Document:

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                                                                     Exhibit 4.2

                           PROTECTIVE LIFE CORPORATION

                                       to

                        THE BANK OF NEW YORK, as Trustee

                          SUPPLEMENTAL INDENTURE NO. 8

                          Dated as of February 28, 2001

                Floating Rate Senior Notes Due February 28, 2003

                                 ($100,000,000)

<PAGE>

                           PROTECTIVE LIFE CORPORATION

                          SUPPLEMENTAL INDENTURE NO. 8

                                  $100,000,000

                Floating Rate Senior Notes Due February 28, 2003

SUPPLEMENTAL INDENTURE NO. 8, dated as of February 28, 2001, from PROTECTIVE
LIFE CORPORATION, a Delaware corporation (the "Company"), to THE BANK OF NEW
YORK, a New York banking corporation, as trustee (the "Trustee").

      The Company has heretofore executed and delivered to the Trustee a Senior
Indenture, dated as of June 1, 1994 (the "Indenture"), providing for the
issuance from time to time of series of the Company's Securities.

      Section 3.1 of the Indenture provides for various matters with respect to
any series of Securities issued under the Indenture to be established in an
indenture supplemental to the Indenture.

      Section 8.1(7) of the Indenture provides for the Company and the Trustee
to enter into an indenture supplemental to the Indenture to establish the form
or terms of Securities of any series as provided by Sections 2.1 and 3.1 of the
Indenture.

      For and in consideration of the premises and the issuance of the series of
Securities provided for herein, it is mutually covenanted and agreed as follows
for the equal and ratable benefit of the Holders of the Securities of such
series:

                                    ARTICLE I

                       RELATION TO INDENTURE; DEFINITIONS

      Section 1.1. This Supplemental Indenture No. 8 constitutes an integral
part of the Indenture.

      Section 1.2. For all purposes of this Supplemental Indenture No. 8:

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      Section 1.2.1.Capitalized terms used herein without definition shall have
      the meanings specified in the Indenture;

      Section 1.2.2.All references herein to Articles and Sections, unless
      otherwise specified, refer to the corresponding Articles and Sections of
      this Supplemental Indenture No. 8; and

      Section 1.2.3.The terms "herein", "hereof", "hereunder" and other words of
      similar import refer to this Supplemental Indenture No. 8.

                                   ARTICLE II

                          THE SERIES 2001 SENIOR NOTES

      Section 2.1. TITLE OF THE SECURITIES. There shall be a series of
Securities designated the Floating Rate Senior Notes due February 28, 2003 (the
"Series 2001 Notes").

      Section 2.2. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT; DATE OF SERIES 2001
NOTES. The aggregate principal amount of the Series 2001 Notes shall be limited
to $100,000,000. Each Series 2001 Note shall be dated the date of its
authentication.

      Section 2.3. PRINCIPAL PAYMENT DATES. The principal on the Series 2001
Notes outstanding (together with any accrued and unpaid interest thereon) shall
be payable in a single installment on February 28, 2003.

      Section 2.4. INTEREST AND INTEREST RATES. The rate of interest on each
Series 2001 Note shall be The London Interbank Borrowing Rate ("LIBOR") plus
0.375% per annum, accruing from February 28, 2001 or from the most recent
Interest Payment Date to which interest on such Series 2001 Note has been paid
or duly provided for. Interest shall be payable on each Series 2001 Note
quarterly on February 28, May 28, August 28 and November 28 of each year (each
an "Interest Payment Date"), commencing on May 28, 2001, until the principal
thereof is paid or made available for payment. The interest so payable on any
Series 2001 Note which is punctually paid or duly provided for on any Interest
Payment Date shall be paid to the Person in whose name such Series 2001 Note is
registered at the close of business on the fifteenth calendar day preceding
February 28, May 28, August 28 or November 28 (each a

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"Regular Record Date"). The interest so payable on a Series 2001 Note which is
not punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the Person in whose name such Series 2001 Note
is registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name such Series 2001 Note is
registered on the Special Record Date or other specified Date determined in
accordance with the Indenture.

