<PAGE>
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED OCTOBER 12, 1994
2,000,000 SHARES
PROTECTIVE LIFE CORPORATION
COMMON STOCK
(PAR VALUE $.50 PER SHARE)
--------------
The last reported sales price of the Common Stock, which is listed under the
symbol "PL", on the New York Stock Exchange on May 23, 1996 was $38 3/8 per
share. See "Price Range of Common Stock and Dividends". The Company's Common
Stock is listed on the New York Stock Exchange and application has been made to
list the shares of Common Stock offered hereby.
SEE "INVESTMENT CONSIDERATIONS" BEGINNING ON PAGE S-8 FOR CERTAIN
CONSIDERATIONS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK.
--------------
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
OFFERING PRICE DISCOUNT(1) COMPANY(2)
-------------- ------------- --------------
<S> <C> <C> <C>
Per Share......................................................... $37.25 $1.86 $35.39
Total(3).......................................................... $74,500,000 $3,720,000 $70,780,000
</TABLE>
- --------------
(1) Protective Life has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(2) Before deducting estimated expenses of $292,300 payable by Protective Life.
(3) Protective Life has granted the Underwriters an option for 30 days to
purchase up to an additional 300,000 shares at the initial public offering
price per share, less the underwriting discount, solely to cover
over-allotments. If such options are exercised in full, the total initial
public offering price, underwriting discount and proceeds to Protective Life
will be $85,675,000, $4,278,000 and $81,397,000, respectively. See
"Underwriting".
--------------
The shares 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 certificates
for the shares will be ready for delivery in New York, New York, on or about May
30,1996, against payment therefor in immediately available funds.
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
MERRILL LYNCH & CO.
THE ROBINSON-HUMPHREY COMPANY, INC.
---------
The date of this Prospectus Supplement is May 23, 1996.
<PAGE>
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES OFFERED
HEREBY AT A LEVEL ABOVE THAT 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>
PROTECTIVE LIFE CORPORATION
THE COMPANY
Protective Life Corporation ("Protective Life" or the "Company"), through
its subsidiary life insurance companies, produces, distributes and services a
diverse array of insurance and investment products. Protective Life markets
individual life insurance, dental insurance, group life and health insurance,
credit life and disability insurance, guaranteed investment contracts and
annuities throughout the United States. The Company also maintains a separate
line of business devoted exclusively to the acquisition of insurance policies
from other companies. The Company recently began to market individual life
insurance in Hong Kong through a fifty-percent-owned joint venture with the
Lippo Group. Protective Life Insurance Company ("Protective Life Insurance"),
founded in 1907, is Protective Life's principal operating subsidiary. Unless the
context otherwise requires, as used in this Prospectus Supplement "Protective
Life" and "Company" refer to the consolidated group of Protective Life
Corporation and its subsidiaries. Protective Life Insurance is currently rated
A+ (Superior) by A.M. Best Company, Inc. Protective Life's principal executive
offices are located at 2801 Highway 280 South, Birmingham, Alabama 35223
(Telephone: (205) 879-9230).
For the year ended December 31, 1995, Protective Life reported revenues of
$922 million and net income of $76.7 million. For the three months ended March
31, 1996, Protective Life reported revenues of $250 million and net income of
$21.1 million. At March 31, 1996, Protective Life had total assets of $7.6
billion, stockholders' equity of $491 million and life insurance in force of
$65.9 billion.
Over the five year period ended December 31, 1995, Protective Life's total
assets have grown from $2.3 billion to $7.2 billion, a compound annual growth
rate of 25%. In the same five-year period, Protective Life's net income has
grown from $28.1 million to $76.7 million, a compound annual growth rate of 22%,
and its return on equity has averaged 17.4%.
STRATEGY
The Company's operating strategy has been to identify market opportunities
in the life and health insurance business that offer attractive prospects for
growth and profitability and then to move quickly to take advantage of those
opportunities and become a strong participant in the targeted market segment.
The Company believes that its diverse product mix supports the strategy by
giving the Company broad exposure to attractive market opportunities and a more
diverse base of earnings. The Company also emphasizes discipline in the
allocation of capital, the pricing of products and the management of expenses.
Protective Life is organized around six primary divisions, which are the
Acquisitions Division, the Guaranteed Investment Contracts Division, the
Individual Life Insurance Division, the Group Division, the Investment Products
Division and the Financial Institutions Division.
S-3
<PAGE>
Set forth below are the operating earnings (unaudited), realized investment
gains (losses) and related amortization of deferred policy acquisition costs
(unaudited), and income before income tax for each of the Company's Divisions
and a Corporate and Other business segment, and unallocated realized investment
gains (losses) for each of the years ended December 31, 1995, 1994, 1993, 1992
and 1991 and for the three-month periods ended March 31, 1996 and 1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,(1) YEARS ENDED DECEMBER 31,(2)
-------------------- ------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
--------- --------- ----------- ----------- ------------ --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING EARNINGS
(3)(4)
Acquisitions........................ $ 12,959 $ 11,009 $ 48,490 $ 36,796 $ 27,415(5) $ 18,785 $ 22,199
Guaranteed Investment Contracts
(6)................................ 8,708 7,201 31,557 26,005 22,070 12,438 9,358
Individual Life Insurance........... 2,407 3,494 13,490 13,933 18,005(5) 11,875 11,049
Group............................... 3,872 1,603 10,060 10,139 8,501 6,723 6,541
Investment Products................. 2,160 1,844 6,352 120 (748)(5) 3,217 (360)
Financial Institutions.............. 1,335 1,776 8,375 9,024 7,137 4,907 4,104
Corporate and Other (6)............. 1,522 12 2,663 2,183 (2,390)(5) 2,016 1,897
--------- --------- ----------- ----------- ------------ --------- ---------
Total Operating Earnings.......... 32,963 26,939 120,987 98,200 79,990 59,961 54,788
REALIZED INVESTMENT GAINS (LOSSES)
Acquisitions........................ 0 0 0 532 0 0 0
Guaranteed Investment Contracts..... (2,380) 116 (3,908) 3,000 1,175 962 (519)
Individual Life Insurance........... 3,098 0 0 0 0 0 0
Investment Products................. 3,013 (18) 4,937 (2,500) 2,003 473 119
Unallocated Realized Investment
Gains (Losses)..................... 690 2,521 583 5,266 1,876 (1,449) (2,685)
RELATED AMORTIZATION OF DEFERRED
POLICY ACQUISITION COSTS
Individual Life Insurance........... (1,974) 0 0 0 0 0 0
Investment Products................. (2,270) 14 (1,565) 1,675 0 0 0
--------- --------- ----------- ----------- ------------ --------- ---------
Total Net......................... 177 2,633 47 7,973 5,054 (14) (3,085)
INCOME BEFORE INCOME TAX (4)
Acquisitions........................ 12,959 11,009 48,490 37,328 27,415(5) 18,785 22,199
Guaranteed Investment Contracts
(6)................................ 6,328 7,317 27,649 29,005 23,245 13,400 8,839
Individual Life Insurance........... 3,531 3,494 13,490 13,933 18,005(5) 11,875 11,049
Group............................... 3,872 1,603 10,060 10,139 8,501 6,723 6,541
Investment Products................. 2,903 1,840 9,724 (705) 1,255(5) 3,690 (241)
Financial Institutions.............. 1,335 1,776 8,375 9,024 7,137 4,907 4,104
Corporate and Other (6)............. 1,522 12 2,663 2,183 (2,390)(5) 2,016 1,897
Unallocated Realized Investment
Gains (Losses)..................... 690 2,521 583 5,266 1,876 (1,449) (2,685)
--------- --------- ----------- ----------- ------------ --------- ---------
Total Income before
Income Tax....................... $ 33,140 $ 29,572 $ 121,034 $ 106,173 $ 85,044 $ 59,947 $ 51,703
</TABLE>
S-4
<PAGE>
1. Information for the three-month periods ended March 31, 1996 and 1995 is
unaudited but, in the opinion of management, all adjustments (consisting of
normal recurring accruals) necessary for a fair presentation have been
included. Operating results for the three-month period ended March 31, 1996
are not necessarily indicative of the results that may be expected for the
year ending December 31, 1996.
2. The selected financial data for the years ended December 31, 1995, 1994,
1993, 1992 and 1991 has been derived from previously audited consolidated
financial statements of Protective Life.
3. Income before Income Tax excluding realized investment gains and losses and
related amortization of deferred policy acquisition costs.
4. Certain reclassifications have been made in the previously reported results
relating to the allocation of corporate overhead to make prior period
results comparable to those of the current year. Such reclassifications had
no effect on previously reported net income, total assets, or stockholders'
equity.
5. 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 Acquisitions, Individual Life Insurance, and Investment
Products business segments of approximately $2,600, $3,000 and $2,000,
respectively, while decreasing income of the Corporate and Other segment.
6. Pre-tax income for the Guaranteed Investment Contracts business segment has
not been reduced by pre-tax minority interest of $1,631 in 1991. Pre-tax
income for the Corporate and Other business segment has not been reduced by
pre-tax minority interest of $4,950 in 1995, $2,764 in 1994, $19 in 1993 and
$90 in 1992 and 1991, and $1,238 and $1,237 in the three months ending March
31, 1996 and 1995, respectively. Such minority interest in 1996, 1995 and
1994 arises from payments made on Monthly Income Preferred Securities issued
in 1994.
