<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
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 Permited 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)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
- -----------------------------------------------------------------
(2) Aggregate number of securities to which transactions applies:
- -----------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
- -----------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- -----------------------------------------------------------------
<PAGE>
(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>
[PROTECTIVE LETTERHEAD]
March 25, 1999
Dear Share Owners:
It is my pleasure to invite you to Protective's Annual Meeting of Share
Owners. We will hold the meeting on Monday, April 26, 1999 at 10:00 a.m., CDT,
at our Executive Offices in Birmingham, Alabama. In addition to considering the
matters described in the Proxy Statement, we will review the major
developments since our last Share Owners' Meeting.
This booklet includes the Notice of Annual Meeting and the Proxy Statement.
The Proxy Statement describes the business that we will conduct at the meeting
and provides information about Protective. Also enclosed is the Company's 1998
Annual Report to Share Owners.
We hope that you will attend the meeting in person, but even if you are
planning to come, we strongly encourage you to designate the Proxies named on
the enclosed card to vote your shares. This will ensure that your Common
Stock will be represented at the meeting. Please complete, date, sign and
return your proxy as soon as possible so that the Company may be assured of
the presence of a quorum at the Annual Meeting. A postage prepaid return
envelope has been provided for your use. If you attend the meeting and prefer
to vote in person, you may do so.
We look forward to your participation.
Sincerely yours,
/s/ Drayton Nabers, Jr.
-----------------------
Drayton Nabers, Jr.
Chairman of the Board and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF SHARE OWNERS
Date: Monday, April 26, 1999
Time: 10:00 a.m. CDT
Place: Protective Life Corporation Executive Offices
2801 Highway 280 South
Birmingham, Alabama 35223
Dear Share Owners:
At the Annual Meeting, we will ask you to:
- Elect eleven Directors
- Ratify the appointment of PricewaterhouseCoopers LLP as the Company's
Independent Auditors
- Transact any other business that may be properly presented at the
Meeting.
If you were a share owner of record at the close of business on March 5,
1999, you may vote at the Annual Meeting.
The Annual Meeting may be adjourned without notice other than the
announcement at the meeting, and any business for which this notice is given may
be transacted at any such adjournment.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Deborah J. Long
------------------------------
Deborah J. Long, Secretary
March 25, 1999
<PAGE>
TABLE OF CONTENTS
Letter from the Chairman of the Board and Chief Executive Officer
Notice of 1999 Annual Meeting of Share Owners
<TABLE>
<CAPTION>
Proxy Statement PAGE
<S> <C>
General Information About Voting. . . . . . . . . . . . . . . . . . . . 1
Proposal 1: Election of Directors. . . . . . . . . . . . . . . . . . . 2
Information About the Nominees. . . . . . . . . . . . . . . . . . . . . 2
About the Board of Directors and Its Committees . . . . . . . . . . . . 5
Director's Compensation . . . . . . . . . . . . . . . . . . . . . . . . 6
Security Ownership of Directors, Executive Officers and
Principal Share Owners. . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 16(a) Beneficial Ownership Reporting Compliance . . . . . . . . 9
Compensation Committee Interlocks and Insider Participation . . . . . . 9
Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . 10
Other Plans and Arrangements. . . . . . . . . . . . . . . . . . . . . . 12
Compensation and Management Succession Committee's Report
on Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . 13
Performance Comparison. . . . . . . . . . . . . . . . . . . . . . . . . 16
Proposal 2: Ratify Appointment of the Company's Independent
Auditors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
<PAGE>
PROXY STATEMENT
Your vote is very important. For this reason, the Board of Directors is
requesting that you allow your Common Stock to be represented at the Annual
Meeting by the Proxies named in the enclosed proxy card. This Proxy Statement
is being sent to you in connection with this request and has been prepared for
the Board by our Management. "We," "our," "Protective" and "the Company" each
refers to Protective Life Corporation. The Proxy Statement is first being sent
to our share owners on or about March 25, 1999.
GENERAL INFORMATION ABOUT VOTING
WHO CAN VOTE. You are entitled to vote your Common Stock if our records show
that you held shares as of March 5, 1999. At the close of business on March 5,
1999, a total of 64,448,096 shares of Common Stock were outstanding and entitled
to vote. Each share of Common Stock has one vote. The enclosed proxy card
shows the number of shares which you are entitled to vote.
VOTING BY PROXIES. If your Common Stock is held by a broker, bank or other
nominee, you will receive instructions from them which you must follow in order
to have your shares voted. If you hold your shares in your own name as a holder
of record, you may instruct the Proxies how to vote your Common Stock by
signing, dating and mailing the proxy card in the postage paid envelope which we
have provided to you. Of course, you can always come in person to the meeting
and vote your shares. If you mail in your proxy card, the Proxies will vote
your shares in accordance with the instructions on the card. If you sign and
return the proxy card without giving specific voting instructions, your shares
will be voted as recommended by the Board of Directors. We are not now aware of
any other matters to be presented except those described in this Proxy
Statement. If any other matters not described in the Proxy Statement are
presented at the meeting, the Proxies will use their own judgment to determine
how to vote your shares. If the meeting is adjourned, your Common Stock may be
voted by the Proxies on the new meeting date as well, unless your have revoked
your proxy instructions.
HOW YOU MAY REVOKE YOUR PROXY INSTRUCTIONS. If you give a proxy, you may revoke
it at any time before it is exercised. To revoke your proxy instructions, you
must send another proxy card with a later date, notify the Secretary in writing
before the Annual Meeting that you have revoked your proxy, or attend the
meeting and vote your shares in person.
HOW VOTES ARE COUNTED. The Annual Meeting will be held if a quorum (a majority
of the outstanding Common Stock entitled to vote) is represented at the meeting.
If you have returned valid proxy instructions or attend the meeting in person,
your Common Stock will be counted for the purpose of determining whether there
is a quorum, even if you wish to abstain from voting on some or all of the
matters introduced at the meeting.
"BROKER NON-VOTES" ALSO COUNT FOR QUORUM PURPOSES. If you hold your Common
Stock through a broker, bank or other nominee, generally the nominee may only
vote the Common Stock which it holds for you in accordance with your
instructions. However, if it has not received your instructions within ten days
of the meeting, the nominee may vote on matters which the New York Stock
Exchange determines to be routine. If a nominee cannot vote on a particular
matter because it is not routine, there is a "broker non-vote" on that matter.
