<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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> 2
1776 American Heritage Life Drive
[LOGO] Jacksonville, Florida 32224
Telephone 904/992-1776
AMERICAN HERITAGE LIFE
INVESTMENT CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 25, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Shareholders of
American Heritage Life Investment Corporation (the "Company") will be held in
the Auditorium of the American Heritage Life Building, on the First Floor, at
1776 American Heritage Life Drive, Jacksonville, Florida, on Thursday, April
25, 1996, at 9:00 A. M., Jacksonville time, for the following purposes:
1. To elect two (2) Class II Directors to serve until the Annual
Meeting of Shareholders in 1999;
2. To ratify the approval of the American Heritage Life Investment
Corporation Amended and Restated Long-Term Incentive Plan;
3. To approve the American Heritage Life Investment Corporation 1996
Stock Option Plan;
4. To approve the material terms under which the remuneration of the
Officers of the Company and its subsidiaries is to be paid;
5. To amend the Company's Amended and Restated Articles of Incorporation
to increase the number of authorized shares of the Company's Common
Stock from 20,000,000 to 35,000,000; and
6. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Only shareholders of record at the close of business on February 16, 1996
will be entitled to vote at the meeting or at any adjournment thereof.
Please sign the accompanying proxy and return it to the Company in the
return envelope enclosed for your use. If you attend the meeting in person, you
may revoke your proxy at such meeting and cast your vote in person.
A copy of the Company's annual report for the year ended December 31,
1995, which report contains consolidated financial statements and other
information of interest with respect to the Company and its subsidiaries, is
enclosed.
By order of the Board of Directors,
W. MICHAEL HEEKIN, Corporate Secretary
March 22, 1996
PLEASE DATE, SIGN AND MAIL THE ENCLOSED PROXY PROMPTLY. NO POSTAGE IS
REQUIRED IF MAILED IN THE UNITED STATES IN THE ACCOMPANYING ENVELOPE.
<PAGE> 3
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
1776 AMERICAN HERITAGE LIFE DRIVE
JACKSONVILLE, FLORIDA 32224
(904) 992-1776
MARCH 22, 1996
--------------
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by
management of proxies for use at the 1996 Annual Meeting of Shareholders of
American Heritage Life Investment Corporation (the "Company") to be held on
April 25, 1996 and any adjournments thereof. It is expected that this Proxy
Statement and the enclosed form of proxy will be mailed to shareholders
commencing on or about March 22, 1996. If the enclosed form of proxy is
executed and returned, it will be voted at the meeting and, where no choice has
been specified thereon, will be voted for the election of the directors, and
the other matters contained thereon. A proxy may be revoked at any time to the
extent that it has not been exercised. A shareholder may revoke his or her
proxy by (a) writing the Secretary of the Company a letter of proxy revocation,
(b) executing a subsequently dated proxy, or (c) attending the shareholders'
meeting and voting his or her shares personally. The cost of preparing and
assembling the proxy materials and soliciting proxies will be borne by the
Company. In addition to the solicitation by mail, a number of regular employees
of the Company may solicit proxies in person or by telephone or other means of
communication. Brokers, dealers, banks and their nominees who hold shares for
the benefit of others will be asked to send proxy material to the beneficial
owners of the shares. The Company will reimburse them for their reasonable
expenses.
Only shareholders of record at the close of business on February 16, 1996
will be entitled to vote. On that date there were outstanding 13,837,893 shares
of the Company's common stock, par value $1.00 per share, which stock is the
only class of outstanding voting securities of the Company (the "Shares"). On
that date there were issued 431,084 shares of the Company's Class A
Non-Convertible Preferred Stock, par value $10.00 per share, to two
wholly-owned subsidiaries of the Company and accordingly were not entitled to
vote. No shares of its Class B Convertible Preferred Stock, par value $10.00
per share, are outstanding. Each Share is entitled to one vote at the meeting.
Robert D. Davis, T. O'Neal Douglas and W. Ashley Verlander or any one of them
have been designated as proxies to vote the Shares solicited hereby. The Shares
are not subject to cumulative voting.
MATTERS TO BE CONSIDERED
The Company shareholders will consider and act upon proposals (i) to elect
two (2) Class II Directors to serve until the annual meeting of shareholders in
1999 and until their respective successors are elected and qualified, (ii) to
ratify the approval of the American Heritage Life Investment Corporation
Amended and Restated Long-Term Incentive Plan, (iii) to approve the American
Heritage Life Investment Corporation 1996 Stock Option Plan, (iv) to approve
the material terms under which the remuneration of the Officers of the Company
and its subsidiaries is to be paid, (v) to amend the Company's Amended and
Restated Articles of Incorporation to increase the number of authorized shares
of the Company's Common Stock from 20,000,000 to 35,000,000; and (vi) to
transact such other business as may properly come before the meeting or any
adjournment thereof.
PROPOSAL 1
ELECTION OF DIRECTORS
The directors of the Company are divided into three different classes
with each class being elected for a three-year term. Proxies are solicited for
the election of Class II of the directors to serve until the annual meeting of
shareholders in 1999 and until the successors of the members of that class are
elected and qualified. Class II includes A. Dano Davis and T. O'Neal Douglas
who are members of the present Board of the Company, Mr. Douglas having been
last elected to the Board at the 1993 Annual Meeting of Shareholders and Mr.
Davis having been last elected to the Board at the 1994 Annual Meeting of
Shareholders. The enclosed proxy, unless otherwise specified, will be voted
1
<PAGE> 4
in favor of the election of the above named directors for the period
indicated. The above named directors also serve as members of the Board of
American Heritage Life Insurance Company (the "Insurance Company"), a
wholly-owned subsidiary of the Company. Management believes the nominees will
be able to serve; however, if either of them should be unable to serve, the
proxies may be voted with discretionary authority for a substitute designated
by management and in the absence of a substitute the size of the Board would be
reduced.
The bylaws of the Company provide that its Board consist of eight
directors as follows: three directors in Class I, two directors in Class II and
three directors in Class III, each of which classes is elected for a three year
term.
Certain information concerning the directors of the Company, including
their principal occupations for the past five or more years, is set forth
below:
<TABLE>
<CAPTION>
CLASS AND
ANNUAL
BENEFICIALLY OWNED MEETING
PRINCIPAL AT JANUARY 31, 1996 DATE AT WHICH TERM
OCCUPATION ------------------------- FIRST BECAME AS DIRECTOR
DIRECTORS OR EMPLOYMENT SHARES PERCENTAGE DIRECTOR AGE WILL EXPIRE
--------- ------------- ------ ---------- ------------ --- -------------
<S> <C> <C> <C> <C> <C> <C>
Edward L. Chairman of the Board, 6,606 .05 April 28, 1994 60 Class I
Baker Florida Rock Industries, Inc., 1998
Jacksonville, Florida (Con-
struction Products Company)
Robert D. Davis Chairman of the Board of 13,722(1) .10 Oct. 7, 1968 64 Class I
D.D.I., Inc., Jacksonville, 1998
Florida (Investments)
Christopher A. Executive Vice President 54,518(3) .39 July 30, 1987 48 Class I
Verlander (2) of the Company since 1990 1998
and President of the Insurance
Company since April, 1994;
Corporate Secretary 1985-1994
of the Company and the Insurance
Company; Executive Vice President
of the Insurance Company April,
1990-April, 1994; Senior Vice
President 1984-1990 of the
Company and the Insurance
Company, Vice President
Investments 1981-1984 of the
Insurance Company
A. Dano Davis Chairman of the Board 58,031(1) .42 June 25, 1993 50 Class II
and Principal Executive 1996
Officer, Winn-Dixie Stores, Inc.,
Jacksonville, Florida
(Retail Grocery Chain)
T. O'Neal Chairman of the Board 100,294(4) .73 July 30, 1987 60 Class II
Douglas since April, 1994, President 1996
and Chief Executive Officer
since 1990, Executive Vice
President 1986-1990 of the
Company; Chairman of the
Board since April, 1994,
Chief Executive Officer since
1990, President 1986-1994,
Executive Vice President
1985-1986, Senior Vice
President 1983-1985 of the
Insurance Company
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
CLASS AND
ANNUAL
BENEFICIALLY OWNED MEETING
PRINCIPAL AT JANUARY 31, 1996 DATE AT WHICH TERM
OCCUPATION ------------------------- FIRST BECAME AS DIRECTOR
DIRECTORS OR EMPLOYMENT SHARES PERCENTAGE DIRECTOR AGE WILL EXPIRE
--------- ------------- ------ ---------- ------------ --- -------------
<S> <C> <C> <C> <C> <C> <C>
H. Corbin Day Chairman of the Board of 72,987 (5) .53 June 25, 1993 58 Class III
Jemison Investment Co., Inc., 1997
Birmingham, Alabama
(Investment Banking Firm)
Radford D. Chairman of the Board, 14,489 .11 Feb. 9, 1989 62 Class III
Lovett Commodores Point 1997
Terminal Corp.,
Jacksonville, Florida
(Marine Terminal)
W. Ashley Retired Chairman of the 160,415 (6) 1.16 Oct. 7, 1968 76 Class III
Verlander (2) Board, President and Chief 1997
Executive Officer of the
Company and the Insurance
Company; Chairman of the
Board 1990-1994, President
and Chief Executive Officer
1968-1990 of the Company;
Chairman of the Board
1986-1994 and Chief Executive
Officer 1986-1990, President
and Chief Executive Officer
1962-1986 of the Insurance
Company
All Directors of the Company and
Executive Officers of the Company and
its subsidiaries as a group (16 persons) 552,943(1)(7) 4.00
</TABLE>
- --------------------
(1) In addition, Robert D. Davis and A. Dano Davis, who are first cousins,
are directors and officers of D.D.I., Inc. and Estuary Corporation. A.
