<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material pursuant to Section 240.14a-11(c) or
Section 240.14a-12
PROTECTIVE LIFE CORPORATION
(Name of Registrant as Specified In Its Charter)
PROTECTIVE LIFE CORPORATION
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
5) Total fee paid:
-------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
3) Filing Party:
-------------------------------------------------------------------------
4) Date Filed:
-------------------------------------------------------------------------
<PAGE>
March 29, 1996
To the Stockholders of Protective Life Corporation:
You are invited to attend the 1996 Annual Meeting of Stockholders of
Protective Life Corporation, which will be held at the principal office of
the Company, 2801 Highway 280 South, Birmingham, Alabama, on Monday, May 6,
1996 at 10:00 a.m., CDT. Formal notice of the Annual Meeting, a Proxy
Statement, and a form of proxy accompany this letter.
Also enclosed is the Company's 1995 Annual Report to Stockholders.
At the Annual Meeting, stockholders will elect directors for the forthcoming
year and consider for approval the Company's Deferred Compensation Plan for
Directors Who Are Not Employees of the Company and the Company's Deferred
Compensation Plan for Officers. These Deferred Compensation Plans allow
eligible directors and officers of the Company to voluntarily elect to defer
certain compensation. Please carefully consider the enclosed Proxy Statement
and execute and return your proxy so that the Company may be assured of the
presence of a quorum at the Annual Meeting. A postage prepaid envelope is
enclosed for your convenience in replying. The prompt return of your proxy
will be of great assistance in reducing the expense of subsequent mailings.
If you attend the Annual Meeting, and so elect, you may withdraw your proxy
and vote in person.
Sincerely yours,
/s/ DRAYTON NABERS, JR.
--------------------------------------
Drayton Nabers, Jr.
Chairman of the Board, President
and Chief Executive Officer
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Letter from the Chairman of the Board, President and Chief Executive
Officer.................................................................. 1
Notice of 1996 Annual Meeting of Stockholders............................. 2
Proxy Statement........................................................... 3
General Information....................................................... 3
Voting Securities and Record Date....................................... 4
Principal Stockholders.................................................. 5
*Election of Directors.................................................... 8
Election of Directors and Information about Nominees.................... 8
Vote Required........................................................... 11
Certain Information Concerning the Board of Directors and Its
Committees............................................................. 11
Director's Fees......................................................... 12
Compensation Committee Interlocks and Insider Participation............. 12
Executive Compensation.................................................... 14
Performance Share Plan.................................................... 14
Pension Plan.............................................................. 15
Severance Compensation Agreements......................................... 16
Compensation and Management Succession Committee's Report on Executive
Compensation............................................................. 16
Salary.................................................................. 17
Annual Incentive Plan................................................... 17
Performance Share Plan.................................................. 18
$1 Million Limit on Executive Compensation.............................. 19
Performance Comparison.................................................... 20
Certain Transactions...................................................... 22
*Proposals to Approve Deferred Compensation Plans......................... 23
Other Information......................................................... 25
Independent Public Accountants.......................................... 25
Annual Reports Available................................................ 26
Stockholder Proposals................................................... 26
</TABLE>
- - ------------------------
*To be voted on at the Annual Meeting of Stockholders
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1996
------------------------
TO THE STOCKHOLDERS OF PROTECTIVE LIFE CORPORATION:
Notice is hereby given that the Annual Meeting of Stockholders of Protective
Life Corporation will be held at the principal office of the Company, 2801
Highway 280 South, Birmingham, Alabama, on Monday, May 6, 1996 at 10:00 a.m.,
CDT, for the following purposes:
(a) to elect 13 directors to serve for the ensuing year,
(b) to consider and vote upon the Company's Deferred Compensation Plan for
Directors Who Are Not Employees of the Company, described in the
accompanying Proxy Statement, whereby eligible directors of the Company
may voluntarily elect to defer all or any portion of their directors'
fees,
(c) to consider and vote upon the Company's Deferred Compensation Plan for
Officers, described in the accompanying Proxy Statement, whereby
eligible officers of the Company may voluntarily elect to defer all or
any portion of their bonuses, and
(d) to transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The close of business on Friday, March 8, 1996 has been fixed by the Board
of Directors as the record date for determination of stockholders of the Company
entitled to notice of and to vote at the Annual Meeting of Stockholders. The
stock transfer books of the Company will not be closed.
The Annual Meeting may be adjourned from time to time without notice other
than announcement at the meeting, or any adjournment thereof, and any business
for which notice is hereby given may be transacted at any such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ JOHN K. WRIGHT
-------------------------------------
JOHN K. WRIGHT, SECRETARY
March 29, 1996
2
<PAGE>
PROTECTIVE LIFE CORPORATION
P. O. BOX 2606
BIRMINGHAM, ALABAMA 35202
------------------------
PROXY STATEMENT DATED MARCH 29, 1996
FOR ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON MAY 6, 1996
GENERAL INFORMATION
This Proxy Statement is furnished to the stockholders of Protective Life
Corporation, a Delaware corporation ("Company"), in connection with the
solicitation of proxies on behalf of Management to be used in voting at the
Annual Meeting of Stockholders ("Annual Meeting") to be held Monday, May 6,
1996. If the enclosed form of proxy is properly executed and received by the
Company before or at the Annual Meeting, shares represented thereby will be
voted as specified thereon. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE
VOTED FOR THE ELECTION OF THE NOMINEES AS DIRECTORS AND FOR THE APPROVAL OF THE
COMPANY'S DEFERRED COMPENSATION PLAN FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE
COMPANY AND THE COMPANY'S DEFERRED COMPENSATION PLAN FOR OFFICERS, AS
RECOMMENDED BY THE BOARD OF DIRECTORS AND DESCRIBED HEREIN. This Proxy Statement
and the accompanying proxy card are first being sent to stockholders on or about
March 29, 1996.
The enclosed form of proxy provides a method for stockholders to withhold
authority or abstain from voting. If a stockholder makes such a direction, his
shares will not be voted either for or against a proposal but would be counted
for the purposes of determining that a quorum of the stockholders would be
present at the meeting. While there may be instances in which a stockholder may
consider abstaining, the Board of Directors encourages all stockholders to vote
their shares in their best judgment and to participate in the voting process to
the fullest extent possible.
A stockholder may revoke his proxy at any time before such proxy is voted by
giving a proxy bearing a later date or written notice of such revocation (in
either case delivered to the Secretary of the Company at its principal office
prior to the time of taking the vote) or by voting in person at the Annual
Meeting. Attendance at the Annual Meeting will not in and of itself constitute
the revocation of a proxy.
A quorum of stockholders (stockholders owning a majority of the outstanding
shares of the Company entitled to vote) must be present, in person or by proxy,
to conduct business at the Annual Meeting of Stockholders, and a majority vote
of those shares issued and outstanding is required to vote "for" a proposal in
order for such proposal to be adopted. Both abstentions and broker non-votes are
included in determining the number of stockholders present for quorum purposes.
Broker non-votes exist where a broker proxy indicates that the broker is not
authorized to vote on some proposals. As required by Delaware law, abstentions
(but not broker non-votes) are counted in calculating the number of shares
voting on a particular proposal. In counting votes on a particular proposal,
only those votes clearly indicated as voting "for" a proposal are counted as
such. Abstentions are recorded and counted separately and have the effect of
votes against the proposal being voted upon.
3
<PAGE>
As votes are received they are compared with the list of stockholders as of
March 8, 1996 to ensure that the stockholders are entitled to vote and are
voting their authorized number of shares. Votes for each proposal are tallied by
the Internal Audit Department of the Company. All proxies, work papers, and
summaries of results are then reviewed by an independent panel of proxy judges.
The Company will bear all costs in connection with this solicitation. In
addition to the use of the mails, proxies may be solicited in person or by
telephone, by officers or employees of the Company or its subsidiaries, who will
not be separately compensated therefor. Brokerage houses, nominees, fiduciaries,
and other custodians have been requested to forward soliciting material to the
beneficial owners of Company Common Stock held of record by them and will be
reimbursed for their reasonable expenses in connection with such mailing or
other communication with the beneficial owners.
The Management of the Company does not know of any matters that may be
brought before the Annual Meeting other than the matters described in the
accompanying Notice of Annual Meeting. If any other matters should properly be
brought before the Annual Meeting or any adjournment thereof, THE ENCLOSED PROXY
WILL BE VOTED IN ACCORDANCE WITH THE JUDGMENT OF THE PERSON OR PERSONS VOTING
IT, UNLESS "AUTHORIZATION WITHHELD" IS INDICATED IN THE APPROPRIATE BOX OF THE
PROXY.
THIS SOLICITATION IS MADE BY MANAGEMENT OF THE COMPANY.
VOTING SECURITIES AND RECORD DATE
Shares of common stock ("Common Stock"), $0.50 par value per share, are the
only voting securities of the Company and each share is entitled to one vote.
Only holders of record of Common Stock at the close of business on March 8, 1996
will be entitled to vote at the Annual Meeting. As of that date, there were
31,336,462 shares of Common Stock of the Company issued, of which 2,539,273
shares were held as treasury shares, leaving 28,797,189 shares issued,
outstanding and entitled to vote at the Annual Meeting.
4
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth information concerning beneficial ownership
of the Company's Common Stock as of March 18, 1996 with respect to (i) persons
the Company believes to be the beneficial owners of 5% or more of the Company's
Common Stock, (ii) each current director, the nominees, and each of the
executive officers named in the Summary Compensation Table contained herein, and
(iii) all directors and executive officers of the Company and such nominees for
election as a director, as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL
OWNERSHIP (1)
----------------------------------- PERCENT
SHARED OF
NAME OF BENEFICIAL OWNER SOLE POWER POWER (2) CLASS (1)
- - -------------------------------------------------- ----------------- ------------- ---------
<S> <C> <C> <C>
William J. Rushton III............................ 654,547(3) 11,094(4) 2.3%
John W. Woods..................................... 6,365 -0- *
William J. Cabaniss, Jr........................... 96,144 76,976 *
H. G. Pattillo.................................... 8,000 20,000 *
Drayton Nabers, Jr................................ 100,614(5) 10,554 *
John J. McMahon, Jr............................... 12,019(6) 18,000 *
A. W. Dahlberg.................................... 2,433 -0- *
John W. Rouse, Jr................................. 2,630 -0- *
Robert T. David................................... 4,021 -0- *
Ronald L. Kuehn, Jr............................... 1,861 -0- *
Herbert A. Sklenar................................ 1,325 1,366 *
James S. M. French................................ 500 4,900(7) *
Robert A. Yellowlees.............................. 1,500 -0- *
R. Stephen Briggs................................. 55,632(8) -0- *
John D. Johns..................................... 9,090(9) 2,100 *
Jim E. Massengale................................. 52,191(10) 350 *
A. S. Williams III................................ 43,789(11) -0- *
All current directors, the nominees, and executive
officers as a group (24 individuals)............. 1,143,206(12)(13) 145,340 4.5%
AmSouth Bank of Alabama in various fiduciary
capacities....................................... -0- 3,797,719(14) 13.2%(14)
Nicholas Company, Inc............................. 2,319,920(15) -0- 8.1%(15)
Firstar Corporation............................... 1,705,800(16) 126,500(16) 6.4%(16)
</TABLE>
- - ------------------------
*less than one percent
(1) The number of shares reflected are shares which under applicable
regulations of the Securities and Exchange Commission are deemed to be
beneficially owned. Shares deemed to be beneficially owned, under such
regulations, include shares as to which, directly or indirectly, through
any contract, relationship, arrangement, understanding or otherwise, either
voting power or investment power is held or shared. The total number of
shares beneficially owned is subdivided, where applicable, into two
categories: shares as to which voting/investment power is held solely and
shares as to which voting/investment power is shared. Unless otherwise
indicated in the following notes, if a beneficial owner has sole power, he
has sole voting and investment power, and if a beneficial owner has shared
power, he has shared voting and investment power. The percentage
calculation is based on the aggregate number of shares beneficially owned.
(2) This column may include shares held in the name of a spouse, minor
children, or certain other relatives sharing the same home as the director
or officer, or held by the director or officer, or the spouse of the
director or officer, as a trustee or as a custodian for children, as to all
of which beneficial ownership is disclaimed by the respective directors and
officers except as otherwise noted below.