ACQUISITIONS DIVISION
Protective Life is an active participant in the consolidation of the life
and health insurance industry. The Acquisitions Division has approximately 120
full-time employees and focuses solely on acquiring, converting and servicing
business acquired from other companies. The Company has long been an active
acquiror of blocks of insurance policies and has closed a total of 35
acquisitions over the last 25 years. In 1990, the Company became more focused on
the acquisitions business and, since that year, has invested over $170 million
in acquired blocks of policies and small insurance companies. In the five-year
period ended December 31, 1995, pretax operating earnings from acquisitions
increased from $17.6 million to $48.5 million, a compound annual growth rate of
22%. The Division concentrates on identifying acquisition opportunities in the
$10 million to $50 million range, a market segment that the Company believes to
be less competitive than the market for larger transactions. Protective Life
believes that its highly focused and disciplined approach to the acquisitions
process and its extensive experience in the assimilation, conservation and
servicing of purchased books of business give it a significant competitive
advantage over many other companies that attempt to make similar acquisitions.
The Company expects acquisition opportunities to continue to be available as the
life insurance industry continues to consolidate.
GUARANTEED INVESTMENT CONTRACTS DIVISION
Protective Life's Guaranteed Investment Contracts Division markets GICs to
401(k) and other qualified retirement savings plans. The Division also offers
guaranteed funding agreements to the trustees of municipal bond proceeds and
other annuity contracts. Protective Life entered the GIC business in 1989. In
the five-year period ended December 31, 1995, the Division's operating earnings
increased from $4.3 million to $31.6 million. The Division's emphasis is on a
consistent and disciplined approach to product pricing and asset/liability
management, careful underwriting of early withdrawal risks and maintaining low
distribution and administration costs.
S-5
<PAGE>
INDIVIDUAL LIFE INSURANCE DIVISION
The Individual Life Insurance Division markets universal and other life
insurance products on a national basis. In the five-year period ended December
31, 1995, the Division's sales (as measured by new annualized premium) have
grown from $17.9 million to $36.3 million, a compound annual growth rate of 15%.
Over the same period, the U.S. life insurance industry has experienced virtually
no growth in annualized new premium sales. The Division's primary marketing
channel is a network of independent insurance agents. In addition, the Division
has grown sales by developing niche marketing strategies. The strategies include
marketing specialty products through insurance brokerage channels and
traditional life insurance products through regional stock brokers. The Division
has also developed a unit to distribute life insurance products on a "private
label" basis through other insurance companies.
GROUP DIVISION
The Group Division's strategic emphasis is on a full range of indemnity and
managed-care dental products. At March 31, 1996, the Company had approximately
351,000 members in its dental HMOs and over 768,000 lives covered in total by
its dental programs.
The Group Division was a pioneer in developing indemnity dental products for
the voluntary payroll deduction market. In the first quarter of 1995, Protective
Life entered the dental managed care segment when it acquired a dental managed
care company which transacts business under the trade name "DentiCare". The
acquisition combined DentiCare's high quality service and product capabilities
with the Group Division's marketing strength and capacity to distribute dental
products through a much broader geographic distribution framework. The
Division's strategy is to promote a "dual choice" option by offering DentiCare's
products through Protective Life's existing indemnity dental distribution
channels. The Division has developed an innovative system for prospecting and
selling dental insurance products by telephone. The Division also plans to grow
the dental business through acquisitions. In the first quarter of 1996, the
Division extended the geographic reach of its dental managed care operations
into Oklahoma, Arkansas and Missouri, and added approximately 38,000 new
members, through the acquisition of two dental managed care plans licensed to do
business in those states. The Company's dental annualized new premium and
premium equivalent sales were $13.6 million in 1994 and $27.0 million in 1995,
an increase of 99%. For the quarter ended March 31, 1996 the Company had $14.4
million of such sales.
The Group Division also actively markets group life, group health and
disability coverages, typically to employee groups of 25 to 100, as well as
administrative services for self-insured employer health plans. The Division
also markets cancer insurance, but is currently evaluating whether to sell its
existing cancer book of business.
INVESTMENT PRODUCTS DIVISION
The Investment Products Division markets fixed and variable annuity
products. Annuity products are primarily used by consumers as a source of
retirement savings. Overall industry sales of annuity products have grown in
recent years as the "baby-boom" generation has increased its level of retirement
savings. The Division's annuity products are sold through broker-dealers,
financial institutions and the Individual Life Insurance Division's agent sales
force. The Company's primary product is a variable annuity that offers mutual
funds managed by Goldman, Sachs & Co. The Division has been marketing this
product for 27 months. The variable annuity account balance was $456 million at
March 31, 1996.
FINANCIAL INSTITUTIONS DIVISION
The Company's Financial Institutions Division specializes in marketing
credit life and credit disability insurance products through commercial banks,
savings and loan associations, mortgage bankers and automobile dealers. The
majority of these policies cover consumer loans made by financial institutions
located primarily in the southeastern United States and automobile dealers
throughout the United States. The Division markets through employee field
representatives, independent brokers and a wholly-owned subsidiary. In the
five-year period ended December 31, 1995, the Division's sales have increased
from $45 million to $135 million, a compound annual growth rate of 25%. The
Company believes it has
S-6
<PAGE>
been a beneficiary of a "flight to quality" as financial institutions and
automobile dealers increasingly prefer to do business with insurers having
quality products, strong balance sheets and high-quality training and service
capabilities.
CORPORATE AND OTHER
The Corporate and Other segment consists of earnings from the Company's
fifty-percent-owned joint venture in Hong Kong with the Lippo Group, unallocated
net investment income on capital, interest expense on substantially all debt,
charitable contributions, and earnings from several small insurance and
noninsurance subsidiaries such as the Company's recent investment in a 30% stake
in QuickQuote, an Internet-based insurance distribution system. In 1995, its
first year of operations, the Hong Kong joint venture company, Lippo Protective
Life Insurance Company, had annualized new premium sales of $5.9 million and
$2.2 million in the first quarter of 1996.
INVESTMENT PORTFOLIO
Protective Life believes its investment strategy is a key component of its
financial success. The Company targets three primary asset categories:
mortgage-backed securities, corporate bonds and bank loan participations, and a
specialized class of commercial mortgage loans. The portfolio is actively
managed to support the liabilities of Protective Life's lines of business,
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. The following table shows the
composition of Protective Life's invested assets at March 31, 1996:
<TABLE>
<CAPTION>
DOLLARS PERCENT OF TOTAL
(IN THOUSANDS) INVESTED ASSETS
-------------- -----------------
<S> <C> <C>
Fixed Maturity Investments
Mortgage-Backed Securities $ 2,231,721 35%
Corporate Bonds and Bank Loan Participations 1,857,430 30
-------------- -----
Total Investment Grade 4,089,151 65
Unrated or Below Investment Grade 319,670 5
-------------- -----
Total Fixed Maturity 4,408,821 70
Mortgage Loans on Real Estate 1,378,045 22
Policy Loans 164,741 3
Other, including Short-Term Investments 300,823 5
-------------- -----
Total Invested Assets $ 6,252,430 100%
</TABLE>
In its mortgage-backed securities portfolio, Protective Life has focused on
sequential and planned amortization class securities, which tend to be less
volatile than other classes of mortgage-backed securities, and on strict
underwriting and constant monitoring of the portfolio through the use of
state-of-the-art technology. Almost all of the Company's corporate bonds are
investment grade, publicly traded securities. The Company's participation in
senior bank loan programs provides it with enhanced yields and flexibility in
matching maturities in its GIC portfolio. Bank loan participations totalled $216
million at March 31, 1996.
In its approach to commercial mortgage loans, the Company has, for 25 years,
specialized in originating small (average new loan size of $2.4 million) loans
to finance shopping centers, typically in smaller communities. The Company
provides a high level of service to the developers of such properties and
generally does not attempt to compete for business solely by offering the lowest
interest rates available. Such loans provide attractive yields to the Company
and historically have performed very well. On a cumulative basis, the Company
has had no significant loss of principal on its commercial mortgage loan
portfolio over the last 20 years. As of March 31, 1996, 2.3% of the commercial
loan portfolio was classified as 90 days past due, foreclosed or restructured,
which the Company believes to be well below
S-7
<PAGE>
the life insurance industry average. The Company believes that its many years of
specialization in this subsegment of the real estate industry helps it to
maintain the quality of its loan underwriting and loan approval process.
INVESTMENT CONSIDERATIONS
Set forth below is a discussion of certain considerations relevant to an
investment in the Common Stock. For additional information concerning these
considerations and other factors relevant to such an investment, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Results of Operations -- Known Trends and Uncertainties" included
in Protective Life's 1995 Annual Report and incorporated by reference into its
Form 10-K Report for the year ended December 31, 1995.
COMPETITION
Life insurance is a highly competitive industry and Protective Life
encounters significant competition in all lines of business from other insurance
companies, many of which have greater financial resources than Protective Life,
as well as competition from other providers of financial services.
RATINGS
Ratings are an important factor in the competitive position of insurance
companies. Rating organizations periodically review the financial performance
and condition of insurers, including Protective Life and its insurance
subsidiaries. A downgrade in the ratings of Protective Life's subsidiaries could
adversely affect its ability to sell its products and its ability to compete for
attractive acquisition opportunities.