Dano Davis is a director and officer of James E. Davis Family--WD
Charities, Inc., a private charitable foundation. Robert D. Davis and A.
Dano Davis are shareholders of D.D.I., Inc. and have shared voting and
dispositive powers as to its shareholdings. A. Dano Davis is a shareholder
of Estuary Corporation and has sole voting and dispositive power as to the
shareholdings of such corporation. Estuary Corporation is the sole general
partner of FND, Ltd. Robert D. Davis is sole trustee and beneficiary of a
trust which is a limited partner of ADFAM Partners, Ltd. and the trust is
a 50 percent shareholder of a corporation, which is one of two general
partners of ADFAM Partners, Ltd. Robert D. Davis has authority to replace
the current trustee of a Trust which is also a general partner of ADFAM
Partners, Ltd. A. Dano Davis disclaims any beneficial interest in the
shareholdings of James E. Davis Family--WD Charities, Inc.
At January 31, 1996, these entities held the following Shares:
<TABLE>
<CAPTION>
PERCENTAGE OF
NAMED ENTITY NO. OF SHARES OUTSTANDING SHARES
-------------------- ------------- ------------------
<S> <C> <C>
D.D.I., Inc. 4,189,263 30.30%
Estuary Corporation 1,209,326 8.75%
FND, Ltd. 38,399 .28%
ADFAM Partners, Ltd. 23,848 .17%
James E. Davis Family--
WD Charities, Inc. 19,999 .14%
</TABLE>
A. Dano Davis is co-trustee for trusts for the benefit of his sister,
his cousin and his sister's and cousin's children which hold an aggregate
of 62,119 Shares. A. Dano Davis disclaims any beneficial interest in the
shareholdings of such trusts. Also, A. Dano Davis is co-trustee for trusts
for the benefit of him and his children which hold an aggregate of 19,123
Shares.
3
<PAGE> 6
Principally through private corporations, the Davis Family holds 41.82% of
the Shares. For information concerning Shares held by certain members of
the Davis family and their associates, see "Principal Shareholders."
(2) Christopher A. Verlander is the son of W. Ashley Verlander.
(3) Includes 14,069 Shares which are subject to presently exercisable
options.
(4) Includes 29,929 Shares which are subject to presently exercisable
options.
(5) Includes 47,247 Shares held by Jemison Investment Co., Inc. of which Mr.
Day has shared voting and dispositive power.
(6) Includes 26,665 Shares owned by the wife of Mr. Verlander as to which
beneficial ownership is disclaimed.
(7) Includes 85,112 Shares which are subject to presently exercisable
options.
DIRECTORS OF THE INSURANCE COMPANY
The Company, as sole shareholder of the Insurance Company, intends to
elect the following persons to the Board of Directors of the Insurance Company
at its annual shareholder meeting also to be held on April 25, 1996, all of
whom are presently members of the Board thereof. The term of office for that
Board is for one year and until the 1997 annual meeting.
<TABLE>
<CAPTION>
<S> <C>
F. Duane Ackerman T. O'Neal Douglas
Vice-Chairman and Chief Chairman of the Board, President
Operating Officer and Chief Executive Officer of
BellSouth Corporation the Company; Chairman of the Board
Atlanta, Georgia and Chief Executive Officer of the
(Telecommunications) Insurance Company
Edward L. Baker Langdon S. Flowers
Chairman of the Board Retired Chairman of the Board
Florida Rock Industries, Inc. Flowers Industries, Inc.
Jacksonville, Florida Thomasville, Georgia
(Construction Products Company) (Food Manufacturing and
Distribution)
I. Jon Brumley
Chairman of the Board Radford D. Lovett
Cross Timbers Oil Company Chairman of the Board
Fort Worth, Texas Commodores Point Terminal Corp.
(Oil and Gas Production Company) Jacksonville, Florida
(Marine Terminal)
John Ellis "Jeb" Bush
President, Codina Group, Inc. Clarence V. McKee
Coral Gables, Florida (Real Estate) Chairman of the Board,
Chief Executive Officer
A. Dano Davis and President
Chairman of the Board McKee Communications, Inc.
and Principal Executive Officer Tampa, Florida
Winn-Dixie Stores, Inc. (Communications)
Jacksonville, Florida
(Retail Grocery Chain) C. Richard Morehead
Executive Vice President,
Robert D. Davis Treasurer and Chief Financial
Chairman of the Board Officer of the Company
D.D.I., Inc. and the Insurance Company
Jacksonville, Florida
(Investments) Herbert H. Peyton
President
H. Corbin Day Gate Petroleum Company
Chairman of the Board Jacksonville, Florida
Jemison Investment Co., Inc. (Petroleum Products Retailing)
Birmingham, Alabama
(Investment Banking Firm)
</TABLE>
4
<PAGE> 7
Frederick H. Schultz Rolf H. Towe
Private Investor Senior Partner
Jacksonville, Florida; The Clipper Group, L.P.
Former Vice Chairman of the New York, New York
Board of Governors of the Investments)
Federal Reserve System
Washington, D.C. Christopher A. Verlander
Executive Vice President
Jay Stein of the Company; President
Chairman of the Board of Chief of the Insurance Company
Executive Officer
Stein Mart, Inc. W. Ashley Verlander
Jacksonville, Florida Retired Chairman of the Board
(Retail Department Store Chain) of the Company and the Insurance
Company
CORPORATE GOVERNANCE
The Company's Board of Directors had four regular quarterly meetings during
1995. The Company's Executive Committee, consisting of Robert D. Davis, W.
Ashley Verlander, T. O'Neal Douglas, Edward L. Baker, Radford D. Lovett and
Christopher A. Verlander, had six regular monthly meetings during 1995; omitting
meetings for the months in which the Company's quarterly board meeting were held
and the months of January and November. The Finance and Investment Committee,
which consists of the same members as the Executive Committee except for Mr.
Baker, had six meetings in 1995. The Executive, and Finance and Investment
Committees have been delegated broad authority to act on behalf of the Board of
Directors on an interim basis between board meetings. The compensation paid all
senior officers of the Company and its subsidiaries is determined by the
Compensation Committee consisting of Robert D. Davis, Radford D. Lovett and W.
Ashley Verlander. This committee met two times during 1995. The Company's Audit
Committee met three times during 1995 with the Company's independent auditors
and certain officers of the Company and its subsidiaries. During these meetings,
the nature and scope of the services performed on behalf of the Company by the
independent auditors and the results of their auditing activities were
considered and discussed, and the committee received reports from the Insurance
Company's internal auditor. This committee currently consists of Radford D.
Lovett, Edward L. Baker and Robert D. Davis. All of the directors attended at
least 75% of the meetings of the Board of Directors and of the committees of the
Board of which they were members. The Company does not have a directors
nominating committee.