5
<PAGE>
(3) Includes 30,953 shares held in the Company's 401(k) and Stock Ownership
Plan for which Mr. Rushton has sole voting power.
(4) Shares owned by the wife of Mr. Rushton.
(5) Includes 5,833 shares held in the Company's 401(k) and Stock Ownership
Plan for which Mr. Nabers has sole voting power. Also, includes 50,059
share equivalents allocated to Mr. Nabers' deferred compensation account
pursuant to the terms of the Company's Deferred Compensation Plan for
Officers. Upon distribution, share equivalents will be distributed in
shares of Company Common Stock. Such shares will be issued directly to
Mr. Nabers who will have sole voting power over the shares at that time.
(6) Includes 2,875 share equivalents allocated to Mr. McMahon's deferred
compensation account pursuant to the terms of the Company's Deferred
Compensation Plan for Directors Who Are Not Employees of the Company. Upon
distribution, share equivalents will be distributed in shares of Company
Common Stock. Such shares will be issued directly to Mr. McMahon who will
have sole voting power over the shares at that time.
(7) Includes 4,000 shares of Company Common Stock owned by Dunn Investment
Company, of which Mr. French is Chairman, President, and Chief Executive
Officer.
(8) Includes 12,249 shares held in the Company's 401(k) and Stock Ownership
Plan for which Mr. Briggs has sole voting power. Also, includes 19,770
share equivalents allocated to Mr. Briggs' deferred compensation account
pursuant to the terms of the Company's Deferred Compensation Plan for
Officers. Upon distribution, share equivalents will be distributed in
shares of Company Common Stock. Such shares will be issued directly to Mr.
Briggs who will have sole voting power over the shares at that time.
(9) Includes 781 shares held in the Company's 401(k) and Stock Ownership Plan
for which Mr. Johns has sole voting power. Also, includes 6,109 share
equivalents allocated to Mr. Johns' deferred compensation account pursuant
to the terms of the Company's Deferred Compensation Plan for Officers.
Upon distribution, share equivalents will be distributed in shares of
Company Common Stock. Such shares will be issued directly to Mr. Johns
who will have sole voting power over the shares at that time.
(10) Includes 14,381 shares held in the Company's 401(k) and Stock Ownership
Plan for which Mr. Massengale has sole voting power. Also, includes 8,880
share equivalents allocated to Mr. Massengale's deferred compensation
account pursuant to the terms of the Company's Deferred Compensation Plan
for Officers. Upon distribution, share equivalents will be distributed in
shares of Company Common Stock. Such shares will be issued directly to Mr.
Massengale who will have sole voting power over the shares at that time.
(11) Includes 11,930 shares held in the Company's 401(k) and Stock Ownership
Plan for which Mr. Williams has sole voting power. Also, includes 21,119
share equivalents allocated to Mr. Williams' deferred compensation account
pursuant to the terms of the Company's Deferred Compensation Plan for
Officers. Upon distribution, share equivalents will be distributed in
shares of Company Common Stock. Such shares will be issued directly to Mr.
Williams who will have sole voting power over the shares at that time.
(12) No officer or director owns any stock of any affiliate of the Company.
(13) Included are the interests of the persons as of December 31, 1995 in
91,261 shares held in the Company's 401(k) and Stock Ownership Plan, which
owned a total of 1,285,774 shares on such date. Each 401(k) and Stock
Ownership Plan participant has sole voting power with respect to the
shares held in the participant's accounts. The 743,462 shares held in the
Company's 401(k) and Stock Ownership Plan Trust which have not been
allocated to participants will be voted by the Trustees in accordance with
the majority of the vote of all participants. Also, includes 157,761 share
equivalents allocated to the deferred compensation accounts of
participating directors and executive officers as a group pursuant to the
Company's Deferred Compensation Plan for Directors Who Are Not Employees
of the Company and the Company's Deferred Compensation Plan for Officers.
(14) AmSouth Bank of Alabama (formerly, AmSouth Bank N.A.), 1900 5th Avenue
North, Birmingham, Alabama 35203, has advised the Company that the bank,
in its capacity as fiduciary of various trusts and estates, may
6
<PAGE>
be deemed the beneficial owner, as of December 31, 1995, of 3,807,719
shares of Common Stock of the Company, for which the bank has no sole
voting or investment power, but has shared voting power with respect to
3,797,719 shares and shared investment power with respect to 2,596,592
shares. AmSouth Bank of Alabama has further advised the Company that none
of the separate trusts and estates of which it is fiduciary holds as much
as 5% of the outstanding shares of the Company. AmSouth Bank of Alabama
reported its beneficial ownership as of December 31, 1995 as 13.2%. The
table shows the percentage based on 28,797,189 shares of Common Stock
outstanding on March 18, 1996.
(15) Nicholas Company, Inc., 700 North Water Street, Milwaukee, Wisconsin
53202, has advised the Company that it, in its capacity as an investment
advisor, may be deemed the beneficial owner, as of December 31, 1995, of
2,319,920 shares of Common Stock of the Company, for which Nicholas
Company, Inc. has no shared investment power and no voting power, but has
sole investment power with respect to 2,319,920 shares. Nicholas Company,
Inc. has further advised the Company that none of its separate clients
other than Nicholas Fund, Inc. holds as much as 5% of the outstanding
shares of the Company. Nicholas Fund, Inc. has advised the Company that
it, in its capacity as an investment company, may be deemed the beneficial
owner, as of December 31, 1995, of 1,518,500 shares of Common Stock of the
Company included within the shares reported by Nicholas Company, Inc.
Nicholas Fund, Inc. has sole voting power with respect to 1,518,500
shares, but has no investment power and no shared voting power. Nicholas
Company, Inc. reported its beneficial ownership as of December 31, 1995 as
8.06%. The table shows the percentage based on 28,797,189 shares of Common
Stock outstanding on March 18, 1996.
(16) Firstar Corporation, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202,
has advised the Company that it, in its capacity as a holding company, may
be deemed the beneficial owner, as of December 31, 1995, of 1,832,300
shares of Common Stock of the Company. Firstar Corporation has sole voting
power with respect to 1,618,000 shares, sole investment power with respect
to 1,705,800 shares, shared voting power with respect to 125,500 shares,
and shared investment power with respect to 126,500 shares. A subsidiary
of Firstar Corporation, Firstar Investment Research & Management Company,
777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, has advised the
Company that it, in its capacity as an investment advisor, may be deemed
the beneficial owner, as of December 31, 1995, of 1,832,300 shares of
Common Stock of the Company. Firstar Investment Research & Management
Company has sole voting power with respect to 688,200 shares, sole
investment power with respect to 776,000 shares, shared voting power with
respect to 1,047,540 shares, and shared investment power with respect to
1,056,300 shares. Firstar Corporation reported its beneficial ownership as
of December 31, 1995 as 6.4%, which it has advised the Company includes
beneficial ownership by its subsidiary. The table shows the percentage
based on 28,797,189 shares of Common Stock outstanding on March 18, 1996.
7
<PAGE>
ELECTION OF DIRECTORS
ELECTION OF DIRECTORS AND INFORMATION ABOUT NOMINEES
Unless "Withhold Authority" is specified in the proxy as to all or some of
the nominees, the persons named in the accompanying proxy intend to vote the
shares represented by such proxy, if properly dated and signed, for the election
as directors of the thirteen nominees listed herein, all of whom are now
directors of the Company except for Messrs. French and Yellowlees, who were
nominated by the Board of Directors on March 4, 1996.
Mr. James S. M. French is Chairman, President, and Chief Executive Officer
of Dunn Investment Company.
Mr. Robert A. Yellowlees is Chairman of the Board, President, and Chief
Executive Officer of National Data Corporation.
If elected, each of the thirteen nominees shall serve as a director of the
Company until the 1997 Annual Meeting of Stockholders and thereafter until his
successor shall have been elected and shall qualify, except as otherwise
provided in the By-laws. Should one or more of such nominees become unavailable
or ineligible to serve, it is intended that the shares represented by the proxy
will be voted for the election of the other nominees and may be voted, unless
authorization is withheld, for any substitute nominee or nominees as Management
may designate. Management has no reason to believe that any nominee will be
unable or unwilling to serve as a director if elected.
After ten years of valuable service to the Board, Edward L. Addison retired
from his position as director of the Company effective December 12, 1995.
The information in the following table and the notes thereto with respect to
each nominee for election as a director with regard to his age, principal
occupation or employment for the last five years, and certain other
directorships of the nominee has been furnished to the Company by the respective
nominees. No nominee, other than Mr. Nabers, has any position or office with the
Company or any subsidiary. The table and notes also indicate the nominees'
present committee memberships.
<TABLE>
<CAPTION>
PROTECTIVE LIFE
OR COMPANY
NAME AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS DIRECTOR SINCE
- - --------------------------- --- ---------------------------------------- ---------------
<S> <C> <C> <C>
William J. Rushton III 66 Chairman Emeritus of the Company and, 1956(g)
formerly, its Chairman of the Board, its
Chairman of the Board and Chief
Executive Officer, and its President;
Director, Alabama Power Company and The
Southern Company. (a)(b)(e)
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
PROTECTIVE LIFE
OR COMPANY
NAME AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS DIRECTOR SINCE
- - --------------------------- --- ---------------------------------------- ---------------
<S> <C> <C> <C>
John W. Woods 64 Chairman of the Board of AmSouth 1970
Bancorporation (bank holding company)
and, formerly, its Chairman of the Board
and Chief Executive Officer and its
President; also Chairman of the Board of
AmSouth Bank of Alabama and, formerly,
its Chairman of the Board and Chief
Executive Officer and its President;
Director, AmSouth Bancorporation,
AmSouth Bank of Alabama, Alabama Power
Company, and McWane, Inc. (a)(c)(e)
William J. Cabaniss, Jr. 57 President of Precision Grinding, Inc. 1974(h)
(machine grinding); Director, Precision
Grinding, Inc., AmSouth Bank of Alabama,
and Birmingham Steel Corporation.
(a)(b)(d)
H. G. Pattillo 69 Chairman of the Board and President, 1979
Pattillo Construction Company, Inc.
(industrial construction); Director,
John H. Harland Company, SunTrust Bank,
Atlanta, SunTrust Banks, Inc., and
Simpson Paper Company. (e)
Drayton Nabers, Jr. 55 Chairman of the Board, President and 1982
Chief Executive Officer of the Company
and, formerly, its President and Chief
Executive Officer and its President and
Chief Operating Officer; Director,
Energen Corporation, National Bank of
Commerce of Birmingham, and Alabama
National Bancorporation. (a)(b)(e)(f)
John J. McMahon, Jr. 53 Chairman of the Board of McWane, Inc. 1987
(pipe and valve manufacturing) and,
formerly, its President; Director,
McWane, Inc., National Bank of Commerce
of Birmingham, and John H. Harland
Company. (a)(c)(e)
A. W. Dahlberg 55 Chairman of the Board, President and 1987
Chief Executive Officer of The Southern
Company (electric utilities) and,
formerly, its President; formerly,
President and Chief Executive Officer,
Georgia Power Company; Director, The
Southern Company, Georgia Power Company,
Southern Company Services, Inc., Alabama
Power Company, Southern Electric
International, Southern Nuclear
Operating Company, SunTrust Bank,
Atlanta, SunTrust Banks of Georgia,
Inc., and Equifax, Inc. (c)
John W. Rouse, Jr. 58 President and Chief Executive Officer, 1988
Southern Research Institute (scientific
research); Director, Alabama Power
Company. (a)(b)(d)
</TABLE>
9
<PAGE>
<TABLE>
<CAPTION>
PROTECTIVE LIFE
OR COMPANY
NAME AGE PRINCIPAL OCCUPATION AND DIRECTORSHIPS DIRECTOR SINCE
- - --------------------------- --- ---------------------------------------- ---------------
<S> <C> <C> <C>
Robert T. David 57 Garrett Professor of Business 1988
Administration, Berry College; formerly,
Vice President and Dean, School of
Business, Samford University; President
of Polatomic, Inc.; Director, Stockham
Valves and Fittings, Inc., Polatomic,
Inc., and Triad Guaranty Inc. (a)(b)(d)
Ronald L. Kuehn, Jr. 60 Chairman of the Board, President and 1990
Chief Executive Officer, Sonat Inc.