Broker non-votes will count for purposes of determining a quorum. We will not
count broker non-votes as votes for or against any proposal.
1
<PAGE>
COST OF THIS PROXY SOLICITATION. We will pay the cost of the proxy
solicitation. In addition to soliciting proxies by mail, we expect that a
number of our employees will solicit share owners for the same type of proxy
personally and by telephone. None of these employees will receive any
additional or special compensation for doing this.
We have retained Corporate Investor Communications, Inc. to forward proxy
materials to the beneficial owners of stock held of record by brokers,
custodians, and other nominees. We will, upon request, reimburse brokers,
custodians and other nominees for their expenses in sending proxy material to
their principals and obtaining their proxies.
PROPOSAL 1: ELECTION OF DIRECTORS
Directors William J. Rushton III and Herbert A. Sklenar will retire from the
Board of Directors at the 1999 Annual Meeting. The entire Board of Directors,
which on April 26, 1999 will consist of 11 members, will be elected at this
Annual Meeting to hold office until the next Annual Meeting and the election of
their successors.
VOTE REQUIRED. The affirmative vote of the holders of the majority of shares
present or represented by proxy at the Annual Meeting and entitled to vote is
required to elect directors. This means if you abstain from voting, it has the
same effect as if you voted against the proposal.
VOTING BY THE PROXIES. The Proxies will vote your Common Stock in accordance
with your instructions. If you have not given specific instructions to the
contrary, your Common Stock will be voted to approve the election of the
nominees named in this Proxy Statement. Although we know of no reason why any
of the nominees would not be able to serve, if any nominee is unavailable for
election, the Proxies would vote your Common Stock to approve the election of
any substitute nominee proposed by the Board of Directors. The Board may also
choose to reduce the number of directors to be elected, as permitted by our
By-laws.
INFORMATION ABOUT THE NOMINEES
All of the nominees are currently directors. Each has agreed to be named in
this Proxy Statement and to serve if elected. Messrs. Nabers and Johns are the
only nominees that have any position or office with the Company or any
subsidiary. Each of the nominees who was a Board member in 1998 attended at
least 75% of the meetings of the Board and the committees on which the nominee
served during that year. The following information was provided by the nominees
as of the date of this Proxy Statement.
COMPANY
PRINCIPAL OCCUPATION DIRECTOR
NAME AGE AND DIRECTORSHIPS SINCE
- ---- --- -------------------- --------
William J. Cabaniss, Jr. 60 President of Precision Grinding, 1974(a)
Inc. (machine grinding);
Director, Precision Grinding,
Inc. and Birmingham Steel
Corporation.
2
<PAGE>
COMPANY
PRINCIPAL OCCUPATION DIRECTOR
NAME AGE AND DIRECTORSHIPS SINCE
- ---- --- -------------------- --------
Drayton Nabers, Jr. 58 Chairman of the Board and Chief 1982
Executive Officer of the
Company and, formerly, its
Chairman of the Board, President
and Chief Executive Officer and
its President and Chief Executive
Officer; Director, Energen
Corporation, National Bank of
Commerce of Birmingham, and
Alabama National Bancorporation.(b)
John J. McMahon, Jr. 56 Chairman of the Executive Committee 1987
of McWane, Inc. (pipe and valve
manufacturing) and, formerly, its
Chairman of the Board and its
President; Director, Alabama
National Bancorporation, National
Bank of Commerce of Birmingham and
John H. Harland Company.
A. W. Dahlberg 58 Chairman of the Board, President 1987
and Chief Executive Officer of
Southern Company (electric
utilities) and, formerly, its
President; formerly, President
and Chief Executive Officer,
Georgia Power Company; Director,
Southern Company, Georgia Power
Company, Southern Company Services,
Inc., Alabama Power Company,
Southern Energy, Inc., Southern
Nuclear Operating Company, SunTrust
Banks, Inc., SunTrust Bank, Atlanta,
SunTrust Banks of Georgia, Inc., and
Equifax, Inc.
Ronald L. Kuehn, Jr. 63 Chairman of the Board, President 1990
and Chief Executive Officer of Sonat
Inc. (energy and natural resources);
Director, Sonat Inc., AmSouth
Bancorporation, Southern Natural Gas
Company, Union Carbide Corporation,
Praxair, Inc., Transocean Offshore,
Inc., and Dun & Bradstreet
Corporation.
James S. M. French 58 Chairman of the Board, President, 1996
and Chief Executive Officer of Dunn
Investment Company (materials,
construction, and investment holding
company); Director, Energen
Corporation, Regions Financial
Corporation, and Hilb, Rogal and
Hamilton Company.
3
<PAGE>
COMPANY
PRINCIPAL OCCUPATION DIRECTOR
NAME AGE AND DIRECTORSHIPS SINCE
- ---- --- -------------------- --------
Robert A. Yellowlees 60 Chairman of the Board, President, 1996
and Chief Executive Officer of
National Data Corporation
(information services company) and,
formerly, its President, Chief
Executive Officer, and Chief
Operating Officer; Director,
National Data Corporation and
John H. Harland Company.
John D. Johns 47 President and Chief Operating 1997
Officer of the Company and,
formerly, its Executive Vice
President and Chief Financial
Officer; formerly, Vice President
and General Counsel of Sonat Inc.;
Director, National Bank of
Commerce of Birmingham and Alabama
National Bancorporation. (b)
Elaine L. Chao 46 Distinguished Fellow at The Heritage 1997
Foundation, Washington, D.C. (policy
research); formerly, President and
Chief Executive Officer, United
Way of America; formerly, Director
of Peace Corps; formerly, deputy
secretary of U.S. Department of
Transportation; formerly, Vice
President - Syndications,
BankAmerica Capital Markets Group;
Director, Dole Food Company, Inc.,
Vencor, Inc., Millipore Corporation,
Raymond James Financial, Inc. and
Northwest Airlines Corporation.
Donald M. James 50 Chairman of the Board and Chief 1997
Executive Officer of Vulcan
Materials Company (construction
materials and chemicals), and,
formerly, its President and Chief
Executive Officer; Director,
Vulcan Materials Company and
SouthTrust Corporation.