5
<PAGE> 8
EXECUTIVE COMPENSATION AND OTHER TRANSACTIONS WITH MANAGEMENT
EXECUTIVE COMPENSATION
Shown below is information concerning the annual and long-term
compensation for services in the capacities to the Company and its subsidiaries
for the years ended December 31, 1995, 1994 and 1993, of those persons who were
at December 31, 1995, (i) the Chief Executive Officer and (ii) the other four
most highly compensated executive officers of the Company (the "Named
Officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS (3) PAYOUTS
----------------------------------- ----------------------- --------
NAME OTHER
AND ANNUAL RESTRICTED LTIP ALL OTHER
PRINCIPAL INCENTIVE COMPEN- STOCK OPTIONS/ PAY- COMPEN-
POSITION YEAR SALARY AWARD (3) SATION AWARDS (4) SARS(#) OUTS (5) SATION
- ------------------------------- ---- --------- -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. O'Neal Douglas 1995 $456,900 $142,553 - $ 71,279 9,451 $63,647 $ 29,284(6)
Chairman of the Board, 1994 436,900 255,412 - 132,020 17,801 71,047 28,705
President, Chief 1993 378,000 142,279 - 68,313 11,382 - 114,408(7)
Executive Officer (1);
Chairman of the Board
and Chief Executive Officer (2)
Christopher A. Verlander 1995 217,875 54,382 - 27,198 3,605 12,629 21,637(6)
Executive Vice President, 1994 190,834 86,881 - 47,955 6,467 14,093 21,581
and Director (1): 1993 150,000 43,141 - 13,558 2,258 - 27,194
President and Director (2)
C. Richard Morehead 1995 191,625 52,945 - 14,937 1,982 12,629 24,257(6)
Executive Vice President, 1994 174,167 73,686 - 26,358 3,555 14,093 24,257
Treasurer and Chief 1993 150,000 43,141 - 13,558 2,258 - 27,749
Financial Officer (1)(2);
Director (2)
James H. Baum 1995 156,294 39,434 - 12,192 1,616 10,525 19,615(6)
Senior Vice President (2) 1994 137,961 47,191 - 20,401 2,752 10,803 19,579
1993 120,875 28,651 - 11,292 1,883 - 22,111
Curtiss S. Sheldon 1995 129,760 35,853 - 10,111 1,342 4,210 20,217(6)
Senior Vice President 1994 124,800 45,522 - 18,032 2,431 - 5,148
and Chief Actuary (2) 1993 50,000 14,380 - 4,513 753 - 2,265
</TABLE>
- -----------------
(1) Of the Company.
(2) Of the Insurance Company.
(3) Represents awards and amounts earned in specified year but granted or
paid in the following year.
(4) Represents market value of Shares on date of grant. Number of Shares and
market value of all restricted stock owned by the Named Officers at
December 31, 1995 were as follows: Mr. Douglas 13,052 Shares, $298,565;
Mr. C. A. Verlander 3,536 Shares, $80,886; Mr. Morehead 2,597 Shares,
$59,406; Mr. Baum 2,050 Shares, $46,894 and Mr. Sheldon 1,033 Shares,
$23,630. Shares and market values at December 31, 1995 do not include
awards earned in 1995 but granted in 1996.
(5) Represents cash award and market value of Shares on date of grant made
during specified year.
(6) Includes (a) Contributions to the Employees' Profit Sharing Retirement
Program of American Heritage Life Insurance Company (Mr. Douglas $15,000,
Mr. Verlander $15,000, Mr. Morehead $15,000, Mr. Baum $15,000 and Mr.
Sheldon $15,000), (b) Premiums on group life and accident and health
policies (Mr. Douglas $11,539, Mr. Verlander $6,502, Mr. Morehead $8,492,
Mr. Baum $4,615 and Mr. Sheldon $4,812), (c) Contributions to the Stock
Investment Plan (Mr. Douglas $2,745, Mr. Verlander $135, Mr. Morehead $765
and Mr. Sheldon $405.)
(7) Includes $78,003 related to forgiveness of debt on a 4.01% note with an
original balance of $156,003. Paydowns of $39,000 were made during 1993
and 1994, paying the note off in full.
6
<PAGE> 9
OPTION/SHAREHOLDER APPRECIATION RIGHTS GRANTS TABLE
Shown below is information for the year ended December 31, 1995, with
respect to option/shareholder appreciation rights ("SARs") grants to purchase
the Shares granted to the Named Officers.
For further information concerning employee stock options of the Company,
reference is made to "Long-Term Incentive Plan--Stock Option Feature,"
"Proposal 2" and "Proposal 3" of this Proxy Statement.
OPTION/SAR GRANTS IN LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (3)
----------------------------------------------- ------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE EXPIRA-
OPTIONS IN FISCAL PRICE/ TION
Name GRANTED (2) YEAR SHARE DATE 0%(4) 5% 10%
- ------------------------- ------------- ----------- -------- -------- ----- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
T. O'Neal Douglas 17,801 42% 18.50 2/05 0 $207,107 524,849
Christopher A. Verlander 6,467 15% 18.50 2/05 0 75,241 190,675
C. Richard Morehead 3,555 8% 18.50 2/05 0 41,361 104,816
James H. Baum 2,752 7% 18.50 2/05 0 32,018 81,141
Curtiss S. Sheldon 2,431 6% 18.50 2/05 0 28,284 71,676
</TABLE>
- -------------------------
(1) Represents grants made in 1995 which were earned in 1994.
(2) Options become exercisable at a cumulative annual rate of 33% commencing
in 1996.
(3) The dollar amounts under these columns are the result of calculations at
0% and at the 5% and 10% rates set by the Securities and Exchange
Commission and therefore are not intended to forecast possible future
appreciation, if any, of the Company's stock price. The Company did not
use an alternative formula for a grant date valuation, as the Company is
not aware of any formula which will determine with reasonable accuracy a
present value based on future unknown or volatile factors.
(4) No gain to the optionees is possible without an increase in stock price
appreciation, which will benefit all shareholders commensurately. A zero
percent gain in stock price appreciation will result in zero dollars for
the optionee.
OPTION EXERCISES AND YEAR-END VALUE TABLE
Shown below with respect to the Named Officers is the aggregate options
exercised for the year ended December 31, 1995, the values realized and the
number of unexercised options and the value of the unexercised options
appreciation value at December 31, 1995.
AGGREGATE OPTION EXERCISES IN 1995 AND DECEMBER 31, 1995 OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/95 12/31/95
# OF SHARES
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE REALIZED UNEXERCISABLE UNEXERCISABLE
- ----------------------------- ------------ --------- ------------------ ---------------
<S> <C> <C> <C> <C>
T. O'Neal Douglas - - 29,929/ 61,723 $89,075/264,150
Christopher A. Verlander - - 14,069/ 26,634 42,413/114,164
C. Richard Morehead - - 14,069/ 23,722 42,413/101,424
James H. Baum - - 12,138/ 17,515 72,414/ 91,543
Curtiss S. Sheldon - - 2,251/ 10,933 11,785/ 55,706
</TABLE>
LONG-TERM INCENTIVE PLAN AWARDS TABLE
The restricted stock awards are listed in the Summary Compensation Table
on page 6. The performance unit feature of the Long-Term Incentive Plan
provides the participating employee the opportunity to earn cash and Shares if
corporate performance meets predetermined three-year financial goals.
7
<PAGE> 10
The plan awards are earned over a three-year period. The performance unit
grants outlined below, if earned, would be paid in early fiscal year 1998 for
results in the 1995-97 performance period.
For further information concerning the Long-Term Incentive Plan of the
Company, reference is made to "Long-Term Incentive Plan--Performance Units
Feature," "Proposal 2" and "Proposal 4" of this Proxy Statement.
LONG-TERM INCENTIVE PLAN--AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
AMOUNT OF UNDER NON-STOCK PRICE BASED PLANS
PERFORMANCE PERFORMANCE --------------------------------------------
UNITS PERIOD THRESHOLD TARGET MAXIMUM
NAME GRANTED COVERED ($) ($) ($)
- -------------------------------- ------------ ----------- ---------- -------- ----------
<S> <C> <C> <C> <C> <C>
T. O'Neal Douglas $71,276 1995-97 $57,113 $114,225 $171,338
Christopher A. Verlander 27,191 1995-97 21,788 43,575 65,363
C. Richard Morehead 14,947 1995-97 11,977 23,953 35,930
James H. Baum 12,191 1995-97 9,769 19,537 29,306
Curtiss S. Sheldon 10,121 1995-97 8,110 16,220 24,330
</TABLE>
ANNUAL INCENTIVE COMPENSATION PLAN
The Company has an Amended and Restated Annual Incentive Compensation Plan
(the "Annual Incentive Plan")to provide additional compensation to all officers
of the Company and its subsidiaries. This Plan provides annual incentive
compensation based upon the participating employee's performance in relation to
predetermined performance goals established by the Company's Compensation
Committee. Individual target incentive award opportunities are established
based upon the impact the various eligible positions are deemed to have in the
Company or its subsidiaries. If the predetermined financial performance goals
are exactly met, the award for a participating employee would be equal to the
amount assigned to such employee at the beginning of the particular fiscal
year. Actual awards for any fiscal year may range from 0% to 150% of the
targeted award opportunities, depending upon how actual performance during the
fiscal year compares to such predetermined performance goals.