(energy and natural resources);
Director, Sonat Inc., AmSouth
Bancorporation, Southern Natural Gas
Company, Union Carbide Corporation,
Praxair, Inc., and Sonat Offshore
Drilling Inc. (a)(b)(c)
Herbert A. Sklenar 64 Chairman and Chief Executive Officer of 1992
Vulcan Materials Company (construction
materials and chemicals) and, formerly,
its President and Chief Executive
Officer; Director, Vulcan Materials
Company, AmSouth Bancorporation, and
Temple-Inland, Inc. (a)(b)(c)
James S. M. French 55 Chairman of the Board, President, and --
Chief Executive Officer of Dunn
Investment Company (materials,
construction, and investment holding
company); Director, Energen Corporation,
Regions Financial Corporation, Hilb,
Rogal and Hamilton Company, and Stockham
Valves and Fittings, Inc.
Robert A. Yellowlees 57 Chairman of the Board, President, and --
Chief Executive Officer of National Data
Corporation (information processing
company) and, formerly, its President,
Chief Executive Officer, and Chief
Operating Officer; Chairman of the Board
of Spectrum Research Group, Inc.
(consultants on management of
technology); Director, National Data
Corporation and John H. Harland Company.
</TABLE>
- - ------------------------
(a) also a member of the Executive Committee
(b) also a member of the Finance and Investments Committee
(c) also a member of the Compensation and Management Succession Committee
(d) also a member of the Audit Committee
(e) also a member of the Board Structure and Nominating Committee
(f) also a director and/or current officer of each principal Company subsidiary
(g) with the exception of the period 1958-1962
(h) with the exception of the period November 1988-February 1992
10
<PAGE>
VOTE REQUIRED
To approve the election of the nominees as directors, the affirmative vote
of the holders of a majority of the shares issued, outstanding and entitled to
vote is required.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES AS DIRECTORS AS SET FORTH IN THIS PROXY STATEMENT.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS AND ITS COMMITTEES
To assist in carrying out its duties and responsibilities, the Board of
Directors has an Executive Committee, a Finance and Investments Committee, an
Audit Committee, a Compensation and Management Succession Committee, and a Board
Structure and Nominating Committee, each composed of members of the Board. The
members of each committee are identified by appropriate notes in the table on
pages 8-10.
The Executive Committee exercises the power of the Board of Directors, if
necessary, between the meetings of the Board. The Company's Chairman is a
standing member of the committee. This committee has broad authority to act on
behalf of the Board of Directors whenever a meeting of the entire Board of
Directors is not practical. The Executive Committee did not meet during 1995.
The Finance and Investments Committee has responsibility for reviewing and
acting upon financial and investment matters, including borrowing and lending
transactions entered into by the Company and its subsidiaries. The Finance and
Investments Committee met seven times during 1995.
The Audit Committee reviews internal controls, systems and procedures,
accounting policies, and other significant aspects of the financial management
of the Company, including the Company's internal audit functions. It also
reviews with the Company's independent public accountants their audit
procedures, management letters, and other significant aspects of the annual
audit made by the independent public accountants. The Audit Committee met three
times during 1995.
The Compensation and Management Succession Committee has oversight and
ultimate charge and control of the compensation paid officers and employees of
the Company and its subsidiaries, whether by salary or under any other
compensation plan, including the Company's Annual Incentive Plan and its
Performance Share Plan. This committee is also vested with the responsibility of
recommending to the Company's Board of Directors a successor to the Chief
Executive Officer whenever the need to name such a successor may arise. The
Compensation and Management Succession Committee met two times during 1995.
The Board Structure and Nominating Committee is charged with the broad
responsibility of reviewing and advising the Board of Directors on the functions
and procedures of the Board and its committees, the compensation of the
directors for service on the Board and its committees, and the selection and
tenure of directors. No formal procedures whereby individual stockholders can
submit recommendations of persons to be considered for nomination as a director
of the Company have been instituted. However, the committee would consider any
such
11
<PAGE>
recommendations made to it in writing on a timely basis. The Board
Structure and Nominating Committee met one time during 1995.
Each of the committees reports its actions taken to the Board of Directors.
The Board of Directors met six times during 1995. Each incumbent director
attended at least 75% of the total number of meetings of the Board and the
committees of which he was a member during 1995.
DIRECTOR'S FEES
Mr. Nabers does not receive director's fees. Other directors receive an
annual director's fee of $20,000. For each board meeting attended, the directors
who reside in Birmingham receive $1,200 (increased from $1,000 in March 1996)
and the directors who do not reside in Birmingham ("non-Birmingham directors")
receive $2,100 (increased from $1,800 in March 1996) and reimbursement of their
travel expenses. For each Executive Committee, Finance and Investments
Committee, Audit Committee, Compensation and Management Succession Committee, or
Board Structure and Nominating Committee meeting attended, the directors who
reside in Birmingham receive $1,200 (increased from $1,000 in March 1996) and
the non-Birmingham directors receive $1,300 (increased from $1,000 in March
1996). Non-Birmingham directors receive an additional fee of $500 and
reimbursement of their travel expenses for attendance at Audit Committee,
Compensation and Management Succession Committee, or Board Structure and
Nominating Committee meetings when travel to Birmingham is for the special
purpose of attending the meeting. The current non-Birmingham directors are
Messrs. Dahlberg and Pattillo. Mr. Yellowlees, a nominee as director, would also
be a non-Birmingham director.
Directors and executive officers of the Company are required to report
changes in their beneficial ownership of the Company's Common Stock to the
Securities and Exchange Commission. In 1995, a report concerning a gift of 1,338
shares to charity by Mr. Rushton and a second report concerning the acquisition
of 41.4 shares through the Company's Dividend Reinvestment Plan by Mr. Nabers'
daughters were filed late.
The Company has established a Deferred Compensation Plan for Directors Who
Are Not Employees of the Company (the "Directors' Plan") whereby eligible
directors may voluntarily elect to defer to a specified date receipt of all or
any portion of their director's fees. Director's fees so deferred are credited
to the directors in cash or Company stock equivalents or a combination thereof.
The cash portion earns interest at approximately the Company's short-term
borrowing rate. The stock equivalent portion is credited with dividends in the
form of additional stock equivalents. Deferred director's fees will be
distributed in stock or cash as specified by the directors in accordance with
the Directors' Plan unless distribution is accelerated under certain provisions,
including upon a change in control of the Company. The Directors' Plan is to be
voted on by the stockholders of the Company at the 1996 Annual Meeting of
Stockholders. For further information, see "Proposals to Approve Deferred
Compensation Plans" on page 23 of this Proxy Statement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Management Succession Committee
("Committee") are Messrs. McMahon (Chairman), Woods, Dahlberg, Kuehn, and
Sklenar. Messrs. McMahon
12
<PAGE>
Woods, Dahlberg, Kuehn, and Sklenar are executive officers of McWane, Inc.,
AmSouth Bancorporation, The Southern Company, Sonat Inc., and Vulcan Materials
Company, respectively.
No member of the Committee was an officer or employee of the Company or any
of its subsidiaries at any time during 1995. Also, no member of the Committee
was formerly an officer of the Company or any of its subsidiaries.
During 1995, McWane, Inc. and National Bank of Commerce of Birmingham, with
which Committee member Mr. McMahon was affiliated, paid the Company's principal
operating subsidiary, Protective Life Insurance Company or its affiliates
("Protective Life") premiums, fees, or investment product deposits for various
types of insurance in the amounts of $264,747 and $89,825, respectively.
Likewise, Sonat Inc., with which Committee member Mr. Kuehn was affiliated, and
Vulcan Materials Company, with which Committee member Mr. Sklenar was
affiliated, paid Protective Life premiums, fees, or investment product deposits
for various types of insurance in the amounts of $360,000 and $4,396,374,
respectively.
Mr. Rushton, the Company's Chairman Emeritus (formerly, its Chairman of the
Board), served as a director of AmSouth Bancorporation through April 1995. Mr.
Woods, the Chairman of the Board of AmSouth Bancorporation, serves as a member
of the Committee. AmSouth Bancorporation and subsidiaries maintain a group life
insurance program with Protective Life (which through reinsurance is shared with
two other companies). In 1995, Protective Life and the Company paid $1,490,270
in credit and mortgage insurance and annuity commissions and $3,771,425 in
interest, mortgage loan service fees, and other charges to AmSouth Bank of
Alabama and other subsidiaries of AmSouth Bancorporation. Additionally, during
1995, AmSouth Bancorporation and certain of its subsidiaries paid Protective
Life premiums, fees, or investment product deposits for various types of
insurance in the amount of $5,004,741.
Mr. Rushton serves as a director of The Southern Company. Mr. Dahlberg, the
Chairman of the Board, President and Chief Executive Officer of The Southern
Company, serves on the Committee, and Mr. Addison, formerly, Chairman of the
Board and Chief Executive Officer of The Southern Company and a director of the
Company through December 1995, served on the Committee through May 1994. During
1995, affiliates of The Southern Company paid Protective Life premiums, fees, or
investment product deposits for various types of insurance in the amount of
$180,722. The Company is a 25% member of a limited liability company which
acquired an office building adjacent to the Company's home office from an
affiliate of The Southern Company which continues to lease portions of the
building. During 1995, the limited liability company received $1,631,268 in
lease payments from affiliates of The Southern Company.
13
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding the
compensation paid to the Chief Executive Officer and each of the four other most
highly compensated executive officers of the Company ("Named Executives") during
or with respect to the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -----------------
---------------------------------------------- LONG-TERM
OTHER ANNUAL INCENTIVE PLAN ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY (1)(2) BONUS (1)(2)(3) COMPENSATION PAYOUTS (1)(3)(4) COMPENSATION (5)
(A) (B) (C) (D) (E) (H) (I)
- - ----------------------------------- ---- ------------- --------------- ------------ ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
DRAYTON NABERS, JR. 1995 $499,167 $459,000 $2,970 $738,439(6) $4,500
Chairman of the Board, President 1994 438,550 400,500 1,188 624,499 4,500
and Chief Executive Officer 1993 398,583 365,700 2,238 520,122 6,746
JOHN D. JOHNS 1995 282,500 200,000 -0- 141,328(6) 4,500
Executive Vice President and Chief 1994 268,333 189,000 -0- 87,041 4,500
Financial Officer since October 1993 60,001 75,020 -0- -0- -0-
1993
R. STEPHEN BRIGGS 1995 282,500 190,000 1,056 279,123(6) 4,500
Executive Vice President 1994 268,333 153,900 3,168 243,706 4,500
1993 222,392 149,100 4,218 204,345 6,746
A. S. WILLIAMS III 1995 263,333 159,000 2,970 317,988(6) 4,500
Senior Vice President, Investments 1994 252,500 153,000 2,970 263,283 4,500
and Treasurer 1993 227,008 137,800 4,020 217,077 6,746
JIM E. MASSENGALE 1995 203,333 123,000 753 268,523(6) 4,500
Senior Vice President 1994 193,550 117,000 728 235,020 4,500
1993 184,417 97,800 1,249 158,966 5,991
</TABLE>
- - ------------------------
FOOTNOTES:
(1) For further information, see the "Compensation and Management Succession
Committee's Report on Executive Compensation".
(2) Includes amounts that the named executive officer may have voluntarily
elected to contribute to the Company's 401(k) and Stock Ownership Plan.
(3) Includes amounts that the named executive officer may have voluntarily
deferred under the Company's Deferred Compensation Plan for Officers. (See
"Proposals to Approve Deferred Compensation Plans".)
(4) For further information, see the "Long-Term Incentive Plan -- Awards In Last
Fiscal Year" table.
(5) Matching contributions to the Company's 401(k) and Stock Ownership Plan.
(6) 1995 long-term compensation is not yet determinable. The amount shown is the
best estimate available as of the date of this Proxy Statement.