      The interest rate on the floating rate notes will be a per annum rate
equal to (i) LIBOR (determined for the initial interest period and, quarterly,
for each subsequent interest period in the manner described below) plus (ii)
0.375%. The interest rate will be set for the initial interest period
(commencing February 28, 2001) and reset for each subsequent quarterly interest
period, effective the first day in such interest period. For each interest
period, the interest rate in effect will be based on LIBOR as determined on the
second London business day preceding the first day of such interest period (each
such date is referred to as an interest determination date). LIBOR will be
determined for each interest period in accordance with the following provisions:

      (a) On the initial interest determination date, February 26, 2001, the
Company will ascertain the offered rate based on a weighted average (based on
the actual number of days in the initial interest period) of the respective
offered rates for three-month and four-month deposits in U.S. dollars in the
London interbank market, which appear on the Telerate Page 3750 as of 11:00 a.m.
(London time) on such interest determination date.

      (b) On each interest determination date subsequent to the initial
determina tion date, the Company will ascertain the offered rate for three-month
deposits in U.S. dollars in the London interbank market, which appears on the
Telerate Page 3750 as of 11:00 a.m. (London time) on such interest determination
date.

      (c) If such rate does not appear on the Telerate Page 3750, or the
Telerate Page 3750 is unavailable, the Company will request four major banks in
the London interbank market (referred to as the reference banks) to provide the
Company with their offered quotation (expressed as a rate per annum) for
three-month deposits in U.S. dollars to leading banks in the London interbank
market, in a principal amount equal to an amount of not less than $1 million
that is representative for a single transaction in such market at such time, at
approximately 11:00 a.m. (London time) on the interest determination date. If at
least two such quotations are provided, LIBOR in respect of that interest
determination date will be the arithmetic mean of such quotations.

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      (d) If less than two reference banks provide the Company with such offered
quotations, LIBOR in respect of that interest determination date will be the
arithmetic mean of the rates quoted by three major banks in The City of New York
selected by the Company at approximately 11:00 a.m., New York City time, on that
interest determina tion date for three-month loans in U.S. dollars to leading
European banks, in a principal amount equal to an amount of not less than $1
million that is representative for a single transaction in such market at such
time; provided, however, that if the selected banks are not quoting as mentioned
in this sentence, LIBOR will remain LIBOR in effect on such interest
determination date.

      As used in this Supplemental Indenture No. 8, "business day" means any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which commercial banks are authorized or required by law, regulation or
executive order to close in The City of New York and "London business day" means
any day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.

      Telerate Page 3750 means the display designated as page "3750" on Bridge
Telerate, Inc. (or such other page as may replace the 3750 page on that service
or such other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits).

      Section 2.5. PLACE OF PAYMENT. The Place of Payment where the Series 2001
Notes may be presented or surrendered for payment, where the Series 2001 Notes
may be surrendered for registration of transfer or exchange and where notices
and demands to and upon the Company in respect of the Series 2001 Notes and the
Indenture may be served shall be in the Borough of Manhattan, The City of New
York, New York, and the office or agency maintained by the Company for such
purpose shall initially be the Corporate Trust Office of the Trustee.

      Section 2.6. ADDITIONAL COVENANTS. For the benefit of the Holders from
time to time of the Series 2001 Notes and in addition to the covenants set forth
in Article 9 of the Indenture, the Company further covenants and agrees as
follows:

      Section 2.6.1. LIMITATIONS ON DISPOSITION OF CAPITAL STOCK OF RESTRICTED
      SUBSIDIARIES. The Company will not, and will not permit any Subsidiary to,
      sell, assign, transfer or otherwise dispose of any shares of the capital
      stock of any Restricted Subsidiary unless the entire capital stock of such
      Restricted Subsidiary at the time owned by the Company and its
      Subsidiaries shall be disposed of at the same time for a consideration
      consisting of cash or other property which the Board of Directors, as
      evidenced in a Board Resolution, has

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      determined to be at least equal to the fair value thereof. Notwithstanding
      the foregoing provision, (i) the Company shall be permitted to sell,
      assign, transfer or otherwise dispose of shares of the capital stock of a
      Restricted Subsidiary (A) to any director (or any individual nominated to
      become a director) of such Restricted Subsidiary but only to the extent
      ownership of such shares is required as directors' qualifying shares for
      such director or individual and (B) to any Subsidiary; and (ii) any
      Restricted Subsidiary shall be permitted to sell, assign, transfer or
      otherwise dispose of shares of its capital stock or the capital stock of
      any other Restricted Subsidiary (A) to any director (or any individual
      nominated to become a director) of such Restricted Subsidiary but only to
      the extent ownership of such shares is required as directors' qualifying
      shares for such director or individual, or (B) to the Company or any
      Subsidiary.

