordinated Debentures".
Dividends will be computed on the basis of twelve 30-day months and a 360-day
year and, for any dividend period shorter than a full calendar month, will be
computed on the basis of the actual number of calendar days elapsed in such
period.
Dividends declared on the Series A Preferred Securities will be payable to
the record holders thereof as they appear on the register for the Series A
Preferred Securities on the relevant record dates, which will be one Business
Day prior to the relevant payment dates. Subject to any applicable fiscal or
other laws and regulations, each such payment will be made as described under
"Book-Entry-Only Issuance; The Depository Trust Company" below. In the event
that any date on which dividends are payable on the Series A Preferred
Securities is not a day on which banks in The City of New York are open for
business (a "Business Day"), then payment of the dividend payable on such date
may be made on the next succeeding Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date.
Under the L.L.C. Agreement, dividends on the Series A Preferred Securities
must be declared by the Managing Member in any calendar year or portion thereof
to the extent that the Managing Member reasonably anticipates that at the time
of payment it will have, and must be paid by PLC Capital to the extent that at
the time of proposed payment it has, (x) funds legally available for the payment
of such dividends and (y) cash on hand sufficient to permit such payment. It is
anticipated that such funds will be derived from payments by Protective Life of
interest on the Series A Subordinated Debentures.
Under the terms of the Series A Subordinated Debentures, so long as
Protective Life is not in default in the payment of interest on the Series A
Subordinated Debentures, Protective Life shall have the right at any time to
extend the interest payment period to the next interest payment date by a period
(not to exceed 60 months from the last date on which interest was paid in full)
at the end of which Protective Life shall pay all interest then accrued and
unpaid (together with interest thereon at the rate specified for the Series A
Subordinated Debentures to the extent permitted by applicable law). During any
such extended interest period, or at any time during which there is an uncured
Default or Event of Default (each as hereinafter defined) under the Series A
Subordinated Debentures, Protective Life shall not pay any
S-10
<PAGE>
dividends on, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its shares of capital stock or make any guarantee payments
with respect to the foregoing (other than (a) redemptions or purchases pursuant
to Protective Life's Share Purchase Rights Plan described under "Description of
Capital Stock of Protective Life -- Junior Preferred Stock" in the Prospectus,
or any successor to such Plan, and (b) payments under any guarantee of the
Series A Preferred Securities or other Preferred Securities ranking PARI PASSU
with the Series A Preferred Securities). Protective Life is required to give PLC
Capital not less than five Business Days' prior notice of its selection of such
extended interest payment period. See "Description of the Series A Subordinated
Debentures."
If dividends can be paid only in part on the Series A Preferred Securities
in any calendar year or portion thereof as a result of the lack of sufficient
funds legally available for the payment of dividends, then such partial
dividends shall be paid on the respective dividend payment dates on a pro rata
basis to holders of such Series A Preferred Securities. If any dividends on the
Series A Preferred Securities are not paid in full on any dividend payment date,
additional dividends will accumulate on any accumulated and unpaid dividends at
the dividend rate for the Series A Preferred Securities specified above.
Except as described herein, holders of the Series A Preferred Securities
will have no other right to participate or share in the profits or assets of PLC
Capital.
CERTAIN RESTRICTIONS ON PLC CAPITAL
If dividends have not been paid in full on the Series A Preferred
Securities, PLC Capital shall not:
(i) pay, or declare and set aside for payment, any dividends on any
other Preferred Securities ranking PARI PASSU with the Series A Preferred
Securities as regards participation in profits of PLC Capital ("Dividend
Parity Securities"), unless such dividends are paid or set aside for payment
on the Dividend Parity Securities and the Series A Preferred Securities on a
pro rata basis on the date such dividends are paid, so that
(x) (A) the aggregate amount of dividends paid on the Series A
Preferred Securities bears to (B) the aggregate amount of dividends paid
on such Dividend Parity Securities the same ratio as
(y) (A) the aggregate of all accumulated and unpaid dividends in
respect of the Series A Preferred Securities bears to (B) the aggregate
of all accumulated and unpaid dividends in respect of such Dividend
Parity Securities;
(ii) pay, or declare and set aside for payment, any dividends on any
Common Securities or limited liability company interests of PLC Capital
ranking junior to the Series A Preferred Securities as to dividends
("Dividend Junior Securities"); or
(iii) redeem, purchase or otherwise acquire any Dividend Parity
Securities or Dividend Junior Securities;
until, in each case, such time as all accumulated and unpaid dividends (whether
or not declared) on the Series A Preferred Securities shall have been paid in
full for all dividend periods terminating on or prior to, in the case of clauses
(i) and (ii), such payment, and in the case of clause (iii), the date of such
redemption, purchase or acquisition. As of the date of this Prospectus
Supplement, there are no Dividend Parity Securities outstanding.
PLC Capital may not engage in any business or activity other than issuing
its Common Securities, the Series A Preferred Securities and other series of
Preferred Securities having terms generally consistent with those of the Series
A Preferred Securities (other than dividend rate, and other than changes that
would not adversely affect the ability of PLC Capital to make full and timely
dividend payments or payments upon liquidation to the holders of the Series A
Preferred Securities), lending the proceeds thereof to Protective Life in return
for Subordinated Debentures in an aggregate principal amount equal to the amount
of such loan, bearing interest at a rate at least equal to the dividend rate on
Preferred Securities of such series and otherwise having terms generally
consistent with those of the Series A
S-11
<PAGE>
Subordinated Debentures (other than changes that would not adversely affect the
ability of PLC Capital to make full and timely dividend payments or payments
upon liquidation to the holders of the Series A Preferred Securities), redeeming
its Preferred Securities in accordance with the terms thereof and engaging in
activities incidental or conducive to the foregoing. PLC Capital may not
consolidate or merge with, or convey, transfer or lease its properties and
assets substantially as an entirety to, any corporation or other body.
Notwithstanding the foregoing, PLC Capital may, without the consent of the
holders of any series of Preferred Securities, consolidate or merge with or into
any Delaware limited liability company or "other business entity" (within the
meaning of the Delaware Limited Liability Company Act) formed under the laws of
any state of the United States; PROVIDED that (i) such successor entity
expressly assumes all of the obligations of PLC Capital under each series of
Preferred Securities then outstanding, (ii) Protective Life expressly
acknowledges such successor as the holder of the Subordinated Debentures
pertaining to each series of Preferred Securities then outstanding, (iii) such
merger or consolidation does not cause any series of Preferred Securities then
outstanding to be delisted by any national securities exchange or other
organization on which such Preferred Securities are then listed, (iv) such
merger or consolidation does not cause any series of Preferred Securities then
outstanding to be downgraded by any "nationally recognized statistical rating
organization" (as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Securities Act), (v) such merger or consolidation does not
adversely affect the powers, preferences and other special rights of holders of
any series of Preferred Securities then outstanding and (vi) prior to such
merger or consolidation Protective Life has received an opinion of nationally
recognized independent counsel experienced in such matters to the effect that
(w) holders of any series of Preferred Securities then outstanding will not
recognize any gain or loss for federal income tax purposes as a result of such
merger or consolidation, (x) such successor entity will be treated as a
partnership for federal income tax purposes and such merger or consolidation
will not otherwise cause PLC Capital to be subject to more than a DE MINIMIS
amount of other taxes, duties or other governmental charges, (y) following such
merger or consolidation Protective Life and such successor entity will be in
compliance with the Investment Company Act of 1940, as amended (the "1940 Act"),
without registering thereunder as an investment company and (z) such merger or
consolidation will not adversely affect the limited liability of holders of any
series of Preferred Securities then outstanding.
The Managing Member is authorized to conduct its affairs and to operate PLC
Capital in such a way that PLC Capital would not be deemed to be an "investment
company" required to be registered under the 1940 Act or taxed as a corporation
for federal income tax purposes and so that any loans made by PLC Capital to
Protective Life will be treated as indebtedness for federal income tax purposes.
In this connection, the Managing Member is (a) authorized to take any action
that (i) is not inconsistent with applicable law, the Certificate of Formation
of PLC Capital and the L.L.C. Agreement, (ii) does not adversely affect the
holders of Series A Preferred Securities and (iii) the Managing Member
determines in its sole discretion to be necessary or desirable for such purposes
and (b) instructed not to take affirmative actions, other than as contemplated
by the L.L.C. Agreement, that would cause PLC Capital to be deemed such an
"investment company" or taxed as a corporation for federal income tax purposes
or would cause any such loans not to be treated as indebtedness for federal
income tax purposes.
REDEMPTION
MANDATORY REDEMPTION UPON REPAYMENT OF SERIES A SUBORDINATED DEBENTURES AT
MATURITY
The proceeds from any repayment at maturity or permitted prepayment of any
Series A Subordinated Debentures (or any new Subordinated Debentures replacing
the Series A Subordinated Debentures as contemplated by the proviso to this
sentence) shall be applied to redeem the Series A Preferred Securities for cash
at the Redemption Price, PROVIDED that all or any portion of the principal
amount of Series A Subordinated Debentures repaid by Protective Life at maturity
may be reloaned to Protective Life, and not used for such redemption, if such
new loan is evidenced by Subordinated Debentures and, at the time of the
issuance of the new Subordinated Debentures that will evidence such new loan,
and as determined in the judgment of the Managing Member and PLC Capital's
financial advisor, selected by the Managing Member and who shall not be
affiliated with the Managing Member and shall be among
S-12
<PAGE>
the 30 largest investment banking firms, measured by total capital, in the
United States at the time, (i) Protective Life is not the subject of a pending
case under the United States Bankruptcy Code, (ii) Protective Life is not in
default on any Subordinated Debentures, (iii) Protective Life has timely made
all required monthly payments of interest on all Subordinated Debentures for the
immediately preceding 18 months, (iv) PLC Capital is not in arrearage on
payments of dividends on any Preferred Securities, (v) Protective Life is
expected to be able to make timely payment of principal and interest on such new
loan, (vi) such new loan is being made on terms, and under circumstances, that
are no less favorable to PLC Capital than those that a lender would require for
a similar loan to an unrelated party, (vii) such new loan is being made at a
rate of interest at least equal to or greater than the interest rate on the
Series A Subordinated Debentures, (viii) such new loan is being made for a fixed
term that is consistent with market circumstances and Protective Life's
financial condition, (ix) the senior unsecured long-term debt of Protective Life
is rated not less than BBB-(or the equivalent) by Standard & Poor's Corporation
or Baa3 (or the equivalent) by Moody's Investors Services, Inc. (or if either of
such rating organizations is not then rating Protective Life's senior unsecured
long-term debt, the equivalent of such rating by any other "nationally
recognized statistical rating organization," as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act) and any
subordinated long-term debt of Protective Life or, if there is no such debt then
outstanding, the Series A Preferred Securities of such series, are rated not
less than BBB-(or the equivalent) by Standard & Poor's Corporation or Baa3 (or
the equivalent) by Moody's Investors Service, Inc. or the equivalent of either
such rating by any other "nationally recognized statistical rating
organization", (x) the Subordinated Debentures evidencing such new loan will not
be convertible or exchangeable into any equity interest of or in Protective Life
or any of its affiliates, (xi) such new loan shall not pay any contingent
interest or other interest determined by reference to, or otherwise participate
in, the earnings or profits of Protective Life or any of its affiliates, (xii)
the interest payable on such new loan will not exceed 175% of the dividend rate
on the Series A Preferred Securities, and (xiii) in any event, such new loan
shall have a final maturity date that is before the 50th anniversary of the
original issuance of the Series A Preferred Securities. If, at the maturity of
the Series A Subordinated Debentures, an amount less than the entire principal
amount of the Series A Subordinated Debentures is reloaned to Protective Life,
the amount of such principal not so reloaned shall be used to effect a partial
redemption of the Series A Preferred Securities, provided that, if a partial
redemption would result in a delisting of the Series A Preferred Securities, no
amount of principal may be reloaned to Protective Life, and the Series A
Preferred Securities shall be redeemed in whole. In the event that fewer than
all the outstanding Series A Preferred Securities are to be redeemed, the Series
A Preferred Securities to be redeemed will be selected as described under
"Book-Entry-Only Issuance; The Depository Trust Company" below.