PERFORMANCE SHARE PLAN
LONG-TERM INCENTIVE PLAN -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE OR NON- STOCK PRICE-BASED PLANS
NUMBER OF OTHER PERIOD UNTIL (IN SHARES)
SHARES, UNITS OR MATURATION OR -------------------------------
NAME OTHER RIGHTS (#) PAYOUT THRESHOLD TARGET MAXIMUM
(A) (B) (C) (D) (E) (F)
- - ------------------------- ---------------- ------------------ --------- ------ -------
<S> <C> <C> <C> <C> <C>
Drayton Nabers, Jr. 14,280 shares December 31, 1998 7,140 14,280 24,276
John D. Johns 5,640 shares December 31, 1998 2,820 5,640 9,588
R. Stephen Briggs 5,640 shares December 31, 1998 2,820 5,640 9,588
A. S. Williams III 4,400 shares December 31, 1998 2,200 4,400 7,480
Jim E. Massengale 3,360 shares December 31, 1998 1,680 3,360 5,712
</TABLE>
In 1995, the Compensation and Management Succession Committee of the
Company's Board of Directors awarded performance shares, as indicated, to the
above Named Executives,
14
<PAGE>
which are not payable, if at all, until the results of
the comparison group of companies for the four-year period ending December 31,
1998 are known.
With respect to 1995 awards awarded to the Named Executives, 125% of the
award is earned if the Company's average return on average equity for the
four-year period ranks at the top 25% of the comparison group. If the Company
ranks at the top 10% of the comparison group, 170% of the award is earned. If
the Company ranks at the median of the comparison group, 50% of the award is
earned and if the Company's results are below the median of the comparison
group, no portion of the award is earned. The Performance Share Plan provides
for interpolation between thresholds to determine the exact percentage to be
paid.
PENSION PLAN
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
---------------------------------------------------------
REMUNERATION 15 20 25 30 35
- - -------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 125,000.......... $ 27,932 $ 37,242 $ 46,553 $ 55,864 $ 65,174
150,000.......... 33,932 45,242 56,553 67,864 79,174
175,000*......... 39,932 53,242 66,553 79,864 93,174
200,000*......... 45,932 61,242 76,553 91,864 107,174
225,000*......... 51,932 69,242 86,553 103,864 121,174*
250,000*......... 57,932 77,242 96,553 115,864 135,174*
275,000*......... 63,932 85,242 106,553 127,864* 149,174*
300,000*......... 69,932 93,242 116,553 139,864* 163,174*
400,000*......... 93,932 125,242* 156,553* 187,864* 219,174*
500,000*......... 117,932 157,242* 196,553* 235,864* 275,174*
600,000*......... 141,932* 189,242* 236,553* 283,864* 331,174*
700,000*......... 165,932* 221,242* 276,553* 331,864* 387,174*
800,000*......... 189,932* 253,242* 316,553* 379,864* 443,174*
900,000*......... 213,932* 285,242* 356,553* 427,864* 499,174*
1,000,000*......... 237,932* 317,242* 396,553* 475,864* 555,174*
</TABLE>
- - ------------------------
*Current pension law limits the maximum annual benefit payable at normal
retirement age under a defined benefit plan to $120,000 for 1996 and is subject
to increase in later years. In addition, in 1996, such a plan may not take into
account annual compensation in excess of $150,000, which amount is similarly
subject to increase in later years. The Company's Excess Benefit Plan ("Excess
Benefit Plan"), adopted effective September 1, 1984, and amended and restated
as of January 1, 1989, provides for payment, outside of the Protective Life
Corporation Pension Plan ("Pension Plan"), of the difference between (1) the
fully accrued benefits which would be due under the Pension Plan absent both of
the aforesaid limitations and (2) the amount actually payable under the Pension
Plan as so limited.
The above table illustrates estimated gross annual benefits which would be
payable for life in a straight life annuity commencing at normal retirement age
under the Pension Plan and the Excess Benefit Plan for employees with average
compensation (remuneration under the table above) and years of service. Benefits
in the above table are not reduced by social security or other offset amounts.
Compensation covered by the Pension Plan (for purposes of pension benefits)
excludes commissions and performance share awards and generally corresponds to
that shown under the heading "Annual Compensation" in the Summary Compensation
Table. Compensation is calculated based on the average of the highest level of
compensation paid during a period of 36 consecutive whole months. Only three
Annual Incentive Plan bonuses (whether paid or deferred under a Deferred
Compensation Plan maintained by the Company) may be included in obtaining the
average compensation.
15
<PAGE>
The Named Executives and their estimated length of service as of December
31, 1995 are provided in the following table.
<TABLE>
<CAPTION>
YEARS OF
NAME SERVICE
---------------------------------------- --------
<S> <C>
Drayton Nabers, Jr...................... 17
John D. Johns........................... 2
R. Stephen Briggs....................... 24
A. S. Williams III...................... 31
Jim E. Massengale....................... 12
</TABLE>
SEVERANCE COMPENSATION AGREEMENTS
The Company has entered into Severance Compensation Agreements with all
executive officers and several other officers. These agreements provide for
certain payments upon termination of employment or reduction in duties or
compensation following certain events constituting a "change in control". The
agreements may be terminated or modified by the Board of Directors at any time
prior to a change in control. The benefits granted upon termination of
employment are (i) continuation (for up to twenty-four months) in the Company's
hospital, medical, accident, disability, and life insurance plans as provided to
the executive immediately prior to the date of his termination of employment and
(ii) a plan distribution. The distribution shall consist of (1) the payment in
full of all pending performance share awards as if fully earned, using the
higher of the market price or price of the Company's Common Stock in the
transaction effecting the change in control, and (2) delivery of an annuity to
equal increased benefits under the Pension Plan and the Excess Benefit Plan
resulting from an additional three years of credited service (subject to the
Pension Plan's maximum on crediting service).
The maximum benefits are limited to two times the sum of the executive's
most recent annualized base salary plus the last earned bonus under the
Company's Annual Incentive Plan (not to exceed certain tax law limitations). The
Severance Compensation Agreements also provide that if the Performance Share
Plan has terminated before the time of payment of benefits, the amount of
benefits under the Severance Compensation Agreements would be reduced by any
payment to the executive due to the termination of the Performance Share Plan.
COMPENSATION AND MANAGEMENT SUCCESSION COMMITTEE'S
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Management Succession Committee ("Committee") has
oversight and ultimate control of the compensation paid to the Chief Executive
Officer and other officers and employees of the Company and its subsidiaries,
whether by salary or under other compensation plans, including the Company's
Annual Incentive Plan and its Performance Share Plan. This Report on Executive
Compensation ("Report") was prepared by the Committee.
There were three primary types of compensation paid to executive officers of
the Company in 1995: (i) salary, (ii) Annual Incentive Plan bonuses, and (iii)
long-term incentive Performance Share Plan awards which are further described
below. A significant portion of the Chief Executive Officer's total compensation
is incentive compensation. As reflected in the Summary Compensation Table, for
1995, 70% of the Chief Executive Officer's total compensation was incentive
compensation.
16
<PAGE>
SALARY
The Company utilizes a nationally recognized salary administration
methodology for its executive officers whereby each position, including that of
Chief Executive Officer, has assigned points based upon several factors
including level of responsibility. The number of points translates into a salary
range which is reviewed by the Company's compensation consultants and compared
to similar positions in other insurance companies of comparable size measured by
total assets and/or revenues. Some of the companies in the peer group listed on
page 21 are included in the comparison group. Similar salary survey data for
life insurance companies from at least one other nationally recognized
compensation consulting source is reviewed to confirm the Chief Executive
Officer's salary range. Individual competence, length of time within a position,
and comparisons to salaries for similar positions in other companies (adjusted
for size) guide determination of where an individual employee's salary falls
within the position's salary range. Company performance may also be a factor in
determining the amount of any base salary increase for the Chief Executive
Officer. No specific weights are given to any of the factors considered by the
Committee. Based upon such an analysis, which was prepared for the Committee's
review, the Committee established the Chief Executive Officer's 1995 base salary
at $510,000.
The Committee's compensation strategy for executive officers has generally
been to pay salaries at or near the median which, when supplemented by an Annual
Incentive Plan award, will produce total cash compensation approximately at the
seventy-fifth percentile for Company performance at the seventy-fifth percentile
as related to that of a comparison group of companies. Growth in earnings per
share and return on average equity are the two principal measures of Company
performance employed by the Committee.
ANNUAL INCENTIVE PLAN
In 1973, the Company adopted an annual cash bonus plan, which in 1990 was
amended and renamed the Annual Incentive Plan ("AIP"). The AIP was established
for the purpose of rewarding, retaining, and providing incentive for outstanding
performance for those employees who contribute most to the operating progress of
the Company. The AIP is administered by the Committee. Employees are selected
and individual bonuses are allotted to them by the Company's executive officers
with the approval of the Chief Executive Officer. The Committee sets the total
amount of bonuses payable for each year and reviews the methodology used to
determine individual bonuses. The Committee specifically reviews and approves
each annual bonus paid to the executive officers, including the Chief Executive
Officer. Currently, there are 139 employees in the AIP, including the Chief
Executive Officer. Each employee is assigned a target bonus percentage which
ranges from 4% to 45% of salary. The Chief Executive Officer's target bonus
percentage is 45%. Bonus payments, when made, may range from 33% to 200% of the
target. The Committee is authorized to determine the exact percentage of AIP
bonuses earned and may direct that no AIP bonuses be paid.
The AIP provides that the Committee may credit annually to an incentive
reserve for each fiscal year a provision which may not be more than 5% of the
Company's pretax income for that year. In 1995, $3.3 million, or 2.7% of the
Company's 1995 pretax income, was credited to the incentive reserve. In any year
the Committee may pay any part or all of the incentive reserve as awards. Any
part of the incentive reserve which is not paid in any year may remain in the
incentive reserve and be carried forward to the next year. The Committee has
authority to determine to what extent a nonrecurring gain or loss may be
included in the amount of pretax income in the administration of this plan. No
adjustment was made to 1995 pretax income.
17
<PAGE>
An individual's AIP bonus is based upon Company performance and, in
addition, may also be based upon divisional and/or individual performance
criteria specifically related to the officer's responsibilities which are
consistent with overall Company objectives. The Chief Executive Officer's AIP
bonus is based solely on the Company's achieved earnings per share according to
a range fixed for the year at the Committee's March meeting. For the other named
executive officers, 40% to 100% of their respective AIP bonuses is based upon
Company performance.
Under the terms fixed by the Committee, Mr. Nabers would earn a target AIP
bonus of 45% of 1995 base salary if the Company's 1995 operating earnings per
share were $2.40 representing approximately a 16% operating return on average
equity. A maximum bonus, 200% of target or 90% of Mr. Nabers' 1995 base salary
would be paid if the Company's operating earnings were $2.65 representing
approximately a 17.5% operating return on average equity. The Company's 1995
operating earnings per share of $2.68 per share representing approximately a
17.7% operating return on average equity resulted in Mr. Nabers earning a
maximum AIP bonus of 90% of his 1995 base salary, or $459,000. The total payout
to all employees under the AIP for 1995 was $3.7 million, which is 3.1% of the
Company's pretax earnings.
The Committee believes that its administration of the AIP relates bonuses
paid to the Chief Executive Officer to Company performance.
PERFORMANCE SHARE PLAN
The Performance Share Plan was initially adopted in 1973 by stockholders to
motivate officers and key employees, including the Chief Executive Officer, to
focus on the Company's long-range earnings performance, to reward them based on
long-range results, and to provide a process by which officers and key employees
may increase stockholdings in the Company. Under the Performance Share Plan,
officers and key employees of the Company and its subsidiaries, who are
determined by the Committee to have a substantial opportunity to influence the
long-term growth in profitability of the Company, are eligible to participate in
the Performance Share Plan. Those selected by the Committee are awarded
performance shares on an annual basis, each of which has a potential value equal
to the market value of one share of Company Common Stock at the date payment may
be earned. If an award is earned, unless deferment is elected under the Deferred
Compensation Plan for Officers, the employee receives payment (in cash
approximately equal to the income tax liability on the award and the balance in
Common Stock) of all or part of the award four years after the award date, based
on the award conditions determined by the Committee at the time of the award.
With respect to 1995 awards, the number of performance shares awarded was
determined by multiplying the employee's award percentage times base salary plus
target AIP bonus, divided by the average share price of the Company's Common
Stock. Each employee is assigned an award percentage which ranges from 20% to
50%, to provide long-term compensation which is competitive to that offered by
insurance companies of comparable size. The Chief Executive Officer's 1995 award
percentage is 50%. For 1995, a total of 71,170 shares were awarded to 27
participants. For further information, see the "Long-Term Incentive Plan --
Awards in Last Fiscal Year" table on page 14 and the accompanying text for a
description of how 1995 awards may be earned.