Performance goals for each fiscal year ended are based upon the growth in
operating earnings of the Company or the growth in operating earnings and the
growth in premium and equivalent revenues of a particular business unit of the
Insurance Company in which the participating employee is involved. Payments of
annual incentive awards are made within 30 days after the date on which the
Company's independent certified public accountants have issued their opinion on
the Company's financial statements for the fiscal year to which the incentive
awards relate and after it has been determined that statutory earnings are
sufficient to pay dividends to stockholders.
The Company paid in 1996, aggregate annual incentive awards in the amount
of $744,725 with respect to 1995 performance. For information concerning awards
to Named Officers pursuant to the Annual Incentive Plan reference is made to
"Executive Compensation--Summary Compensation Table" and for further
information concerning this Plan reference is made to "Proposal 4" of this
Proxy Statement.
LONG-TERM INCENTIVE PLAN
The Company has an Amended and Restated Long-Term Incentive Plan (the
"Long-Term Incentive Plan") which provides for the grant to certain officers of
the Company and its subsidiaries of (1) stock options, (2) restricted stock and
(3) performance units (as described below). For further information concerning
the Long-Term Incentive Plan reference is made to "Proposal 2" and "Proposal 4"
of this Proxy Statement.
The stock option feature of the Long-Term Incentive Plan provides to
senior officers the grant of options to purchase Shares at their fair market
value on the date of grant. The right to exercise these stock options will
commence one year after grant and will vest at the rate of one-third per year
on a cumulative basis thereafter. These options have a term of up to ten years.
Although the stock options will terminate with the termination of employment,
if such termination is the result of retirement,
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<PAGE> 11
disability or death, or is involuntary, the Compensation Committee may
extend the right to exercise such option to such retired or disabled employee
or his or her guardian and, in the case of death, to the personal
representative of such employee.
The granting of such options is dependent upon the Company's performance
for the prior fiscal year. During 1995, options to purchase 41,984 Shares were
granted relative to 1994 performance.
The restricted stock feature of the Long-Term Incentive Plan provides for
the grant of Shares of restricted stock to a participating employee. The number
of Shares of restricted stock available to be issued in the name of each
participating employee is determined at the beginning of each fiscal year by
the Compensation Committee based on the prior year's operating results. Such
Shares are held by the Company in the name of the participating employee, who
has the right to vote and to receive dividends paid on all such Shares.
The number of Shares issued to each participating employee is based upon
achieving a target award level established for such employee and the market
price of the Shares at the time the grant is made. During the period of
restriction such Shares may not be sold, transferred or pledged. Such Shares are
subject to forfeiture to the Company, in whole or in part, if the participating
employee does not remain in the Company's employ for three years after the date
of grant. The Compensation Committee, at is sole discretion, may waive such
forfeiture provisions, in whole or in part, in the event that termination of
employment occurs as a result of retirement, death or disability, or is
involuntary. Upon vesting, all restrictions as to transferability will terminate
and all Shares held in the name of a participating officer will thereafter be
freely transferable except to the extent limited by federal securities laws.
The granting of such awards is dependent upon the Company's performance
for the prior fiscal year. During 1995, 19,985 Shares were granted relative to
1994 performance.
The performance units feature of the Long-Term Incentive Plan provides to
a participating employee the opportunity to earn cash and Shares if corporate
performance meets predetermined three-year financial goals. A target award is
established for each participating employee, and payments ranging from 0% to
150% of the targeted award may result, depending upon actual performance over
the following three-year period.
At the end of each performance period, the Compensation Committee will
determine the value of performance units based on actual Company performance as
compared with the predetermined financial goals. When the value of an award is
determined, half of the award will be paid in cash and half will be paid in
Shares based on the market value of a Share at payment date.
If a participating employee's employment is terminated for any reason
during the performance period, he or she shall automatically forfeit all rights
to receive payment for any outstanding performance units. The Compensation
Committee may, however, determine to prorate the amounts payable as awards of
performance units, in whole or in part, in the event that the termination of a
participating employee occurs as a result of retirement, death or disability.
The performance unit feature of the Long-Term Incentive Plan is based upon
three-year performance periods, the first of which commenced on January 1,
1992. During 1995 the Company made aggregate awards pursuant to the performance
unit feature of the Long-Term Incentive Plan of 5,384 Shares and $102,961 for
the three year period ended December 31, 1994.
For information concerning awards to Named Officers pursuant to the
Long-Term Incentive Plan see "Executive Compensation--Summary Compensation
Table."
MANAGEMENT SECURITY PLAN
The Company has a Management Security Plan, which essentially is a
deferred compensation plan, which provided at December 31, 1995, benefits for
24 key employees of the Company and its subsidiaries.
This plan provides in the event a senior officer participant dies prior to
age 65 that his or her beneficiary will receive 100% of such participant's
monthly salary, as set forth in the plan, for a period of 12 months and,
thereafter, 50% of that monthly salary until such time as such participant
would have reached age 65, provided, however, that such 50% payments are for a
minimum of nine
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<PAGE> 12
years in the event of the participant's death between the ages of 55 and 65. For
senior officers with an agreed upon later retirement age, his or her
beneficiary will receive a pre-determined amount for 120 months. For all other
participants in the plan who die prior to age 65, his or her beneficiary will
receive two-thirds of such participant's monthly salary, as set forth in the
plan, for a period of 12 months and, thereafter, one-third of that monthly
salary until such time as such participant would have reached age 65 provided,
however, that such one-third payment will be made for at least nine years
regardless of the age at the death of such participant.
This plan also provides a retirement benefit which is based on a
participant's age at entry into the plan and salary, as set forth in the plan.
A portion of this retirement benefit will be paid to a participant's
beneficiary if the participant dies after retirement at age 65. For senior
officers, the remainder will be paid in monthly installments for the greater of
ten years or the lifetime of the participant if such participant has ten or
more years of service with the Company at the time of his/her retirement from
the Company. Alternatively, for senior officers who are not employees of the
Company at retirement and for all other participants such payments will be made
over a ten-year period beginning at retirement age whether the participant is
alive or dead. This plan has certain provisions for early retirement and
vesting prior to age 65.
The annual retirement benefit, upon reaching age 65 or an agreed to later
age, payable for life but not less than ten years under this plan for Messrs.
Douglas, Verlander, Morehead, Baum and Sheldon would be $240,159, $179,194,
$162,791, $130,157, and $55,918, respectively.
STOCK INVESTMENT PLAN
The Company has a Stock Investment Plan authorizing the purchase in the
open market on behalf of participating employees and directors of up to an
aggregate of 400,000 Shares. The payment for the Shares is accomplished by a
payroll deduction plan established by participating employers, which are
subsidiaries of the Company. Each employer contributes the following
percentages of each of its respective participating employees' total monthly
payroll deductions: (a) 25% of amounts of from $5 through $25, (b) 20% of
amounts in excess of $25 through $50, and (c) 15% of amounts in excess of $50
through $1,500. Directors of the Company or its subsidiaries may elect to
participate in this plan. A participating director may have deductions made
from such director's fees. The Company pays all commissions and related
expenses of this plan. During the year ended December 31, 1995, the Company's
participating subsidiaries contributed pursuant to this plan an aggregate of
$65,904 on behalf of participating employees and directors.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company adopted an Annual Incentive Plan and a Long-Term Incentive
Plan for the fiscal year beginning January 1, 1992. These important
performance-oriented plans were developed after working with compensation
consultants. They provided a perspective on the types of programs successfully
used by other high-performing companies, and the Compensation Committee of the
Company's Board of Directors (the "Compensation Committee") worked closely with
them to design a program that it believes is right for the Company.