J. Gary Cooper 62 Chairman of the Board, Chief 1999
Executive Officer and co-founder
of Commonwealth National Bank
(banking and financial services);
formerly, U.S. Ambassador to
Jamaica (1994-1997); formerly,
Senior Vice President, Volkert and
Associates (engineering and
architectural services) and
formerly, its Vice President;
Director, Commonwealth National
Bank and GenCorp.
- --------------------------
(a) with the exception of the period November 1988 - February 1992
(b) also a director and/or current officer of each principal Company subsidiary
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION
OF ALL ELEVEN NOMINEES FOR DIRECTORS.
4
<PAGE>
ABOUT THE BOARD OF DIRECTORS AND ITS COMMITTEES
THE BOARD OF DIRECTORS. The Board of Directors oversees the business and
affairs of Protective and monitors the performance of Management. In
accordance with corporate governance principles, the Board does not involve
itself in day-to-day operations. The directors keep themselves informed through
reports from and discussions with the Chairman, the President and other key
executives and, as necessary, the Company's outside advisors. The Board of
Directors met five times in 1998.
THE COMMITTEES OF THE BOARD. To assist in carrying out its duties and
responsibilities, the Board of Directors has 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 of Directors. Each of the Committees reports its actions
to the Board of Directors.
The following table describes, for each Committee, the functions, membership and
the number of meetings held in 1998.
- -------------------------------------------------------------------------------
FINANCE AND INVESTMENTS COMMITTEE - 4 Meetings in 1998
FUNCTIONS MEMBERS
Reviews and acts upon financial William J. Rushton III* James S. M.French
and investment matters, William J. Cabaniss, Jr. Robert A. Yellowlees
including borrowing and lending Drayton Nabers, Jr. John D. Johns
transactions entered into by the John J. McMahon, Jr. Elaine L. Chao
Company and its subsidiaries. A. W. Dahlberg Donald M. James
Ronald L. Kuehn, Jr. J. Gary Cooper
Herbert A. Sklenar*
AUDIT COMMITTEE - 3 MEETINGS IN 1998
FUNCTIONS MEMBERS
Reviews internal controls, systems and Herbert A. Sklenar*
procedures, accounting policies, and other William J. Cabaniss, Jr.
significant aspects of the financial James S. M. French
management of the Company, including the Elaine L. Chao
Company's internal audit functions. It also Donald M. James
reviews with the independent public
accountants their audit procedures, management
letters, and other significant aspects of the
annual audit made by the independent public
accountants.
------------------
*Retiring in April 1999
- -------------------------------------------------------------------------------
5
<PAGE>
- -------------------------------------------------------------------------------
COMPENSATION AND MANAGEMENT SUCCESSION COMMITTEE - 1 MEETING IN 1998
FUNCTIONS MEMBERS
Has oversight and ultimate control of the John J. McMahon, Jr.
compensation paid to officers and employees of A. W. Dahlberg
the Company and its subsidiaries, whether by Ronald L. Kuehn, Jr.
salary or under any of the Company's Robert A. Yellowlees
compensation plans. 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.
BOARD STRUCTURE AND NOMINATING COMMITTEE - 1 MEETING IN 1998
FUNCTIONS MEMBERS
Charged with the broad responsibility of William J. Rushton III*
reviewing and advising the Board of Directors William J. Cabaniss, Jr.
on the functions and procedures of the Board Drayton Nabers, Jr.
of Directors and its Committees, the A. W. Dahlberg
compensation of the directors for service on James S. M. French
the Board of Directors and its Committees, and John D. Johns
the selection and tenure of directors. The
Committee will consider share owner
recommendations for director nominees in
accordance with the Company's By-laws. See
"Other Information" on page 18.
----------------
*Retiring in April 1999
- -------------------------------------------------------------------------------
DIRECTOR'S COMPENSATION
GOAL. Protective feels that it is in the best interest of the Company to tie
director compensation to your interests as share owners. Therefore, a
significant percentage of director compensation is paid in the form of Common
Stock.
FEES. Directors' fees, which are paid only to directors who are not
Protective employees, are as set forth in the following table.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
DIRECTOR'S FEE: AMOUNT:
- --------------------------------------------------------------------------------
<S> <C>
Annual Board Membership Fee $14,000 and 400 shares of Common Stock
- --------------------------------------------------------------------------------
Attendance Fee for each Board Meeting
- - Birmingham Directors $1,500
- - Non-Birmingham Directors $2,600
- --------------------------------------------------------------------------------
Attendance Fee for each Committee $1,200
Meeting
- -------------------------------------------------------------------------------
</TABLE>
Directors who do not reside in Birmingham also receive a $500 fee and
reimbursement of travel expenses for attendance at Committee meetings when
travel to Birmingham is for the special purpose of attending the meeting. The
current non-Birmingham directors are Ms. Chao and Messrs. Cooper, Dahlberg and
Yellowlees.
6
<PAGE>
DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS. Each year non-employee
directors may elect to defer until a specified date all or any portion of their
cash and/or Common Stock compensation. A director's right to receive future
payments under this deferred compensation plan is an unsecured claim against
Protective's general assets. Cash amounts may be deferred into a common stock
equivalent or an interest-bearing equivalent. Stock compensation may only be
deferred as common stock equivalents. Amounts deferred under the plan are
distributable in cash or in stock as elected by the director.