OPTIONAL REDEMPTION
The Series A Preferred Securities are redeemable for cash, at the option of
PLC Capital, in whole or in part, at any time and from time to time, on or after
, 1999, upon not less than 30 nor more than 60 days' notice to the holders
of the Series A Preferred Securities, at the Redemption Price. In the event that
fewer than all the outstanding Series A Preferred Securities are to be so
redeemed, the Series A Preferred Securities to be redeemed will be selected as
described under "Book-Entry-Only Issuance; The Depository Trust Company" below.
PLC Capital will not redeem fewer than all the outstanding Series A Preferred
Securities unless all accumulated and unpaid dividends have been paid on all
Series A Preferred Securities for all monthly dividend periods terminating on or
prior to the date of redemption. In addition, if a partial redemption would
result in a delisting of the Series A Preferred Securities, PLC Capital may only
redeem the Series A Preferred Securities in whole.
At any time after the issuance of the Series A Preferred Securities, at the
option of PLC Capital the Series A Preferred Securities may be redeemed, in
whole (but not in part), upon not less than 30 nor more than 60 days' notice
given within 180 days after the applicable change in U.S. law or regulation or
written change in interpretation of U.S. law or regulation referred to below,
for cash at the Redemption Price or in exchange for Series A Subordinated
Debentures having, at the time of exchange, (a) an aggregate principal amount
equal to $25 per Series A Preferred Security so exchanged and (b) accrued
S-13
<PAGE>
and unpaid interest equal to any accumulated and unpaid dividends (whether or
not declared) at the date fixed for exchange on the Series A Preferred
Securities so exchanged if PLC Capital or Protective Life shall have obtained an
opinion of nationally recognized independent counsel experienced in such matters
to the effect that, as a result of a change in U.S. law or regulation on or
after , 1994, or a written change in interpretation or application of
U.S. law or regulation, by any legislative body, court or governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination) on or after
such date, PLC Capital may be considered an "investment company" under the 1940
Act (an "Investment Company Act Event").
In addition, at any time after the issuance of the Series A Preferred
Securities upon not less than 30 nor more than 60 days' notice given within 180
days after the applicable change in U.S. law or regulation or written change in
interpretation of U.S. law or regulation referred to below, Protective Life may
cause PLC Capital to redeem the Series A Preferred Securities in exchange for
Series A Subordinated Debentures having, at the time of exchange, (a) an
aggregate principal amount equal to $25 per Series A Preferred Security so
exchanged and (b) accrued and unpaid interest equal to accumulated and unpaid
dividends (whether or not declared) at the date fixed for exchange on the Series
A Preferred Securities so exchanged if Protective Life or PLC Capital shall have
received an opinion (the receipt of such opinion, a "Tax Event") of independent
nationally recognized tax counsel experienced in such matters to the effect
that, as a result of any change in U.S. law or regulation on or after
, 1994, or a written change in interpretation or application of U.S.
law or regulation, by any legislative body, court or governmental agency or
regulatory authority (including the enactment of any legislation and the
publication of any judicial decision or regulatory determination on or after
such date), there is more than an insubstantial increase in the risk that (i)
Protective Life will be precluded from deducting the interest on the Series A
Subordinated Debentures for federal income tax purposes, (ii) PLC Capital is
subject to federal income tax with respect to the interest received on the
Series A Subordinated Debentures or (iii) PLC Capital is subject to more than a
DE MINIMIS amount of other taxes, duties or other governmental charges;
PROVIDED, however, that solely in the case of a Tax Event under clause (iii)
above, PLC Capital may not exchange the Series A Preferred Securities for Series
A Subordinated Debentures unless it shall have obtained an opinion of
independent nationally recognized tax counsel experienced in such matters to the
effect that holders of the Series A Preferred Securities will not recognize gain
or loss for federal income tax purposes as a result of such exchange.
Furthermore, Protective Life shall have the right, upon not less than 30 nor
more than 60 days' notice given within 180 days after the applicable change in
U.S. law or regulation or written change in interpretation of U.S. law or
regulation referred to above, to cause PLC Capital to redeem the Series A
Preferred Securities for cash at the Redemption Price if Protective Life shall
have received an opinion (the receipt of such opinion, also a "Tax Event") of
independent nationally recognized tax counsel experienced in such matters that,
as a result of a change in U.S. law or regulation as described above, there is
more than an insubstantial increase in the risk that Protective Life would be
precluded from deducting the interest on the Series A Subordinated Debentures
for federal income tax purposes even if the Series A Preferred Securities were
exchanged for the Series A Subordinated Debentures as described above.
There can be no assurance that an Investment Company Act Event or a Tax
Event will not occur.
REDEMPTION AND EXCHANGE PROCEDURES
After the date fixed for any exchange of the Series A Subordinated
Debentures for the Series A Preferred Securities, (i) the Series A Preferred
Securities will no longer be deemed to be outstanding, (ii) Depository Trust
Company ("DTC") or its nominee, as the record holder of the Series A Preferred
Securities, will exchange the global certificate or certificates representing
the Series A Preferred Securities for a registered global certificate or
certificates representing the Series A Subordinated Debentures to be delivered
upon such exchange, (iii) any certificates representing Series A Preferred
Securities not held by DTC or its nominee will be deemed to represent Series A
Subordinated Debentures having a principal amount equal to the stated liquidated
preference of such Series A Preferred Securities until such certificates are
presented to PLC Capital or its agent for exchange and (iv) all rights of the
holders of Series A Preferred Securities so exchanged will cease, except the
right of such holders to receive
S-14
<PAGE>
Series A Subordinated Debentures. If the Series A Preferred Securities are
exchanged for Series A Subordinated Debentures, Protective Life has agreed to
use its best efforts to have the Series A Subordinated Debentures listed on the
same exchange, if any, on which the Series A Preferred Securities are listed.
If PLC Capital gives a notice of redemption for cash in respect of the
Series A Preferred Securities, then, by 12:00 noon, New York time, on the
redemption date, PLC Capital will irrevocably deposit with The Depository Trust
Company funds sufficient to pay the Redemption Price, and will give DTC
irrevocable instructions and authority to pay the Redemption Price to the
holders thereof. See "Book-Entry-Only Issuance; The Depository Trust Company."
If such notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of holders of such
Series A Preferred Securities so called for redemption will cease, except the
right of such holders of such securities to receive the Redemption Price, but
without interest, and such securities will cease to be outstanding. In the event
that any date fixed for the redemption of Series A Preferred Securities is not a
Business Day, then payment of the redemption price payable on such date will be
made on the next succeeding Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the redemption price in
respect of Series A Preferred Securities is improperly withheld or refused and
not paid either by PLC Capital or Protective Life pursuant to the Guarantee,
dividends on such securities will continue to accumulate, at the then applicable
rate, from the original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to the foregoing and applicable law (including, without limitation,
U.S. federal securities laws), Protective Life or its subsidiaries may at any
time and from time to time purchase outstanding Series A Preferred Securities of
any series by tender, in the open market or by private agreement.
LIQUIDATION DISTRIBUTION
In the event of any voluntary or involuntary dissolution, liquidation or
winding-up of PLC Capital, before any payment or distribution of the assets of
PLC Capital shall be made to or set apart for the holders of any class or
classes of Membership Securities or any series of Preferred Securities ranking
junior to the Series A Preferred Securities as to distribution of assets upon
dissolution, liquidation or winding-up, the holders of the Series A Preferred
Securities shall be entitled to receive, together with the holders of every
other series of Preferred Securities outstanding, if any, ranking PARI PASSU
with the Series A Preferred Securities as to distribution of assets on
dissolution, liquidation or winding-up of PLC Capital ("Liquidation Parity
Securities"), an amount equal, in the case of the holders of the Series A
Preferred Securities, to the aggregate of the liquidation preference of $25 per
Series A Preferred Security and all accumulated and unpaid dividends (whether or
not declared) to the date of payment (the "Liquidation Distribution"), payable
in cash. If, upon any such dissolution, liquidation or winding up, the
Liquidation Distribution can be paid only in part because PLC Capital has
insufficient assets available to pay in full the aggregate Liquidation
Distribution and the aggregate maximum liquidation distributions on the
Liquidation Parity Securities, then the amounts payable directly by PLC Capital
on the Series A Preferred Securities and on such Liquidation Parity Securities
shall be paid on a pro rata basis, so that
(i) (x) the aggregate amount paid as the liquidation distribution on
all Series A Preferred Securities bears to (y) the aggregate amount paid as
the liquidation distribution on all Liquidation Parity Securities the same
ratio as
(ii) (x) the aggregate Liquidation Distribution on all Series A
Preferred Securities bears to (y) the aggregate maximum liquidation
distributions on all Liquidation Parity Securities.