      Section 2.6.2. LIMITATIONS UPON CREATION OF LIENS ON CAPITAL STOCK OF
      RESTRICTED SUBSIDIARIES.

            (a) The Company will not, and will not permit any Restricted
      Subsidiary to, at any time directly or indirectly, issue, assume,
      guarantee or permit to exist any indebtedness secured by a Lien on the
      capital stock of any Restricted Subsidiary without making effective
      provision whereby the Series 2001 Notes then outstanding (and if the
      Company so elects, any other indebted ness ranking on a parity with the
      Series 2001 Notes) shall be equally and ratably secured with such
      indebtedness as to such property so long as such other indebtedness shall
      be so secured; provided, however, that the covenant set forth in this
      Section 2.6.2. will not be applicable to Liens (i) on the shares of stock
      of a subsidiary of a Person that is merged with or into the Company or a
      Subsidiary securing debt of such Person, which debt was outstanding prior
      to such merger, but only if such pledge and debt were not incurred in
      anticipation of such merger, (ii) in favor of the Company securing debt of
      a Restricted Subsidiary owed to the Company, (iii) for taxes or
      assessments or governmental charges or levies not then due and delinquent
      or the validity of which are being contested in good faith or which are
      less than $5,000,000, or (iv) created by or resulting from any litigation
      or legal proceeding being contested in good faith or which are less than
      $5,000,000.

            (b) If the Company shall hereafter be required to secure the Series
      2001 Notes equally and ratably with any other indebtedness pursuant to
      this Section 2.6.2., (i) the Company will promptly deliver to the Trustee
      an Officers' Certificate stating that the foregoing covenant has been
      complied with and an Opinion of Counsel stating that in the opinion of
      such counsel the foregoing

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      covenant has been complied with and that any instruments executed by the
      Company or any Restricted Subsidiary in the performance of the foregoing
      covenant comply with the requirements of the foregoing covenant and (ii)
      the Trustee is hereby authorized to enter into an indenture or agreement
      supplemen tal hereto and to take such action, if any, as it may deem
      advisable to enable it to enforce the rights of the Holders of the Series
      2001 Notes.

      Section 2.6.3. For purposes of this Section 2.6., Restricted Subsidiary
      shall mean any Subsidiary of the Company with assets greater than or equal
      to 20% of all assets of the Company and its Subsidiaries, computed and
      consolidated in accordance with generally accepted accounting principles.

      Section 2.6.4. For purposes of this Section 2.6., "Lien" shall mean any
      mortgage, pledge, lien, charge, security interest, conditional sale or
      other title retention agreement or other encumbrance of any nature
      whatsoever.

      Section 2.7. MODIFICATION OF EVENTS OF DEFAULT. For the benefit of the
Holders from time to time of the Series 2001 Notes, clause 4 of Section 5.1 of
the Indenture is hereby modified by deleting such clause 4 in its entirety and
replacing it with the following:

      A default under any mortgage, agreement, indenture or instrument under
      which there may be issued, or by which there may be secured, guaranteed or
      evidenced any Debt of the Company (including this Indenture) whether such
      Debt now exists or shall hereafter be created, in an aggregate principal
      amount then outstanding of $15,000,000 or more, which default (a) shall
      constitute a failure to pay any portion of the principal of such Debt when
      due and payable or (b) shall result in such Debt becoming or being
      declared due and payable prior to the date on which it would otherwise
      become due and payable, and such accelera tion shall not be rescinded or
      annulled, or such Debt shall not be paid in full, within a period of 30
      days after there has been given, by registered or certified mail, to the
      Company by the Trustee or to the Company and the Trustee by the Holders of
      at least 25% in aggregate principal amount of the Outstanding Securities
      of the Series 2001 Notes, a written notice specifying such event of
      default and requiring the Company to cause such acceleration to be
      rescinded or annulled or to pay in full such Debt and stating that such
      notice is a "Notice of Default" hereunder; (it being understood, however,
      that the Trustee shall not be deemed to have knowledge of such default
      under such agreement or instrument unless either (A) a Responsible Officer
      of the Trustee shall have actual knowledge of such default or (B) a
      Responsible Officer of the Trustee shall have