Under the Performance Share Plan, the criterion for payment of performance
share awards is made in accordance with the Company's average return on average
equity for an award period compared with that of a comparison group of publicly
held life insurance companies, multiline insurers and insurance holding
companies during the award period. The comparison group of companies is
generally comprised of the Company and the 40 largest publicly held stock life
and multiline insurance companies as listed in the NATIONAL UNDERWRITER,
"INSURANCE STOCK RESULTS", each having net worth in excess of $100 million,
ranked according to net worth, excluding
18
<PAGE>
downstream affiliates of any companies in the comparison group (see page 21). If
the Company's four-year results are below the median of the comparison group no
portion of the award is earned. The Committee believes the operation of the
Performance Share Plan relates long-term incentive compensation to the Company's
long-term performance.
For 1994, Mr. Nabers received $624,499 in shares of Company Common Stock and
cash, representing 94.7% of his 1991 performance share award for 1994 results
placing the Company in the top 14% of the comparison group. $445,342 of this
payment, or 71%, represents appreciation in the market value of Company Common
Stock since the award date.
Results for the award period ending in 1995 will not be known until the 1995
results for the individual companies included in the comparison group are
available. Based upon information available as of the date of this Proxy
Statement, it is anticipated that the Company's 1995 results will place the
Company in the top 13% of the comparison group which will entitle Mr. Nabers to
receive approximately $738,439 in shares of Company Common Stock and cash,
representing 121% of his 1992 performance share award. $534,792 of this payment,
or 72%, would represent appreciation in the market value of Company Common Stock
since the award date.
$1 MILLION LIMIT ON EXECUTIVE COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as amended, states that
publicly held corporations may not take tax deductions for amounts greater than
$1 million that are paid annually to executives whose pay must be disclosed
separately in the Company's Proxy Statement, unless such compensation is
"qualified performance-based compensation". To date, after giving effect to
deferred compensation arrangements, none of the named executives in this Report
has received compensation which exceeds such a $1 million annual limit. The
Company's Annual Incentive Plan and Performance Share Plan previously have been
approved by stockholders and the Company's executive compensation procedures
meet many, though not all, of the requirements necessary to meet the criteria
for "qualified performance-based compensation". Under a transition rule for
plans that have been previously approved by stockholders, the Company may deduct
any annual compensation in excess of $1 million until 1997, provided certain
procedural actions are taken by the Committee. The Committee is presently
studying what possible revisions to the Company's executive compensation plans,
and the administration thereof, might be required in order to be able to deduct
any covered compensation in excess of $1 million after 1997.
COMPENSATION AND MANAGEMENT
SUCCESSION COMMITTEE
John J. McMahon, Jr., Chairman
A. W. Dahlberg John W. Woods
Herbert A. Sklenar Ronald L. Kuehn
19
<PAGE>
PERFORMANCE COMPARISON
The following graph compares total returns on the Company's Common Stock
over the last five fiscal years to the Standard & Poor's 500 Stock Index ("S&P
500") and to a peer comparison group ("Peer Group"). Total return values were
calculated based on cumulative total return values assuming reinvestment of
dividends. The shareholder return shown in the graph below is not necessarily
indicative of future performance.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN (1)
AMONG PROTECTIVE LIFE CORPORATION, THE S&P 500, AND A PEER GROUP (2)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C>
PROTECTIVE LIFE CORPORATION 100 134 222 329 373 491
S&P 500 100 130 140 155 157 215
PEER GROUP 100 140 173 188 182 264
</TABLE>
FOOTNOTES:
(1) Assumes $100 invested on December 31, 1990 in Protective Life Corporation,
S&P 500, and Peer Group common stocks including reinvestment of dividends.
(2) Fiscal Year ending December 31.
20
<PAGE>
The companies included in the Peer Group index are generally identical to
those companies included in the Company's 1995 Performance Share Plan comparison
group of companies, which is generally comprised of the Company and the 40
largest publicly held stock life and multiline insurance companies as listed in
the NATIONAL UNDERWRITER, "INSURANCE STOCK RESULTS", each having net worth in
excess of $100 million, ranked according to net worth at January 1, 1995,
excluding downstream affiliates of any companies in the comparison group. The
Peer Group excludes EMPHESYS Financial Group, Inc., Southwestern Life
Corporation, and USLICO Corporation that are included in the Company's 1995
Performance Share Plan comparison group of companies because, although they
were among the 40 largest companies on January 1, 1995, they were not publicly
held on December 31, 1995. The index weights individual company returns for
stock market capitalization. The companies included in the Peer Group index are:
<TABLE>
<S> <C>
Aetna Life & Casualty Company Kansas City Life Insurance Company
AFLAC, Inc. The Liberty Corporation
Alfa Corporation Life Partners Group, Inc.
American General Corporation Lincoln National Corporation
American Heritage Life Investment National Western Life Insurance Company
Corporation Old Republic International
American International Group, Inc. Presidential Life Corporation
American National Insurance Company Protective Life Corporation
Aon Corporation Provident Life & Accident Insurance
CIGNA Corporation Company of America
CNA Financial Corporation Providian Corporation
Conseco, Inc. ReliaStar Financial Corporation
Delphi Financial Group, Inc. Security-Connecticut Corporation
The Equitable Companies Incorporated Sun America, Inc.
Equitable of Iowa Companies Torchmark Corporation
First Colony Corporation United Insurance Companies, Inc.
Home Beneficial Corporation Unitrin Incorporated
Independent Insurance Group, Inc. UNUM Corporation
Jefferson-Pilot Corporation USLIFE Corporation
John Alden Financial Corporation Washington National Corporation
</TABLE>
The composition of the Peer Group has changed from that used in the previous
year's Proxy Statement. Kemper Corporation was deleted because the NATIONAL
UNDERWRITER lists it as a financial services company, and American Income
Holding, Inc., Southwestern Life Corporation, The Statesman Group, Inc., and
USLICO Corporation were deleted because they were acquired by other companies.
Security-Connecticut Corporation and United Insurance Companies, Inc. were added
to the Peer Group index because they were among the 40 largest companies on
January 1, 1995.
As disclosed in the "Compensation and Management Succession Committee's
Report on Executive Compensation", the Company's incentive compensation is
predominantly based upon comparisons of the Company's return on average equity
(rather than total return) to that of a comparison group of companies. The
following table sets forth the return on average equity and average return on
average equity for the Company and the median for the applicable comparison
group of companies.
21
<PAGE>
<TABLE>
<CAPTION>
PROTECTIVE LIFE COMPARISON GROUP
CORPORATION MEDIAN(1)
----------------------- -------------------------
YEAR ROE(2) AVERAGE ROE(3) ROE(2) AVERAGE ROE(3)
- - ------------------------- ------ -------------- -------- --------------
<S> <C> <C> <C> <C>
1995..................... 17.7% 18.0% 11.7%(4) 11.5%(4)
1994..................... 20.1 17.3 10.5 9.5
1993..................... 18.6 15.6 12.4 9.7
1992..................... 15.5 13.5 12.1 10.2
1991..................... 15.1 9.8 11.1 9.8
</TABLE>
- - ------------------------
FOOTNOTES:
(1) The median is the middle value in a distribution, above and below which lie
an equal number of values.
(2) Return on average equity for the year shown. For 1993, 1994, and 1995,
average equity excludes net unrealized gains and losses on investments.
(3) Average return on average equity for the four-year award period ending with
the year shown.
(4) The 1995 comparison group median is not yet determinable. The percentage
shown is the best estimate available as of the date of this Proxy Statement.
CERTAIN TRANSACTIONS
Director Woods is Chairman of the Board of AmSouth Bancorporation, a bank
holding company which owns all of the stock of AmSouth Bank of Alabama. In
addition to Mr. Woods, one of the directors of the Company is also a director of
such bank and two are directors of AmSouth Bancorporation. Through April 1995,
Director Rushton was also a director of AmSouth Bancorporation and AmSouth Bank
of Alabama. AmSouth Bancorporation and subsidiaries maintain a group life
insurance program with Protective Life (which through reinsurance is shared with
two other companies). In 1995, Protective Life and the Company paid $1,490,270
in credit and mortgage insurance and annuity commissions and $3,771,425 in
interest, mortgage loan service fees, and other charges to AmSouth Bank of
Alabama and other subsidiaries of AmSouth Bancorporation.
In 1995, the Company received $20,206 from the National Bank of Commerce of
Birmingham ("NBC"), in connection with the provision of a partial guaranty of
mortgage loan participations previously sold to NBC, which has two directors in
common with the Company.
The Company is a 25% member of a limited liability company which acquired an
office building adjacent to the Company's home office from an affiliate of The
Southern Company which continues to lease portions of the building. During 1995,
the limited liability company received $1,631,268 in lease payments from
affiliates of The Southern Company. The Southern Company has two directors in
common with the Company. Financing for the purchase of the office building was
provided to the limited liability company by SunTrust Bank, Atlanta which has
two directors in common with the Company. In 1995, the limited liability company
paid $429,618 in interest and the Company paid $14,354 in credit and mortgage
insurance commissions and mortgage loan service fees to SunTrust Bank, Atlanta.
In 1995, the Company paid $4,648 in fees to Equifax, Inc., which has one
director in common with the Company.
22
<PAGE>
During 1995, the following corporations with which one or more of the
Company's directors were affiliated paid Protective Life premiums, fees, or
investment product deposits for various types of insurance as follows:
<TABLE>
<S> <C>
Alabama Power Company............................. $ 714,563
AmSouth Bancorporation and subsidiaries........... 5,004,741
Coca-Cola Bottling Company United, Inc............ 108,856
McWane, Inc. and affiliates....................... 264,747
National Bank of Commerce of Birmingham........... 89,825
Pattillo Construction Company, Inc................ 16,420
Sonat Inc. and subsidiaries....................... 360,000
Southern Research Institute....................... 61,336
SunTrust Banks, Inc. and affiliates............... 10,023,355
The Southern Company and affiliates............... 180,722
Vulcan Materials Company.......................... 4,396,374
</TABLE>
PROPOSALS TO APPROVE
DEFERRED COMPENSATION PLANS
At the Annual Meeting, stockholders will be asked to approve the Company's
Deferred Compensation Plan for Directors Who Are Not Employees of the Company
and the Company's Deferred Compensation Plan for Officers. Such approval by
stockholders is one of several requirements under Section 16(b) of the
Securities and Exchange Act of 1934, to enable an award or payment of the
Company's stock (or stock equivalents) to a director or executive officer of the
Company to qualify for certain exemptions available under the Federal securities
laws.
On March 8, 1996, the closing price of the Company's Common Stock on the New
York Stock Exchange was $34.63.
DEFERRED COMPENSATION PLAN FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY
The Company has established a Deferred Compensation Plan for Directors Who
Are Not Employees of the Company (the "Directors' Plan") whereby eligible
directors may voluntarily elect to defer to a specified date receipt of all or
any portion of their directors' fees. Directors' fees so deferred are credited
to the directors in cash or Company stock equivalents or a combination thereof.
The cash portion earns interest at approximately the Company's short-term
borrowing rate. The stock equivalent portion is credited with dividends in the
form of additional stock equivalents. Deferred directors' fees will be
distributed in stock or cash as specified by the directors in accordance with
the Directors' Plan unless distribution is accelerated under certain provisions,
including upon a change in control of the Company.
There are currently ten non-employee directors eligible to participate in
the Directors' Plan. The number of non-employee directors who actually
participate in the Directors' Plan may vary from year to year. Employees of the
Company or its subsidiaries, whether or not directors, are not eligible to
participate in the Directors' Plan.
23
<PAGE>
The number of any stock equivalents acquired under the Directors' Plan is
based on the fair market value of a share of the Company's Common Stock on the
date fees would otherwise have been payable to the participating director.
The table below shows the aggregate amount of fees deferred and the amount
of cash and stock equivalents, including interest and dividends, credited to
participating directors at December 31, 1995.