Pursuant to the L.L.C. Agreement, PLC Capital will automatically dissolve
and be liquidated (i) when the period fixed for the duration of PLC Capital
expires (I.E., December 31, 2094), (ii) upon the death, retirement, resignation,
expulsion, bankruptcy (as defined in Section 18-304 of the Delaware Limited
S-15
<PAGE>
Liability Company Act) or dissolution of a holder of Common Securities or the
occurrence of any other event which terminates the continued membership of a
Common Securities holder in PLC Capital, unless, if there is more than one
Member remaining, the business of PLC Capital is continued by the consent of all
the remaining Members within ninety days following the occurrence of any such
event; (iii) upon the unanimous written consent of the Members; or (iv) upon the
entry of a judicial decree of dissolution under Section 18-802 of the Delaware
Limited Liability Company Act. For purposes of the foregoing, a merger or
consolidation of Protective Life into or with any other entity will not be
deemed a dissolution of Protective Life. Under the L.L.C. Agreement and the
Guarantee, Protective Life will covenant that it will not voluntarily dissolve,
wind up or liquidate PLC Capital, or allow PLC Capital to be dissolved, wound-up
or liquidated, so long as any Preferred Securities are outstanding. See
"Description of the Guarantee -- Certain Covenants of the Guarantor".
If a limited liability company organized under the laws of the State of
Delaware has any publicly traded limited liability company interests and is
treated as a corporation for U.S. federal income tax purposes, then, on
application by or for a member or the manager of such limited liability company,
the Delaware Court of Chancery shall (x) grant such relief as may be appropriate
to cause the limited liability company not to have any publicly traded limited
liability company interests or (y) decree the dissolution of the limited
liability company.
PERSONAL LIABILITY OF HOLDERS OF COMMON SECURITIES
Under the L.L.C. Agreement, Protective Life and a special purpose subsidiary
of Protective Life, in their capacities as holders of Common Securities, will be
liable for, and will pay (as additional capital contributions to PLC Capital),
the debts of and claims against PLC Capital (including tax obligations, but
excluding obligations in respect of the Series A Preferred Securities).
VOTING RIGHTS
Except as provided below and under "Description of the Guarantee --
Amendments and Assignment" and "Description of the Series A Subordinated
Debentures -- Miscellaneous," the holders of the Series A Preferred Securities
will have no voting rights.
If (i) PLC Capital fails to pay dividends in full on the Series A Preferred
Securities (whether or not funds are legally available therefor) for 18 monthly
dividend periods or (ii) Protective Life breaches any of its obligations under
the Series A Subordinated Debentures or any of its obligations under the
Guarantee (as defined in "Description of the Guarantee"), then the holders of
the outstanding Series A Preferred Securities, together with the holders of any
other series of Preferred Securities having the right to vote for the
appointment of a trustee in such event, acting as a single class, will be
entitled, by ordinary resolution passed by the holders of a majority in
liquidation preference (plus all accumulated and unpaid dividends) of such
Preferred Securities present in person or by proxy at a separate general meeting
of such holders convened for such purpose (or by written consent), to appoint
and authorize a trustee to enforce PLC Capital's rights as a creditor in respect
of the Series A Subordinated Debentures, to enforce the limited obligations
undertaken by Protective Life under the Guarantee and to declare and pay
dividends to the extent that funds are held by PLC Capital and legally available
therefor. For a description of rights and obligations under the Series A
Subordinated Debentures, including the right of Protective Life to extend the
period to the next interest payment date to up to 60 months (even if a trustee
has been appointed), see "Description of the Series A Subordinated Debentures."
For purposes of determining whether PLC Capital has failed to pay dividends in
full for 18 monthly dividend periods, dividends shall be deemed to remain in
arrears, notwithstanding any payments in respect thereof, until full cumulative
dividends have been or contemporaneously are declared and paid with respect to
all monthly dividend periods terminating on or prior to the date of payment of
such full cumulative dividends. Not later than 30 days after such entitlement
arises, the Managing Member will convene a separate general meeting for the
above purpose. If the Managing Member fails to convene such meeting within such
30-day period, the holders of 10% in aggregate liquidation preference (plus all
accumulated and unpaid dividends) of the outstanding Series A Preferred
Securities and such other Preferred Securities will be entitled to
S-16
<PAGE>
convene such separate general meeting. The provisions of the L.L.C. Agreement
relating to the convening and conduct of the general meetings of Members (as
defined in the L.L.C. Agreement) will apply with respect to any such separate
general meeting. Any trustee so appointed shall vacate office, subject to the
terms of such other Preferred Securities, if PLC Capital (or Protective Life
pursuant to the Guarantee) shall have paid in full all accumulated and unpaid
dividends on the Series A Preferred Securities (if the event that gave rise to
such appointment was clause (i) of this paragraph) or such breach by Protective
Life shall have been cured (if the event that gave rise to such appointment was
clause (ii) of this paragraph).
If any resolution is proposed for adoption by the Members of PLC Capital
providing for, or the Managing Member proposes to take, any action that will (w)
amend or alter the provisions of the L.L.C. Agreement (including the Action
creating the Series A Preferred Securities) so as to adversely affect any rights
or powers of the Series A Preferred Securities or the holders thereof or result
in the authorization or issuance of any limited liability company interest in
PLC Capital ranking, as to dividends or upon dissolution, liquidation or
winding-up, senior to the Series A Preferred Securities, (x) result in the
dissolution, liquidation or winding-up of PLC Capital, (y) waive any rights of
PLC Capital under the Series A Subordinated Debentures or allow the Series A
Subordinated Debentures to be repurchased or prepaid prior to , 1999
(unless there is an Event of Default thereunder and except in connection with a
redemption occurring as a result of a Tax Event or an Investment Company Act
Event) or (z) modify (i) Section 2.6 of the L.L.C. Agreement which limits the
business and activity in which PLC Capital may engage, (ii) Section 7.1 of the
L.L.C. Agreement which absolutely prohibits transfers of Common Securities,
(iii) Section 3.3 of the L.L.C. Agreement which requires the holders of the
Common Securities to contribute amounts to PLC Capital such that the Common
Securities represent at all times not less than 21% of all interests in the
capital, income, gain, loss, deduction or credit of PLC Capital or (iv) Section
6.2 of the L.L.C. Agreement pursuant to which the holders of the Common
Securities agree to be personally liable for and to pay all debts of and claims
against PLC Capital (excluding obligations in respect of the Preferred
Securities), then the holders of outstanding Series A Preferred Securities (and,
in the case of a resolution described in clause (w) above that would, to a like
extent, adversely affect the rights or powers of any Dividend Parity Securities
or any Liquidation Parity Securities, the holders of such Dividend Parity
Securities or such Liquidation Parity Securities, as the case may be, or, in the
case of any resolution described in clause (x) or (z) above, all Liquidation
Parity Securities) will be entitled to vote together as a class on such
resolution (but not on any other resolution) (i) at a separate meeting of such
holders, (ii) at the general meeting of Members called for the purpose of
adopting such resolution or (iii) without a meeting but in writing, and such
resolution shall not be effective except with the approval, in the case of
clauses (i) and (ii), of the holders of 66 2/3% in aggregate liquidation
preference (plus all accumulated and unpaid dividends) of such outstanding
securities present in person or by proxy at a meeting at which 66 2/3% in
aggregate liquidation preference (plus all accumulated and unpaid dividends) of
such securities are so present or, in the case of clause (iii), by the holders
of 66 2/3% in aggregate liquidation preference (plus all accumulated and unpaid
dividends) of such securities; PROVIDED, however, that no such approval shall be
required under clauses (w) and (x) if the dissolution, liquidation and
winding-up of PLC Capital is proposed or initiated upon the initiation of
proceedings, or after proceedings have been initiated, for the dissolution,
liquidation or winding-up of Protective Life.
PLC Capital will cause a notice of any meeting at which holders of the
Series A Preferred Securities are entitled to vote, or of any matter upon which
action by written consent is to be taken, to be mailed to each holder of record
of the Series A Preferred Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such holders are entitled to vote or of such matter on which
written consent is sought and (iii) instructions for the delivery of proxies or
written consents.
Notwithstanding that holders of Series A Preferred Securities are entitled
to vote under any of the circumstances described above, any of the Series A
Preferred Securities and such other Preferred Securities entitled to vote with
such Series A Preferred Securities as a single class outstanding at such
S-17
<PAGE>
time that are owned by Protective Life or any Affiliate (as defined in the
L.L.C. Agreement), either directly or indirectly, shall not be entitled to vote
and shall, for the purposes of such vote, be treated as if they were not
outstanding.
No vote of the holders of the Series A Preferred Securities will be required
for PLC Capital to redeem and cancel Series A Preferred Securities in accordance
with the L.L.C. Agreement (including the Actions).
BOOK-ENTRY-ONLY ISSUANCE; THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC"), New York, New York will act as
securities depository for the Series A Preferred Securities. The information in
this section concerning DTC and DTC's book-entry system is based upon
information obtained from DTC.
The Series A Preferred Securities will be issued as fully-registered
securities registered in the name of Cede & Co. (DTC's nominee) in substantially
the form attached as an exhibit to the Registration Statement of which this
Prospectus Supplement forms a part. One or more fully-registered Series A
Preferred Security certificates will be issued, representing in the aggregate
the total number of Series A Preferred Securities, and will be deposited with
DTC.
DTC 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 Section 17A of the Exchange Act. DTC
holds securities that its participants ("Participants") deposit with DTC. DTC
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"). DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, Inc., the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC 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 DTC and its
participants are on file with the Securities and Exchange Commission.
Purchases of Series A Preferred Securities under the DTC system must be made
by or through Direct Participants, who will receive a credit for the Series A
Preferred Securities on DTC's records. The ownership interest of each actual
purchaser of each Series A Preferred Security (a "Beneficial Owner") is in turn
to be recorded on the Direct and Indirect Participants' records. Beneficial
Owners will not receive written confirmation from DTC of their purchase, but
Beneficial Owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the Direct or Indirect Participant through which the Beneficial Owner
purchased Series A Preferred Securities. Transfers of ownership interests in the
Series A Preferred Securities are to be accomplished by entries made on the
books of Participants acting on behalf of Beneficial Owners. Beneficial Owners
will not receive certificates representing their ownership interests in Series A
Preferred Securities, except in the event that use of the book-entry system for
the Series A Preferred Securities is discontinued.
To facilitate subsequent transfers, all Series A Preferred Securities
deposited by Participants with DTC are registered in the name of DTC's nominee,
Cede & Co. The deposit of Series A Preferred Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial ownership.
DTC has no knowledge of the actual Beneficial Owners of the Series A Preferred
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Series A Preferred Securities are credited, which may or
may not be the Beneficial Owners. The Participants will remain responsible for
keeping account of their holdings on behalf of their customers.
S-18
<PAGE>
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Series A Preferred Securities are being redeemed, DTC's practice is to determine
by lot the amount of the interest of each Direct Participant in such series to
be redeemed.