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      received written notice thereof from the Company, from any Holder, from
      the holder of any such indebtedness or from the trustee under any such
      agreement or other instrument); PROVIDED, HOWEVER, that if such default
      under such mortgage, agreement, indenture or instrument is remedied or
      cured by the Company or waived by the holders of such indebtedness, then
      the Event of Default hereunder by reason thereof shall be deemed likewise
      to have been thereupon remedied, cured or waived without further action
      upon the part of either the Trustee or any of such Holders; PROVIDED,
      FURTHER, that the foregoing shall not apply to any secured Debt under
      which the obligee has recourse (exclusive of recourse for ancillary
      matters such as environmental indemnities, misapplication of funds, costs
      of enforcement and the like) only to the collateral pledged for repayment
      so long as the fair market value of such collateral does not exceed 2% of
      Total Assets at the time of the "default;"

      Section 2.8. DENOMINATION. The Series 2001 Notes shall be issuable in
denominations of $1,000 and integral multiples thereof.

      Section 2.9. CURRENCY. Principal and interest on the Series 2001 Notes
shall be payable in U.S. Dollars.

      Section 2.10. REGISTERED SECURITIES IN GLOBAL FORM.

      Section 2.10.1. The Series 2001 Notes will be issued in the form of one or
      more fully registered global securities, representing the aggregate
      principal amount of the Series 2001 Notes, that will be deposited with, or
      on behalf of, The Depository Trust Company ("DTC"), and registered in the
      name of Cede & Co., the nominee of DTC.

      Section 2.10.2. Except as provided in Section 3.5 of the Indenture,
      Beneficial Owners of interests in the Series 2001 Notes may not exchange
      such interests for certificated Series 2001 Notes.

      Section 2.10.3. In addition to the legend specified in Section 2.4 of the
      Indenture, each certificate evidencing the Series 2001 Notes shall bear
      the following legend:

      UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
      THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR
      ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY

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      CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
      OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
      PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
      AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE
      HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
      THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

      Section 2.11. FORM OF SERIES 2001 SENIOR NOTES. The Series 2001 Notes
shall be substantially in the form attached as Exhibit A hereto.

      Section 2.12. DEFEASANCE AND COVENANT DEFEASANCE. The provisions of
Section 4.4 of the Indenture shall apply to the Series 2001 Notes. The
provisions of Section 4.5 of the Indenture shall apply to the Series 2001 Notes
with respect to the covenants specified in said Section 4.5 and the covenants
set forth in Section 2.6. of this Supplemental Indenture No. 8.

      Section 2.13. REGISTRAR AND PAYING AGENT. The Trustee shall initially
serve as Registrar and Paying Agent.

                                    ARTICLE 3

                            MISCELLANEOUS PROVISIONS

      Section 3.1. The Indenture, as supplemented and amended by this
Supplemental Indenture No. 8, is in all respects hereby adopted, ratified and
confirmed.

      Section 3.2. This Supplemental Indenture No. 8 may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.

      SECTION 3.3. THIS SUPPLEMENTAL INDENTURE NO. 8 AND EACH SERIES 2001 NOTE
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

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      IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture No. 8 to be duly executed, as of the day and year first written above.

                             PROTECTIVE LIFE CORPORATION

                             By:
                                 ----------------------------------------------
                             Name:  Richard J. Bielin
                             Title: Senior Vice President, Investments

(Seal)                       By:
                                 ----------------------------------------------
                             Name:  Jerry W. DeFoor
                             Title: Vice President, Controller
                                    and Chief Accounting Officer

Attest:
        -----------------------------------
Name:   Deborah J. Long
Title:  Senior Vice President,
        Secretary and General Counsel

                             THE BANK OF NEW YORK,
                             as Trustee

                             By: THE BANK OF NEW YORK TRUST
                                 COMPANY OF FLORIDA, N.A.,
                                 as Agent

(Seal)

                             By:
                                 ----------------------------------------------
                             Name: Charles S. Northen, IV
                             Title: Vice President

Attest:
        ------------------------------------
Name:
Title:

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                                  EXHIBIT A TO
                          SUPPLEMENTAL INDENTURE No. 8

                 (FORM OF FACE OF FLOATING RATE SENIOR NOTE DUE
                               FEBRUARY 28, 2003)

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESEN TATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORA TION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANS FER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