As a starting point, the Compensation Committee established a simple and
straightforward management compensation philosophy/strategy which guided the
design of the program. The strategy included the following seven points, or
statements of policy:
Compensation Elements Relative to Competitive Market. The Company needs to
attract and retain quality officers, yet control fixed costs. Therefore, the
Company has provided competitive total cash compensation opportunities
consisting of: (1) base salary targeted at 90% of the competitive market, and
(2) above competitive incentive opportunities for attaining high targeted
Company performance results.
Forms of Incentive Compensation: Both annual and long-term incentive
compensation opportunities are available for all Company officers.
Incentive Compensation--Annual/Long-Term Orientation: The relative weight
of annual versus long-term incentive compensation reflects the time orientation
associated with each organization level. This orientation tends to be
longer-term for executive officers and shorter-term for other officers.
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<PAGE> 13
Incentive Compensation--Performance Measurement: Bottom-line profitability
is the Company's key measure of success. The magnitude of award distributions
under both the annual and long-term incentive plans is primarily tied to this
measure.
Annual Incentive Compensation--Corporate/Business Unit Emphasis: The
Company recognizes the different impact that various officers have on corporate
and business unit performance. Therefore, annual incentive compensation is
weighted in favor of corporate performance for corporate officers and business
unit performance for business unit officers.
Annual Incentive Compensation--Individual Performance Emphasis: The
financial success of the Company requires the achievement of some goals which
are non-financial in nature. These goals are reinforced by basing a part of the
annual incentive compensation on management discretion.
Long-Term Incentive Compensation--Equity Building: The Company believes
that officers should have a "stake" in the Company's long-term success.
Therefore, long-term incentive compensation is heavily weighted towards
equity-building components.
This strategy formed the basis for the plans adopted. These plans have now
been in place for the past four years. The Compensation Committee believes the
plans have worked extremely well in serving the best interests of the
shareholders by rewarding key executives for a job well done. Consequently, the
Compensation Committee has endorsed their continued use for fiscal 1996 without
change.
As pertaining to the Chief Executive Officer (the "CEO"), the Committee
established his base salary at $456,900 for fiscal 1995 after consideration of
competitive salary levels for comparably qualified and experienced CEO's at
companies similar in size to that of the Company and engaged in the same or
similar businesses. Under the adopted annual incentive plan a percent of his
salary is funded based upon a predetermined increase in the Company's operating
income. The Company believes the following operating earnings growth goals of:
(1) threshold (7%), (2) target (12%), and (3) superior (17%) represented a very
challenging range of goals in light of both the Company's strong fiscal 1994
operating income results and the difficult economy. The Compensation Committee
was therefore pleased with the resultant 8.2% increase in operating earnings
for 1995 and to pay the formula-based annual incentive amount of $142,553,
which appears in the Summary Compensation Table in the incentive award column.
Under the Long-Term Incentive Plan, the granting of stock options and
restricted Shares is dependent upon meeting predetermined performance goals.
For fiscal 1995 these goals were:
- The Insurance Company's statutory earnings were sufficient to pay the
Company's declared dividends to shareholders, and
- The Insurance Company's GAAP operating earnings were equal to or
greater than the threshold performance levels established for that year.
These criteria were met. Accordingly, stock options and restricted Shares
were granted in fiscal 1996 to the CEO in accordance with the adopted
compensation strategy. The assumption is that the present value of a restricted
Share is its market value at time of grant and that three option Shares are
approximately equal to one restricted Share. This relationship was reflected in
the granting of stock options and restricted Shares to the CEO, as well as to
all other senior officers.
The Long-Term Incentive Plan also provides for the granting of performance
units to the CEO. Their unit value, if any, is based upon future performance
over a three-year period. The Company performance criteria upon which the value
of the performance units granted in 1995 will be based is that of annualized
growth in operating earnings for the period 1995-1997.
A minimum of at least a 7% annualized growth in operating earnings is
required before the performance units will have any value. The Company's 1995
growth in operating earnings of 8.2% was above this threshold level and, if
maintained over the next two years, will result in a payout under this
performance-oriented feature of the Long-Term Incentive Plan.
As pertains to the other Named Officers, as well as other senior
management, the compensation program consists of a base salary, annual
incentive compensation and long-term incentive compensation composed of stock
options, restricted stock and performance units. Base salary range midpoints
are fixed at levels approximately 10% below the competitive amounts paid to
senior managers with comparable qualifications, experience and responsibility
at companies similar in size to that of the Company and engaged in the same or
similar businesses as the Company. The annual and long-term incentive
compensation is more highly leveraged and closely tied to the Company's success
in achieving significant financial performance goals.
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<PAGE> 14
In the early part of each fiscal year, the Compensation Committee reviews
with the CEO and approves any modification it deems appropriate in the annual
salary plan for the Company's senior executives (other than for the CEO). This
salary plan was developed with the assistance of an independent compensation
consultant and is based on industry, peer group and national surveys concerning
salary competitiveness. Performance judgments as to past and expected future
contributions of each individual senior executive are provided by the CEO.
Salary adjustments within the appropriate salary ranges are recommended by the
CEO. The Compensation Committee reviews the recommendations of the CEO and
fixes the base salary for each of the Named Officers and other senior
management position holders.
The objectives of the Annual and Long-Term Incentive Plans are to motivate
key employees to continue their efforts to improve the success and growth of
the Company and to encourage the high performing employees to remain with the
Company and to be rewarded for their performance.
As pertains to the Annual Incentive Plan for 1995, the Compensation
Committee reviewed and approved the recommendations of the CEO as pertaining to
the individual performance portion of the funded awards. In fixing the grant of
stock options, restricted stock and performance unit awards to each individual
in the senior management group, including the Named Officers other than the
CEO, the Compensation Committee reviewed with the CEO the recommended
individual awards. In doing so, the Long-Term Incentive Plan calls for taking
into account the respective scope of accountability, strategic and operational
goals, contributions of each individual in the senior management group, and the
Company-wide performance requirements for the granting of stock options and
restricted stock awards. The latter, having been met for the fiscal year 1995,
will result in stock option grants and restricted stock awards being made
during 1996.
Summary descriptions of the Annual Incentive and Long-Term Incentive Plans
have been previously provided in the subsections under this section of this
Proxy Statement describing executive compensation and "Proposal 4" of this
Proxy Statement. A description of the Long-Term Incentive Plan is also included
as "Proposal 2" of this Proxy Statement.
The foregoing report has been furnished by the Compensation Committee of
the Company consisting of the following individuals: Robert D. Davis, Radford
D. Lovett and W. Ashley Verlander.
DIRECTORS COMPENSATION
Except for T. O'Neal Douglas and Christopher A. Verlander, who received no
fees as directors or committee members of the Company, a director receives a
fee of $1,000 for each director's meeting he attends and a quarterly retainer
of $2,500. A member of the Board of Directors receives a fee of $500 for each
meeting of a committee he attends. Directors may elect payment in Shares or to
defer the payment of these fees according to an established plan under which
the deferred amounts are paid with interest in later years.
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<PAGE> 15
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below is a line graph comparing the five-year cumulative total
shareholder return on the Shares against the cumulative total return of the
Standard and Poor's Composite--500 Stock Index and a Peer Group for the period
commencing January 1, 1991 (closing price December 31, 1990) and ending
December 31, 1995.
COMPARISON OF FIVE YEAR CUMULATIVE RETURN (1)
AMONG THE COMPANY, S&P 500 AND PEER GROUP(2)
[GRAPH]
<TABLE>
<CAPTION>
INDUSTRY
MEASUREMENT PERIOD STOCK GROUP
(FISCAL YEAR COVERED) COMPANY INDEX INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 150.89 130 120.17
1992 204.23 140 174.22
1993 197.12 154 211.38
1994 206.42 156 233.55
1995 254.56 215 316.62
</TABLE>
(1) Assumes a reinvestment of dividends and a $100 initial investment on
January 1, 1991 in the Company, S&P 500, and the Peer Group.
(2) The members of the peer group are Protective Life Corporation and Liberty
Corporation. The returns of each company have been weighted according to
their respective stock market capitalization for purposes of arriving at a
peer group average.
(3) In October 1993 the Company completed a public offering. The Company sold
1,872,045 Shares and certain selling shareholders sold an additional
980,300 Shares for a total number of Shares sold of 2,852,345. The price
of the Company's Shares since the offering has been impacted as a result
of this offering.