Although voting with respect to the Series A Preferred Securities is
limited, in those cases where a vote is required, neither DTC nor Cede & Co.
will consent or vote with respect to Series A Preferred Securities. Under its
usual procedures, DTC mails an Omnibus Proxy to PLC Capital as soon as possible
after the record date. The Omnibus Proxy assigns Cede & Co.'s consent or voting
rights to those Direct Participants to whose accounts the Series A Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy).
Dividend payments on the Series A Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payable date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payable date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participant and not of DTC or PLC Capital, subject to any statutory
regulatory requirements as may be in effect from time to time. Payment of
dividends to DTC is the responsibility of PLC Capital, disbursement of such
payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
DTC may discontinue providing its services as securities depository with
respect to the Series A Preferred Securities at any time by giving reasonable
notice to PLC Capital. Under such circumstances, in the event that a successor
securities depository is not obtained, Series A Preferred Security certificates
are required to be printed and delivered.
REGISTRAR, TRANSFER AGENT AND PAYING AGENT
AmSouth Bank NA will act as registrar, transfer agent and paying agent for
the Series A Preferred Securities (the "Paying Agent").
Registration of transfers of Series A Preferred Securities will be effected
without charge by or on behalf of PLC Capital, but upon payment (with the giving
of such indemnity as PLC Capital or Protective Life may require) in respect of
any tax or other governmental charges which may be imposed in relation to it.
PLC Capital will not be required to register or cause to be registered the
transfer of Series A Preferred Securities after such Series A Preferred
Securities have been called for redemption.
MISCELLANEOUS
Except as described in this Prospectus Supplement, PLC Capital is not
subject to any mandatory redemption or sinking fund provisions with respect to
the Series A Preferred Securities. Holders of Series A Preferred Securities have
no preemptive rights.
The Common Securities are owned by the Managing Member and one of its
wholly-owned subsidiaries. The Common Securities are not transferable. The
Managing Member and the other holder of the Common Securities are required,
pursuant to the terms of the L.L.C. Agreement, to contribute to PLC Capital
amounts such that the Common Securities at all times represent at least 21% of
all interests in the capital, income, gain, loss, deduction and credit of PLC
Capital.
S-19
<PAGE>
DESCRIPTION OF THE GUARANTEE
Set forth below is condensed information concerning the Guarantee which will
be executed and delivered by Protective Life for the benefit of the holders from
time to time of the Series A Preferred Securities. The summary set forth below
addresses the material terms of the Guarantee but does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
text of the Guarantee Agreement pursuant to which the Guarantee will be made, a
copy of which has been filed as an exhibit to the Registration Statement of
which this Prospectus Supplement is part.
GENERAL
Protective Life will irrevocably and unconditionally agree, to the extent
set forth herein, to pay the Guarantee Payments (defined below) (except to the
extent paid by PLC Capital), as and when due, regardless of any defense, right
of set-off or counterclaim which PLC Capital may have or assert. The following
payments to the extent not paid by PLC Capital (the "Guarantee Payments") will
be subject to the Guarantee (without duplication): (i) any accumulated and
unpaid dividends that have been theretofore declared on the Series A Preferred
Securities 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 Series A Preferred Securities 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 and all accrued 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 Series A Preferred Securities. In
addition, Protective Life will unconditionally and irrevocably guarantee, in the
event of any exchange by PLC Capital of Series A Preferred Securities for Series
A Subordinated Debentures as described herein, the delivery of a registered
global certificate or certificates representing the proper amount of Series A
Subordinated Debentures to DTC or such other entity or person as shall at the
date of exchange be acting as securities depository for the Series A Preferred
Securities. 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 Series A Preferred Securities or by causing PLC Capital to pay such
amounts to such holders.
The Guarantee is not a guarantee that any particular dividend or amount on
dissolution, liquidation 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 legally available therefor, of the redemption price payable, out of
funds held by PLC Capital and legally available therefor, with regard to any
Series A Preferred Securities called for redemption by PLC Capital and of
amounts, if any, available for distribution to the holders of Series A Preferred
Securities upon dissolution, liquidation or winding-up after payment to all
creditors of PLC Capital of all amounts due to them.
CERTAIN COVENANTS OF PROTECTIVE LIFE
In the Guarantee, Protective Life will covenant that, so long as any Series
A Preferred Securities remain outstanding, neither Protective Life, nor any
majority-owned subsidiary of Protective Life, shall declare or pay any dividend
on, or redeem, purchase, acquire or make a liquidation payment with respect to,
any of its capital stock or make any guarantee payments with respect to the
foregoing (other than (i) payments under the Guarantee or any other guarantee of
any other series of Preferred Securities ranking PARI PASSU with the Series A
Preferred Securities, (ii) dividends or guarantee payments to Protective Life or
(iii) redemptions or purchases pursuant to Protective Life's Share Purchase
Rights Plan described under "Description of Capital Stock of Protective Life --
Junior Preferred Stock" in the Prospectus, or any successor to such Plan) if at
such time (x) Protective Life shall have extended the period to the next
interest payment date under the Series A Subordinated Debentures, or shall be in
default with respect to its payment or other obligations under the Guarantee,
(y) there shall have occurred any Event of Default or event that, with the
giving of notice or the lapse of time or both, would constitute an Event of
Default under the Subordinated Indenture or (z) there shall exist any arrearage
in the payment of accumulated dividends on the Series A Preferred Securities.
Pursuant to the Guarantee, Protective Life will agree that, so long as any
Series A Preferred Securities are outstanding, (i) it shall maintain ownership,
directly or indirectly, of 100% of the Common
S-20
<PAGE>
Securities, (ii) it shall not voluntarily dissolve, liquidate or wind-up PLC
Capital, or permit PLC Capital to be dissolved, liquidated or wound-up, and
(iii) it shall timely perform all of its respective duties under the L.L.C.
Agreement.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not adversely affect the rights
of holders of Series A Preferred Securities (in which case no vote will be
required), the Guarantee may be changed only with the prior approval of the
holders of not less than 66 2/3% in liquidation preference of the Series A
Preferred Securities by agreement in writing or present in person or by proxy at
a separate general meeting and voting as a single class. All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of Protective Life and shall inure to
the benefit of the holders of the Series A Preferred Securities. The quorum for
any such meeting and the determination of the Series A Preferred Securities
entitled to vote are set forth under "Description of the Series A Preferred
Securities -- Voting Rights" above.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price (including all accumulated arrears and accruals
of unpaid dividends) of all Series A Preferred Securities, upon full payment of
the amounts payable upon liquidation of PLC Capital or upon exchange of all
Series A Preferred Securities for Series A Subordinated Debentures as described
above. The Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of the Series A Preferred Securities must
restore payment of any sums paid under the Series A Preferred Securities or the
Guarantee.
STATUS OF THE GUARANTEE
The Guarantee will rank PARI PASSU with the Series A Subordinated Debentures
and, accordingly, will be subordinate and junior in right of payment to all
Senior Indebtedness as such term is defined in the Subordinated Indenture. See
"Description of Debt Securities of Protective Life -- Subordination under the
Subordinated Indenture" in the accompanying Prospectus.
The Guarantee will constitute a guarantee of payment and not of collection.
A holder of Series A Preferred Securities may enforce the Guarantee directly
against Protective Life, and Protective Life will waive any right or remedy to
require that any action be brought against PLC Capital or any other person or
entity before proceeding against Protective Life. The Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by PLC Capital and by complete performance of all obligations under the
Guarantee.
GOVERNING LAW
The Guarantee will be governed and construed in accordance with the laws of
the State of New York.
DESCRIPTION OF THE SERIES A SUBORDINATED DEBENTURES
Set forth below is a summary of the terms of the Series A Subordinated
Debentures that will evidence the loans to be made by PLC Capital to Protective
Life of the proceeds of (i) the Series A Preferred Securities and (ii) the
Common Securities and related capital contributions ("Common Securities
Payments"). Series A Subordinated Debentures will be issued under the
subordinated indenture, dated , 1994, between Protective Life and
AmSouth Bank, N.A., as Trustee (the "Subordinated Indenture"). See "Description
of Debt Securities of Protective Life" in the accompanying Prospectus and the
description below for a summary of the material terms of the Subordinated
Indenture. The summary set forth below and the summary of the terms of the
Subordinated Indenture in the accompanying Prospectus together address the
material terms of the Series A Subordinated Debentures and the Subordinated
Indenture but do not purport to be complete and are subject to, and qualified in
their entirety by reference to, the text of the Series A Subordinated Debentures
and the Subordinated Indenture, forms of which have been filed as exhibits to
the Registration Statement of which this Prospectus Supplement forms a part.
S-21
<PAGE>
GENERAL
Pursuant to the Subordinated Indenture, Protective Life will issue Series A
Subordinated Debentures to PLC Capital in an aggregate principal amount of
$ , such amount being the sum of (i) the aggregate stated liquidation
preference of the Series A Preferred Securities issued and sold by PLC Capital
and (ii) the Common Securities Payments. [In the event that the Underwriters'
over-allotment option is exercised, Protective Life will agree to issue
additional Series A Subordinated Debentures to PLC Capital equal to the
aggregate stated liquidation preference of the Series A Preferred Securities so
sold upon such exercise plus related aggregate additional cash contributions to
PLC Capital by the holders of the Common Securities. If the over-allotment
option is exercised in full, the aggregate principal amount of such additional
Series A Subordinated Debentures will equal $ .]
The entire principal amount of the Series A Subordinated Debentures shall
become due and payable (together with any accrued and unpaid interest thereon)
on May , 2024 (the "Maturity Date"), subject to relending under conditions
described under "Terms of the Series A Preferred Securities -- Mandatory
Redemption upon Repayment of Series A Subordinated Debentures at Maturity." Upon
exchange of the Series A Preferred Securities for Series A Subordinated
Debentures, (i) the Series A Subordinated Debentures will no longer be subject
to mandatory prepayment upon the dissolution, winding-up or liquidation of PLC
Capital, (ii) the Series A Subordinated Debentures will not be subject to an
election by Protective Life to exchange Series A Subordinated Debentures for new
debentures or to repay the Series A Subordinated Debentures and re-borrow the
proceeds from such repayment, (iii) Protective Life will use its best efforts to
have the Series A Subordinated Debentures listed on the same exchange on which
the Series A Preferred Securities are listed and (iv) the Subordinated Indenture
or Series A Subordinated Debentures may, thereafter, be modified or amended with
the consent of not less than 66 2/3% in principal amount of the Series A
Subordinated Debentures at the time outstanding, PROVIDED, however, that no such
modification or amendment may, without the consent of the holder of each Series
A Subordinated Debenture affected thereby, (a) extend the stated maturity of the
principal of any Series A Subordinated Debenture, or reduce the principal amount
thereof or reduce the rate or extend the time of payment of interest thereon, or
reduce any amount payable on redemption thereof or change the currency in which
the principal thereof or interest thereon is payable or impair the right to
institute suit for the enforcement of any payment on any Series A Subordinated
Debenture when due or (b) reduce the aforesaid principal amount of Series A
Subordinated Debentures of any series the consent of the holders of which is
required for any such modification.