LIQUIDITY OF INVESTMENT PORTFOLIO
Many of the products offered by Protective Life's insurance subsidiaries
allow policyholders and contractholders to withdraw their funds under defined
circumstances. Protective Life's insurance subsidiaries design products and
configure investment portfolios so as to provide and maintain sufficient
liquidity to support anticipated withdrawal demands and contract benefits and
maturities. Formal asset/ liability programs are used continuously to monitor
the relative duration of the Company's assets and liabilities. While Protective
Life's insurance subsidiaries own a significant amount of liquid assets, many of
their assets are relatively illiquid. Significant unanticipated withdrawal or
surrender activity could, under some circumstances, compel Protective Life's
insurance subsidiaries to dispose of illiquid assets on unfavorable terms, which
could have a material adverse effect on Protective Life.
INTEREST RATE FLUCTUATIONS
Sudden changes in interest rates expose life insurance companies to the risk
of not earning anticipated spreads between the returns earned on investments and
the credited rates paid on outstanding policies. Both rising and declining
interest rates can negatively affect the Company's spread income. While
Protective Life maintains programs and procedures designed to protect spread
income in rising or falling interest rate environments, no assurance can be
given that significant changes in interest rates will not materially affect such
spreads.
REGULATION AND TAXATION
Protective Life's insurance subsidiaries are subject to government
regulation in each of the states in which they conduct business. Such regulation
is vested in state agencies having broad administrative power over all aspects
of the insurance business, including premium rates, marketing practices,
advertising, policy forms and capital adequacy, and is concerned primarily with
the protection of policyholders rather than stockholders. Protective Life cannot
predict the form of any future regulatory initiatives.
Under the Internal Revenue Code of 1986, as amended (the "Code"), income tax
payable by policyholders on investment earnings is deferred during the
accumulation period of certain life insurance and annuity products. This
favorable tax treatment may give certain of Protective Life's products a
competitive advantage over other non-insurance products. To the extent that the
Code is revised to
S-8
<PAGE>
reduce the tax-deferred status of life insurance and annuity products, or to
increase the tax deferred status of competing products, all life insurance
companies, including Protective Life, would be adversely affected.
LITIGATION
A substantial number of civil jury verdicts have been returned against life
and health insurers in the jurisdictions in which Protective Life does business
involving the insurers' sales practices, alleged agent misconduct, failure to
properly supervise agents, and other matters. Increasingly these lawsuits have
resulted in the award of substantial judgments against the insurer, including
material amounts of punitive damages that are disproportionate to the actual
damages. In some states (including Alabama), juries have substantial discretion
in awarding punitive damages which creates the potential for unpredictable
material adverse judgments in any given punitive damages suit. Protective Life
and its subsidiaries, like other life and health insurers, in the ordinary
course of business are involved in such litigation. In addition, in some class
action and other lawsuits involving insurers' sales practices, insurers have
made material settlement payments. Although the outcome of any litigation cannot
be predicted with certainty, the management of Protective Life believes that at
the present time there are no pending or threatened lawsuits that are reasonably
likely to have a material adverse effect on the Company's financial condition.
INVESTMENT RISKS
Protective Life's invested assets are subject to customary risks of credit
defaults and changes in market values. The value of the Company's commercial
mortgage portfolio depends in part on the creditworthiness of the tenants
occupying the properties which the Company has financed. Factors that may affect
the overall default rate on, and market value of, the Company's invested assets
include interest rate levels, financial market performance and general economic
conditions, as well as particular circumstances affecting the businesses of
individual borrowers and tenants.
S-9
<PAGE>
CAPITALIZATION OF PROTECTIVE LIFE
The following table sets forth the unaudited summary capitalization of
Protective Life at March 31, 1996 and as adjusted to give effect to the sale of
the shares of Common Stock offered hereby (assuming that the over-allotment
granted to the underwriters is not exercised) and the receipt of the net
proceeds therefrom. The table below 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 MARCH 31, 1996
-------------------------
ACTUAL AS ADJUSTED
----------- ------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt $ 10,200 $ 10,200
----------- ------------
Total short-term debt................................................................ 10,200 10,200
----------- ------------
----------- ------------
Long-term debt
Notes payable to banks............................................................... 43,500 43,500
7.95% Senior Notes due July 1, 2004.................................................. 75,000 75,000
----------- ------------
Total long-term debt................................................................. 118,500 118,500
Series A Preferred Securities of PLC Capital (minority interest in consolidated
subsidiary)........................................................................... 55,000 55,000
Stockholders' equity
Preferred Stock ($1 par value shares authorized: 3,600,000; issued: none)............ -- --
Junior Participating Cumulative Preferred Stock ($1 par value shares authorized:
400,000; issued: none).............................................................. -- --
Common equity ($.50 par value shares authorized: 80,000,000; issued and outstanding:
28,797,293)......................................................................... 491,327 561,815
----------- ------------
Total stockholders' equity......................................................... 491,327 561,815
----------- ------------
Total capitalization............................................................. $ 675,027 $ 745,515
----------- ------------
----------- ------------
</TABLE>
USE OF PROCEEDS
The net proceeds from the sale of the shares of Common Stock (after
deducting the underwriting discount and estimated expenses and assuming that the
over-allotment granted to the underwriters is not exercised), estimated to equal
approximately $70.5 million, will be primarily invested by Protective Life in
its insurance company subsidiaries. Pending such application, such proceeds will
be invested in short-term securities. A significant portion of the proceeds is
expected to be used over time by such subsidiaries to finance acquisitions of
additional blocks of insurance policies or otherwise support the continued
growth of the business.
S-10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
OF PROTECTIVE LIFE CORPORATION
The following selected financial information for the years ended December
31, 1995, 1994, 1993, 1992 and 1991 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, L.L.P., independent auditors.
The selected financial information for the three-month periods ended March 31,
1996 and 1995 is unaudited but, in the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation have
been included. Operating results for the three-month period ended March 31, 1996
are not necessary indicative of the results that may be expected for the year
ending December 31, 1996. 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>
THREE MONTHS ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
------------------------- ----------------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Premiums and Policy Fees.... $ 108,666 $ 102,014(1) $ 411,681(1) $ 402,772 $ 370,758 $ 323,136 $ 273,975
Net Investment Income....... 124,280 112,663 475,924 417,825 362,130 284,069 233,502
Realized Investment Gains
Losses..................... 4,421 2,619 1,612 6,298 5,054 (14) (3,085)
Other Income................ 12,378 4,533(1) 32,663 21,553 21,695 18,835 11,556
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total Revenues.............. 249,745 221,829 921,880 848,448 759,637 626,026 515,948
Benefits and Expenses....... 216,605 192,257(1) 800,846(1) 742,275 674,593 566,079 464,245
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income Before Income Tax.... 33,140 29,572 121,034 106,173 85,044 59,947 51,703
Net Income.................. 21,068 19,009 76,665 70,401 56,550(2) 41,420(3) 35,789
BALANCE SHEET DATA
Total Invested Assets....... 6,252,430 5,574,824 6,025,056 5,301,911 4,766,711 3,597,070 2,795,755
Total Assets................ 7,594,796 6,450,331 7,231,257 6,130,284 5,316,005 4,006,667 3,120,290
Total Debt.................. 128,700 124,000 115,500 98,000 147,118 88,248 57,579
Total Liabilities........... 7,103,469 6,085,890 6,704,700 5,859,911 4,955,272 3,725,267 2,868,545
Stockholders' Equity (4).... 491,327 364,440 526,557 270,373 360,733 281,400 251,745
Stockholders' Equity
Excluding Net Unrealized
Gains and Losses on
Investments................ 486,214 424,491 468,694 377,905 321,449 278,244 247,764
PER SHARE DATA (5)
Operating Earnings.......... 0.73 0.63 2.68 2.38 1.99 1.56 1.39
Net Income.................. 0.73 0.69 2.68 2.57 2.07(2) 1.52(3) 1.31
Stockholders' Equity (4).... 17.06 12.67 18.30 9.86 13.17 10.28 9.22
Stockholders' Equity
Excluding Net Unrealized
Gains and Losses on
Investments................ 16.88 14.76 16.29 13.78 11.74 10.16 9.08
Operating Return on Average
Equity (6)................. 17.6%(7) 19.0%(7) 17.7% 18.7% 18.2% 16.2% 16.1%
Return on Average
Equity (6)................. 17.3%(7) 20.0%(7) 17.7% 20.1% 18.6% 15.5% 15.1%
CONSOLIDATED STATUTORY
FINANCIAL DATA (8)
Net Income.................. $ 6,735 $ 17,517 $ 115,259 $ 68,945 $ 53,138 $ 32,426 $ 35,196
Total Capital and Surplus... 300,590 314,189 324,416 306,858 265,075 208,476 189,473
</TABLE>
- --------------
1. Certain reclassifications have been made in the previously reported results
to make prior period results comparable to those of the current year. Such
reclassifications had no effect on previously reported net income, total
assets, or stockholders' equity.
2. Reduced by one-time adjustment of income tax expense of $1,261 or $.05 per
share due to increase in the corporate income tax rate from 34% to 35%.