SECURITY OWNERSHIP OF DIRECTORS,
EXECUTIVE OFFICERS AND PRINCIPAL SHARE OWNERS
The following table shows the number of shares of Common Stock and common stock
equivalents beneficially owned as of March 5, 1999 (unless otherwise noted) by
(i) each current director, (ii) each of the executive officers named in the
Summary Compensation Table, (iii) all current directors and executive officers
of the Company as a group, and (iv) persons the Company believes to be the
beneficial owners of 5% or more of the Company's Common Stock.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
AMOUNT AND NATURE
OF BENEFICIAL OWNERSHIP(1) PERCENT
NAME OF --------------------------------- OF
BENEFICIAL OWNER SOLE POWER SHARED POWER(2) CLASS (1)
- ---------------- ---------- --------------- ---------
<S> <C> <C> <C>
William J. Rushton III 915,677 160,000(3) 1.7%
William J. Cabaniss, Jr. 191,278 153,952 *
Drayton Nabers, Jr. 325,486(4) 9,638 *
John J. McMahon, Jr. 28,882(5) 36,000 *
A. W. Dahlberg 5,997 0 *
Ronald L. Kuehn, Jr. 7,099(5) 0 *
Herbert A. Sklenar 6,561(5) 2,732 *
James S. M. French 2,030 19,800(6) *
Robert A. Yellowlees 8,554(5) 0 *
John D. Johns 61,520(4) 4,200 *
Elaine L. Chao 3,889(5) 0 *
Donald M. James 3,146(5) 0 *
J. Gary Cooper 100 0 *
R. Stephen Briggs 132,511(4) 1,428 *
Jim E. Massengale 135,819(4) 700 *
A. S. Williams III 103,006(4) 0 *
All current directors
and executive officers
as a group (24 persons) 2,195,220(4)(5)(7) 388,450(2)(6) 4.0%
Firstar Corporation 1,439,996(8) 2,914,945(8) 6.8%(8)
AmSouth Bancorporation 0 6,489,423(9) 10.1%(9)
Nicholas Company, Inc. 4,111,040(10) 0 6.4%(10)
FMR Corp. 3,246,420(11) 0 5.0%(11)
</TABLE>
- --------------------------
*less than one percent
- -------------------------------------------------------------------------------
7
<PAGE>
Notes to Security Ownership Table:
(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. 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. Unless
otherwise noted below, the directors and officers disclaim beneficial
ownership of these shares.
(3) Shares owned by the wife of Mr. Rushton.
(4) The amounts reported include shares allocated to accounts under the
Company's 401(k) and Stock Ownership Plan as follows: Mr. Nabers, 12,773
shares; Mr. Johns, 3,553 shares; Mr. Briggs, 27,669 shares; Mr. Massengale,
30,540 shares; Mr. Williams, 25,796 shares; and all directors and executive
officers as a group, 150,128 shares.
The amounts reported also include stock equivalents held by certain
officers under the Company's Deferred Compensation Plan for Officers,
entitling each such officer to receive upon distribution a share of Common
Stock for each stock equivalent. The number of stock equivalents
included are as follows: Mr. Nabers, 252,490; Mr. Johns, 53,567; Mr.
Briggs, 89,173; Mr. Massengale, 57,084; Mr. Williams, 62,246; and all
directors and executive officers as a group, 698,796.
The reported amounts do not include stock appreciation rights ("SARs")
awarded under the Company's 1996 Stock Incentive Plan as follows: Mr.
Nabers, 300,000 SARs; Mr. Johns, 150,000 SARs; Mr. Briggs, 40,000 SARs; Mr.
Massengale, 40,000 SARs; Mr. Williams, 40,000 SARs; and all directors and
executive officers as a group, 675,000 SARs.
(5) The amounts reported include stock equivalents held by certain directors
under the Company's Deferred Compensation Plan for Directors Who Are Not
Employees of the Company, entitling each such director to receive upon
distribution a share of Common Stock for each stock equivalent. The number
of stock equivalents included are as follows: Mr. McMahon, 10,594;
Mr. Kuehn, 3,239; Mr. Sklenar, 3,123; Mr. Yellowlees, 5,554; Ms. Chao,
2,703; Mr. James, 2,146; and all directors and executive officers as a
group, 698,796.
(6) Includes 18,000 shares of Common Stock owned by Dunn Investment Company, of
which Mr. French is Chairman of the Board, President, and Chief Executive
Officer.
(7) No officer or director owns any stock of any affiliate of the Company.
(8) Firstar Corporation, 777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202,
has advised the Company that, in its capacity as a holding company, it may
be deemed the beneficial owner, as of December 31, 1998, of 4,354,941
shares of Common Stock. Firstar Corporation reported sole voting and
investment power with respect to 1,439,996 shares, shared voting power with
respect to 2,851,775 shares, and shared investment power with respect to
2,914,945 shares. Firstar Investment Research & Management Company, LLC,
777 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, a subsidiary of
Firstar Corporation, has advised the Company that, in its capacity as an
investment adviser, it may be deemed the beneficial owner, as of
December 31, 1998, of 4,354,941 shares of Common Stock. Firstar Investment
Research & Management Company, LLC reported sole voting and investment
power with respect to 1,439,996 shares, shared voting power with respect to
2,851,775 shares, and shared investment power with respect to 2,914,945
shares. Firstar Corporation reported its beneficial ownership as of
December 31, 1998 as 6.4%, which it has advised the Company includes
beneficial ownership by its subsidiary. The table shows the percentage
based on 64,448,096 shares of Common Stock outstanding on March 5, 1999.
8
<PAGE>
(9) AmSouth Bancorporation, AmSouth/Sonat Tower, 1900 Fifth Avenue North,
Birmingham, Alabama 35203, has advised the Company that, in its capacity as
a holding company, it may be deemed the beneficial owner, as of December
31, 1998, of 6,489,423 shares of Common Stock. AmSouth Bancorporation
reported that it has no sole voting or investment power, but has shared
voting power with respect to 5,484,436 shares, and shared investment power
with respect to 4,719,504 shares. AmSouth Bank, AmSouth/Sonat Tower,
Birmingham, Alabama 35203, a subsidiary of AmSouth Bancorporation, has
advised the Company that, in its capacity as a bank fiduciary of various
trusts and estates, it may be deemed the beneficial owner, as of
December 31, 1998, of 6,489,423 shares of Common Stock. AmSouth Bank
reported that it has no sole voting or investment power, but has shared
voting power with respect to 5,484,436 shares, and shared investment power
with respect to 4,719,504 shares. AmSouth Bank 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 Common Stock.
AmSouth Bancorporation reported its beneficial ownership as of December 31,
1998 as 10.1%, which it has advised the Company includes beneficial
ownership by its subsidiary, AmSouth Bank. The table shows the percentage
based on 64,448,096 shares of Common Stock outstanding on March 5, 1999.
(10) Nicholas Company, Inc., 700 North Water Street, Milwaukee, Wisconsin 53202,
has advised the Company that, in its capacity as an investment adviser, it
may be deemed the beneficial owner, as of December 31, 1998, of 4,111,040
shares of Common Stock, for which Nicholas Company, Inc. has sole
investment power but no voting power. Nicholas Company, Inc. has further
advised the Company that none of its separate clients holds as much as 5%
of the outstanding shares of Common Stock. Nicholas Company, Inc. reported
its beneficial ownership as of December 31, 1998 as 6.38%. The table shows
the percentage based on 64,448,096 shares of Common Stock outstanding on
March 5, 1999.