THIS SENIOR NOTE IS IN GLOBAL FORM WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. UNLESS AND UNTIL IT IS EX CHANGED IN WHOLE OR IN PART FOR SENIOR NOTES IN
CERTIFICATED FORM IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, THIS
NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC, OR BY
A NOMINEE OF DTC TO ANOTHER NOMINEE OF DTC, OR BY DTC OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

                           PROTECTIVE LIFE CORPORATION
                 Floating Rate Senior Note Due February 28, 2003

No. 1                                                               $100,000,000
                                                              CUSIP: 743674 AN 3

Protective Life Corporation, a corporation duly organized and existing under the
laws of the State of Delaware (herein called the "Company", which term includes
any successor corporation under the Indenture (as defined on the reverse
hereof)), for value

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received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of $100,000,000 (One Hundred Million Dollars) on February 28,
2003, and to pay interest thereon from February 28, 2001, or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for. Interest shall be payable on the Company's Floating Rate Senior Note due
February 28, 2003 ("Series 2001 Note") quarterly on February 28, May 28, August
28 and November 28 of each year (each an "Interest Payment Date"), commencing on
May 28, 2001 at the rate of The London Interbank Borrowing Rate ("LIBOR") plus
0.375% per annum, until the principal hereof is paid or made available for
payment; PROVIDED that any such installment of interest which is overdue shall
bear interest at the rate of LIBOR plus 0.375% per annum (to the extent that the
payment of such interest shall be legally enforceable) from the dates such
amounts are due until they are paid or made available for payment, and such
interest shall be payable on demand. The amount of interest payable on any
Interest Payment Date shall be computed on the basis of a 360-day year for the
actual number of days elapsed. In the event that any date on which interest is
payable on this Series 2001 Note is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect to any such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date. The interest
so payable on any Interest Payment Date which is punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture
referred to on the reverse hereof, be paid to the Person in whose name this
Series 2001 Note is registered at the close of business on the Regular Record
Date for such Interest Payment Date, which shall the 15th calendar day preceding
February 28, May 28, August 28 or November 28 (each a "Regular Record Date").
Any such interest not so punctually paid or duly provided for will forthwith
cease to be payable to the Person in whose name this Series 2001 Note is
registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name this Series 2001 Note is
registered on the Special Record Date or other specified date determined in
accordance with the Indenture and Supplemental Indenture No. 8, referred to on
the reverse hereof.

      The interest rate on the floating rate notes will be a per annum rate
equal to (i) LIBOR (determined for the initial interest period and, quarterly,
for each subsequent interest period in the manner described below) plus (ii)
0.375 %. The interest rate will be set for the initial interest period
(commencing February 28, 2001) and reset for each subsequent quarterly interest
period, effective the first day in such interest period. For each interest
period, the interest rate in effect will be based on LIBOR as determined on the
second London business day preceding the first day of such interest period (each

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such date is referred to as an interest determination date). LIBOR will be
determined for each interest period in accordance with the following provisions:

      (a) On the initial interest determination date, February 26, 2001, the
Company will ascertain the offered rate based on a weighted average (based on
the actual number of days in the initial interest period) of the respective
offered rates for three-month and four-month deposits in U.S. dollars in the
London interbank market, which appear on the Telerate Page 3750 as of 11:00 a.m.
(London time) on such interest determination date.

      (b) On each interest determination date subsequent to the initial
determina tion date, the Company will ascertain the offered rate for three-month
deposits in U.S. dollars in the London interbank market, which appears on the
Telerate Page 3750 as of 11:00 a.m. (London time) on such interest determination
date.

      (c) If such rate does not appear on the Telerate Page 3750, or the
Telerate Page 3750 is unavailable, the Company will request four major banks in
the London interbank market (referred to as the reference banks) to provide the
Company with their offered quotation (expressed as a rate per annum) for
three-month deposits in U.S. dollars to leading banks in the London interbank
market, in a principal amount equal to an amount of not less than $1 million
that is representative for a single transaction in such market at such time, at
approximately 11:00 a.m. (London time) on the interest determination date. If at
least two such quotations are provided, LIBOR in respect of that interest
determination date will be the arithmetic mean of such quotations.