OTHER TRANSACTIONS AND RELATIONSHIPS
The Insurance Company is the carrier of the individual insurance carried
on certain officers and/or directors and the group health, accident and
sickness and life insurance of Winn-Dixie Stores, Inc. ("Winn-Dixie") of which
A. Dano Davis, Robert D. Davis and Radford D. Lovett, directors of the Company,
are also directors. Affiliates of A. Dano Davis and Robert D. Davis are
principal shareholders of the Company and Winn-Dixie. During 1995, the
Insurance Company received premiums of $63,238 for such individual policies and
$3,430,075 for such group insurance. The Insurance Company also received a net
premium of $10,034,067 from Winn-Dixie to fund a deferred compensation plan for
certain senior officers and other key management personnel of Winn-Dixie. In
addition, the Insurance Company carries certain life insurance policies on the
lives of certain members of the Davis family and on employees of certain
corporations owned by them. During 1995, the Insurance Company received
$287,214 in net premiums with respect to this insurance.
T. O'Neal Douglas, Chairman of the Board, President and Chief Executive
Officer of the Company, is also a director of Physician Sales & Service, Inc.;
A. Dano Davis, a director of the Company, is also Chairman of the Board of
Directors of Winn-Dixie; Robert D. Davis and Radford D. Lovett, directors of
the Company, are also directors of First Union Corporation, Florida Rock
Industries, Inc. and Winn-Dixie; Robert D. Davis is also a director of Stein
Mart, Inc. and Mr. Lovett is also a director of FRP Properties, Inc.; Edward L.
Baker, a director of the Company, is also Chairman of the Board of Directors of
Florida Rock Industries and FRP Properties, Inc. and a director of Flowers
Industries, Inc. and Regency Realty; H. Corbin Day, a director of the Company,
is also a
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<PAGE> 16
director of Blount International, Inc., all of which corporations have
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934 or subject to the requirements of Section 15(d) of that Act. In addition,
T. O'Neal Douglas, Chairman of the Board, President and Chief Executive Officer
of the Company, is a director of the Barnett Bank of Jacksonville, N.A., a
subsidiary of Barnett Banks, Inc.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers to file with the Securities and
Exchange Commission ("SEC") and the New York Stock Exchange initial reports of
ownership and reports of changes in ownership of the Shares. Executive officers
and directors are required by SEC regulation to furnish the Company with copies
of all Section 16(a) forms they file.
To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the fiscal year ended December 31, 1995, all
Section 16(a) filing requirements applicable to its executive officers and
directors were complied with, except two Form 4 reports reflecting an indirect
interest in 4,030 Shares acquired in April, 1995, by two trusts of which Mr. A.
Dano Davis is a trustee. Such transaction was reported on the trust's Form 4s
for June, 1995.
PROPOSAL 2
TO RATIFY APPROVAL OF
THE COMPANY'S AMENDED AND RESTATED
LONG-TERM INCENTIVE PLAN
At the Annual Meeting, shareholders will be asked to consider and ratify
the approval of the American Heritage Life Investment Corporation Amended and
Restated Long-Term Incentive Plan (the "Long-Term Incentive Plan") which was
originally adopted in 1992 and which was amended and restated as of February 6,
1996.
The purpose of the Long-Term Incentive Plan is to provide officers with
financial motivation to act in the long-term interest of the Company and its
shareholders. By providing increased capital building opportunities to
officers which are linked to achievement of long-term goals, the Company
believes that the Long-Term Incentive Plan will promote an increased focus by
those people primarily responsible for its long-term success.
Some of the more important features of the Long-Term Incentive Plan are
summarized below. A copy of the Long-Term Incentive Plan is attached as
Exhibit I to this Proxy Statement and the description of this Plan contained
below is qualified in its entirety by the actual terms and provisions contained
in such Exhibit. For further information concerning the Long-Term Incentive
Plan, reference is made to "Executive Compensation and Other Transactions with
Management -- Long-Term Incentive Plan" and "Proposal 4" of this Proxy
Statement.
The Long-Term Incentive Plan provides for (1) the grant of stock options,
(2) the grant of restricted stock and (3) the grant of performance units
("Performance Units").
Shares Subject to the Long-Term Incentive Plan. There is available and
reserved for issuance a total of 300,000 Shares for grant of stock options,
restricted stock and Performance Units pursuant to the Long-Term Incentive
Plan. In the event of a stock dividend, stock split, reorganization or other
change in corporate structure of the Company affecting the Shares, such
adjustment shall be made in the number of Shares subject to Long-Term Incentive
Plan and the number of Shares (and the option price in the case of stock
options) subject to awards pursuant to the Plan as may be determined
appropriate by the Compensation Committee of the Board of Directors of the
Company (the "Compensation Committee").
In the event of any Shares subject to unexercised stock options granted
pursuant to the Long-Term Incentive Plan or subject to restrictive stock grants
made under this Plan are reacquired by the Company pursuant to the Long-Term
Incentive Plan, such Shares again will become available for issuance under the
Plan.
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<PAGE> 17
Administration. The Compensation Committee is responsible for the
administration of the Long-Term Incentive Plan and is authorized to interpret
the Plan to prescribe, amend and rescind rules and regulations relating to the
Plan and to make all other determinations necessary or advisable for the
administration of the Plan. The Compensation Committee shall consist of at
least two members of the Board of Directors, all of whom shall be disinterested
persons within the meaning of Rule 16b-3 as promulgated under the Securities
Exchange Act of 1934 and outside directors within the meaning of Section
162(m)(4)(c)(i) of the Internal Revenue Code of 1986 (the "Code"), and the
selection of persons subject to Section 16(b) of the Exchange Act for
participation in the Long-Term Incentive Plan, decisions concerning the timing,
pricing and amount of any grant pursuant to the Long-Term Incentive Plan to
such a person, and [to the extent required in order to qualify for the
performance-based remuneration exception under Section 162(m) of the Code] all
other decisions under the Long-Term Incentive Plan shall be made by a vote of
at least a majority of such members. The transactions contemplated by the
Long-Term Incentive Plan are intended to qualify for the exemption provided in
Rule 16b-3 as promulgated under the Securities and Exchange Act of 1934, as
amended, and to qualify for the performance-based remuneration exception under
Section 162(m) of the Code. The Compensation Committee may from time to time
make amendments to the Long-Term Incentive Plan as it, in its sole discretion,
determines are necessary in order to preserve such exemption under such rule
and such exception under such section or other similar rule and section which
might be in effect.
Stock Option Feature. The stock option feature of the Long-Term Incentive
Plan provides for the grant to a participating employee of options to purchase
Shares at their fair market value on the date of grant. The right to exercise
these options will commence one (1) year after grant and will vest at the rate
of one-third (1/3) per year on a cumulative basis thereafter. These options
may have a term of up to ten (10) years and may be exercisable only for cash.
Although the stock options will terminate with the termination of employment,
if such termination is the result of retirement, disability, or death, the
Compensation Committee may extend the right to exercise such options to such
retired or disabled employee or his or her guardian in the case of death to the
personal representative of such employee. For further information concerning
employee stock options of the Company, reference is made to "Executive
Compensation and Other Transactions with Management -- Option/Shareholder
Appreciation Rights Grants Table" and " -- Option Exercise and Year-End Value
Table," "--Long-Term Incentive Plan," "Proposal 3" and "Proposal 4" of this
Proxy Statement.
Restricted Stock Feature. The restricted stock feature of the Long-Term
Incentive Plan provides for the grant of Shares of restricted stock to a
participating employee. The number of Shares of restricted stock to be issued
in the name of each participating employee will be determined based on
operating earnings achieved. Such Shares will be held by the Company in the
name of the participating employee, who will have the right to vote and to
receive dividends paid on all such Shares. The number of Shares to be issued
to each participating employee will be based upon a target award level
established for such employee and the market price of the Shares at the time
the target award is established. Each Period of Restriction shall be for three
consecutive fiscal years of the Company. During the Period of Restriction,
such Shares may not be sold, transferred or pledged. Such Shares are subject
to forfeiture to the Company in whole in the event that the participating
employee does not remain in the Company's employ until the end of the Period of
Restriction. The Compensation Committee may waive such forfeiture provisions,
in whole or in part, in the event that termination of employment occurs as the
result of retirement, death or disability or is involuntary. All restrictions
on transferability will terminate at the end of the Period of Restrictions, and
all Shares held in the name of a participating officer will thereafter be
freely transferable. For further information concerning restricted stock
grants pursuant to the Long-Term Incentive Plan, reference is made to
"Executive Compensation and Other Transactions with Management -- Executive
Compensation" and "--Long-Term Incentive Plan" and "Proposal 4" of this Proxy
Statement.