(11) FMR Corp., 82 Devonshire Street, Boston, Massachusetts 02109, has advised
the Company that, in its capacity as a holding company, it may be deemed
the beneficial owner, as of December 31, 1998, of 3,246,420 shares of
Common Stock. FMR Corp. reported sole voting power with respect to 567,968
shares and sole investment power with respect to 3,246,420 shares, but no
shared power. FMR Corp. reported its beneficial ownership as of December
31, 1998 as 5.038%, which it has advised the Company includes beneficial
ownership by its various subsidiaries, acting in their capacities as
investment advisors and/or investment managers. FMR Corp. has further
advised the Company that none of its subsidiaries holds as much as 5% of
the outstanding shares of Common Stock. The table shows the percentage
based on 64,448,096 shares of Common Stock outstanding on March 5, 1999.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors and executive officers of the Company are required to file reports
with the Securities and Exchange Commission ("SEC") showing changes in their
beneficial ownership of Common Stock. We have reviewed copies of these reports
and written representations from the individuals who are required to file
reports. Based on this review, we believe that each of our directors and
executive officers complied with reporting requirements in 1998, except for Mr.
Williams who inadvertently filed a late Form 4 reporting two transactions.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation and Management Succession Committee are Messrs.
McMahon (Chairman), Dahlberg, Kuehn, and Yellowlees. None of these individuals
has ever been an officer or employee of the Company or any of its subsidiaries
or has any other relationship with the Company for which the SEC requires
disclosure.
9
<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 (collectively, the "Named
Executives") during or with respect to the last three fiscal years.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------------------------------------
AWARDS PAYOUTS
------------------------
SECURITIES
OTHER UNDERLYING
ANNUAL OPTIONS/ LONG-TERM ALL
COMPEN- SARS INCENTIVE PLAN OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1)(2) BONUS(1)(2)(3) SATION (#) PAYOUTS(1)(3)(4) COMPENSATION(5)
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DRAYTON NABERS, JR. 1998 $575,833 $580,000 $ 0 0 $1,675,044(8) $4,800
Chairman of the Board and 1997 552,500 499,500 372 0 1,686,972 4,800
Chief Executive Officer 1996 535,000 691,063(6) 2,970 300,000(7) 807,362 4,500
- -------------------------------------------------------------------------------------------------------------------------------
JOHN D. JOHNS 1998 383,333 312,000 0 0 661,572(8) 4,800
President and Chief Operating 1997 347,500 280,000 0 0 702,694 4,800
Officer 1996 312,917 306,316(9) 0 150,000(7) 176,956 4,500
- -------------------------------------------------------------------------------------------------------------------------------
R. STEPHEN BRIGGS 1998 295,000 206,500 0 0 661,572(8) 4,800
Executive Vice President 1997 295,000 172,400 0 0 702,694 4,800
1996 293,333 181,700 0 40,000(7) 265,434 4,500
- -------------------------------------------------------------------------------------------------------------------------------
JIM E. MASSENGALE 1998 275,000 196,000 1,890 0 394,128(8) 4,800
Executive Vice President, 1997 247,500 210,000 1,890 0 416,035 4,800
Acquisitions 1996 225,417 148,100 756 40,000(7) 248,844 4,500
- -------------------------------------------------------------------------------------------------------------------------------
A. S. WILLIAMS III 1998 289,167 383,263 5,742 0 516,120(8) 4,800
Executive Vice President, 1997 283,333 282,833 5,742 0 539,265 4,800
Investments and Treasurer 1996 273,333 442,500 5,742 40,000(7) 298,613 4,500
- -------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) For further information, see the "Compensation and Management Succession
Committee's Report on Executive Compensation."
(2) Includes amounts that the Named Executives may have voluntarily elected to
contribute to the Company's 401(k) and Stock Ownership Plan.
(3) Includes amounts that the Named Executives may have voluntarily deferred
under the Company's Deferred Compensation Plan for Officers.
(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) Includes a one-time bonus award of $205,063 in shares of Common Stock.
(7) SARs have been restated to reflect a two-for-one stock split on April 1,
1998.
(8) 1998 long-term compensation is not yet determinable. The amount shown is
the best estimate available as of the date of this Proxy Statement.
(9) Includes a one-time bonus award of $53,316 in shares of Common Stock.
10
<PAGE>
The following table sets forth the value of the stock appreciation rights held
by the Named Executives based upon the value of the Common Stock as of December
31, 1998. No stock appreciation rights were granted to the Named Executives
during 1998.
<TABLE>
<CAPTION>
AGGREGATED FY-END OPTION/SAR VALUES
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Number of Securities Value of Unexercised
Underlying Unexercised In-the-Money Options/SARs
Name Options/SARs at FY-End ($)
at FY-End (#) Exercisable/Unexercisable
Exercisable/Unexercisable
- --------------------------------------------------------------------------------
<S> <C> <C>
Drayton Nabers,Jr. 0/300,000 $0/$6,712,500
- --------------------------------------------------------------------------------
John D. Johns 0/150,000 0/3,356,250
- --------------------------------------------------------------------------------
R. Stephen Briggs 0/ 40,000 0/895,000
- --------------------------------------------------------------------------------
Jim E. Massengale 0/ 40,000 0/895,000
- --------------------------------------------------------------------------------
A. S. Williams III 0/ 40,000 0/895,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
In 1998, the Compensation and Management Succession Committee awarded
performance shares under the Company's 1997 Long-Term Incentive Plan to the
Named Executives as indicated in the table below. These awards are generally
payable, if at all, at the time the results of the comparison group of companies
for the four-year period ending December 31, 2001 are known.