MANDATORY PREPAYMENT
If PLC Capital redeems Series A Preferred Securities in cash for the
Redemption Price in accordance with the terms thereof, the Series A Subordinated
Debentures will become due and payable in a principal amount equal to the
aggregate stated liquidation preference of the Series A Preferred Securities so
redeemed (together with accrued interest on such principal amount to the date of
redemption). Any payment pursuant to this provision shall be made prior to 12:00
noon, New York time, on the date of such redemption or at such other time on
such earlier date as PLC Capital and Protective Life shall agree.
OPTIONAL PREPAYMENT
Protective Life shall have the right to prepay the Series A Subordinated
Debentures, without premium or penalty, in whole or in part (together with any
accrued but unpaid interest) at any time on or after , 1999.
INTEREST
The Series A Subordinated Debentures shall bear interest at an annual rate
of % from , 1994 until maturity. Such interest shall be payable on
the last day of each calendar month of each year, commencing May , 1994.
Interest will be computed on the basis of twelve 30-day months and a 360-day
year and, for any interest period that is shorter than a full calendar month,
will be calculated on the basis of the actual number of days elapsed in such
period. If any date on which interest is payable on the Series A Subordinated
Debentures is not a Business Day, then payment of the interest
S-22
<PAGE>
due on such date may be made on the next succeeding Business Day (and without
any interest or other payment in respect of any such delay), except that, if
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date; PROVIDED, however, that Protective Life
shall have the right at any time or times during the term of the Series A
Subordinated Debentures, so long as Protective Life is not in default in the
payment of interest on the Series A Subordinated Debentures, to extend the
interest payment period to the next interest payment date by a period (not to
exceed 60 months from the last date on which interest was paid in full) at the
end of which Protective Life shall pay all interest then accrued and unpaid
(together with interest thereon at the rate specified for the Series A
Subordinated Debentures to the extent permitted by applicable law); and PROVIDED
FURTHER that, during any such extended interest period, or at any time during
which there is an uncured Default or Event of Default under the Series A
Subordinated Debentures, Protective Life shall not pay any dividends on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its shares of capital stock or make any guarantee payments with respect to the
foregoing (other than (a) redemptions or purchases pursuant to Protective Life's
Share Purchase Rights Plan described under "Description of Capital Stock of
Protective Life -- Junior Preferred Stock" in the Prospectus, or any successor
to such Plan and (b) payments under any guarantee of the Series A Preferred
Securities or any other series of Preferred Securities ranking PARI PASSU with
the Series A Preferred Securities). Protective Life shall give PLC Capital and
the holders of the Series A Preferred Securities not less than five Business
Days' prior notice of its selection of such extended interest payment period.
METHOD AND DATE OF PAYMENT
Each payment by Protective Life of principal and interest on the Series A
Subordinated Debentures shall be made to PLC Capital in United States Dollars at
such place and to such account as may be designated by PLC Capital.
SET-OFF
Notwithstanding anything to the contrary in the Subordinated Indenture or
the Series A Subordinated Debentures, Protective Life shall have the right to
set-off any payment it is otherwise required to make thereunder with and to the
extent Protective Life has theretofore made, or is concurrently on the date of
such payment making, a payment under the Guarantee.
SUBORDINATION
The Subordinated Indenture will provide that Protective Life and PLC Capital
covenant and agree that each of the Series A Subordinated Debentures is
subordinate and junior in right of payment to all Senior Indebtedness as
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
Series A Subordinated Debentures 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
the Series A Subordinated Debentures. 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. For
a more detailed description of the subordination provisions set forth in the
Subordinated Indenture, see "Description of Debt Securities of Protective Life
- -- Subordination under the Subordinated Indenture" in the accompanying
Prospectus.
S-23
<PAGE>
COVENANTS
In the Series A Subordinated Debentures, Protective Life will agree that, so
long as the Series A Preferred Securities are outstanding, (i) it shall not
declare or pay any dividend on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, or make any
guarantee payments with respect to the foregoing (other than (a) redemptions or
purchases pursuant to Protective Life's Share Purchase Rights Plan described
under "Description of Capital Stock of Protective Life -- Junior Preferred
Stock" in the Prospectus, or any successor to such Plan and (b) payments under
any guarantee of the Series A Preferred Securities or any other series of
Preferred Securities ranking PARI PASSU with the Series A Preferred Securities)
if at such time (x) there shall have occurred any Event of Default or event (a
"Default") that, with the giving of notice or the lapse of time or both, would
constitute an Event of Default or (y) Protective Life shall be in default with
respect to its payment or other obligations under any guarantee of the Series A
Preferred Securities, (ii) it shall maintain ownership, directly or indirectly,
of all of the Common Securities and (iii) it shall timely perform all of its
respective duties under the L.L.C. Agreement.
Protective Life also will agree (i) that its obligations under the Series A
Subordinated Debentures will also be for the benefit of the holders from time to
time of the Series A Preferred Securities and that such holders or a trustee
acting on behalf of such holders will be entitled to enforce the Series A
Subordinated Debentures directly against Protective Life as third party
beneficiaries of Protective Life's obligations thereunder, and (ii) not to
consolidate with or merge into another entity or permit another entity to
consolidate with or merge into it unless (a) at such time no default or Event of
Default has occurred and is continuing, or would occur as a result of such
merger and (b) Protective Life is the survivor of such merger or the entity
formed by or resulting from such merger shall expressly assume payment of the
principal of and premium, if any, and interest on the Series A Subordinated
Debentures.
EVENTS OF DEFAULT
If an Event of Default (as defined in the Subordinated Indenture and
described in the accompanying Prospectus) shall occur and be continuing, PLC
Capital will have the right to declare the principal of and the interest on the
Series A Subordinated Debentures (including any interest subject to an extension
of the interest payment period) and any other amounts payable on the Series A
Subordinated Debentures to be forthwith due and payable, whereupon the Series A
Subordinated Debentures and any other amounts payable in respect of the Series A
Subordinated Debentures under the Series A Subordinated Debentures or the
Subordinated Indenture shall be forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which will be waived by
Protective Life, and PLC Capital will have the right to enforce its other rights
as a defaulted creditor with respect to the Series A Subordinated Debentures,
subject to the subordination provisions thereof. See "Description of Debt
Securities of Protective Life -- Events of Default, Notice and Certain Rights on
Default" in the accompanying Prospectus. Under the terms of the Series A
Preferred Securities, the holders of outstanding Series A Preferred Securities
will have the rights referred to under "Terms of the Series A Preferred
Securities -- Voting Rights", including the right to appoint a trustee, which
trustee shall be authorized to exercise PLC Capital's rights to accelerate the
principal amount of the Series A Subordinated Debentures and to enforce PLC
Capital's other rights under the Series A Subordinated Debentures. Because the
Series A Subordinated Debentures will be for the benefit of the holders of
Series A Preferred Securities, PLC Capital will agree that it will declare
principal of and interest on the Series A Subordinated Debentures due and
payable in the event of an interest payment or covenant Event of Default if, and
only if, so directed by holders of 25% or more of the Series A Preferred
Securities, or by a trustee appointed by such holders as a result of an
arrearage in dividend payments on the Series A Preferred Securities.
MISCELLANEOUS
Protective Life shall have the right at all times to assign any of its
rights or obligations under the Series A Subordinated Debentures to a direct or
indirect wholly-owned subsidiary of Protective Life; PROVIDED, HOWEVER, that, in
the event of any such assignment, Protective Life shall remain jointly and
severally liable for all such obligations. PLC Capital may not assign any of its
rights under the Series A
S-24
<PAGE>
Subordinated Debentures, other than in connection with a merger or consolidation
or sale of assets or exchange permitted under the terms of the Series A
Preferred Securities. Subject to the foregoing, the Series A Subordinated
Debentures shall be binding upon and inure to the benefit of Protective Life and
PLC Capital and their respective successors and assigns. Any assignment by
Protective Life or PLC Capital in contravention of such provisions will be null
and void.
The Series A Subordinated Debentures and the Subordinated Indenture will be
governed by and construed in accordance with the internal laws of the State of
New York.
The Series A Subordinated Debentures may be amended by mutual consent of the
parties in the manner the parties shall agree; PROVIDED, HOWEVER, that, so long
as any of the Series A Preferred Securities remain outstanding, no such
amendment shall be made that adversely affects the holders of the Series A
Preferred Securities, no termination of the Series A Subordinated Debentures
shall occur, and no Event of Default or compliance with any covenant under the
Series A Subordinated Debentures may be waived by PLC Capital, without the prior
approval of the holders of at least 66 2/3% in liquidation preference of all
Series A Preferred Securities then outstanding, in writing or at a duly
constituted meeting of such holders.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of the material U.S. federal income tax
considerations relevant to the purchase, ownership and disposition of the Series
A Preferred Securities by a beneficial owner acquiring Series A Preferred
Securities on their original issue at the original offering price who is (i) an
individual citizen or a resident of the United States, (ii) a corporation or
partnership created or organized in or under the laws of the United States or
any state thereof or the District of Columbia or (iii) an estate or trust
subject to United States federal income taxation without regard to the source of
its income (a "United States Person"). To the extent it relates to matters of
law or legal conclusion, this summary is based upon the opinion of Debevoise &
Plimpton, special counsel to Protective Life and PLC Capital. This summary does
not address potential tax consequences to a purchaser that is not a United
States Person. Neither PLC Capital nor Protective Life is required to pay any
additional amounts with respect to payments of dividends on the Series A
Preferred Securities if any withholding or similar taxes are imposed on any such
dividends; accordingly, any such taxes would reduce the amounts that would be
received by any beneficial owner that is not a United States Person. PROSPECTIVE
PURCHASERS OF THE SERIES A PREFERRED SECURITIES THAT ARE NOT UNITED STATES
PERSONS ARE URGED TO CONSULT THEIR TAX ADVISORS.
This summary does not purport to address all potential tax consequences that
may be applicable to a beneficial owner of a Series A Preferred Security, and is
not intended to be wholly applicable to all categories of investors (including
insurance companies, banks, tax-exempt organizations, dealers in securities and
persons acquiring Series A Preferred Securities as a straddle or hedge or as
part of a "conversion transaction") or persons whose functional currency is not
the United States dollar. This discussion is based upon the United States
Internal Revenue Code of 1986, as amended (the "Code"), Treasury Regulations
(including proposed Treasury Regulations), Internal Revenue Service rulings and
pronouncements and judicial decisions now in effect, all of which are subject to
change at any time. Such changes may be applied retroactively in a manner that
could cause tax consequences to vary substantially from the consequences
described below, possibly adversely affecting a beneficial owner of a Series A
Preferred Security. These authorities are subject to various interpretations and
it is therefore possible that the federal income tax treatment of the Series A
Preferred Securities may differ from the treatment described below.