<TABLE>
<CAPTION>
CREDITED TO PARTICIPANTS
DIRECTORS' FEES DEFERRED AT DECEMBER 31, 1995
-------------------------- ------------------------
THROUGH DECEMBER STOCK EQUIVALENTS
PARTICIPATING DIRECTORS IN 1995 31, 1995 CASH (IN SHARES)
- - ------------------------ ------- ----------------- ----- -----------------
<S> <C> <C> <C> <C>
All participating
Directors who are not
employees of the
Company, as a group
(1 person)............ $26,100 $58,555 $-0- 2,602
</TABLE>
VOTE REQUIRED
To approve the Company's Deferred Compensation Plan for Directors Who Are
Not Employees of the Company, the affirmative vote of the holders of a majority
of the shares issued, outstanding and entitled to vote is required.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
COMPANY'S DEFERRED COMPENSATION PLAN FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE
COMPANY.
DEFERRED COMPENSATION PLAN FOR OFFICERS
The Company has established a Deferred Compensation Plan for Officers (the
"Officers' Plan") whereby eligible officers may voluntarily elect to defer to a
specified date receipt of all or any portion of their Annual Incentive Plan and
Performance Share Plan bonuses. Bonuses so deferred are credited to the officers
in cash or Company stock equivalents or a combination thereof. The cash portion
earns interest at approximately the Company's short-term borrowing rate. The
stock equivalent portion is credited with dividends in the form of additional
stock equivalents. Deferred bonuses will be distributed in stock or cash as
specified by the officers in accordance with the Officers' Plan unless
distribution is accelerated under certain provisions, including upon a change in
control of the Company.
There are currently 139 officers eligible to participate in the Officers'
Plan. The number of officers who actually participate in the Officers' Plan may
vary from year to year. Non-employee directors and employees who are not
officers of the Company or its subsidiaries, are not eligible to participate in
the Officers' Plan.
The number of stock equivalents acquired under the Officers' Plan is based
on the fair market value of a share of the Company's Common Stock on the date
bonuses would otherwise have been payable to the participating officer.
24
<PAGE>
The table below shows the aggregate amount of bonuses which were deferred
and the amount of cash and stock equivalents, including interest and dividends,
credited to participating officers at December 31, 1995.
<TABLE>
<CAPTION>
CREDITED TO PARTICIPANTS AT
BONUSES DEFERRED DECEMBER 31, 1995
------------------------------ ---------------------------
THROUGH DECEMBER STOCK EQUIVALENTS
PARTICIPATING OFFICERS IN 1995 31, 1995 CASH (IN SHARES)
- - ----------------------------------------------------------------- ---------- ----------------- ------- -----------------
<S> <C> <C> <C> <C>
Drayton Nabers, Jr............................................... $ 624,499 $1,082,932 $ 0 48,139
John D. Johns.................................................... 85,157 138,321 0 6,081
R. Stephen Briggs................................................ 238,513 441,442 0 19,680
A. S. Williams III............................................... 257,723 472,628 0 21,023
Jim E. Massengale................................................ 0 184,128 0 8,840
All participating executive officers, as a group (9 persons)..... 1,787,239 3,391,515 0 151,019
All participating officers who are not executive officers, as a
group (19 persons).............................................. 1,009,155 1,620,848 50,904 69,428
All participating officers, as a group (28 persons).............. 2,796,394 5,012,363 50,904 220,447
</TABLE>
VOTE REQUIRED
To approve the Company's Deferred Compensation Plan for Officers, the
affirmative vote of the holders of a majority of the shares issued, outstanding
and entitled to vote is required.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
COMPANY'S DEFERRED COMPENSATION PLAN FOR OFFICERS.
OTHER INFORMATION
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Coopers & Lybrand L.L.P. was selected as the principal
independent public accountants for the Company and its subsidiaries for 1995. It
is anticipated that Coopers & Lybrand L.L.P. will be selected again in 1996 as
the Company's principal independent public accountants. This firm has served as
independent public accountants for the Company and its predecessor since 1974.
Representatives of Coopers & Lybrand L.L.P. are expected to attend the Annual
Meeting of Stockholders and will have an opportunity to make a statement if they
so desire and to respond to appropriate questions.
In evaluating the selection of Coopers & Lybrand L.L.P. as principal
independent public accountants for the Company and its subsidiaries, the Audit
Committee of the Board of Directors has considered generally the non-audit
professional services that Coopers & Lybrand L.L.P. will likely be asked to
provide for the Company during 1996, and the effect which performing such
services might have on audit independence. It has reviewed the non-audit
services which were performed in 1995 and determined that they were consistent
with Company policy.
25
<PAGE>
ANNUAL REPORTS AVAILABLE
A COPY OF THE COMPANY'S 1995 ANNUAL REPORT ON FORM 10-K TO THE SECURITIES
AND EXCHANGE COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO ANY STOCKHOLDER WHO
REQUESTS SUCH REPORT IN WRITING FROM THE SECRETARY OF THE CORPORATION,
PROTECTIVE LIFE CORPORATION, P. O. BOX 2606, BIRMINGHAM, ALABAMA 35202.
THE COMPANY'S ANNUAL REPORT ON FORM 10-K IS ALSO ELECTRONICALLY ACCESSIBLE
THROUGH THE INTERNET FROM THE "EDGAR DATABASE OF CORPORATE INFORMATION" ON THE
SECURITIES AND EXCHANGE COMMISSION'S WORLD WIDE WEB SITE (HTTP://WWW.SEC.GOV).
STOCKHOLDER PROPOSALS
In order to be included in the proxy materials for the Company's 1997 Annual
Meeting of Stockholders, any proposals of stockholders intended to be presented
at the 1997 Annual Meeting of Stockholders must be received in written form by
the Company's Secretary at the principal office of the Company at the address
stated above on or before November 29, 1996.
26
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR OFFICERS
1. ELIGIBILITY AND PURPOSE
Officers of Protective Life Corporation and its affiliates (the "Company")
who participate in either the Annual Incentive Plan (or other eligible bonus
plan) or Performance Share Plan, or both shall be eligible to participate in the
Protective Life Corporation Deferred Compensation Plan for Officers (the
"Plan"). Any Officer who elects to participate in the Plan ("Officer") shall
thereby defer the receipt of all or any portion of such bonuses payable by the
Company to such Officer (the "Deferrable Compensation").
2. DEFERRAL OF COMPENSATION
An Officer may elect to defer all or any portion of the Deferrable
Compensation by executing a form prescribed by the Company and delivering such
election form to the Company prior to the first day of the calendar year for
which the election is to be effective or at such other time and subject to such
other conditions as the Company shall determine, PROVIDED, THAT, any such
election shall be applicable only to Deferrable Compensation with respect to
which the Officer, at the time of election, has no current right to receive. The
amount of Deferrable Compensation deferred shall be paid or distributed to the
Officer in accordance with the provisions of Section 5 or Section 6, below.
3. DEFERRED COMPENSATION ACCOUNT
The Company shall establish a deferred compensation account (the "Account")
for the Officer. As of the date payments of Deferrable Compensation otherwise
would be made to the Officer, the Company shall credit to the Account, in cash
or stock equivalents, or a combination thereof, as hereinafter provided, that
amount of the Deferrable Compensation which the Officer has elected to defer.
4. CASH OR STOCK ELECTION
(a) As of the date payments of Deferrable Compensation otherwise would be
made to the Officer, the amount due the Officer shall be credited to the Account
either as a cash allotment or as a stock allotment, or a portion to each, as the
Officer shall elect, except that any Performance Share Plan bonuses will be
credited as a stock allotment.
(b) If a cash allotment is elected in whole or in part, the Account shall be
credited with the dollar amount of the allotment. Interest (at the rate
described below) on the Average Daily Balance (computed as described below)
shall be credited to the Account as of the last day of each calendar month
before and after the termination of the Officer's service and after the
Officer's death or disability until the total balance in the Account has been
paid out in accordance with the provisions of Section 5 or Section 6, below. The
interest rate for each calendar month shall be the 30-Day London Interbank
Offered Rate (LIBOR) plus 75 basis points for the last business day of the
immediately preceding calendar month as reported on the Bloomberg financial news
system. The "Average Daily Balance" shall be the quotient obtained by dividing
the sum of the closing balance in the Account at the end of each calendar day in
a calendar month by the number of days in such calendar month.
(c)(1) If a stock allotment is elected in whole or in part, the Account
shall be credited with a stock equivalent that shall be equal to the number of
full and fractional shares of the Company's Common Stock, par value $0.50 per
share (the "Common Stock"), that could be purchased with the dollar amount of
the allotment using the Average Closing Price (as defined below) of the Common
Stock for the twenty (20) trading days ending on the day preceding the date the
Account is so credited. The "Average Closing Price" of the Common Stock means
the average of the daily closing prices for a share of the Common Stock for the
applicable twenty (20) trading days on the Composite Tape for the New York Stock
Exchange D Listed Stocks, or, if the Common Stock is not listed on such
Exchange, on the principal United States securities exchange registered under
the Securities Exchange Act of 1934,
A-1
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR OFFICERS (CONTINUED)
4. CASH OR STOCK ELECTION (CONTINUED)
as amended (the "Exchange Act"), on which the Common Stock is listed, or, if the
Common Stock is not listed on any such Exchange, the average of the daily
closing bid quotations with respect to a share of the Common Stock for such
twenty (20) trading days on the National Association of Securities Dealers,
Inc., Automated Quotations Systems or any system then in use, or, if no such
quotations are available, the fair market value of a share of the Common Stock
as determined by a majority of the Board; provided, however, that if a Change in
Control (as defined below) shall have occurred, then such determination shall be
made by a majority of the Continuing Directors (as defined in the Protective
Life Corporation Rights Agreement, as in effect from time to time).
(2) The Account also shall be credited as of the payment date for each
dividend on the Common Stock with additional stock equivalents computed as
follows: The dividend paid, either in cash or property (other than Common
Stock), upon a share of Common Stock to a shareholder of record shall be
multiplied by the number of stock equivalents in the Account and the product
thereof shall be divided by the Average Closing Price of the Common Stock for
the twenty (20) trading days ending on the day preceding the dividend payment
date. In the case of dividends payable in property, the amount paid shall be
based on the fair market value of the property at the time of distribution of
the dividend, as determined by a majority of the Board; provided, however, that
if a Change in Control shall have occurred, then such determination shall be
made by a majority of the Continuing Directors.
(3) In the event of any change in the Common Stock, upon which the stock
equivalency hereunder is based, by reason of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or any other change in corporate structure, the number of
shares credited to the Account shall be adjusted in such manner as a majority of
the Board shall determine to be fair under the circumstances; provided, however,
that if a Change in Control shall have occurred, then such determination shall
be made by a majority of the Continuing Directors (as defined in the Protective
Life Corporation Rights Agreement, as in effect from time to time).
5. DISTRIBUTION
(a) Except as otherwise provided in the Plan, at the Officer's election, the
balance in the Account shall be paid out to the Officer commencing on the date
which the Officer has specified on his or her election form.
Except as otherwise provided in the Plan, the balance in the Account shall
be paid either in a lump sum or, at the Officer's election, in monthly,
quarterly, semiannual or annual installments, but such installments shall be
payable over a period of years not to exceed ten (10) years (the "Payout
Period"). In order to be effective, an election to change the method and/or
timing of distribution with respect to the Account must be in a form prescribed
by the Company and received by the Company at least six months prior to such
Officer's retirement from the Company and prior to the first day of the calendar
year in which payments (i) are to begin pursuant to such election and (ii) would
have begun absent such election. The amount of each installment shall be
determined as of the first day of the period in which payment is to be made by
dividing the then balance in the Account by the then remaining number of payment
dates in the Payout Period. The lump sum or first periodic installment shall be
paid by the Company as promptly as is convenient, but not more than sixty (60)
days following the date specified by the Officer.
(b) Notwithstanding the provisions of Section 5(a), in the event the Officer
ceases to be employed by the Company, other than after a Change in Control as
defined in Section 6(a) below or due to such
A-2
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR OFFICERS (CONTINUED)
5. DISTRIBUTION (CONTINUED)
Officer's retirement pursuant to terms of the Company's qualified pension plan,
prior to distribution of the entire balance in the Officer's Account, the
balance in the Account shall be payable in a lump sum.
(c) In the event of the death of the Officer prior to distribution of the
entire balance in the Officer's Account, the balance in the Account shall be
payable in a lump sum to:
(i) the surviving beneficiary (or surviving beneficiaries in such
proportions as) the Officer may have designated by notice in writing to the
Company unrevoked by a later notice in writing to the Company or, in the
absence of an unrevoked notice,
(ii) the beneficiary (or beneficiaries in such proportions as) the
Officer may have designated by will or, if no beneficiary is designated,
(iii) the legal representative of the Officer's estate.