<TABLE>
<CAPTION>
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
ESTIMATED FUTURE PAYOUTS UNDER
PERFORMANCE NON-STOCK PRICE-BASED PLANS (IN SHARES)(2)
NUMBER OF OR OTHER -----------------------------------------
SHARES, UNITS PERIOD UNTIL
NAME OR OTHER MATURATION
RIGHTS (#)(1) OR PAYOUT THRESHOLD TARGET MAXIMUM
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Drayton Nabers, Jr. 12,380 shares December 31, 2001 6,190 15,475 21,046
- -------------------------------------------------------------------------------------------------
John D. Johns 7,420 shares December 31, 2001 3,710 9,275 12,614
- -------------------------------------------------------------------------------------------------
R. Stephen Briggs 4,280 shares December 31, 2001 2,140 5,350 7,276
- -------------------------------------------------------------------------------------------------
Jim E. Massengale 3,640 shares December 31, 2001 1,820 4,550 6,188
- -------------------------------------------------------------------------------------------------
A. S. Williams III 4,140 shares December 31, 2001 2,070 5,175 7,038
- -------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------
</TABLE>
(1) In the event of a change in control, payment will be made with respect to
all outstanding awards based upon performance at the target level (which,
for all outstanding awards, is deemed to be at the seventy-fifth
percentile) or, if greater, performance as of the December 31 preceding the
change in control.
(2) Award is earned based on comparison of the Company's average return on
average equity or total rate of return for a four-year period to a peer
group. Below threshold, which is the median of the comparison group, no
portion of award is earned.
11
<PAGE>
OTHER PLANS AND ARRANGEMENTS
RETIREMENT BENEFITS. The table below illustrates the annual pension benefits
payable to executive officers under the Protective Life Corporation Pension
Plan. The table also reflects the Excess Benefit Plan that we have established
to provide retirement benefits over the Internal Revenue Code limitations.
Benefits in the table are not reduced by social security or other offset
amounts. Since the benefits shown in the table reflect a straight life form of
annuity benefit, if the payment is made in the form of a joint and survivor
annuity, the annual amounts of benefit could be substantially below those
illustrated.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
YEARS OF SERVICE
REMUNERATION -----------------------------------------------------------------
15 20 25 30 35
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$ 150,000 $ 33,521 $ 44,694 $ 55,868 $ 67,041 $ 78,215
200,000 45,521 60,694 75,868 91,041 106,215
250,000 57,521 76,694 95,868 115,041 134,215
300,000 69,521 92,694 115,868 139,041 162,215
400,000 93,521 124,694 155,868 187,041 218,215
500,000 117,521 156,694 195,868 235,041 274,215
750,000 177,521 236,694 295,868 355,041 414,215
1,000,000 237,521 316,694 395,868 475,041 554,215
1,250,000 297,521 396,694 495,868 595,041 694,215
1,500,000 357,521 476,694 595,868 715,041 834,215
1,750,000 417,521 556,694 695,868 835,041 974,215
2,000,000 477,521 636,694 795,868 955,041 1,114,215
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
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) may be
included in obtaining the average compensation.
The Named Executives and their credited years of service as of December 31, 1998
are provided in the following table.
-------------------------------------------
NAME YEARS OF SERVICE
-------------------------------------------
Drayton Nabers, Jr. 20
John D. Johns 5
R. Stephen Briggs 27
Jim E. Massengale 15
A. S. Williams III 34
-------------------------------------------
-------------------------------------------
12
<PAGE>
EMPLOYMENT CONTINUATION AGREEMENTS. The Company has entered into Employment
Continuation Agreements with each of the Named Executives which provide for
certain benefits in the event such executive's employment is actually or
constructively (by means of a reduction in duties or compensation) terminated
following certain events constituting a "change in control." Such benefits
include (i) a payment equal to three times the sum of the annual base salary in
effect at the time of the change in control and the average annual incentive
plan bonus for the three years preceding the change in control; (ii)
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; (iii) 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); and (iv) an
additional payment, if necessary, to reimburse the executive for any additional
tax (other than normal Federal, state and local income taxes) incurred as a
result of any benefits received in connection with the change in control.
COMPENSATION AND MANAGEMENT SUCCESSION COMMITTEE'S
REPORT ON EXECUTIVE COMPENSATION
The Compensation and Management Succession Committee ("Committee"), which
consists solely of independent non-employee directors, 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 the Company's compensation plans. The Committee has furnished
the following report on executive compensation for 1998.
COMPENSATION POLICY
Under the supervision of the Committee, the Company has developed and
implemented compensation policies and programs designed to add share-owner value
by aligning the financial interests of the Company's executive officers with
those of share owners. The strategy of the compensation program is to relate
compensation to measurable business objectives and performance, and provide
incentives to executives who contribute to the success of the Company. Growth
in earnings per share, return on average equity and total rate of return are
principal measures of Company performance employed by the Committee.
The compensation package for the Chief Executive Officer and all other
executive officers is comprised of three components: base salary, annual
incentive awards and long term equity-based incentives.
SALARY
The Company utilizes an independent compensation consultant to provide
competitive compensation data for executive officers. Through the consultant,
the Company accesses multiple compensation survey sources to review the pay
practices of other life insurance companies and to establish salary ranges for
executive officers. Some of the companies in the peer group listed on page 17
are included in the compensation surveys.
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 commensurate with the
Company's performance as compared to a peer group of companies.
Individual competence, length of time within a position, and comparisons to
salaries for similar positions in other companies (adjusted for size) help
determine where an officer's salary falls within the range. For the
13
<PAGE>
Chief Executive Officer, Company performance is also considered by the Committee
in setting the appropriate base salary level. No specific weights are given
to any of the factors considered by the Committee. Based upon the above
factors, the Committee established Mr. Nabers' 1998 base salary at $580,000,
effective March 1, 1998.
ANNUAL INCENTIVE AWARDS
The Company has had an annual cash bonus plan since 1973. The Annual
Incentive Plan ("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 the annual
bonus paid to each of the executive officers, including the Chief
Executive Officer. Currently, there are 211 employees in the AIP, including the
Chief Executive Officer. Each employee is assigned a target bonus percentage
which ranges from 4% to 50% of salary. The Chief Executive Officer's target
bonus percentage was 50% in 1998. 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 1998, $ 6.5 million, or 2.9% of the
Company's 1998 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.
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
executive officers, 20% to 100% of their respective AIP bonuses is based upon
Company performance, which, for 1998, was measured by the Company's operating
earnings per share.