S-11
<PAGE>
3. Reflects the adoption of SFAS No. 106, "Employers' Accounting For
Postretirement Benefits Other Than Pensions," which decreased net income
$1,053 or $.04 per share.
4. Reflects the adoption of SFAS No. 115, "Accounting for Certain Investments
in Debt and Equity Securities" at December 31, 1993. As prescribed by SFAS
No. 115, certain investments are recorded at their market values with the
resulting unrealized gains and losses reduced by a related adjustment to
deferred policy acquisition costs, net of income tax, reported as a
component of stockholders' equity. The market values of fixed maturities
increase or decrease as interest rates fall or rise. Therefore, although the
adoption of SFAS No. 115 does not affect the Company's operations, its
reported stockholders' equity will fluctuate significantly as interest rates
change.
5. Prior period results have been restated to reflect a two-for-one stock split
on June 1, 1995.
6. Average equity excludes net unrealized gains and losses on investments.
7. Return on average equity for the twelve months ending March 31.
8. Of Protective Life's insurance subsidiaries prepared in conformity with
statutory accounting practices prescribed or permitted by insurance
regulatory authorities. Statutory accounting practices differ in some
respects from generally accepted accounting principles. For example, (a)
acquisition costs of obtaining new businesses are expensed as incurred, (b)
benefit liabilities are computed using methods statutorily mandated and are
not adjusted for actual experience, (c) income tax expenses is computed on
taxable earnings and (d) furniture and equipment, agents' debt balances and
prepaid expenses are charged directly against surplus rather than reported
as assets.
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
Protective Life's Common Stock is listed and principally traded on the New
York Stock Exchange (NYSE symbol: PL). The following table sets forth the
highest and lowest closing prices of Protective Life's Common Stock, $0.50 par
value, as reported by the New York Stock Exchange during the periods indicated,
along with the dividends paid per share of Common Stock during the same periods.
Prices and dividends prior to June 1, 1995 have been adjusted for the June 1,
1995 two-for-one stock split.
<TABLE>
<CAPTION>
RANGE
--------------------
HIGH LOW DIVIDENDS
--------- --------- -----------
<S> <C> <C> <C>
1994
First Quarter.................................................................. $ 22.88 $ 20.44 $ .13
Second Quarter................................................................. 23.13 19.06 .14
Third Quarter.................................................................. 22.06 20.00 .14
Fourth Quarter................................................................. 24.31 19.94 .14
1995
First Quarter.................................................................. $ 24.25 $ 21.44 $ .14
Second Quarter................................................................. 27.50 21.63 .16
Third Quarter.................................................................. 29.63 27.38 .16
Fourth Quarter................................................................. 31.25 26.88 .16
1996
First Quarter.................................................................. $ 36.50 $ 30.50 $ .16
Second Quarter (closing prices through May 23)................................. 38.38 33.13 .18
</TABLE>
Protective Life (or its predecessor) has paid cash dividends each year since
1926 and each quarter since 1934. Protective Life expects to continue to pay
cash dividends, subject to the earnings and financial condition of Protective
Life and other relevant factors. The ability of Protective Life to pay cash
dividends is dependent on cash dividends and other payments received by
Protective Life from its life insurance subsidiaries which are subject to
certain limitations under applicable insurance laws and financial covenants.
S-12
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement,
Protective Life has agreed to sell to each of the Underwriters named below, and
each of such Underwriters, for whom Goldman, Sachs & Co., Dean Witter Reynolds
Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and The
Robinson-Humphrey Company, Inc. are acting as representatives, has severally
agreed to purchase from Protective Life, the respective number of shares of
Common Stock set forth opposite its name below:
<TABLE>
<CAPTION>
NUMBER OF SHARES
UNDERWRITER OF COMMON STOCK
- ------------------------------------------------------------------------------------ ------------------
<S> <C>
Goldman, Sachs & Co................................................................. 325,000
Dean Witter Reynolds Inc............................................................ 325,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................................................. 325,000
The Robinson-Humphrey Company, Inc.................................................. 325,000
Donaldson, Lufkin & Jenrette Securities Corporation................................. 100,000
A.G. Edwards & Sons, Inc............................................................ 100,000
Fox-Pitt, Kelton Inc................................................................ 100,000
Edward D. Jones & Co................................................................ 100,000
Lehman Brothers Inc................................................................. 100,000
J.P. Morgan Securities Inc.......................................................... 100,000
Oppenheimer & Co., Inc.............................................................. 100,000
----------
Total........................................................................... 2,000,000
----------
----------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the shares offered hereby,
if any are taken.
The Underwriters propose to offer the shares of Common Stock 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 $1.05 per share. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $.10 per
share to certain brokers and dealers. After the shares of Common Stock are
released for sale to the public, the offering price and other selling terms may
from time to time be varied by the representatives.
Protective Life has granted the Underwriters an option exercisable for 30
days after the date of this Prospectus Supplement to purchase up to an aggregate
of 300,000 additional shares of Common Stock solely to cover over-allotments, if
any. 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 shares to be purchased by each of
them, as shown in the foregoing table, bears to the 2,000,000 shares of Common
Stock offered.
Protective Life and its executive officers have agreed that, during the
period beginning from the date of this Prospectus Supplement and continuing to
and including the date 90 days after the date of this Prospectus Supplement,
they will not offer, sell, contract to sell or otherwise dispose of any
securities of Protective Life (other than pursuant to director and employee
benefit plans existing, or on the conversion or exchange of convertible or
exchangeable securities outstanding, on the date of this Prospectus Supplement)
which are substantially similar to the shares of Common Stock or which are
convertible or exchangeable into securities that are substantially similar to
the shares of Common Stock, without the prior written consent of Goldman, Sachs
& Co., except for the shares of Common Stock offered in connection with the
offering.
The Underwriters and certain affiliates thereof engage in transactions with
and perform services for Protective Life and its affiliates in the ordinary
course of business.
Protective Life has agreed to indemnify the several Underwriters against
certain liabilities, including certain liabilities under the Securities Act of
1933.
S-13
<PAGE>
PROSPECTUS
PROTECTIVE LIFE CORPORATION
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
PLC CAPITAL L.L.C.
CUMULATIVE MONTHLY INCOME PREFERRED SECURITIES (MIPS-SM-*)
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, (the "Debt Securities"), in one
or more series, which may be either senior debt securities (the "Senior Debt
Securities") or subordinated debt securities (the "Subordinated Debt
Securities"), (b) shares of its preferred stock, par value $1.00 per share
("Preferred Stock"), in one or more series, and/or (c) shares of its common
stock, par value $.50 per share ("Common Stock"), and PLC Capital, a subsidiary
of Protective Life ("PLC Capital"), may from time to time offer, in one or more
series, its Cumulative Monthly Income Preferred Securities (the "Preferred
Securities"), in each case in amounts, at prices and on terms to be determined
at the time or times of offering. The Debt Securities, Preferred Stock, Common
Stock and Preferred Securities are referred to herein collectively as the
"Offered Securities". The aggregate initial offering price of the Offered
Securities in respect of which this Prospectus is being delivered will not
exceed U.S. $120,000,000 (or its equivalent (based on the applicable exchange
rate at the time of issue), in one or more foreign currencies or currency units
as shall be designated by Protective Life). The aggregate initial offering price
of the Common Stock in respect of which this Prospectus is being delivered will
not exceed U.S. $75,000,000.
PLC Capital, a limited liability company formed under the laws of the State
of Delaware, was formed by Protective Life solely to issue its Preferred
Securities, representing preferred limited liability company interests, and its
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 Offered Securities in respect of which this
Prospectus is being delivered 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, denominations,
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,
initial public offering or purchase price, conversion rights, methods of
distribution and other special terms, (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, initial public offering or
purchase price, conversion rights, methods of distribution and other special
terms and (z) in the case of Common Stock, the number of shares offered, the
methods of distribution and the public offering or purchase price. Protective
Life's Common Stock is listed on the New York Stock Exchange under the trading
symbol "PL". Any Common Stock sold pursuant to a Prospectus Supplement will be
listed on such exchange, subject to official notice of issuance.
The Prospectus Supplement will also contain information, as applicable,
about certain United States federal income tax considerations relating to the
Offered Securities in respect of which this Prospectus is being delivered.
The Debt Securities will be unsecured. Unless otherwise specified in a
Prospectus Supplement, the Senior Debt Securities will rank equally with all
other unsecured and unsubordinated indebtedness of Protective Life. The
Subordinated Debt Securities will be subordinated in right of payment to all
Senior Indebtedness (as defined herein) of Protective Life to the extent
described herein and in the Prospectus Supplement relating thereto.The Debt
Securities may be denominated in United States dollars or, at the option of
Protective Life if so specified in the applicable Prospectus Supplement, in one
or more foreign currencies or currency units. The Debt Securities may be issued
in registered form or bearer form, or both. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities.
The Offered Securities may be sold to or through underwriters, through
dealers or agents or directly to purchasers. See "Plan of Distribution". The
names of any underwriters, dealers or agents involved in the sale of the Offered
Securities in respect of which this Prospectus is being delivered and any
applicable fee, commission or discount arrangements with them will be set forth
in a Prospectus Supplement.