      (d) If less than two reference banks provide the Company with such offered
quotations, LIBOR in respect of that interest determination date will be the
arithmetic mean of the rates quoted by three major banks in The City of New York
selected by the Company at approximately 11:00 a.m., New York City time, on that
interest determina tion date for three-month loans in U.S. dollars to leading
European banks, in a principal amount equal to an amount of not less than $1
million that is representative for a single transaction in such market at such
time; provided, however, that if the selected banks are not quoting as mentioned
in this sentence, LIBOR will remain LIBOR in effect on such interest
determination date.

      As used in this Supplemental Indenture No. 8, "business day" means any
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which commercial banks are authorized or required by law, regulation or
executive order to close in The City of New York and "London business day" means
any day on which dealings in deposits in U.S. dollars are transacted in the
London interbank market.

                                       13
<PAGE>

      Telerate Page 3750 means the display designated as page "3750" on Bridge
Telerate, Inc. (or such other page as may replace the 3750 page on that service
or such other service or services as may be nominated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits).

      Payment of the principal of and interest on this Series 2001 Note will be
made at the office or agency of the Company maintained for that purpose in the
Borough of Manhattan, The City of New York (which shall initially be the
Corporate Trust Office of the Trustee), in same day funds by wire transfer to an
account maintained by the Person entitled thereto as specified in the Register
of Holders of the Series 2001 Notes, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts.

      Reference is hereby made to the further provisions of this Series 2001
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.

      Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Series 2001
Note shall not be entitled to any benefit under the Indenture and Supplemental
Indenture No. 8 referred to on the reverse hereof or be valid or obligatory for
any purpose.

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<PAGE>

      IN WITNESS WHEREOF, Protective Life Corporation has caused this instrument
to be executed under its corporate seal.

Dated: February 28, 2001
(Corporate Seal)                    PROTECTIVE LIFE CORPORATION

                                    By:
                                        ----------------------------------------
                                    Richard J. Bielen
                                    Senior Vice President, Investments

                                    By:
                                        ----------------------------------------
                                    Jerry W. DeFoor
                                    Vice President, Controller
                                    and Chief Accounting Officer

This is one of the Securities of the series described in the within-mentioned
Indenture.

Dated: February 28, 2001

                                    THE BANK OF NEW YORK,
                                    as Trustee

                                    By: THE BANK OF NEW YORK TRUST
                                        COMPANY OF FLORIDA, N.A.,
                                        as Agent

                                    By:
                                        ----------------------------------------
                                    Authorized Signatory

                                       15
<PAGE>

                      (FORM OF REVERSE OF SERIES 2001 NOTE)

This Series 2001 Note is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under a Senior Indenture, dated as of June 1, 1994 (herein, together with
all indentures supplemental thereto, including Supplemental Indenture No. 8,
dated as of February 28, 2001, called the "Indenture"), from the Company to The
Bank of New York (herein called the "Trustee," which term includes any successor
trustee under the Indenture), to which Indenture reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof,
limited in aggregate principal amount to $100,000,000, and is issued pursuant to
Supplemental Indenture No. 8, dated as of February 28, 2001, from the Company to
the Trustee, relating to the securities of this series (herein called
"Supplemental Indenture No. 8").

The Securities of this series shall not be subject to redemption at the option
of the Company at any time and the Company shall have no obligation to redeem or
purchase the Securities pursuant to any sinking fund.

For purposes of this section, a "Beneficial Owner" means the Person who has the
right to sell, transfer or otherwise dispose of an interest in a Series 2001
Note and the right to receive the proceeds therefrom, as well as the interest
and principal payable to the holder thereof. In general, a determination of
beneficial ownership in the Series 2001 Notes will be subject to the rules,
regulations and procedures governing the Depositary and institutions that have
accounts with the Depositary or a nominee thereof ("Participants").

For purposes of this section, an interest in a Series 2001 Note held in tenancy
by the entirety, joint tenancy or by tenants in common will be deemed to be held
by a single Beneficial Owner.

During such time or times as the Series 2001 Notes are not represented by a
Global Security and are issued in definitive form, all references in this
section to Participants and the Depositary, including the Depositary's governing
rules, regulations and procedures shall be deemed deleted, all determinations
which under this section the Participants are required to make shall be made by
the Company.

                                       16
<PAGE>

      EVENTS OF DEFAULT. The Indenture contains provisions for defeasance at any
time of the indebtedness on this Security or of certain restrictive covenants
and Events of Default with respect to this Security, in each case upon
compliance by the Company with certain conditions set forth therein, which
provisions apply to this Security.