In the event an Officer becomes disabled or suffers a hardship, the payment
commencement date and/or payment schedule with respect to a balance in an
Officer's Account may be accelerated by the Compensation and Management
Succession Committee of Protective Life Corporation (or its designee) in its
sole discretion.
(d) The provisions of the Plan shall apply to and be binding upon the
beneficiaries, distributees and personal representatives and any other
successors in interest of the Officer.
(e) Distribution of the cash in the Account shall be made in cash.
Distribution of stock equivalents in the Account shall be made in whole shares
of the Company's Common Stock; fractional shares shall be paid in cash in an
amount equal to the number of fractional shares multiplied by the Average
Closing Price of the Common Stock for the twenty (20) trading days ending on the
day preceding the date of distribution.
(f) The Company shall deduct from all distributions hereunder any taxes
required to be withheld by the federal or any state or local government.
6. ACCELERATION OF DISTRIBUTION
(a) "Change in Control" is:
(1) as defined in Protective Life Corporation's Rights Agreement, as in
effect from time to time; or
(2) approval by the Board of (i) a merger, consolidation or
reorganization of the Company in which, as a consequence of the transaction,
either the Continuing Directors do not constitute a majority of the
directors of the continuing or surviving corporation or any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, controls 15% or more of the combined voting power of the
continuing or surviving corporation; (ii) any sale, lease or other transfer,
in one transaction or a series of related transactions, of all or
substantially all of the assets of Protective Life Corporation, including,
without limitation, any sale, lease, exchange or other transfer (in one or a
series of related transactions) of all or substantially all, of the assets
of Protective Life Insurance Company; or (iii) any plan or proposal for the
liquidation or dissolution of Protective Life Corporation; provided,
however, that, if at the time of such approval, a majority of the Continuing
Directors determines that such merger, consolidation, reorganization, sale,
lease, other transfer, liquidation or dissolution shall not, for purposes of
the Plan, be deemed
A-3
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR OFFICERS (CONTINUED)
6. ACCELERATION OF DISTRIBUTION (CONTINUED)
a Change in Control, such transaction shall not constitute a Change in
Control hereunder, and, provided further, that, if a majority of the
Continuing Directors so determines, a Change in Control shall not be deemed
to occur until the consummation of any such transaction.
(b) Upon a Change in Control or any time thereafter, the Officer may convert
any stock allotments in the Account (including Performance Share Plan bonuses
credited as a stock allotment) into cash allotments. The Officer may not convert
any cash allotments in the Account into stock allotments.
(c) Notwithstanding any other provision of the Plan, if a Change in Control
occurs and at any time after or in connection with the occurrence of such Change
in Control either of the following events occurs:
(1) the Officer ceases to have duties consistent with the Officer's
position, responsibilities and status with the Company immediately prior to
a Change in Control;
(2) the Plan is terminated; or
(3) the Company's capital structure is changed materially;
then the balance in the Account shall be paid in a lump sum to the Officer as
soon as practicable after January 1 of the calendar year immediately following
such second event unless such Officer completes a new election form, prior to
the end of the calendar year in which such second event occurs, electing an
alternative method and/or timing of distribution. Notwithstanding the foregoing,
no such election shall cause a distribution to be made earlier than the calendar
year following the year in which such election is made.
(d) Distribution shall be in accordance with Sections 5(b), 5(c), 5(d) and
5(e), above, except that distribution of stock equivalents in the Account shall
be made in cash in an amount equal to the number of stock equivalents to be
distributed multiplied by the greater of (i) the Average Closing Price of the
Common Stock for the twenty (20) trading days ending on the day preceding the
date on which the right to such distribution arose; (ii) the Average Closing
Price of the Common Stock for the twenty (20) trading days ending on the day
preceding the date of the Change in Control; or (iii) the highest price per
share of Common Stock in the transaction or series of transactions constituting
the Change in Control.
(e) With respect to conversions of stock allotments in the Officer's Account
into cash allotments in accordance with Section 6(b), the converted stock
allotments shall be valued at the greater of (i) the Average Closing Price of
the Common Stock for the twenty (20) trading days ending on the day preceding
the effective date of such conversions; (ii) the Average Closing Price of the
Common Stock for the twenty (20) trading days ending on the day preceding the
date of the Change in Control; or (iii) the highest price per share of Common
Stock in the transaction or series of transactions constituting the Change in
Control.
(f) Any payments shall be made by the Company as promptly as practicable,
but not more than thirty (30) days following the date on which the right to such
payment arose. The Company shall promptly reimburse the Officer for all legal
fees and expenses reasonably incurred in successfully seeking to obtain or
enforce any right or benefit provided under this Section 6.
(g) This Section 6 may not be amended or modified after the occurrence of a
Change in Control.
A-4
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR OFFICERS (CONTINUED)
7. MISCELLANEOUS
(a) Except as set forth in 6(c) above, the election to defer Deferrable
Compensation, including, but not limited to, the allocation of the amount
deferred between the cash allotment or the stock allotment portion of the
Account, or a combination thereof, shall be irrevocable as to amounts payable
following the time when the election is made and shall remain irrevocable until
a new election form reflecting a change or revocation with respect to amounts
payable in a subsequent time period is delivered to the Company not later than
seven (7) days preceding the payment date of subsequent Deferrable Compensation
to which such change or revocation is applicable.
(b) Neither the Officer nor any other person shall have any interest in any
fund or in any specific asset of the Company by reason of amounts credited to
the Account of an Officer hereunder, nor the right to exercise any of the rights
or privileges of a shareholder with respect to any stock equivalents credited to
the Account, nor the right to receive any distribution under the Plan except as
and to the extent expressly provided for in the Plan. Distributions hereunder
shall be made from the general funds of the Company, and the rights of the
Officer shall be those of an unsecured general creditor of the Company.
(c) The interest of the Officer under the Plan shall not be assignable by
the Officer or the Officer's beneficiary or legal representative, either by
voluntary assignment or by operation of law, and any assignment of such
interest, whether voluntary or by operation of law, shall be ineffective to
transfer the Officer's interest; provided, however, that (i) the Officer may
designate a beneficiary to receive any benefit payable under the Plan upon
death, and (ii) the legal representative of the Officer's estate may assign the
Officer's interest under the Plan to the persons entitled to any benefit payable
under the Plan upon the Officer's death.
(d) Except as provided in Section 6, above, the Company may amend, modify,
terminate or discontinue the Plan at any time; provided, however, that no such
action shall reduce the amounts credited to the Account of the Officer
immediately prior to such action, nor change the time, method or manner of
distribution of such amount, including, without limitation, distribution in
accordance with Section 6, above.
(e) Nothing contained herein shall impose any obligation on the Company to
continue the tenure of the Officer beyond the term for which such Officer may
have been elected or appointed or shall prevent the removal of such Officer.
(f) This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by the Compensation and Management
Succession Committee of Protective Life Corporation (or its designee) whose
interpretation or determination, when made in good faith, shall be conclusive
and binding, unless a Change in Control shall have occurred, in which case such
interpretation or determination shall be made by a majority of the Continuing
Directors.
(g) If any amounts deferred pursuant to the Plan are found in a
"determination" (within the meaning of Section 1313(a) of the Internal Revenue
Code of 1986, as amended) to have been includible in gross income by an Officer
prior to payment of such amounts from the Officer's Account, such amounts shall
be immediately paid to such Officer, notwithstanding the Officer's elections
pursuant to Section 2.
(h) The Deferrable Compensation is still subject to Federal Insurance
Contributions Taxes at the rate required by Section 3101 of the Internal Revenue
Code, as amended. The Company will withhold such taxes from other compensation
which is not deferred.
A-5
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY
1. ELIGIBILITY AND PURPOSE
Each member of the Board of Directors (the "Board") of Protective Life
Corporation (the "Company") who is not an employee of the Company or its
subsidiaries shall be eligible to participate in the Protective Life Corporation
Deferred Compensation Plan for Directors Who Are Not Employees of the Company
(the "Plan"). Any member of the Board who elects to participate in the Plan
("Director") shall thereby defer the receipt of all or any portion of the annual
retainer (except any voluntary contributions to the Company's Political Action
Committees paid out of such retainer), meeting and committee fees payable by the
Company to such Director for serving as a member of the Board or one or more of
its committees (the "Deferrable Compensation").
2. DEFERRAL OF COMPENSATION
A Director may elect to defer all or any portion of the Deferrable
Compensation by executing a form prescribed by the Company and delivering such
election form to the Company prior to the first day of the calendar year for
which the election is to be effective or at such other time and subject to such
other conditions as the Company shall determine, PROVIDED, THAT, any such
election shall be applicable only to Deferrable Compensation with respect to
which the Director, at the time of election, has no current right to receive. In
the calendar year that a Director first becomes eligible to participate in the
Plan, such Director may elect to defer all or any portion of the Deferrable
Compensation, provided that the election form is delivered to the Company within
thirty (30) days after the Director first becomes eligible to participate in the
Plan for such year. An election made in this manner will be applicable only to
Deferrable Compensation earned after the effective date of the election. The
amount of Deferrable Compensation deferred shall be paid or distributed to the
Director in accordance with the provisions of Section 5 or Section 6, below.
3. DEFERRED COMPENSATION ACCOUNT
The Company shall establish a deferred compensation account (the "Account")
for the Director. As of the date payments of Deferrable Compensation otherwise
would be made to the Director, the Company shall credit to the Account, in cash
or stock equivalents, or a combination thereof, as hereinafter provided, that
amount of the Deferrable Compensation which the Director has elected to defer.
4. CASH OR STOCK ELECTION
(a) As of the date payments of Deferrable Compensation otherwise would be
made to the Director, the amount due the Director shall be credited to the
Account either as a cash allotment or as a stock allotment, or a portion to
each, as the Director shall elect.
(b) If a cash allotment is elected in whole or in part, the Account shall be
credited with the dollar amount of the allotment. Interest (at the rate
described below) on the Average Daily Balance (computed as described below)
shall be credited to the Account as of the last day of each calendar month
before and after the termination of the Director's service and after the
Director's death or disability until the total balance in the Account has been
paid out in accordance with the provisions of Section 5 or Section 6, below. The
interest rate for each calendar month shall be the 30-Day London Interbank
Offered Rate (LIBOR) plus 75 basis points for the last business day of the
immediately preceding calendar month as reported on the Bloomberg financial news
system. The "Average Daily Balance" shall be the quotient obtained by dividing
the sum of the closing balance in the Account at the end of each calendar day in
a calendar month by the number of days in such calendar month.
(c)(1) If a stock allotment is elected in whole or in part, the Account
shall be credited with a stock equivalent that shall be equal to the number of
full and fractional shares of the Company's Common Stock, par value $0.50 per
share (the "Common Stock"), that could be purchased with the
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<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY (CONTINUED)
4. CASH OR STOCK ELECTION (CONTINUED)
dollar amount of the allotment using the Average Closing Price (as defined
below) of the Common Stock for the twenty (20) trading days ending on the day
preceding the date the Account is so credited. The "Average Closing Price" of
the Common Stock means the average of the daily closing prices for a share of
the Common Stock for the applicable twenty (20) trading days on the Composite
Tape for the New York Stock Exchange D Listed Stocks, or, if the Common Stock is
not listed on such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on which the Common Stock is listed, or, if the Common Stock is not
listed on any such Exchange, the average of the daily closing bid quotations
with respect to a share of the Common Stock for such twenty (20) trading days on
the National Association of Securities Dealers, Inc., Automated Quotations
Systems or any system then in use, or, if no such quotations are available, the
fair market value of a share of the Common Stock as determined by a majority of
the Board; provided, however, that if a Change in Control (as defined below)
shall have occurred, then such determination shall be made by a majority of the
Continuing Directors (as defined in Protective Life Corporation's Rights
Agreement, as in effect from time to time).