This Prospectus may not be used to consummate sales of Offered Securities
unless accompanied by a Prospectus Supplement.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------
- ------------------------------
*MIPS is a service mark of Goldman, Sachs & Co.
The date of this Prospectus is October 12, 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, Citicorp 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 special purpose entity, has 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 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 is managed by Protective
Life, in its capacity as a holder of Common Securities.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
Protective Life's Quarterly Reports on Form 10-Q for the three month period
ended March 31, 1994 and the three month and six month periods ended June 30,
1994, its Annual Report on Form 10-K for the year ended December 31, 1993, its
Form 10-K/A (amending its Annual Report on Form 10-K for the year ended December
31, 1993) dated May 19, 1994, its Current Reports on Form 8-K dated August 4,
1993, February 14, 1994, April 26, 1994, June 17, 1994, July 1, 1994 and July
27, 1994 and its Form 8-K/A dated June 20, 1994 as filed with the Commission
pursuant to the Exchange Act (file no. 0-9924), and the description of
Protective Life's Common Stock contained in its Registration Statement on Form
10 filed pursuant to Section 12 of the Exchange Act on September 4, 1981, as
amended by an amendment thereto filed on Form 8 on October 27, 1981 and the
description of Protective Life's Junior Participating Cumulative Preferred Stock
contained in its Form 8-A filed on July 15, 1987, as amended by amendments
thereto filed on Form 8 on July 23, 1987 and July 29, 1987, including any
amendment or report filed for the purpose of updating such descriptions prior to
the termination of the offering, 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
2
<PAGE>
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).
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'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 or dividends on any Preferred Stock or Common Stock 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. 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) would be
entitled to receive any payment from the assets of such subsidiary.
PLC CAPITAL L.L.C.
PLC Capital is a limited liability company formed under the laws of the
State of Delaware. PLC Capital's offices are located at 2801 Highway 280 South,
Birmingham, Alabama 35223 (Telephone: (205) 879-9230). Protective Life owns,
directly and indirectly, all of the Common Securities of PLC
3
<PAGE>
Capital, which Common Securities are nontransferable. PLC Capital was formed by
Protective Life and a 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 is 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 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
Except as otherwise described in the applicable Prospectus Supplement, the
proceeds from the sale by PLC Capital 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, Preferred Stock or Common Stock, for general corporate purposes,
including, but not limited to, repayments of indebtedness of Protective Life or
its subsidiaries. Pending such use, the proceeds may be invested temporarily in
short-term marketable securities. A more detailed description of the use of
proceeds of any specific offering of Offered Securities shall be set forth in
the Prospectus Supplement pertaining to such offering.
RATIOS OF CONSOLIDATED EARNINGS TO FIXED CHARGES
The following table sets forth Protective Life's ratios of consolidated
earnings to fixed charges for the years and periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
---------------------------- ----------
1989 1990 1991 1992 1993 1993 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of Consolidated Earnings to Fixed Charges (1)................... 25.3 8.2 9.7 13.5 14.4 14.6 13.1
Ratio of Consolidated Earnings to Combined Fixed Charges and Dividends
on Preferred Securities (2).......................................... 25.3 8.2 9.7 13.5 14.4 14.6 12.3
Ratio of Consolidated Earnings to Interest on Debt, Dividends on
Preferred Securities, and Interest Credited on Investment Products
(3).................................................................. 3.1 1.6 1.4 1.3 1.4 1.4 1.4
<FN>
- ------------------------
(1) The ratio of consolidated earnings to fixed charges is calculated by
dividing the sum of income before income tax (excluding pre-tax minority
interest but not excluding dividends on Preferred Securities reported as
minority interest) and interest expense on debt, by interest expense on
debt.
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
(2) The ratio of consolidated earnings to combined fixed charges and dividends
on Preferred Securities is calculated by dividing the sum of income before
income tax (excluding pre-tax minority interest but not excluding dividends
on Preferred Securities reported as minority interest) and interest expense
on debt, by interest expense on debt and dividends on Preferred Securities.
(3) The ratio of consolidated earnings to interest on debt, dividends on
Preferred Securities, and interest credited on investment products is
calculated by dividing the sum of income before income tax (excluding
pre-tax minority interest but not excluding dividends on Preferred
Securities reported as minority interest), interest expense on debt and
interest credited on investment products, by the sum of interest expense on
debt, dividends on Preferred Securities and interest credited on invest-
ment products. Investment products include products such as guaranteed
investment contracts and annuities.
</TABLE>
DESCRIPTION OF DEBT SECURITIES OF PROTECTIVE LIFE
The Senior Debt Securities offered hereby are to be issued in one or more
series under the Senior Indenture, dated as of June 1, 1994, as supplemented by
Supplemental Indenture No. 1, dated as of July 1, 1994 (as so supplemented, the
"Senior Indenture"), between Protective Life and The Bank of New York, as
trustee (the "Trustee"). The Subordinated Debt Securities offered hereby are to
be issued under the Subordinated Indenture, dated as of June 1, 1994, as amended
and supplemented by Supplemental Indenture No. 1, dated as of June 9, 1994, and
Supplemental Indenture No. 2, dated as of August 1, 1994 (as so supplemented and
amended, the "Subordinated Indenture" and, together with the Senior Indenture,
the "Indentures"), between Protective Life and AmSouth Bank of Alabama, a State
banking corporation, successor, by conversion of charter, to AmSouth Bank NA
("AmSouth Bank"), as trustee (also, the "Trustee"), copies of which have been
filed as exhibits to the Registration Statement of which this Prospectus forms a
part.
The statements herein relating to the Debt Securities and the following
summaries of certain provisions of the Indentures do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all the
provisions of the Indentures (as they may be amended or supplemented from time
to time), including the definitions therein of certain terms capitalized in this
Prospectus. Whenever particular Sections or defined terms of the Indentures (as
they may be amended or supplemented from time to time) are referred to herein or
in a Prospectus Supplement, such Sections or defined terms are incorporated
herein or therein by reference.
GENERAL
The Debt Securities will be unsecured obligations of Protective Life. The
Senior Debt Securities will be unsecured and will rank PARI PASSU with all other
unsecured and unsubordinated obligations of Protective Life. The Subordinated
Debt Securities 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. Except as otherwise provided in the applicable
Prospectus Supplement, the Indentures, as they apply to any series of Debt
Securities, also do not 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
5
<PAGE>
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
or at the option of a Holder thereof 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 the amount of principal of, or any premium or
interest on, any of such Debt Securities may be determined with reference to an
index or pursuant to a formula, the manner in which such amounts will be
determined; (13) 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; (14) if the principal amount payable at the Stated Maturity
of any of such Debt Securities will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the principal
amount thereof which will be due and payable upon any Maturity other than the
Stated Maturity or which will be deemed to be Outstanding as of any such date
(or, in any such case, the manner in which such deemed principal amount is to be
determined); (15) 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; (16) 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; (17) the
application, if any, of such means of defeasance or covenant defeasance as may
be specified for such Debt Securities; (18) 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; (19) in the case of the Subordinated Indenture, the
terms, if any, upon which such Debt Securities may be converted or exchanged, at
the option of the holders thereof, into or for Common Stock of Protective Life
or other securities or property; and (20) any other terms not inconsistent with
the terms of the Indentures pertaining to such Debt Securities. (Section 3.1 of
each Indenture.) Unless otherwise specified in the applicable Prospectus
Supplement, the Debt Securities will not be listed on any securities exchange.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued in fully-registered form without coupons. Where Debt
Securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special federal
income tax considerations, applicable to any such Debt Securities and to payment
on and transfer and exchange of such Debt Securities will be described in the
applicable Prospectus Supplement. Bearer Debt Securities will be transferable by
delivery. (Section 3.5 of each Indenture.)
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain federal income tax consequences and
special considerations applicable to any such Debt Securities will be described
in the applicable Prospectus Supplement.
If the purchase price of any of the Debt Securities is payable in one or
more foreign currencies or currency units or if any Debt Securities are
denominated in one or more foreign currencies or currency units or if the
principal of, premium, if any, or interest, if any, on any Debt Securities is
payable in one or more foreign currencies or currency units, the restrictions,
elections, certain federal income tax considerations, specific terms and other
information with respect to such issue of Debt Securities and such foreign
currency or currency units will be set forth in the applicable Prospectus
Supplement.
6
<PAGE>
If any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of Debt Securities, special federal
income tax, accounting and other considerations applicable thereto will be
described 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.)
All moneys paid by Protective Life to the Trustee or a paying agent for the
payment of the principal of, or any premium or interest on, any Debt Security
which remain unclaimed at the end of two years after such principal, premium or
interest has become due and payable will be repaid to Protective Life, and the
Holder of such Security thereafter may look only to Protective Life for payment
thereof. (Section 9.3 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"). Each Registered Global Security will be registered in the name of a
depository (the "Depository") or a nominee for the Depository identified in the
applicable Prospectus Supplement, will be deposited with such Depository or
nominee or a custodian therefor and will bear a legend regarding the
restrictions on exchanges and registration of transfer thereof referred to below
and any such other matters as may be provided for pursuant to each Indenture. 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
7
<PAGE>
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.)
Ownership of beneficial interests in a Global Security will be limited to
participants and to persons that may hold beneficial interests through
participants. 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 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.