PROSPECTIVE PURCHASERS OF SERIES A PREFERRED SECURITIES ARE ADVISED TO
CONSULT THEIR OWN TAX ADVISORS AS TO THE FEDERAL TAX CONSEQUENCES OF THE
PURCHASE, OWNERSHIP AND DISPOSITION OF SERIES A PREFERRED SECURITIES, AS WELL AS
THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
S-25
<PAGE>
INCOME FROM SERIES A PREFERRED SECURITIES
PLC Capital will be treated as a partnership for federal income tax
purposes. Each beneficial owner of a Series A Preferred Security (a
"Securityholder") will be required to include in gross income its distributive
share of PLC Capital's net income. PLC Capital anticipates that such income will
generally not exceed dividends received on a Series A Preferred Security, except
in limited circumstances as described under "-- Potential Extension of Payment
Period" and "-- Information Returns." Any amount so included in a
Securityholder's gross income will increase its tax basis in the Series A
Preferred Securities, and the amount of cash dividends to the Securityholder
will reduce its tax basis in the Series A Preferred Securities. No portion of
such income will be eligible for the dividends received deduction.
PLC Capital does not presently intend to make an election under section 754
of the Code. In the event no such election is made, a subsequent purchaser of
Series A Preferred Securities may not be permitted to adjust its taxable income
from PLC Capital to reflect any difference between its purchase price for the
Series A Preferred Securities and PLC Capital's underlying tax basis in its
assets.
SALE OR REDEMPTION OF SERIES A PREFERRED SECURITIES
Gain or loss will be recognized on a sale of Series A Preferred Securities
(including a distribution of cash in redemption of all of a Securityholder's
Series A Preferred Securities) equal to the difference between the amount
realized and the Securityholder's tax basis for the Series A Preferred
Securities sold or so redeemed. Gain or loss recognized by a Securityholder on
the sale or exchange of a Series A Preferred Security held for more than one
year will generally be taxable as long-term capital gain or loss. See "--Market
Discount and Premium" below.
POTENTIAL EXTENSION OF PAYMENT PERIOD
Under the terms of the Series A Subordinated Debentures, Protective Life may
be permitted to extend the interest payment period to up to 60 months. In the
event that Protective Life exercises this right, Protective Life may not, among
other things, declare dividends on any share of its preferred or common stock.
In the event that the payment period is extended, PLC Capital will continue to
accrue income equal to the amount of the interest payment due at the end of the
extended payment period, based on a constant yield method, over the length of
the extended payment period.
Accrued income for any month will be allocated by PLC Capital to
Securityholders of record on the record date for dividends in respect of such
month (whether or not dividends are actually paid). Securityholders of record
during an extended interest payment period should include in gross income
amounts in respect of interest so allocated to them in advance of the receipt of
cash. The tax basis of a Series A Preferred Security will be increased by any
such amounts that are included in income without a receipt of cash, and will be
decreased when such cash is subsequently received from PLC Capital.
EXCHANGE OF SERIES A PREFERRED SECURITIES FOR SERIES A SUBORDINATED DEBENTURES
Upon the occurrence of an Investment Company Act Event or a Tax Event, as
described under "Description of the Series A Preferred Securities -- Optional
Redemption," PLC Capital may distribute the Series A Subordinated Debentures (or
beneficial interests therein) in exchange for, and liquidation of, the Series A
Preferred Securities. If the exchange occurs following a Tax Event that relates
solely to the deductibility by Protective Life of interest payable on the Series
A Subordinated Debentures, such exchange generally would be treated as a
non-taxable exchange to a Securityholder and such Securityholder would have an
aggregate tax basis in the Series A Subordinated Debentures received equal to
such Securityholder's aggregate tax basis in its Series A Preferred Securities.
A Securityholder's holding period for the Series A Subordinated Debentures so
received will include the period for which the Series A Preferred Securities
were held by such Securityholder. If the exchange occurs following an Investment
Company Act Event or a Tax Event that relates to PLC Capital being subject to
federal income tax with respect to interest received on the Series A
Subordinated Debentures, the exchange generally will be taxable to a
Securityholder, who will recognize gain or loss measured by the difference
between
S-26
<PAGE>
such Securityholder's basis in its Series A Preferred Securities and the value
of the Series A Subordinated Debentures received in exchange therefor. In such a
case, the holding period of a Securityholder for the Series A Subordinated
Debentures received in the exchange will not include the period in which the
Series A Preferred Securities were held.
After any exchange of Series A Preferred Securities for Series A
Subordinated Debentures, holders of the Series A Subordinated Debentures
(including those otherwise using a cash basis method of accounting) should
include interest on the Series A Subordinated Debentures in income as it
accrues, based on a constant yield method, before the receipt of payments of
interest, including in circumstances where Protective Life has extended the
interest payment period. See "--Potential Extension of Payment Period". If
issuance costs of the Series A Subordinated Debentures are determined to be
expenses of PLC Capital, the issue price of the Series A Subordinated Debentures
could be treated as being less than the stated principal amount thereof, in
which case the amount of interest that a holder of Series A Subordinated
Debentures would be required to include in income could exceed the amount of
stated interest thereon. Such holder's tax basis in the Series A Subordinated
Debentures will be increased by accrued interest previously included in income
by such holder and reduced by the payment of such interest. Gain or loss will be
recognized on the sale, exchange or retirement of Series A Subordinated
Debentures equal to the difference between the amount realized and such holder's
tax basis in the Series A Subordinated Debentures sold, exchanged or retired.
Gain or loss recognized by a holder on the sale, exchange or retirement of
Series A Subordinated Debentures held for more than one year will generally be
taxable as long-term capital gain or loss. See "--Market Discount and Premium".
MARKET DISCOUNT AND PREMIUM
If a Securityholder receives Series A Subordinated Debentures in exchange
for Series A Preferred Securities in a transaction in which gain or loss is
recognized (see "-- Exchange of Series A Preferred Securities for Series A
Subordinated Debentures"), such holder may have market discount or acquisition
premium with respect to the Series A Subordinated Debentures. Securityholders
(other than initial purchasers who acquire Series A Preferred Securities at
their original offering price) may be considered to have market discount or
acquisition premium under certain circumstances and are advised to consult their
own tax advisors.
INFORMATION RETURNS
The Managing Member will furnish each Securityholder with a Schedule K-1
setting forth such Securityholder's allocable share of income within 90 days
after the close of PLC Capital's taxable year. In preparing this information,
the Managing Member will use various accounting and reporting conventions to
determine a Securityholder's allocable share of income. See "-- Potential
Extension of Payment Period". If such conventions were successfully challenged
by the Internal Revenue Service, the distributive share of PLC Capital's income
allocable to Series A Preferred Securities in respect of a month in which such
Series A Preferred Securities are sold may be allocated between the seller and
purchaser on some other basis. Any amount so allocated to the Securityholder,
whether as seller or purchaser, would be includible in the Securityholder's
income and would increase the Securityholder's tax basis in its Series A
Preferred Securities.
Any person who holds Series A Preferred Securities as a nominee for another
person is required to furnish to PLC Capital (a) the name, address and taxpayer
identification number of the beneficial owner and the nominee; (b) whether the
beneficial owner is (i) a person that is not a United States Person, (ii) a
foreign government, an international organization or any wholly-owned agency or
instrumentality of either of the foregoing, or (iii) a tax-exempt entity; (c)
the amount and description of Series A Preferred Securities held, acquired or
transferred for the beneficial owner; and (d) certain information including the
dates of acquisitions and transfers, means of acquisitions and transfers, and
acquisition cost for purchases, as well as the amount of net proceeds from
sales. Brokers and financial institutions are required to furnish additional
information, including whether they are a United States Person and certain
information on Series A Preferred Securities they acquire, hold or transfer for
their own account. A
S-27
<PAGE>
penalty of $50 per failure (up to a maximum of $100,000 per calendar year) is
imposed by the Code for failure to report such information to PLC Capital. The
nominee is required to supply the beneficial owner of the Series A Preferred
Securities with the information furnished to PLC Capital.
ERISA MATTERS
PLC Capital, Protective Life and other affiliates of PLC Capital or
Protective Life may each be considered a "party in interest" (within the meaning
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")) or
a "disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA. The
purchase and/or holding of Series A Preferred Securities or Series A
Subordinated Debentures by a Plan that is subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
Section 4975 of the Code (including individual retirement arrangements and other
plans described in Section 4975(e)(1) of the Code) and with respect to which PLC
Capital, Protective Life or any other affiliate of PLC Capital or Protective
Life is a service provider (or otherwise is a party in interest or a
disqualified person) may constitute or result in a prohibited transaction under
ERISA or Section 4975 of the Code, unless such Series A Preferred Securities or
Series A Subordinated Debentures, are acquired pursuant to and in accordance
with an applicable exemption, such as Prohibited Transaction Class Exemption
("PTCE") 84-14 (an exemption for certain transactions determined by an
independent qualified professional asset manager), PTCE 91-38 (an exemption for
certain transactions involving bank collective investment funds) or PTCE 90-1
(an exemption for certain transactions involving insurance company pooled
separate accounts). Any pension or other employee benefit plan proposing to
acquire any Series A Preferred Securities should consult with its counsel.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement,
PLC Capital has agreed to sell to each of the Underwriters named below, and each
of the Underwriters, for whom Goldman, Sachs & Co., Dean Witter Reynolds Inc.,
Kidder, Peabody & Co. Incorporated and The Robinson-Humphrey Company, Inc. (the
"Representatives") are acting as representatives, has severally agreed to
purchase from PLC Capital, the respective number of Series A Preferred
Securities set forth opposite its name below.
<TABLE>
<CAPTION>
NUMBER OF
SERIES A
UNDERWRITERS PREFERRED SECURITIES
- ---------------------------------------------------------------------------------- --------------------
<S> <C>
Goldman, Sachs & Co...............................................................
Dean Witter Reynolds Inc..........................................................
Kidder, Peabody P Co. Incorporated................................................
The Robinson-Humphrey Company, Inc................................................
Total.....................................................................
--------
--------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all the Series A Preferred
Securities offered hereby, if any are taken.
The Underwriters propose to offer the Series A Preferred Securities 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 $[ ] per Series A Preferred
Security. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $[ ] per Series A
S-28
<PAGE>
Preferred Security to certain brokers and dealers. After the Series A Preferred
Securities are released for sale to the public, the public offering price and
other selling terms may from time to time be varied by the Representatives.