(2) The Account also shall be credited as of the payment date for each
dividend on the Common Stock with additional stock equivalents computed as
follows: The dividend paid, either in cash or property (other than Common
Stock), upon a share of Common Stock to a shareholder of record shall be
multiplied by the number of stock equivalents in the Account and the product
thereof shall be divided by the Average Closing Price of the Common Stock for
the twenty (20) trading days ending on the day preceding the dividend payment
date. In the case of dividends payable in property, the amount paid shall be
based on the fair market value of the property at the time of distribution of
the dividend, as determined by a majority of the Board; provided, however, that
if a Change in Control shall have occurred, then such determination shall be
made by a majority of the Continuing Directors.
(3) In the event of any change in the Common Stock, upon which the stock
equivalency hereunder is based, by reason of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination or
exchange of shares, or any other change in corporate structure, the number of
shares credited to the Account shall be adjusted in such manner as a majority of
the Board shall determine to be fair under the circumstances; provided, however,
that if a Change in Control (as defined below) shall have occurred, then such
determination shall be made by a majority of the Continuing Directors (as
defined in Protective Life Corporation's Rights Agreement, as in effect from
time to time).
5. DISTRIBUTION
(a) Except as otherwise provided in the Plan, at the Director's election,
the balance in the Account shall be paid out to the Director commencing on the
date which the Director has specified on his or her election form.
Except as otherwise provided in the Plan, the balance in the Account shall
be paid either in a lump sum or, at the Director's election, in monthly,
quarterly, semiannual or annual installments, but such installments shall be
payable over a period of years not to exceed ten (10) years (the "Payout
Period"). In order to be effective, an election to change the method and/or
timing of distribution with respect to the Account must be in a form prescribed
by the Company and received by the Company at least six months prior to such
Director's retirement as Director of the Company and prior to the first day of
the calendar year in which payments (i) are to begin pursuant to such election
and (ii) would have begun absent such election. The amount of each installment
shall be determined as of the first day of the period in which payment is to be
made by dividing the then balance in the Account by the then
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<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY (CONTINUED)
5. DISTRIBUTION (CONTINUED)
remaining number of payment dates in the Payout Period. The lump sum or first
periodic installment shall be paid by the Company as promptly as is convenient,
but not more than sixty (60) days following the date specified by the Director.
(b) Notwithstanding the provisions of Section 5(a), in the event the
Director ceases to hold office as a member of the Board, other than after a
Change in Control (as defined in Section 6(a) below) or due to such Director's
retirement from the Board, prior to distribution of the entire balance in the
Director's Account, the balance in the Account shall be payable in a lump sum.
(c) In the event of the death of the Director prior to distribution of the
entire balance in the Director's Account, the balance in the Account shall be
payable in a lump sum to
(i) the surviving beneficiary (or surviving beneficiaries in such
proportions as) the Director may have designated by notice in writing to the
Company unrevoked by a later notice in writing to the Company or, in the
absence of an unrevoked notice,
(ii) the beneficiary (or beneficiaries in such proportions as) the
Director may have designated by will or, if no beneficiary is designated,
(iii) the legal representative of the Director's estate.
In the event a Director becomes disabled, the payment commencement date
and/or payment schedule with respect to a balance in a Director's Account may be
accelerated by the Board Structure and Nominating Committee (or its designee) in
its sole discretion.
(d) The provisions of the Plan shall apply to and be binding upon the
beneficiaries, distributees and personal representatives and any other
successors in interest of the Director.
(e) Distribution of the cash in the Account shall be made in cash.
Distribution of stock equivalents in the Account shall be made in whole shares
of the Company's Common Stock; fractional shares shall be paid in cash in an
amount equal to the number of fractional shares multiplied by the Average
Closing Price of the Common Stock for the twenty (20) trading days ending on the
day preceding the date of distribution.
(f) The Company shall deduct from all distributions hereunder any taxes
required to be withheld by the federal or any state or local government.
6. ACCELERATION OF DISTRIBUTION
(a) "Change in Control" is:
(1) as defined in Protective Life Corporation's Rights Agreement, as in
effect from time to time; or
(2) approval by the Board of (i) a merger, consolidation or
reorganization of the Company in which, as a consequence of the transaction,
either the Continuing Directors do not constitute a majority of the
directors of the continuing or surviving corporation or any person, entity
or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act, controls 15% or more of the combined voting power of the
continuing or surviving corporation; (ii) any sale, lease or other transfer,
in one transaction or a series of transactions, of all or substantially all
of the assets of the Company, including, without limitation, any sale,
lease, exchange or other transfer (in one or a series of related
transactions) of all or substantially all of the assets of Protective Life
Insurance Company; or (iii) any plan or proposal for the liquidation or
dissolution of the Company; provided, however, that, if at the time of such
approval, a majority of the Continuing
B-3
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY (CONTINUED)
6. ACCELERATION OF DISTRIBUTION (CONTINUED)
Directors determines that such merger, consolidation, reorganization, sale,
lease, other transfer, liquidation or dissolution shall not, for purposes of
the Plan, be deemed a Change in Control, such transaction shall not
constitute a Change in Control hereunder, and, provided further, that, if a
majority of the Continuing Directors so determines, a Change in Control
shall not be deemed to occur until the consummation of any such transaction.
(b) Notwithstanding any other provision of the Plan, if a Change in Control
occurs and at any time after or in connection with the occurrence of such Change
in Control either of the following events occurs:
(1) the Director ceases to hold office as a member of the Board;
(2) the Plan is terminated; or
(3) the Company's capital structure is changed materially;
then the balance in the Account shall be payable in a lump sum to the Director
as soon as practicable after January 1 of the following calendar year unless
such Director completes a new election form prior to the end of the current
calendar year, determining the method and timing of election, provided, that, no
such election shall cause a distribution to occur earlier than the calendar year
following such election. If payment is payable in a lump sum, such payment shall
be made by the Company as promptly as practicable, but not more than thirty (30)
days following the date on which the right to such payment arose.
(c) Distribution shall be in accordance with Sections 5(b), 5(c), 5(d) and
5(e), above, except that distribution of stock equivalents in the Account shall
be made in cash in an amount equal to the number of stock equivalents to be
distributed multiplied by the greater of (i) the Average Closing Price of the
Common Stock for the twenty (20) trading days ending on the day preceding the
date on which the right to such distribution arose; (ii) the Average Closing
Price of the Common Stock for the twenty (20) trading days ending on the day
preceding the date of the Change in Control; or (iii) the highest price per
share of Common Stock in the transaction or series of transactions constituting
the Change in Control.
(d) The Company shall promptly reimburse the Director for all legal fees and
expenses reasonably incurred in successfully seeking to obtain or enforce any
right or benefit provided under this Section 6.
(e) This Section 6 may not be amended or modified after the occurrence of a
Change in Control.
7. MISCELLANEOUS
(a) Except as provided in 6(b) above, the election to defer Deferrable
Compensation, including, but not limited to, the allocation of the amount
deferred between the cash allotment or the stock allotment portion of the
Account, or a combination thereof, shall be irrevocable as to amounts earned
following the time when the election is made and shall remain irrevocable until
a new election form reflecting a change or revocation with respect to amounts
earned in a subsequent time period is delivered to the Company not later than
ten (10) days preceding the first day of the calendar month to which such change
or revocation is applicable.
(b) Neither the Director nor any other person shall have any interest in any
fund or in any specific asset of the Company by reason of amounts credited to
the Account of a Director hereunder, nor the right to exercise any of the rights
or privileges of a shareholder with respect to any stock equivalents credited to
the Account, nor the right to receive any distribution under the Plan except as
B-4
<PAGE>
PROTECTIVE LIFE CORPORATION
DEFERRED COMPENSATION PLAN
FOR DIRECTORS WHO ARE NOT EMPLOYEES OF THE COMPANY (CONTINUED)
7. MISCELLANEOUS (CONTINUED)
and to the extent expressly provided for in the Plan. Distributions hereunder
shall be made from the general funds of the Company, and the rights of the
Director shall be those of an unsecured general creditor of the Company.
(c) The interest of the Director under the Plan shall not be assignable by
the Director or the Director's beneficiary or legal representative, either by
voluntary assignment or by operation of law, and any assignment of such
interest, whether voluntary or by operation of law, shall be ineffective to
transfer the Director's interest; provided, however, that (i) the Director may
designate a beneficiary to receive any benefit payable under the Plan upon
death, and (ii) the legal representative of the Director's estate may assign the
Director's interest under the Plan to the persons entitled to any benefit
payable under the Plan upon the Director's death.
(d) Except as provided in Section 6, above, the Company may amend, modify,
terminate or discontinue the Plan at any time; provided, however, that no such
action shall reduce the amounts credited to the Account of the Director
immediately prior to such action, nor change the time, method or manner of
distribution of such amount, including, without limitation, distribution in
accordance with Section 6, above.
(e) Nothing contained herein shall impose any obligation on the Company to
continue the tenure of the Director beyond the term for which such Director may
have been elected or shall prevent the removal of such Director.
(f) This Plan shall be interpreted by and all questions arising in
connection therewith shall be determined by a majority of the Board, whose
interpretation or determination, when made in good faith, shall be conclusive
and binding, unless a Change in Control shall have occurred, in which case such
interpretation or determination shall be made by a majority of the Continuing
Directors.
(g) If any amounts deferred pursuant to the Plan are found in a
"determination" (within the meaning of Section 1313(a) of the Internal Revenue
Code of 1986, as amended) to have been includible in gross income by a Director
prior to payment of such amounts from his Director's Account, such amounts shall
be immediately paid to such director, notwithstanding his elections pursuant to
Section 2.
B-5
<PAGE>
PROTECTIVE LIFE CORPORATION
Post Office Box 2606
Birmingham, Alabama 35202
PROXY
The undersigned hereby appoints Drayton Nabers, Jr., John D. Johns, and
John K. Wright, and each of them, with power of substitution, as proxies to
represent and vote on behalf of the undersigned all shares of Common Stock of
Protective Life Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held at the principal office of the
Company, 2801 Highway 280 South, Birmingham, Alabama 35223 on Monday, May 6,
1996 at 10:00 a.m., CDT, and at any adjournments thereof, hereby revoking all
proxies heretofore given with respect to such shares, upon the following
proposals more fully described in the notice of, and Proxy Statement dated
March 29, 1996 for, said meeting (receipt whereof is hereby acknowledged).
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
- - -------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, AND 3.
1. ELECTION OF DIRECTORS
/ / FOR all nominees listed below (except as marked to the contrary below)
/ / WITHHOLD AUTHORITY to vote for all nominees listed below
WILLIAM J. RUSHTON III JOHN W. WOODS WILLIAM J. CABANISS, JR.
H. G. PATTILLO DRAYTON NABERS, JR. JOHN J. McMAHON, JR.
A. W. DAHLBERG JOHN W. ROUSE, JR. ROBERT T. DAVID
RONALD L. KUEHN, JR. HERBERT A. SKLENAR JAMES S. M. FRENCH
ROBERT A. YELLOWLEES
INSTRUCTION: TO WITHHOLD AUTHORITY to vote for any individual nominee, write
that nominee's name here:
------------------------------------------------------
2. APPROVAL OF THE COMPANY'S DEFERRED COMPENSATION PLAN FOR DIRECTORS WHO ARE
NOT EMPLOYEES OF THE COMPANY, AS DESCRIBED IN THE PROXY STATEMENT DATED
MARCH 29, 1996. / / FOR / / AGAINST / / ABSTAIN
3. APPROVAL OF THE COMPANY'S DEFERRED COMPENSATION PLAN FOR OFFICERS, AS
DESCRIBED IN THE PROXY STATEMENT DATED MARCH 29, 1996.
/ / FOR / / AGAINST / / ABSTAIN
4. Unless "Authorization Withheld" is marked below, the persons named above
as proxies are authorized to vote in accordance with their own judgment upon
such other matter or matters as may properly come before the meeting.
/ / AUTHORIZATION WITHHELD
THIS PROXY WHEN PROPERLY EXECUTED WILL BE
VOTED IN THE MANNER SPECIFIED ABOVE BY THE
UNDERSIGNED. IF NO DIRECTION IS MADE WITH
RESPECT TO A PROPOSAL, THIS PROXY WILL BE
VOTED "FOR" SUCH PROPOSAL.
THIS PROXY IS SOLICITED ON BEHALF OF THE
BOARD OF DIRECTORS.
Dated , 1996
-------------------------------
-------------------------------------------
Signature
-------------------------------------------
Signature
Please sign exactly as your name appears
hereon, date, and return promptly in
the enclosed postage prepaid envelope.