If an Event of Default with respect to Securities of this series shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.

The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of at least a majority in aggregate principal amount of
the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security and of any
Security issued upon the registration of transfer hereof or in exchange hereof
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security. No reference herein to the Indenture or to Supplemental
Indenture No. 8 and no provision of this Security or of the Indenture or of
Supplemental Indenture No. 8 shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Security at the times, place and rate, and in the coin or
currency, herein prescribed.

      TRANSFER OR EXCHANGE OF SERIES 2001 NOTES. As provided in the Indenture
and subject to certain limitations as set forth therein and in Supplemental
Indenture No. 8, the transfer of this Security is registrable on the Register,
upon surrender of this Security for registration of transfer at the office or
agency of the Company in any place where the principal of and interest on this
Security are payable, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company, the Trustee and the Registrar
duly executed by the Holder hereof or his attorney duly authorized in writing,
and thereupon one or more new Securities of this series and of like tenor, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.

                                       17
<PAGE>

The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.

No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat the
person in whose name this Security is registered as the owner hereof for all
purposes, whether or not the Security be overdue, and neither the Company, the
Trustee nor any such agent of the Company or the Trustee shall be affected by
notice to the contrary.

THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCOR DANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

All terms used in this Security which are defined in the Indenture shall have
the meanings assigned to them in the Indenture.

                                       18<PAGE>

                                                                    EXHIBIT 10.4

Optionee:     STANLEY T. CROOKE                     Date:    JANUARY 6, 2000
          -----------------------------                  -----------------------

                           ISIS PHARMACEUTICALS, INC.
                       SUPPLEMENTAL STOCK OPTION AGREEMENT

Isis Pharmaceuticals, Inc. (the "Company"), pursuant to its 1989 Stock Option
Plan (the "Plan") has this day granted to the undersigned optionee, an option to
purchase shares of the common stock of the Company ("Common Stock") as described
herein. This option is not intended to qualify and will not be treated as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"). This option is
subject to all of the terms and conditions as set forth herein and on Attachment
I hereto, which is incorporated herein in its entirety.

                   Number of Shares Subject to Option: 250,000
                                                      ---------
VESTING SCHEDULE:

 NUMBER OF SHARES (INSTALLMENT)              DATE OF EARLIEST EXERCISE (VESTING)
 ------------------------------              -----------------------------------
           250,000                                     01/02/2002*

*This option shall fully vest on January 2, 2006; provided, however, that this
option will fully vest on January 2, 2002, if and only if, the following
objectives are met: (1) as of December 31, 2000, the amount of cash available to
the Company is greater than $40 million; (2) the Company reaches a "go/no go"
decision on four product opportunities (indications); (3) the restructuring of
the Company, as described in the Restructuring Plan is successful; and (4) the
Company has completed at least one new corporate partnership.

Exercise Price Per Share:   $6.81(1)             Expiration Date:  1/05/2010(2)
                            -----                                  ---------

Isis Pharmaceuticals, Inc.

By:                                          Optionee:
   -----------------------------------                --------------------------
   Duly authorized on behalf of              Address:  3211 Piragua Street
    the Board of Directors                             Encinitas, CA  92024

OPTIONEE:

1.  Acknowledges receipt of the option as described herein and the attachments
    referenced therein and understands that all rights and liabilities with
    respect to this option are set forth in the option and the Plan; and

2.  Acknowledges that as of the date of grant of this option, it sets forth the
    entire understanding between the undersigned optionee and the Company and
    its affiliates regarding the acquisition of stock in the Company and
    supersedes all prior oral and written agreements on that subject with the
    exception of the following agreements only:

None:                             Other:
     -------------------                ----------------------------------------
     (Initial)

(1) Not less than the fair market value of the Common Stock on the date of
    grant of this option.
(2) Less than 10 years from the date of grant of this option.

<PAGE>

Optionee:     B. LYNNE PARSHALL                    Date:    JANUARY 6, 2000
         ------------------------------                 -----------------------

                           ISIS PHARMACEUTICALS, INC.
                       SUPPLEMENTAL STOCK OPTION AGREEMENT

Isis Pharmaceuticals, Inc. (the "Company"), pursuant to its 1989 Stock Option
Plan (the "Plan") has this day granted to the undersigned optionee, an option to
purchase shares of the common stock of the Company ("Common Stock") as described
herein. This option is not intended to qualify and will not be treated as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"). This option is
subject to all of the terms and conditions as set forth herein and on Attachment
I hereto, which is incorporated herein in its entirety.