In view of the fact that the proceeds of the sale of the Series A Preferred
Securities will be loaned to Protective Life, pursuant to the Underwriting
Agreement Protective Life has agreed to pay to the Underwriters, as compensation
for their services, an amount equal to $ per Series A Preferred
Security, except that such compensation will be $ per Series A
Preferred Security sold to certain institutions.
[PLC Capital has granted to the Underwriters an option exercisable for 30
days after the date of this Prospectus Supplement to purchase up to [ ]
additional Series A Preferred Securities to cover over-allotments, if any, at
the initial public offering price (with additional Underwriters' compensation),
as set forth on the cover page of this Prospectus Supplement. If the
Underwriters exercise their over-allotment option, the Underwriters have
severally agreed, subject to certain conditions, to purchase approximately the
same percentage thereof that the number of Series A Preferred Securities to be
purchased by each of them, as shown in the foregoing table, bears to the number
of Series A Preferred Securities initially offered hereby.]
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.
Prior to this offering, there has been no market for the Series A Preferred
Securities. Application will be made to list the Series A Preferred Securities
on the NYSE. In order to meet one of the requirements for listing the Series A
Preferred Securities on the NYSE, the Underwriters will undertake to sell Series
A Preferred Securities to a minimum of 400 beneficial holders.
PLC Capital and Protective Life have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act.
LEGAL OPINIONS
Tax matters described under "Certain Federal Income Tax Considerations" in
this Prospectus Supplement have been passed upon by Debevoise & Plimpton. In
rendering its opinion, Debevoise & Plimpton has relied upon an opinion of
Richards, Layton & Finger, P.A. as to certain matters of Delaware law.
S-29
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MAY 6, 1994
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 SECURI-
TIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTA-
TION 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 , 1994.
<PAGE>
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 Annual Report on Form 10-K for the year ended December 31,
1993 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.
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).
2
<PAGE>
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. At December 31, 1993, Protective Life had total assets of
$5.3 billion, stockholders' equity of $361 million and life insurance inforce of
$42.5 billion. Protective Life's insurance subsidiaries generated approximately
94% of its revenues in 1993. 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 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.
3
<PAGE>
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.
RATIO OF CONSOLIDATED EARNINGS TO FIXED CHARGES
The following table sets forth Protective Life's ratio of earnings to fixed
charges:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------------------------------
1989 1990 1991 1992 1993
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ratio of Consolidated Earnings
to Fixed Charges*............ 25.8 8.2 9.8 13.5 14.5
<FN>
- ------------------------
*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.
</TABLE>
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 , 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 , 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.
4
<PAGE>
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 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.
5
<PAGE>
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.)
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
6
<PAGE>
"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 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
7
<PAGE>
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 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.)
8
<PAGE>
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 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.)
9
<PAGE>
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 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
10
<PAGE>
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 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
11
<PAGE>
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 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
12
<PAGE>
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
At December 31, 1993, the authorized capital stock of Protective Life was
21,000,000 shares, consisting of:
(a) 850,000 shares of Preferred Stock, par value $1.00 per share, of
which no shares were 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
were outstanding; and
(c) 20,000,000 shares of Common Stock, par value $.50 per share (the
"Common Stock"), of which 13,693,244 shares were outstanding.
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").
In the proxy statement for the Annual Meeting of stockholders of Protective
Life to be held on May 2, 1994, the Board of Directors of Protective Life will
submit to the stockholders a resolution approving an amendment to the Restated
Certificate of Incorporation which would increase the number of shares of
authorized Common Stock from 20,000,000 to 80,000,000 and the number of shares
of authorized Preferred Stock from 1,000,000 to 4,000,000.
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
<PAGE>
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
<PAGE>
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
<PAGE>
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 PAYMENT TO ALL CREDITORS OF PLC CAPITAL OF ALL
AMOUNTS DUE TO THEM.
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
<PAGE>
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
<PAGE>
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.
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 reports 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.
18
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN CONNECTION WITH THE
OFFER HEREUNDER AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY PROTECTIVE LIFE CORPORATION, PLC
CAPITAL L.L.C. OR THE UNDERWRITERS. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY THE SERIES A PREFERRED SECURITIES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS OR IN THE AFFAIRS OF PROTECTIVE LIFE CORPORATION OR
PLC CAPITAL L.L.C. SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PLC Capital L.L.C.............................. S-3
Protective Life Corporation.................... S-3
Certain Investment Considerations.............. S-6
Capitalization of Protective Life.............. S-8
Use of Proceeds................................ S-8
Selected Consolidated Financial Data of
Protective Life Corporation.................. S-9
Terms of the Series A Preferred Securities..... S-10
Description of the Guarantee................... S-20
Description of the Series A Subordinated
Debentures................................... S-21
Certain Federal Income Tax Considerations...... S-25
ERISA Matters.................................. S-28
Underwriting................................... S-28
Legal Opinions................................. S-29
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
Ratio of Consolidated Earnings to Fixed
Charges...................................... 4
Description of Debt Securities of Protective
Life......................................... 4
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
</TABLE>
[ ] PREFERRED SECURITIES
PLC CAPITAL L.L.C.
GUARANTEED TO THE EXTENT SET FORTH
HEREIN BY
PROTECTIVE LIFE CORPORATION
% CUMULATIVE
MONTHLY INCOME PREFERRED SECURITIES,
SERIES A ("MIPS")
-----------
PROSPECTUS SUPPLEMENT
-----------
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
KIDDER, PEABODY & CO.
INCORPORATED
THE ROBINSON-HUMPHREY
COMPANY, INC.
REPRESENTATIVES OF THE UNDERWRITERS
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth those expenses to be incurred by Protective
Life in connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission filing fee, all
amounts shown are estimates.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee..................... $ 60,345
Rating agency fees................................................
Fees and expenses of Trustees.....................................
Blue Sky and legal investment fees and expenses...................
Printing and engraving expenses...................................
Accountant's fees and expenses....................................
New York Stock Exchange filing fees...............................
Legal fees and expenses...........................................
Miscellaneous expenses............................................
---------
Total......................................................... $
---------
---------
<FN>
- ------------------------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 6.5 of Article VI of Protective Life's Restated Certificate of
Incorporation provides that Protective Life shall indemnify to the fullest
extent permitted by law any person who is made or is threatened to be made a
party or is involved in any action, suit, or proceeding whether civil, criminal,
administrative or investigative by reason of the fact that he is or was a
director, officer, employee or agent of Protective Life or was serving at the
request of Protective Life as an officer, director, employee or agent of another
corporation, partnership, joint venture, enterprise, or nonprofit entity.
Protective Life is empowered by Section 145 of the Delaware General
Corporation Law, subject to the proceedings and limitations stated therein, to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of Protective Life) by reason of the fact that such person is or was
an officer, employee, agent or director of Protective Life, or is or was serving
at the request of Protective Life as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of Protective
Life, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. Protective Life may indemnify any
such person against expenses (including attorneys' fees) in an action by or in
the right of Protective Life under the same conditions, except that no
indemnification is permitted without judicial approval if such person is
adjudged to be liable to Protective Life. To the extent such person is
successful on the merits or otherwise in the defense of any action referred to
above, Protective Life must indemnify him against the expenses which he actually
and reasonably incurred in connection therewith.
Policies of insurance are maintained by Protective Life under which
directors and officers of Protective Life are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
II-1
<PAGE>
As permitted by Section 102 (b)(7) of the Delaware General Corporation Law,
Protective Life's Restated Certificate of Incorporation also provides that no
director shall be personally liable to Protective Life or its stockholders for
monetary damages for any breach of fiduciary duty by such director as a
director, except (i) for breach of the director's duty of loyalty to Protective
Life or its stockholders, (ii) for acts or omissions not in good faith which
involve intentional misconduct or a knowing notation of law, (iii) under Section
174 of the Delaware General Corporation Law or (iv) for any transaction from
which the director derived an improper personal benefit.
Protective Life has entered into indemnity agreements with each of its
directors which provide insurance protection in excess of the directors' and
officers' liability insurance maintained by Protective Life and in force at the
time up to $20 million and against certain liabilities excluded from such
liability insurance. The agreements provide generally that, upon the happening
of certain events constituting a change in control of Protective Life,
Protective Life must obtain a $20 million letter of credit upon which the
directors may draw for defense or settlement of any claim relating to
performance of their duties as directors. Protective Life has similar agreements
with certain of its executive officers under which Protective Life is required
to provide up to $10 million in indemnification, although this obligation is not
secured by a commitment to obtain a letter of credit.
ITEM 16. EXHIBITS.
See Index to Exhibits.
ITEM 17. UNDERTAKINGS.
(A) RULE 415 OFFERING.
The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
Protective Life pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial BONA FIDE offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(B) FILINGS INCORPORATING SUBSEQUENT EXCHANGE ACT DOCUMENTS BY REFERENCE.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Protective Life's annual report pursuant to Section 13(a) or 15(d)
II-2
<PAGE>
of the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(C) RULE 430A OFFERING.
The undersigned hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of a registration statement in reliance upon Rule 430A and contained in the
form of prospectus filed by Protective Life pursuant to Rule 424(b) (1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of the
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(D) ACCELERATION OF EFFECTIVENESS.
Insofar as indemnifications for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons, if any,
of the registrant pursuant to the foregoing provisions, or otherwise, the
Registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by Protective Life of expenses
incurred or paid by a director, officer or controlling person of Protective Life
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-3
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, PROTECTIVE LIFE
CORPORATION CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS
ALL OF THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS
AMENDMENT NO. 3 TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF
ALABAMA, ON MAY 6, 1994.
PROTECTIVE LIFE CORPORATION
(Registrant)
By: /S/ DRAYTON NABERS, JR.
--------------------------------------
Drayton Nabers, Jr.
President and Chief Executive
Officer
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, PLC CAPITAL
L.L.C. CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF
THE REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS AMENDMENT NO. 3
TO THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF BIRMINGHAM, STATE OF ALABAMA, ON MAY
6, 1994.
PLC CAPITAL L.L.C.
(Registrant)
By PROTECTIVE LIFE CORPORATION
as Managing Member
By: /S/ DRAYTON NABERS, JR.
--------------------------------------
Drayton Nabers, Jr.