Performance Units Feature. The Performance Units feature of the Long-Term
Incentive Plan provides for the grant to a participating employee of
Performance Units which are based on targeted award levels established for
each participating employee at the beginning of each fiscal year in accordance
with a formula relating to individual levels of performance set by the
Compensation Committee involving increases in financial operation of the
Company including, but not limited to,
15
<PAGE> 18
growth in the Company's operating earnings. A target award is established for
each participating employee, and awards will be in the form of cash bonuses
and Shares ranging from 0% to 150% of the targeted award, depending upon actual
performance over the following three-year period. If the target is exactly met,
the award for an employee would be equal to the target amount assigned to him at
the beginning of the three-year period. At the end of each Performance Period,
the Compensation Committee will determine the value of Performance Units based
on actual performance as compared with targeted goals. Payments of the amounts
so determined will be made as soon as practicable following such determination
of the value of Performance Units for each participating employee. When the
value of an award is determined, half of the award will be paid in cash and half
will be paid in Shares based on the market value of the Shares on the date of
the valuation of the award. If a participating employee's employment is
terminated for any reason during the Performance Period, he or she shall
automatically forfeit all rights to receive payment for outstanding Performance
Units. The Compensation Committee may, however, determine to prorate the
amounts payable as awards of Performance Units, in whole or in part, in the
event that the termination of a participating officer's employment occurs as a
result of retirement, death or disability. For further information concerning
Share and cash awards made pursuant to the Performance Unit feature of the
Long-Term Incentive Plan, reference is made to "Executive Compensation and Other
Transactions with Management -- Executive Compensation" and "--Long-Term
Incentive Plan" and "Proposal 4" of this Proxy Statement.
Federal Income Tax Consequences. No income will be recognized by a
Participant for federal income tax purposes at the time of the grant of an
option or the award of restricted stock pursuant to the Long-Term Incentive
Plan. However, at the time an option is exercised, ordinary income will be
recognized by the optionee in the amount equal to the excess of the fair market
value of the stock at the date of exercise over the option price. The amount
of income recognized by the optionee will be deductible by the Company in the
taxable year the option is exercised. An optionee's basis for the stock
acquired will be the fair market value of the stock on the date of exercise.
No income will be recognized by the recipient of restricted stock for federal
income tax purposes at the time of the grant of the award. However, at the
time the restrictions upon the stock are removed and the rights of ownership
are fully vested in the participant, ordinary income will be recognized by the
recipient of restricted stock in an amount equal to the fair market value on
the date that the restrictions were removed. The amount of income recognized
by the recipient of restricted stock will be deductible by the Company in the
taxable year in which the restrictions were removed from the Shares. The basis
for the restricted stock acquired will be the fair market value of the stock on
the date the restrictions were removed. Ordinary income equal to the fair
market value of the Shares plus the cash awarded to a Participant will be
recognized and the Company will receive a deduction in the taxable year in
which the settlement of the Performance Units occurs. The basis for the Shares
received in settlement of Performance Units will be their fair market value on
the date received. At the time of sale of either the option stock, formerly
restricted stock or Shares received in settlement of Performance Units, any
gain or loss recognized by the optionee will be long-term or short-term capital
gain or loss depending on the holding period of the Shares. Options granted
under the Long-Term Incentive Plan will not qualify as incentive stock options
under the Code.
The favorable vote of the holders of a majority of the outstanding Shares
represented in person or by proxy at the Annual Meeting and voting for or
against the proposal is required for approval of this proposal. Under Florida
law, abstentions and broker non-votes will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
LONG-TERM INCENTIVE PLAN.
PROPOSAL 3
TO APPROVE THE COMPANY'S 1996 STOCK OPTION PLAN
At the Annual Meeting, shareholders will be asked to consider and approve
the Company's 1996 Stock Option Plan (the "1996 Stock Option Plan") which was
adopted by the Company's Board of Directors on February 6, 1996.
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<PAGE> 19
The purposes of the 1996 Stock Option Plan are to provide an additional
incentive for key employees of the Company and its subsidiaries to invest in
Shares and thereby increase their proprietary interest in the Company's
business, to encourage such employees to remain in the employ of the Company or
its subsidiaries, and to increase their personal interest in the continued
success and progress of the Company.
Currently, the Company has stock option plans, which originally provided
for the grant of options to purchase up to 966,666 Shares. At January 31,
1996, there were outstanding options to purchase 287,247 Shares at an exercise
prices ranging from $11.13 to $22.63 per Share, with there remaining available
for grant of options to purchase up to 298,755 Shares under these plans. These
plans provide for the grant by the Company's Compensation Committee of stock
options to key employees of the Company and its subsidiaries at an exercise
price of the fair market value on the date of grant for a term of up to ten
years and under such other terms and conditions as may be determined by the
Compensation Committee similar to the provisions of the 1996 Stock Option Plan.
For further information concerning employee stock options of the Company,
reference is made to "Executive Compensation and Other Transactions with
Management -- Option/Shareholder Appreciation Rights Grants Table," " -- Option
Exercises and Year-End Value Table," "--Long-Term Incentive Plan," "Proposal
2" and "Proposal 4" of this Proxy Statement.
Some of the more important features of the 1996 Stock Option Plan are
summarized below. A copy of the 1996 Stock Option Plan is attached as Exhibit
II to this Proxy Statement, and the description of this Plan contained below is
qualified in its entirety by the actual terms and provisions contained in such
Exhibit.
Shares to Be Optioned; Changes in Corporate Structure. Subject to
adjustment as discussed below, no more than 350,000 Shares may be issued
pursuant to options granted under the 1996 Stock Option Plan. In the event of
a stock dividend, stock split, reorganization or other change in the corporate
structure of the Company affecting the Shares, such adjustment shall be made in
the number of Shares subject to the 1996 Stock Option Plan, and the number and
option price of Shares subject to options granted under the 1996 Stock Option
Plan, as may be determined to be appropriate by the Compensation Committee of
the Board of Directors (the "Compensation Committee"). No option may be
granted under the 1996 Stock Option Plan after ten years from the date the
1996 Stock Option Plan is approved by the shareholders of the Company. Shares
subject to lapsed or terminated options will be available for future option
grants. If the 1996 Plan is not approved by the shareholders on or before one
year from the date of adoption of the 1996 Stock Option Plan by the Board of
Directors, the 1996 Stock Option Plan and all options granted thereunder will
be null and void.
Administration of Plan. The 1996 Stock Option Plan is to be administered
by the Compensation Committee. The Compensation Committee will designate the
participants, the number of Shares to be optioned, the option prices and the
term of each option, not to exceed ten years after the date of grant. The
Compensation Committee shall consist of at least two (2) members of the Board
of Directors, all of whom shall be disinterested persons within the meaning of
Rule 16b-3 as promulgated under the Securities Exchange Act of 1934 and outside
directors within the meaning of Section 162(m)(4)(c)(i) of the Internal Revenue
Code of 1986 (the "Code"), and the selection of persons subject to Section
16(b) of the Exchange Act for participation in the 1996 Stock Option Plan,
decisions concerning the timing, pricing and amount of any grant pursuant to
this Plan to such a person, and [to the extent required in order to qualify for
the performance-based remuneration exception under Section 162(m) of the Code
all other decisions under the 1996 Stock Option Plan shall be made by a vote of
at least a majority of such members. The transactions contemplated by the 1996
Stock Option Plan are intended to qualify for the exemption provided in Rule
16b-3 as promulgated under the Securities and Exchange Act of 1934, as amended,
and to qualify for the performance-based remuneration exception under Section
162(m) of the Code. The Committee may from time to time make amendments to the
1996 Stock Option Plan as it, in its sole discretion, determines are necessary
in order to preserve such exemption under such rule and such exception under
such section or other similar rule and section which might be in effect.
Eligible Employees. Key employees of the Company and its subsidiaries
will be eligible for options. More than one option may be granted to an
employee. Directors who are not full-time employees are not eligible to
participate in the 1996 Stock Option Plan.
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<PAGE> 20
Option Price. The price at which Shares may be purchased upon exercise of
an option must be at least 100% of the "fair market value" of the Shares on the
date the option is granted. "Fair market value" is defined, in part, in the
1996 Stock Option Plan as the closing price at which Shares of the Company's
Common Stock traded as reported on the New York Stock Exchange composite
transaction listing on the date of grant.