Under the terms fixed by the Committee, Mr. Nabers would earn a target AIP
bonus of 50% of 1998 base salary if the Company's 1998 operating earnings per
share were $1.90. A maximum bonus, 200% of target or 90% of Mr. Nabers' 1998
base salary, would be paid if the Company's operating earnings per share were
$2.00. The Company's 1998 operating earnings per share (diluted) of $2.02,
representing a 16.6% operating return on average equity, resulted in Mr. Nabers
earning a maximum AIP bonus of 100% of his 1998 base salary, or $580,000.
STOCK INCENTIVE AWARDS
The Company's Long-Term Incentive Plan (formerly, the Performance Share
Plan) was initially adopted in 1973 by share owners 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 share
ownership in the Company. Under the Long-Term Incentive 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, may be awarded performance shares and/or other
forms of stock-based incentive compensation. In 1998, those selected by the
Committee were awarded performance shares, each of which has a potential value
equal to the market value of one share of Common Stock at the date payment may
be
14
<PAGE>
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 1998 awards, the number of performance shares awarded was
determined by multiplying the employee's award percentage times such employee's
base salary plus target AIP bonus, divided by the average share price of Common
Stock. Each employee was assigned an award percentage which ranged up to 50% in
1998, to provide long-term compensation which is competitive to that offered to
persons performing similar functions at insurance companies of comparable size.
Mr. Nabers' 1998 award percentage was 50%. For 1998, a total of 71,340 shares
were awarded to 36 participants including an award of 12,380 shares to Mr.
Nabers.
The criterion for payment of performance share awards is based upon a
comparison of the Company's average return on average equity and total rate of
return for an award period to that of a comparison group of publicly held life
insurance companies, multiline insurers and insurance holding companies during
the award period. The criterion provides for payment in the event the Company
achieves its comparison levels with respect to either average return on average
equity or total rate of return. 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 downstream affiliates of any companies in the
comparison group (see page 17). In the event that the Company's four-year
results are below the median of the comparison group, no portion of the award is
earned. If the Company's four-year results are at the median, 50% of the award
is earned. Company results at the top 25% and 10% of the comparison group would
result in up to 125% and 170% of the award being earned, respectively, for each
executive officer. Mr. Nabers' awards earn out at 125% and 170% at these
comparison levels, respectively. If a company in the comparison group is
acquired or exits the insurance industry during the award period, such company
is ranked below the Company for comparison purposes.
Results for the award period ending in 1998 will not be known until the
1998 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 1998 results will place the
Company in the top 10% of the comparison group which will entitle Mr. Nabers to
approximately $1,675,044 in shares of Common Stock and cash, representing 170%
of his 1995 performance share award. $1,126,261 of this payment, or 67%, would
represent appreciation in the market value of Common Stock since the award date.
LIMITS TO TAX DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Under Section 162(m) of the Internal Revenue Code, Protective 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 the payments are made under qualifying performance-based
compensation plans which meet certain specific requirements. All of the
Company's executive compensation plans have been approved by share owners and
are designed to comply with these specific requirements. As in all prior years,
the Company did not pay any compensation that was non-deductible by reason of
Section 162(m) in 1998.
COMPENSATION AND MANAGEMENT
SUCCESSION COMMITTEE
John J. McMahon, Jr., Chairman
A. W. Dahlberg
Ronald L. Kuehn, Jr.
Robert A. Yellowlees
15
<PAGE>
PERFORMANCE COMPARISON
The following graph compares total returns on the 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"). The graph assumes $100 invested on
December 31, 1993 and that all dividends were reinvested. Points on the graph
represent performance as of the last business day of each of the years
indicated.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG PROTECTIVE LIFE CORPORATION, THE S&P 500, AND A PEER GROUP
[GRAPH]
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998
-----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PROTECTIVE LIFE CORPORATION $100 $113 $149 $194 $296 $399
-----------------------------------------
S&P 500 100 101 139 171 229 294
-----------------------------------------
PEER GROUP 100 98 144 177 249 305
- -----------------------------------------------------------------------------
</TABLE>
The companies included in the Peer Group index are generally the same as those
companies included in the Company's 1998 comparison group of companies under the
Performance Share Plan. The index 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, 1998,
excluding downstream affiliates of any companies in the comparison group. The
Peer Group excludes Allied Life Financial Corporation, John Alden Financial
Corporation and Travelers Group, Inc. that are included in the Company's 1998
Performance Share Plan comparison group because, although they were among the
40 largest companies on January 1, 1998, they were not
16
<PAGE>
publicly held on December 31, 1998. The index weights individual company
returns for stock market capitalization. The companies included in the Peer
Group index are shown in the table below.
- --------------------------------------------------------------------------------
Aetna Life & Casualty Company Jefferson-Pilot Corporation
AFLAC, Inc. Kansas City Life Insurance Company
Alfa Corporation The Liberty Corporation
Allmerica Financial Corporation Liberty Financial Companies
American General Corporation Life USA Holding, Inc.
American Heritage Life Investment Lincoln National Corporation
Corporation National Western Life Insurance
American International Group, Inc. Company
American National Insurance Company Nationwide Financial Services, Inc.
AmerUS Life Holdings, Inc. Old Republic International
Aon Corporation Penn Treaty American Corporation
ARM Financial Group, Inc. Presidential Life Corporation
CIGNA Corporation Protective Life Corporation
CNA Financial Corporation Provident Companies, Inc.
Conseco, Inc. ReliaStar Financial Corporation
Delphi Financial Group, Inc. SunAmerica, Inc.
The Equitable Companies Incorporated Torchmark Corporation
Guarantee Life Companies, Inc. United Insurance Companies, Inc.
Hartford Financial Services Group, Inc. Unitrin Incorporated
Intercontinental Life Corporation UNUM Corporation
- --------------------------------------------------------------------------------
The composition of the Peer Group has changed from that used in the previous
year's Proxy Statement. John Alden Financial Corporation was deleted because it
was acquired by another company. AmerUS Life Holdings, Inc., ARM Financial
Group, Inc., Guarantee Life Companies, Inc., Intercontinental Life Corporation,
Life USA Holding, Inc., Nationwide Financial Services, Inc., and Penn Treaty
American Corporation were added to the Peer Group index because they were among
the 40 largest companies on January 1, 1998.