8
<PAGE>
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. Nevertheless, payments, transfers,
exchanges and other matters relating to beneficial interests in a Registered
Global Security may be subject to various policies and procedures adopted by the
Depository from time to time. 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.)
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
9
<PAGE>
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.)
Except as otherwise provided in a Prospectus Supplement relating to the Debt
Securities of a particular series, 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 (after the
expiration of any applicable grace period with respect thereto), 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 such Event of Default 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 9.6 of each Indenture.)
10
<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 or to add or change any provisions to such extent as necessary to
permit or facilitate the appointment of a separate Trustee or Trustees for
specific series of Debt Securities; (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 then Outstanding; 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 then Outstanding (and in the case of Subordinated
Debentures issued in return for the proceeds of Preferred Securities of any
series then Outstanding, 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 interest rate, the amount of
principal or 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 then Outstanding (and in
the case of Subordinated Debentures issued in return for the proceeds of
Preferred Securities of any series then Outstanding, 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.)
11
<PAGE>
SUBORDINATION UNDER THE SUBORDINATED INDENTURE
In the Subordinated Indenture, Protective Life has covenanted and agreed
that any Subordinated Debt Securities (including Subordinated Debentures) issued
thereunder are subordinate and junior in right of payment to all Senior
Indebtedness to the extent provided in the Subordinated Indenture. The
Subordinated Indenture defines the term "Senior Indebtedness" as the principal,
premium, if any, and interest on (i) all indebtedness of Protective Life,
whether outstanding on the date of the issuance of Subordinated Debt Securities
or thereafter created, incurred or assumed, which is for money borrowed, or
which is 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.
12
<PAGE>
Senior Indebtedness shall not be deemed to have been paid in full unless the
holders thereof shall have received cash, securities or other property equal to
the amount of such Senior Indebtedness then outstanding. Upon the payment in
full of all Senior Indebtedness, the holders of Subordinated Debt Securities
shall be subrogated to all the rights of any holders of Senior Indebtedness to
receive any further payments or distributions applicable to the Senior
Indebtedness until all Subordinated Debt Securities shall have been paid in
full, and such payments or distributions received by any holder of Subordinated
Debt Securities, by reason of such subrogation, of cash, securities or other
property which otherwise would be paid or distributed to the holders of Senior
Indebtedness, shall, as between Protective Life and its creditors other than the
holders of Senior Indebtedness, on the one hand, and the holders of Subordinated
Debt Securities, on the other, be deemed to be a payment by Protective Life on
account of Senior Indebtedness, and not on account of Subordinated Debt
Securities.
The Subordinated Indenture provides that the foregoing subordination
provisions, insofar as they relate to any particular issue of Subordinated Debt
Securities, may be changed prior to such issuance. Any such change would be
described in the Prospectus Supplement relating to such Subordinated Debt
Securities.
The Subordinated Indenture places no limitation on the amount of additional
Senior Indebtedness that may be incurred by Protective Life. Protective Life
expects from time to time to incur additional indebtedness constituting Senior
Indebtedness.
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
13
<PAGE>
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 an Event of Default. If Protective
Life exercises its covenant defeasance option, payment of such Debt Securities
may not be accelerated by reason of a Default or an Event of Default with
respect to the covenants to which such covenant defeasance is applicable.
However, if such acceleration were to occur by reason of another Event of
Default, the realizable value at the acceleration date of the money and
Government Obligations in the defeasance trust could be less than the principal
and interest then due on such Debt Securities, in that the required deposit in
the defeasance trust is based upon scheduled cash flow rather than market value,
which will vary depending upon interest rates and other factors.
NOTICES
Notices to holders of registered Debt Securities will be given by mail to
the addresses of such holders as they may appear in the Register. (Section 1.6
of each Indenture)
TITLE
Protective Life, the Trustee and any agent of Protective Life or the Trustee
may treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of receiving payment and for all other purposes. (Section 3.8 of each Indenture)
GOVERNING LAW
The Indentures and the Debt Securities will be governed by, and construed in
accordance with, the laws of the State of New York. (Section 1.11 of each
Indenture)
THE TRUSTEES
The Bank of New York is the Trustee under the Senior Indenture. AmSouth Bank
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. The Indentures contain
certain limitations on the right of each Trustee, should it become a creditor of
Protective Life, to obtain payment of claims in certain cases, or to realize for
its own account on certain property received in respect of any such claim as
security or otherwise. Each Trustee will be permitted to engage in certain other
transactions; however, if it acquires any conflicting interest and there is a
default under the Debt Securities, it must eliminate such conflict or resign.
DESCRIPTION OF CAPITAL STOCK OF PROTECTIVE LIFE
AUTHORIZED AND OUTSTANDING CAPITAL STOCK
The authorized capital stock of Protective Life is 84,000,000 shares,
consisting of:
(a) 3,850,000 shares of Preferred Stock, par value $1.00 per share, of
which no shares were outstanding as of June 30, 1994;
(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 as of June 30, 1994; and
(c) 80,000,000 shares of Common Stock, par value $.50 per share (the
"Common Stock"), of which 13,698,752 shares (as well as the same number of
Preferred Share Purchase Rights ("Rights") to purchase shares of Junior
Preferred Stock pursuant to the Rights Agreement, dated July 13, 1987 (the
"Rights Agreement"), between Protective Life and AmSouth Bank, as Rights
Agent) were outstanding as of June 30, 1994.
14
<PAGE>
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 (i) Restated Certificate of Incorporation of
Protective Life, as amended (the "Restated Certificate of Incorporation"), (ii)
the By-laws of Protective Life and (iii) the Rights Agreement, copies of each of
which are filed as exhibits to the Registration Statement of which this
Prospectus forms a part.
No holders of any class of Protective Life's capital stock are entitled to
preemptive rights.
DESCRIPTION OF PREFERRED STOCK OF PROTECTIVE LIFE
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.
DESCRIPTION OF COMMON STOCK OF PROTECTIVE LIFE
GENERAL
Subject to the rights of the holders of any shares of Preferred Stock which
may at the time be outstanding, holders of Common Stock are entitled to such
dividends as the Board of Directors may declare out of funds legally available
therefor. The holders of Common Stock will possess exclusive voting rights in
Protective Life, except to the extent the Board of Directors specifies voting
power with respect to any Preferred Stock issued. Except as hereinafter
described, holders of Common Stock are entitled to one vote for each share of
Common Stock, but will not have any right to cumulate votes in the election of
directors. In the event of liquidation, dissolution or winding up of Protective
Life, the holders of Common Stock are entitled to receive, after payment of all
of Protective Life's debts and liabilities and of all sums to which holders of
any Preferred Stock may be entitled, the distribution of any remaining assets of
Protective Life. Holders of Common Stock will not be entitled to preemptive
rights with respect to any shares which may be issued. Any shares of Common
Stock sold hereunder will be fully paid and non-assessable. AmSouth Bank of
Birmingham, Alabama is the registrar and transfer agent for the Common Stock.
The Common Stock is listed on the New York Stock Exchange under the symbol "PL."
CERTAIN PROVISIONS
The provisions of Protective Life's Restated Certificate of Incorporation
that are summarized below may be deemed to have an anti-takeover effect and may
delay, defer or prevent a tender offer or takeover attempt that a stockholder
might consider to be in such stockholder's best interests, including those
attempts that might result in a premium over the market price for the shares
held by stockholders.
ISSUANCE OF PREFERRED STOCK. Pursuant to the Restated Certificate of
Incorporation, the Board of Directors by resolution may establish one or more
series of Preferred Stock having such number of shares, designation, relative
voting rights, dividend rights, dividend rates, liquidation and other rights,
15
<PAGE>
preferences and limitations as may be fixed by the Board of Directors without
any further stockholder approval. Such rights, preferences, privileges and
limitations as may be established could have the effect of impeding or
discouraging the acquisition of control of Protective Life.
BUSINESS COMBINATIONS. 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. Under the Restated Certificate of
Incorporation, the amendment of, repeal of or adoption of any provision
inconsistent with provisions of the Restated Certificate of Incorporation
relating to Business Combinations with a Related Person requires the affirmative
vote of the holders of at least 80 percent of Protective Life's voting stock and
the holders of at least 67 percent of Protective Life's voting stock held by
holders other than such Related Person.
SHARE PURCHASE RIGHTS PLAN
On July 13, 1987, the Board of Directors of Protective Life declared a
dividend distribution of one Right for each outstanding share of Common Stock.
The distribution was payable on July 28, 1987 to the shareholders of record on
that date. Each Right entitles the registered holder to purchase from Protective
Life one one-hundredth of a share of Junior Preferred Stock at a price of $52
per one one-hundredth of a share of Junior Preferred Stock (the "Purchase
Price"), subject to adjustment.