President and Chief Executive
Officer
II-4
<PAGE>
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 3 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN
THE CAPACITIES WITH PROTECTIVE LIFE CORPORATION AND THE MANAGING MEMBER
INDICATED:
<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- --------------------------------------------- ---------------------------------- ------------------------------
<C> <S> <C>
/s/ DRAYTON NABERS, JR. President and Chief Executive
---------------------------------- Officer (Principal Executive May 6, 1994
Drayton Nabers, Jr. Officer) and Director
/s/ JOHN D. JOHNS Executive Vice President and Chief
---------------------------------- Financial Officer (Principal May 6, 1994
John D. Johns Financial Officer)
/s/ JERRY W. DEFOOR Vice President and Controller and
---------------------------------- Chief Accounting Officer May 6, 1994
Jerry W. DeFoor (Principal Accounting Officer)
*
---------------------------------- Chairman of the Board and Director
William J. Rushton III
*
---------------------------------- Director
John W. Woods
*
---------------------------------- Director
Crawford T. Johnson III
*
---------------------------------- Director
William J. Cabaniss, Jr.
*
---------------------------------- Director
H.G. Pattillo
*
---------------------------------- Director
Edward L. Addison
*
---------------------------------- Director
John J. McMahon, Jr.
*
---------------------------------- Director
A.W. Dahlberg
*
---------------------------------- Director
John W. Rouse, Jr.
*
---------------------------------- Director
Robert T. David
*
---------------------------------- Director
Ronald L. Kuehn, Jr.
*
---------------------------------- Director
Herbert A. Sklenar
*By /s/ DEBORAH J. LONG
---------------------------
Deborah J. Long
Attorney-in-Fact
May 6, 1994
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER DESCRIPTION NO.
- ------------- --------------------------------------------------------------------------------------------------- -----
<S> <C> <C>
*1(a) Form of Underwriting Agreement -- Debt Securities..................................................
*1(b) Form of Underwriting Agreement -- Preferred Stock..................................................
*1(c) Form of Underwriting Agreement -- Preferred Securities.............................................
*4(a) 1985 Restated Certificate of Incorporation of Protective Life Corporation (incorporated by
reference to Exhibit 3(a) to Protective Life Corporation's Form 10-K Annual Report for the year
ended December 31, 1993)..........................................................................
*4(a)(1) Certificate of Amendment of 1985 Restated Certificate of Incorporation of Protective Life
Corporation (incorporated by reference to Exhibit 3(a)(1) to Protective Life Corporation's Form
10-K Annual Report for the year ended December 31, 1993)..........................................
*4(a)(2) Certificate of Designation of Junior Participating Cumulative Preferred Stock of Protective Life
Corporation filed with the Secretary of State of Delaware on July 14, 1987 (incorporated by
reference to Exhibit A to Protective Life Corporation's Form 8-K Report filed July 15, 1987)......
*4(a)(3) Certificate of Correction of Certificate of Designation of Junior
Participating Cumulative Preferred Stock of the Company filed with the Secretary of State of
Delaware on July 27, 1987 (incorporated by reference to Exhibit 3(a)(4) to Protective Life
Corporation's Form 10-K Annual Report for the year ended December 31, 1987).......................
*4(b) Amended By-Laws of Protective Life Corporation, as amended (incorporated by reference to Exhibit B
to Protective Life Corporation's Form 8-K Report, filed May 18, 1983).............................
*4(c) Certificate of Formation of PLC Capital L.L.C......................................................
*4(d) Form of Amended and Restated Limited Liability Company Agreement of PLC Capital L.L.C..............
*4(e) Form of Action establishing the Series A Preferred Securities (included as Annex A to Exhibit
4(d)).............................................................................................
*4(f) Specimen Series A Preferred Security Certificate (included as Annex B to Exhibit 4(d)).............
*4(g) Form of Senior Indenture between Protective Life Corporation and The Bank of New York, as
Trustee...........................................................................................
*4(h) Form of Subordinated Indenture between Protective Life Corporation and AmSouth Bank N.A., as
Trustee...........................................................................................
*4(i) Form of Guarantee Agreement between Protective Life Corporation and PLC Capital L.L.C..............
**4(j) Specimen Series A Subordinated Debenture...........................................................
**5(a) Opinion of Debevoise & Plimpton, counsel to Protective Life Corporation and PLC Capital L.L.C., as
to legality of the Debt Securities, the Preferred Stock, the Guarantee and the Preferred
Securities........................................................................................
**5(b) Opinion of Richards, Layton & Finger, special Delaware counsel to Protective Life Corporation and
PLC Capital, as to legality of the Preferred Securities...........................................
8(a) Opinion of Debevoise & Plimpton, as to United States tax matters...................................
*12(a) Computation of Ratio of Consolidated Earnings to Fixed Charges.....................................
23(a) Consent of Coopers & Lybrand.......................................................................
23(b) Consent of KPMG Peat Marwick.......................................................................
**23(c) Consent of Debevoise & Plimpton (included in Exhibits 5(a) and 8(a))...............................
**23(d) Consent of Richards, Layton & Finger (included in Exhibit 5(b))....................................
*24(c) Power of Attorney of Board of Directors............................................................
*25(a) Statement of Eligibility of Trustee on Form T-1 (The Bank of New York).............................
*25(b) Statement of Eligibility of Trustee on Form T-1 (AmSouth Bank N.A.)................................
</TABLE>
- ------------------------
* Previously filed.
** To be filed by amendment.
<PAGE>
Exhibit 8(a)
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
May 6, 1994
Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
PLC Capital L.L.C.
c/o Protective Life Corporation
2801 Highway 280 South
Birmingham, Alabama 35202
Protective Life Corporation
Registration Statement on Form S-3
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to Protective Life Corporation, a
Delaware corporation ("Protective Life"), and PLC Capital L.L.C., a Delaware
limited liability company ("PLC Capital"), in connection with the preparation
and filing with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "1933 Act"), of a Registration
Statement on Form S-3 (Registration No. 33-52831), as amended (the "Registration
Statement"), relating to the public offering of up to $175,000,000 in the
aggregate of (i) debt securities representing unsecured obligations of
Protective Life
<PAGE>
Protective Life Corporation 2 May 6, 1994
PLC Capital L.L.C.
to be issued pursuant to a Senior Indenture to be entered into between
Protective Life and The Bank of New York, as trustee, (ii) shares of
preferred stock of Protective Life, par value $1.00 per share and (iii)
Cumulative Monthly Income Preferred Securities (the "Preferred Securities"),
representing preferred limited liability company interests of PLC Capital. The
proceeds of the offering of Preferred Securities (together with proceeds from
the issuance of common limited liability company interests in PLC Capital and
related capital contributions) may be loaned by PLC Capital to Protective Life
and such loan may be evidenced by subordinated debentures of Protective Life
to be issued pursuant to a Subordinated Indenture to be entered into between
Protective Life and AmSouth Bank N.A., as trustee. In addition,
certain payment obligations of PLC Capital with respect to the Preferred
Securities will be guaranteed by a subordinated guarantee of Protective Life.
In so acting, we have participated in the preparation of the original
Limited Liability Company Agreement of PLC Capital, dated March 24, 1994, and
the Certificate of Formation of PLC Capital.
In connection with the issuance pursuant to the Registration Statement
of the Series A Preferred Securities (as defined in the Registration Statement),
you have requested that we render the opinion set forth below. In rendering
such opinion, we have examined and relied upon the representations and
warranties as to factual matters made in or pursuant to the documents referred
to above and upon the originals, or copies certified or otherwise identified to
our satisfaction, of such records, documents, certificates or other instruments
as in our judgment are necessary or appropriate to enable us to render the
opinion expressed below. We have not, however, undertaken any independent
investigation of any factual matter set forth in any of the foregoing.
Subject to the foregoing and the qualifications and limitations set
forth herein and assuming the due execution and delivery of the Amended and
Restated Limited Liability Agreement substantially in the form of Exhibit
<PAGE>
Protective Life Corporation 3 May 6, 1994
PLC Capital L.L.C.
4(d) to the Registration Statement (the "L.L.C. Agreement"), that the L.L.C.
Agreement is valid and enforceable in accordance with its terms and the
compliance by PLC Capital with the Delaware Limited Liability Company Act and
the terms of the L.L.C. Agreement, we are of the opinion that the statements
contained in the Prospectus Supplement subject to completion dated May 6, 1994
(the "Prospectus Supplement") relating to the issuance of the Series A Preferred
Securities under the heading "Certain Federal Income Tax Considerations", to the
extent that they relate to matters of law or legal conclusion, are correct in
all material respects.
This opinion is based on the relevant law in effect (or, in the case
of Proposed Treasury Regulations, proposed) and the relevant facts that exist as
of the date hereof. No assurance can be given that the law or facts will not
change, and we have not undertaken to advise you or any other person with
respect to any event subsequent to the date hereof.
This opinion is addressed solely to you and no other person may rely
on it, PROVIDED that we hereby consent to the filing of this opinion as an
exhibit to the Registration Statement and to the use of our name under the
caption "Certain Federal Income Tax Considerations" and "Legal Opinions" in
the Prospectus Supplement. In giving such consent, we do not thereby concede
that we are within the category of persons whose consent is required under
Section 7 of the 1933 Act or the Rules and Regulations of the Securities and
Exchange Commission thereunder.
Very truly yours,
/s/ Debevoise & Plimpton
<PAGE>
Exhibit 23(a)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 3 to
Registration Statement on Form S-3 of Protective Life Corporation and PLC
Capital L.L.C. for the registration of debt securities and preferred stock of
Protective Life Corporation and preferred securities of PLC Capital L.L.C. of
our report, which includes an explanatory paragraph with respect to changes in
the Protective Life Corporation's methods of accounting for certain investments
in debt and equity securities in 1993 and postretirement benefits other than
pensions in 1992, dated February 14, 1994, on our audits of the consolidated
financial statements and financial statement schedules of Protective Life
Corporation as of December 31, 1993 and 1992 and for the years ended December
31, 1993, 1992 and 1991. We also consent to the reference to our firm under the
caption "Experts" in the Registration Statement.
/s/ COOPERS & LYBRAND
Birmingham, Alabama
May 6, 1994
<PAGE>
Exhibit 23(b)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Amendment No. 3 to
Registration Statement on Form S-3 of Protective Life Corporation and PLC
Capital L.L.C. of our report to the Board of Directors of Wisconsin National
Life Insurance Company, dated February 26, 1993 (including Note 11 thereto,
which is dated as of May 4, 1993), relating to the balance sheets
of Wisconsin National Life Insurance Company as of December 31, 1992 and 1991
and the related statements of income, stockholder's equity and cash flows for
the years then ended, which report appears in the
Protective Life Corporation's Current Report on Form 8-K, dated
August 4, 1993, filed with the Securities and Exchange Commission. We also
consent to the reference to our firm under the caption "Experts" in the
Registration Statement.
/s/ KPMG PEAT MARWICK
Milwaukee, Wisconsin
May 6, 1994