As disclosed in the "Compensation and Management Succession Committee's Report
on Executive Compensation," the Company's long-term incentive compensation is
based upon comparisons of the Company's average return on average equity (in
addition to 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.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PROTECTIVE LIFE CORPORATION COMPARISON GROUP MEDIAN(1)
------------------------------------------------------------------
YEAR ROE(2) AVERAGE ROE(3) ROE(2) AVERAGE ROE(3)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1998 16.8% 17.1% 12.0%(4) 11.6%(4)
1997 17.2 17.9 12.6 10.2
1996 16.6 18.3 11.8 11.7
1995 17.7 18.0 11.6 11.5
1994 20.1 17.3 10.5 9.5
- --------------------------------------------------------------------------------
</TABLE>
(1) The median is the middle value in a distribution, above and below which lie
an equal number of values. Companies in the comparison group that have
been acquired or have exited the insurance industry have been ranked below
the median.
(2) Return on average equity for the year shown. 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 1998 comparison group median is not yet determinable. The percentage
shown is the best estimate available as of the date of this Proxy
Statement.
17
<PAGE>
PROPOSAL 2: RATIFY APPOINTMENT
OF THE COMPANY'S INDEPENDENT AUDITORS
Upon recommendation of the Audit Committee, which is composed of non-employee
directors, the Board of Directors has appointed PricewaterhouseCoopers LLP, a
firm of independent public accountants, as independent auditors for the Company
and its subsidiaries for 1999. This firm or its predecessor has served as
independent public accountants for the Company and its predecessor since 1974.
Representatives of PricewaterhouseCoopers LLP will be present at the Annual
Meeting of Share Owners and will have an opportunity to make a statement if
they so desire and to respond to appropriate questions by share owners.
In evaluating the selection of PricewaterhouseCoopers LLP 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 PricewaterhouseCoopers LLP will likely be asked to
provide for the Company during 1999, and the effect which performing such
services might have on audit independence. It has reviewed the non-audit
services which were performed in 1998 and determined that they were consistent
with Company policy.
VOTE REQUIRED. The affirmative vote of the holders of a majority of the shares
present or represented by proxy at the Annual Meeting and entitled to vote is
required to ratify the appointment of PricewaterhouseCoopers LLP as the
Company's independent auditors.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR" THE
RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS THE COMPANY'S
INDEPENDENT AUDITORS.
OTHER INFORMATION
ANNUAL REPORTS AVAILABLE. A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1998, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, WILL BE FURNISHED WITHOUT CHARGE TO ANY SHARE OWNER WHO REQUESTS
SUCH REPORT FROM THE COMPANY. REQUESTS FOR COPIES SHOULD BE DIRECTED TO: SHARE
OWNER RELATIONS, PROTECTIVE LIFE CORPORATION, P. O. BOX 2606, BIRMINGHAM,
ALABAMA 35202, TELEPHONE (205) 868-3573, FAX (205) 868-3541. COPIES MAY ALSO BE
REQUESTED THROUGH THE INTERNET FROM THE COMPANY'S WORLD WIDE WEB SITE
(HTTP://WWW.PROTECTIVE.COM). 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).
SHARE OWNER PROPOSALS AND NOMINATIONS FOR THE 2000 ANNUAL MEETING. In order to
be included in the proxy materials for the Company's 2000 Annual Meeting of
Share Owners, any proposals of share owners intended to be presented at the 2000
Annual Meeting of Share Owners must have been received in written form by the
Company's Secretary at the principal office of the Company on or before November
27, 1999. Also, under our By-laws, nominations for director or other business
proposals to be addressed at the meeting may be made by a share owner entitled
to vote who has delivered a notice to the Company's Secretary no later than the
close of business on February 26, 2000 and not earlier than January 27, 2000.
The notice must contain the information required by the By-laws. Copies of our
By-laws may be obtained from the Company's Secretary. Requests for copies should
be directed to: Corporate Secretary, Protective Life Corporation, P. O. Box
2606, Birmingham, Alabama 35202. These advance notice provisions are in addition
to, and separate from, the requirements which a share owner must meet in order
to have a proposal included in the Proxy Statement under the rules of the
Securities and Exchange Commission.
18
<PAGE>
[THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY.]
<PAGE>
<TABLE>
<CAPTION>
<S><C>
- ---------------------------------------------------------------------------------------------------------------------------------
/ /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
1. ELECTION OF DIRECTORS FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below / / for all nominees listed below / / / /
Nominees: William J. Cabaniss, Jr., Drayton Nabers, Jr., John J. McMahon, Jr., A. W. Dahlberg, Ronald L. Kuehn, Jr.,
James S. M. French, Robert A. Yellowlees, John D. Johns, Elaine L. Chao, Donald M. James, J. Gary Cooper
(INSTRUCTIONS:TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, MARK THE "EXCEPTIONS" BOX AND WRITE THAT
NOMINEE'S NAME IN THE SPACE PROVIDED BELOW.)
*Exceptions ___________________________________________________________________________
2. Ratification of the appointment of PricewaterhouseCoopers 3. Unless "Authorization Withheld" is marked below, the
LLP as the Company's independent auditors. 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.
FOR / / AGAINST / / ABSTAIN / /
AUTHORIZATION WITHHELD / /
CHANGE OF ADDRESS AND
OR COMMENTS MARK HERE / /
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.
Dated __________________________________________, 1999
______________________________________________________
Signature
______________________________________________________
Signature
VOTES MUST BE INDICATED
(X) IN BLACK OR BLUE INK. /X/
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS HEREON, DATE, AND RETURN PROMPTLY IN THE ENCLOSED PREPAID ENVELOPE
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PROTECTIVE LIFE CORPORATION
Post Office Box 2606
Birmingham, Alabama 35202
P R O X Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Drayton Nabers, Jr., John D. Johns, and Deborah J. Long, 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 on all matters (unless otherwise
indicated on the reverse side) which may come before the Annual Meeting of Share Owners to be held at the
principal office of the Company, 2801 Highway 280 South, Birmingham, Alabama 35223 on Monday, April 26, 1999 at
10:00 a.m., CDT, and at any adjournments of the meeting. All prior proxies given with respect to the voting of
such shares at the Annual Meeting are revoked.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE.
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY.
PROTECTIVE LIFE CORPORATION
C/O THE BANK OF NEW YORK
P. O. BOX 11203
NEW YORK, NY 10203-0203
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