Until the earlier to occur of (i) ten days following the time of a public
announcement or notice to Protective Life that a person or group of affiliated
or associated persons (an "Acquiring Person") acquired, or obtained the right to
acquire, beneficial ownership of 20% or more of the outstanding
16
<PAGE>
Common Stock of Protective Life (the "Stock Acquisition Time") or (ii) ten days
following the commencement or announcement of an intention to make a tender
offer or exchange offer which, if successful, would cause the bidder to own 30%
or more of the outstanding Common Stock (the earlier of such dates being called
the "Distribution Date"), the Rights will be evidenced, with respect to any of
the Common Stock certificates outstanding as of July 28, 1987, by such Common
Stock certificate with a copy of a "Summary of Rights" attached thereto. The
Rights Agreement provides that, until the Distribution Date, the Rights will be
transferred with and only with the Common Stock. Until the Distribution Date (or
earlier redemption or expiration of the Rights), new Common Stock certificates
issued after July 28, 1987, upon transfer or new issuance of the Common Stock,
will contain a notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any of the Common Stock certificates outstanding as of
July 28, 1987, even without a copy of a "Summary of Rights" attached thereto,
will also constitute the transfer of the Rights associated with the Common
Shares represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights will
expire on July 28, 1997, unless earlier redeemed by Protective Life as described
below or extended.
The Purchase Price payable, and the number and kind of shares of Junior
Preferred Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution (i) in
the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Junior Preferred Stock, (ii) upon the grant to holders
of Junior Preferred Stock of certain rights, options or warrants to subscribe
for or purchase Junior Preferred Stock or convertible securities at less than
the current market price of Junior Preferred Stock or (iii) upon the
distribution to holders of Junior Preferred Stock of evidences of indebtedness
or assets (excluding regular periodic cash dividends or dividends payable in
Junior Preferred Stock) or of subscription rights or warrants (other than those
referred to above). The number of Rights and number of shares of Junior
Preferred Stock issuable upon the exercise of each Right are subject to
adjustment in the event of a stock split, combination or stock dividend on the
Common Stock.
In the event that after the Stock Acquisition Time, Protective Life is
acquired in a merger or other business combination transaction or more than 50%
of its assets or earning power is sold, proper provision shall be made so that
each holder of a Right (other than the Acquiring Person) shall thereafter have
the right to receive, upon the exercise thereof at the then-current exercise
price of the Right, that number of shares of common stock of the acquiring
company which at the time of such transaction would have a market value of two
times the exercise price of the Right. In the event that Protective Life were
the surviving corporation in a merger and its Common Stock was not changed or
exchanged, or in the event that an Acquiring Person engages in one of a number
of self-dealing transactions specified in the Rights Agreement, proper provision
shall be made so that each holder of a Right (other than the Acquiring Person)
will thereafter have the right to receive upon exercise that number of shares of
the Common Stock (or, in certain circumstances, a combination of cash, other
property, Preferred Stock, Common Stock and/or other securities) having a market
value of two times the exercise price of the Right.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractions of Rights or fractional shares will be issued
(other than fractional shares which are integral multiples of one one-hundredth
of a share of Junior Preferred Stock which may, upon the election of Protective
Life, be evidenced by depository receipts) and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Rights or Junior Preferred
Stock, as the case may be, on the last trading date of exercise.
At any time prior to the earlier of ten business days following public
announcement or notice to Protective Life that a person or group of affiliated
or associated persons has acquired beneficial
17
<PAGE>
ownership of 20% or more of the outstanding shares of Common Stock and July 28,
1997, Protective Life may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). After such redemption period
has expired, Protective Life's right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to 5% or less of the
outstanding shares of Common Stock. Immediately upon the action of the Board of
Directors ordering redemption of the Rights, the Rights will terminate and the
only right of the holders of Rights will be to receive the $.01 Redemption Price
per Right.
Until a Right is exercised, the holder thereof, as such, will have no rights
as a stockholder of Protective Life, other than rights resulting from such
holder's ownership of shares of Common Stock, including, without limitation, the
right to vote or to receive dividends. While the distribution of the Rights will
not be taxable to stockholders or to Protective Life, stockholders may,
depending upon the circumstances, recognize taxable income in the event that the
Rights become exercisable for Common Stock (or other consideration) of
Protective Life or for common stock of the acquiring company as set forth above.
The Rights and the Rights Agreement can be amended by the Board of Directors
of Protective Life (after the Stock Acquisition Time, only with the approval of
a majority of the Continuing Directors) in any respect whatsoever up until the
close of business on the tenth business day following the Stock Acquisition
Time, and thereafter in certain respects which do not adversely affect the
interests of holders of Right Certificates (other than an Acquiring Person or
its affiliates of associates).
For purposes of the Rights Agreement, the term "Continuing Director" means
any member of the Board of Directors of Protective Life who was a member of the
Board prior to the Stock Acquisition Time, and any person who is subsequently
elected to the Board if such person is recommended or approved by a majority of
the Continuing Directors, but shall not include an Acquiring Person, or an
affiliate or associate of an Acquiring Person, or any representative of the
foregoing entities.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire Protective
Life in a manner which causes the Rights to become exercisable unless the offer
is conditioned on substantially all the Rights being acquired. This potential
dilution may have the effect of delaying, deferring or discouraging attempts to
acquire control of Protective Life which are not approved by Protective Life's
Board of Directors. However, the Rights should not interfere with any merger or
other business combination approved by Protective Life's Board of Directors.
The foregoing description of the Rights Agreement is qualified in its
entirety by reference to the complete terms of the Rights as set forth in the
Rights Agreement. The Rights Agreement is incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is a part. A copy
of the Rights Agreement can be obtained as described under "Available
Information".
DESCRIPTION OF JUNIOR PREFERRED STOCK
GENERAL. In connection with the Rights Agreement, 150,000 shares of Junior
Preferred Stock have been reserved and authorized for issuance by the Board of
Directors of Protective Life. No shares of Junior Preferred Stock are
outstanding as of the date of this Prospectus. The following statements with
respect to the Junior Preferred Stock do not purport to be complete and are
subject to the detailed provisions of the Restated Certificate of Incorporation
and the certificate of designation relating to the Junior Preferred Stock (the
"Certificate of Designation"), which are filed as exhibits to the Registration
Statement of which this Prospectus is a part.
RANKING. The Junior Preferred Stock shall rank junior to all other series
of Protective Life's Preferred Stock as to the payment of dividends and the
distribution of assets, unless the terms of any such series shall provide
otherwise.
DIVIDENDS AND DISTRIBUTIONS. Subject to the prior and superior rights of
the holders of any share of any series of Preferred Stock ranking prior to and
superior to the shares of Junior Preferred Stock with
18
<PAGE>
respect to dividends, the holders of shares of Junior Preferred Stock, in
preference to the holders of Common Stock and of any other junior stock which
may be outstanding, shall be entitled to receive, when, as and if declared by
the Board of Directors out of funds legally available for that purpose,
quarterly dividends payable in cash on the first day of January, April, July and
October in each year (each such date being referred to herein as "Quarterly
Dividend Payment Date") commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Junior Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $2.50 per share ($10.00 per annum) or (b) (subject to adjustment upon
certain dilutive events) 100 times the aggregate per share amount of all cash
dividends, and 100 times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common Stock, since
the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any share
or fraction of a share of Junior Preferred Stock.
Protective Life shall declare a dividend or distribution on the Junior
Preferred Stock immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $2.50 per
share ($10.00 per annum) on the Junior Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
VOTING RIGHTS. The holders of shares of Junior Preferred Stock shall have
the following voting rights: (a) subject to adjustment upon certain dilutive
events, each share of Junior Preferred Stock shall entitle the holder thereof to
100 votes (and each one one-hundredth of a share of Junior Preferred Stock shall
entitle the holder thereof to one vote) on all matters submitted to a vote of
the stockholders of Protective Life; (b) except as otherwise provided by the
Certificate of Designation, the Restated Certificate of Incorporation, any other
certificate of designation creating a series of preferred stock or any similar
stock or by law, the holders of shares of Junior Preferred Stock and the holders
of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of Protective Life; and (c) except as
provided in the Certificate of Designation or by applicable law, holders of
Junior Preferred Stock shall have no special voting rights and their consent
shall not be required for authorizing or taking any corporate action.
LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any liquidation (voluntary or
otherwise), dissolution or winding up of Protective Life, no distribution shall
be made to the holders of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Junior Preferred Stock
unless, prior thereto, the holders of shares of Junior Preferred Stock shall
have received the higher of (i) $100 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, or (ii) an aggregate amount per share, subject to
adjustment upon certain dilutive events, equal to 100 times the aggregate amount
to be distributed per share to holders of Common Stock; nor shall any
distribution be made to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding-up) with the Junior
Preferred Stock, except distributions made ratably on the Junior Preferred Stock
and all other such parity stock in proportion to the total amounts to which the
holders of all such shares are entitled upon such liquidation, dissolution or
winding-up.
CONSOLIDATION, MERGER, ETC. In case Protective Life shall enter into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, or otherwise changed, then in any such case, each
share of Junior Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share (subject to adjustment upon certain dilutive
events) equal to 100 times the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged.
19
<PAGE>
CERTAIN RESTRICTIONS. Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock are in arrears, thereafter
and until all accrued and unpaid dividends and distributions, whether or not
declared, on shares of Junior Preferred Stock outstanding shall have been paid
in full, Protective Life shall not: (i) declare or pay dividends on, or make any
other distributions on any shares or stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding-up) to the Junior
Preferred Stock; (ii) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding-up) with the Junior Preferred Stock except
dividends paid ratably on the Junior Preferred Stock, and all such parity stock
on which the dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled; (iii) redeem
or purchase or otherwise acquire for consideration shares of any stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or
winding-up) with the Junior Preferred Stock, provided that Protective Life may
at any time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of Protective Life ranking junior
(either as to dividends or upon liquidation, dissolution or winding-up) to the
Junior Preferred Stock; or (iv) purchase or otherwise acquire for consideration
any shares of Junior Preferred Stock, or any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding-up) with the
Junior Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series or classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes. Protective Life shall not permit any subsidiary of Protective Life to
purchase or otherwise acquire for consideration any shares of stock of
Protective Life unless Protective Life could, in accordance with the foregoing
restrictions, purchase or otherwise acquire such shares at such time and in such
manner.