                   Number of Shares Subject to Option: 170,000
                                                      ---------
VESTING SCHEDULE:

NUMBER OF SHARES (INSTALLMENT)              DATE OF EARLIEST EXERCISE (VESTING)
------------------------------              -----------------------------------
        170,000                                       01/02/2002*

*This option shall fully vest on January 2, 2006; provided, however, that this
option will fully vest on January 2, 2002, if and only if, the following
objectives are met: (1) as of December 31, 2000, the amount of cash available to
the Company is greater than $40 million; (2) the Company reaches a "go/no go"
decision on four product opportunities (indications); (3) the restructuring of
the Company, as described in the Restructuring Plan is successful; and (4) the
Company has completed at least one new corporate partnership.

Exercise Price Per Share:  $6.81(1)              Expiration Date:   1/05/2010(2)
                           -----                                    ---------

Isis Pharmaceuticals, Inc.

By:                                              Optionee:
   -------------------------------------                   ---------------------
   Duly authorized on behalf of                  Address:  2645 Marmol Court
     the Board of Directors                                Carlsbad, CA  92009

OPTIONEE:

1.  Acknowledges receipt of the option as described herein and the attachments
    referenced therein and understands that all rights and liabilities with
    respect to this option are set forth in the option and the Plan; and

2.  Acknowledges that as of the date of grant of this option, it sets forth the
    entire understanding between the undersigned optionee and the Company and
    its affiliates regarding the acquisition of stock in the Company and
    supersedes all prior oral and written agreements on that subject with the
    exception of the following agreements only:

None:                                Other:
     ------------------------              -------------------------------------
     (Initial)

(1) Not less than the fair market value of the Common Stock on the date of
    grant of this option.
(2) Less than 10 years from the date of grant of this option.

<PAGE>

Optionee:      DEBBY JO BLANK                          Date:  JANUARY 6, 2000
         -----------------------------                      --------------------

                           ISIS PHARMACEUTICALS, INC.
                       SUPPLEMENTAL STOCK OPTION AGREEMENT

Isis Pharmaceuticals, Inc. (the "Company"), pursuant to its 1989 Stock Option
Plan (the "Plan") has this day granted to the undersigned optionee, an option to
purchase shares of the common stock of the Company ("Common Stock") as described
herein. This option is not intended to qualify and will not be treated as an
"incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"). This option is
subject to all of the terms and conditions as set forth herein and on Attachment
I hereto, which is incorporated herein in its entirety.

                   Number of Shares Subject to Option: 100,000
                                                       ---------
VESTING SCHEDULE:

NUMBER OF SHARES (INSTALLMENT)              DATE OF EARLIEST EXERCISE (VESTING)
------------------------------              -----------------------------------
        100,000                                        01/02/2002*

*This option shall fully vest on January 2, 2006; provided, however, that this
option will fully vest on January 2, 2002, if and only if, the following
objectives are met: (1) as of December 31, 2000, the amount of cash available to
the Company is greater than $40 million; (2) the Company reaches a "go/no go"
decision on four product opportunities (indications); (3) the restructuring of
the Company, as described in the Restructuring Plan is successful; and (4) the
Company has completed at least one new corporate partnership.

Exercise Price Per Share:  $6.81(1)              Expiration Date:  1/05/2010(2)
                           -----                                   ---------

Isis Pharmaceuticals, Inc.

By:                                           Optionee:
   -----------------------------------                 -------------------------
   Duly authorized on behalf of               Address:  318 Colima Court
     the Board of Directors                             La Jolla, CA  92037

OPTIONEE:

1.  Acknowledges receipt of the option as described herein and the attachments
    referenced therein and understands that all rights and liabilities with
    respect to this option are set forth in the option and the Plan; and

2.  Acknowledges that as of the date of grant of this option, it sets forth the
    entire understanding between the undersigned optionee and the Company and
    its affiliates regarding the acquisition of stock in the Company and
    supersedes all prior oral and written agreements on that subject with the
    exception of the following agreements only:

None:                                Other:
     ------------------------              -------------------------------------
     (Initial)

(1) Not less than the fair market value of the Common Stock on the date of
    grant of this option.
(2) Less than 10 years from the date of grant of this option.

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