REDEMPTION. The shares of Junior Preferred Stock are not redeemable.
CERTAIN LIMITATIONS ON DIVIDENDS AND OTHER PAYMENTS
Under the terms of the 9% Subordinated Debentures, Series A of Protective
Life (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 has 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). During any such extended interest
period, or at any time during which there is an uncured Default or Event of
Default (as defined in the Subordinated Indenture, see "Description of Debt
Securities of Protective Life -- Events of Default, Notice and Certain Rights on
Default") under the Series A Subordinated Debentures, Protective Life is
prohibited from paying any dividends on, or redeeming, purchasing, acquiring or
making 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 the Rights Agreement or any successor plan
to the share purchase plan established pursuant to such Rights Agreement 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).
DESCRIPTION OF PREFERRED SECURITIES OF PLC CAPITAL
The issued capital of PLC Capital consists of one Class A Interest, which is
owned by Protective Life, one Class B Interest, which is owned by a wholly-owned
subsidiary of Protective Life, and $55,000,000 in aggregate principal amount of
Series A Preferred Securities which are listed on the New York Stock Exchange
under the trading symbol "PL Pr M."
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
20
<PAGE>
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 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.
21
<PAGE>
The Guarantee will constitute a guarantee of payment and may be enforced by
holders of Preferred Securities directly against Protective Life. The following
payments to the extent not made by PLC Capital (the "Guarantee Payments") will
be subject to the Guarantee (without duplication): (i) any accumulated and
unpaid dividends which have theretofore been declared on the Preferred
Securities of such series out of funds held by PLC Capital and legally available
therefor; (ii) the redemption price (including all accumulated and unpaid
dividends whether or not declared) payable, out of funds held by PLC Capital and
legally available therefor, with respect to any Preferred Securities of such
series called for redemption by PLC Capital; and (iii) in the event of any
dissolution, liquidation or winding-up of PLC Capital, the lesser of (a) the
aggregate of the liquidation preference of the Preferred Securities of such
series and all accumulated and unpaid dividends (whether or not declared) to the
date of payment and (b) the amount of remaining assets of PLC Capital legally
available to holders of Preferred Securities of such series. In addition,
Protective Life will unconditionally and irrevocably guarantee, in the event of
any exchange by PLC Capital of Preferred Securities for Subordinated Debentures
(to the extent permitted by the Action for such Preferred Securities), delivery
of certificates representing the proper amount of such Subordinated Debentures
in conformity with the Action for such series. Protective Life's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by Protective Life to the holders of Preferred Securities of such series
or by causing PLC Capital to pay such amounts to such holders. The Prospectus
Supplement relating to a series of Preferred Securities will describe any
additional covenants or other terms of the Guarantee with respect to such
series. The Guarantee will rank PARI PASSU with Subordinated Debentures and,
accordingly, will be subordinate and junior in right of payment to all Senior
Indebtedness in a manner identical to that described under "Description of Debt
Securities of Protective Life -- Subordination under the Subordinated
Indenture."
THE GUARANTEE IS NOT A GUARANTEE THAT ANY PARTICULAR DIVIDEND OR AMOUNT ON
LIQUIDATION, DISSOLUTION OR WINDING UP WILL BE PAID; RATHER, THE GUARANTEE IS
SOLELY A GUARANTEE OF PAYMENT OF DIVIDENDS, IF ANY, THAT ARE IN FACT DECLARED
OUT OF FUNDS HELD BY PLC CAPITAL AND LEGALLY AVAILABLE THEREFOR, OF THE
REDEMPTION PRICE PAYABLE, OUT OF FUNDS HELD BY PLC CAPITAL AND LEGALLY AVAILABLE
THEREFOR, WITH RESPECT TO THE PREFERRED SECURITIES OF ANY SERIES CALLED FOR
REDEMPTION BY PLC CAPITAL AND OF AMOUNTS, IF ANY, AVAILABLE FOR DISTRIBUTION TO
THE HOLDERS OF THE PREFERRED SECURITIES OF ANY SERIES UPON LIQUIDATION,
DISSOLUTION OR WINDING UP AFTER SATISFACTION OF ALL CREDITORS OF PLC CAPITAL.
SUBORDINATED DEBENTURES
Protective Life will issue Subordinated Debentures to PLC Capital to
evidence the loans to be made by PLC Capital of the proceeds of (i) Preferred
Securities of each series and (ii) Common Securities and related capital
contributions ("Common Securities Payments"). See "Description of Debt
Securities of Protective Life" for a summary of the material provisions of the
Subordinated Indenture, under which the Subordinated Debentures will be issued.
References to provisions of the Subordinated Indenture in this Prospectus and in
the relevant Prospectus Supplement are qualified in their entirety by reference
to the text of the Subordinated Indenture, a form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
aggregate dollar amount of the Subordinated 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, Preferred Stock and
Common 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.
22
<PAGE>
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.
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.
Each series of Offered Securities will be a new issue with no established
trading market, other than the Common Stock which is listed on the New York
Stock Exchange. Any Common Stock sold pursuant to a Prospectus Supplement will
be listed on such exchange, subject to official notice of issuance. Protective
Life may elect to list any series of Debt Securities or Preferred Stock, and PLC
Capital may elect to list any series of Preferred Securities, on an exchange,
but neither company shall be obligated to do so. It is possible that one or more
underwriters may make a market in a series of Offered Securities, but will not
be obligated to do so and may discontinue any market making at any time without
notice. Therefore, no assurance can be given as to the liquidity of the trading
market for the Offered Securities.
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.
23
<PAGE>
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.
VALIDITY OF SECURITIES
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 L.L.P., independent accountants, given on the authority of that firm as
experts in accounting and auditing.
With respect to the unaudited interim financial information for Protective
Life Corporation and subsidiaries for the three-month periods ended March 31,
1994 and 1993 and the three-month and six-month periods ended June 30, 1994 and
1993 incorporated by reference in this Prospectus, the independent accountants
have reported that they have applied limited procedures in accordance with
professional standards for a review of such information. However, their separate
report included in the Registration Statement of which this Prospectus forms a
part states that they did not audit and they do not express an opinion on such
interim financial information. Accordingly, the degree of reliance on their
report on such information should be restricted in light of the limited nature
of the review procedures applied. The accountants are not subject to the
liability provisions of Section 11 of the Securities Act of 1933 for their
report on the unaudited interim financial information because that report is not
a "report" or a "part" of the Registration Statement prepared or certified by
the accountants within the meaning of Sections 7 and 11 of the Act.
24
<PAGE>
The financial statements of Wisconsin National Life Insurance Company as of
December 31, 1992 and 1991, and for each of the years in the two year period
ended December 31, 1992, incorporated by reference in or included in Protective
Life's Current Report on Form 8-K, dated August 4, 1993, have been incorporated
herein by reference in reliance upon the report of KPMG Peat Marwick,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
25
<PAGE>
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS SUPPLEMENT AND THE
PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS PROSPECTUS
SUPPLEMENT OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS NOR ANY
SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE OF SUCH INFORMATION.
------------------------
TABLE OF CONTENTS
PROSPECTUS SUPPLEMENT
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Protective Life Corporation................... S-3
Investment Considerations..................... S-8
Capitalization of Protective Life............. S-10
Use of Proceeds............................... S-10
Selected Consolidated Financial Data of
Protective Life Corporation................. S-11
Price Range of Common Stock and Dividends..... S-12
Underwriting.................................. S-13
PROSPECTUS
Available Information......................... 2
Incorporation of Certain Documents by
Reference..................................... 2
Protective Life Corporation................... 3
PLC Capital L.L.C............................. 3
Use of Proceeds............................... 4
Ratios of Consolidated Earnings to Fixed
Charges..................................... 4
Description of Debt Securities of
Protective Life............................. 5
Description of Capital Stock of
Protective Life............................. 14
Description of Preferred Stock of
Protective Life............................. 15
Description of Common Stock of
Protective Life............................. 15
Description of Preferred Securities of PLC
Capital..................................... 20
Description of Certain Contractual Back-Up
Obligations of Protective Life.............. 21
Plan of Distribution.......................... 22
Validity of Securities........................ 24
Experts....................................... 24
</TABLE>
2,000,000 SHARES
PROTECTIVE LIFE
CORPORATION
COMMON STOCK
(PAR VALUE $.50 PER SHARE)
--------------
PROSPECTUS SUPPLEMENT
----------
GOLDMAN, SACHS & CO.
DEAN WITTER REYNOLDS INC.
MERRILL LYNCH & CO.
THE ROBINSON-HUMPHREY
COMPANY, INC.
REPRESENTATIVES OF THE UNDERWRITERS
- -------------------------------------------
-------------------------------------------
- -------------------------------------------
-------------------------------------------