Exercise of Options. The exercise of an option may be conditioned in any
manner which the Compensation Committee, in its sole discretion, may determine
except an option may not be exercised in whole or in part until the later of
(1) six months after the date of grant or (2) the approval of the 1996 Stock
Option Plan by the shareholders of the Company. On exercise of an option,
payment of the option price, in cash or previously acquired and currently owned
Common Stock, is required before the option stock is delivered. In the
alternative, the optionee may elect to receive Shares equal in value to the
difference between the aggregate fair market value of the Shares exercised on
the exercise date and the aggregate exercise price of those Shares. The
optionee may also, with the permission of the Compensation Committee, elect to
exercise the option in part by having cash withheld equal to the minimum amount
required to be withheld for payroll tax purposes and the balance by receiving
Shares equal to the difference between the aggregate fair market value and the
aggregate exercise price, less the cash withheld for tax purposes.
Termination of Options. Except in the event of the termination of an
employee's employment with the Company or its subsidiaries, other than by
retirement, all options granted under the 1996 Stock Option Plan will expire
ten years after the date of the grant. If an optionee's employment terminates,
other than by reason of death or retirement, the options may be exercisable for
three months as to those Shares to which the right of exercise had accrued
prior to the date of termination of employment, provided the Compensation
Committee consents to such exercise. If the employment is terminated due to
the death of the optionee, or if the optionee dies after retirement, the period
in which the option may be exercised will be one year after the death of such
optionee. Termination of employment due to retirement, either as the result of
age or disability, shall not affect the term of an option.
Amendment of Plan. The Compensation Committee may amend or discontinue
the 1996 Stock Option Plan, but may not, without the prior approval of the
shareholders: (a) make any material change in the eligible employees as
defined in the 1996 Stock Option Plan, (b) increase the total number of Shares
for which options may be granted, (c) extend the term of the 1996 Stock Option
Plan or the maximum option period, or (d) decrease the minimum option price.
The Compensation Committee has the power to alter the 1996 Stock Option Plan in
a number of ways (some of which would be significant) without obtaining the
approval of the Company's shareholders.
Federal Income Tax Consequences. No income will be recognized by an
optionee for federal income tax purposes at the time of the grant of an option.
However, at the time the option is exercised, ordinary income will be
recognized by the optionee in the amount equal to the excess of the fair market
value of the Shares at the date of exercise over the option price. The amount
of income recognized by the optionee will be deductible by the Company in the
taxable year the option is exercised. An optionee's basis for the Shares
acquired will be the fair market value of the stock on the date of exercise.
At the time of sale of the option Shares, any gain or loss recognized by the
optionee will be long-term or short-term capital gain or loss, depending on the
holding period of the Shares. Options granted under the 1996 Stock Option Plan
will not qualify as incentive stock options under the Code.
The favorable vote of the holders of a majority of the outstanding Shares
represented in person or by proxy at the Annual Meeting and voting for or
against the proposal is required for approval of this proposal. Under Florida
law, abstentions and broker non-votes will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE 1996
STOCK OPTION PLAN.
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<PAGE> 21
Proposal 4
TO APPROVE THE MATERIAL TERMS UNDER WHICH THE
REMUNERATION OF THE EXECUTIVE OFFICERS OF THE COMPANY IS
PAID, IN ORDER TO QUALIFY SUCH COMPENSATION AS PERFORMANCE
BASED AND FULLY DEDUCTIBLE FOR CORPORATE TAX PURPOSES.
The Internal Revenue Code of 1986 (the "Code") was amended in 1993 to
provide that, effective January 1, 1994, with certain exceptions, a publicly
held corporation such as the Company could not take a federal income tax
deduction for compensation paid to a "covered employee" in a taxable year to
the extent that the compensation deduction exceeds $1,000,000. A "covered
employee" is the Chief Executive Officer (the "CEO") on the last day of the
taxable year and any other officer who is among the four highest compensated
officers (other than the Chief Executive Officer) as reported in the Proxy
Statement (the "Named Officers"). Generally, these would be the same officers
named each year in the Summary Compensation Table in the Proxy Statement.
The $1,000,000 limit on deductibility does not apply to compensation that
meets the requirements for "qualified performance-based compensation" under
regulations adopted under the Code. In order for compensation to qualify as
performance-based the following conditions must be met: (i) the compensation
must be paid solely on account of the attainment of one or more
pre-established, objective performance goals, (ii) the performance goals must
be timely established by a compensation committee comprised solely of two or
more outside directors, (iii) the material terms of the performance goals must
be disclosed to and approved by the shareholders, and (iv) the compensation
committee must certify in writing prior to payment of the compensation (other
than stock option exercises) that the performance goals and any other material
terms were in fact satisfied.
While no Company executive's annual compensation has ever approached
$1,000,000, the Board of Directors has decided to seek shareholder approval for
four specific compensation plans or specific features of plans that provide
performance based compensation to senior executives so that such compensation
can qualify for full tax deductibility under the Code. The four plans or
features of plans are:
1. The American Heritage Life Investment Corporation Annual Incentive
Plan (the "Annual Incentive Plan"), which provides for annual
performance based bonuses,
2. The Restricted Stock feature of the Long-Term Incentive Plan
("Restricted Stock Plan"), which provides for the grant of restricted
stock if predetermined financial goals are met,
3. The Performance Unit feature of the Long-Term Incentive Plan (the
"Performance Unit") which provides for grants of contingent units
convertible to cash and Shares based upon meeting pre-defined three
year performance requirements, and
4. The 1996 Stock Option Plan and its predecessor Plans and the Stock
Option feature of the Long-Term Incentive Plan (the "Stock Option
Plans").
Under the heading "Executive Compensation and Other Transactions with
Management -- Long-Term Incentive Plan" and in "Proposal 2" and "Proposal 3" of
this Proxy Statement there is provided detailed descriptions of the Restricted
Stock Plan, the Performance Units and the Stock Option Plans. The following
describes these plans to the extent required in order to qualify them as
performance based and thus deductible as compensation expense irrespective of
whether they individually or in the aggregate result in an executive receiving
more than $1,000,000 as remuneration in any given taxable year.
The Annual Incentive Plan. The Annual Incentive Plan, which is
described under "Executive Compensation and Other Transactions with Management
- -- Annual Incentive Plan" of this Proxy Statement, is administered by the
Compensation Committee composed of two or more outside directors. Eligible
employees include the CEO and all other officers of the Company and its
subsidiaries. Award opportunities are expressed as a percent of salary, the
highest of which pertains to the CEO position. At a target performance result
the CEO can receive a bonus payment of 50% of his/her present salary and at a
maximum performance result the CEO can receive a bonus payment of 75% of
his/her present salary. Because Section 162(m) of the Code requires a stated
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<PAGE> 22
maximum award (either as a dollar amount or as a percent of the total
amount funded) the maximum annual payment to any individual under this plan is
limited to $1,000,000, which is a significant multiple of any past or
anticipated individual award.
The performance criteria for funding purposes is the Company's percent
growth in operating earnings over the prior year's operating earnings. Changes
in the funding formula have been infrequent from year to year. In any case,
the Compensation Committee will approve the funding criteria and specific
levels within the first quarter of each fiscal year.
The Compensation Committee shall certify in writing prior to payment of
the compensation that the performance goals and any other material terms were
in fact satisfied.
The Restricted Stock Plan. The Restricted Stock Plan is described under
"Executive Compensation and Other Transactions with Management -- Long-Term
Incentive Plan and in "Proposal 2" of this Proxy Statement. In order to
qualify it as performance based as relates to Section 162(m) of the Code, the
Restricted Stock Plan is:
- Administered by the Compensation Committee composed of two or more outside
directors.
- Based upon the attainment of one-year performance goals pertaining to
percent growth in operating earnings over the prior year's operating
earnings. This same performance goal must be met in order to initiate
funding the Annual Incentive Plan described above. The Compensation
Committee will approve the performance goal within the first quarter of
each fiscal year.
- Limited in that the number of restricted Shares will be determined and
awarded to the CEO and other eligible senior executives based upon their
respective level of responsibility within the Company. If a performance
goal is obtained, the CEO can receive restricted Shares having a market
value on the date of grant equal to a specific percent of his/her then
salary (i.e. at target 25%). Because Section 162(m) of the Code requires
a stated maximum award (either as a dollar amount or as a percent of the
total amount funded) the maximum value of any restricted stock grants to
any individual under this Plan shall be limited to Shares having a maximum
fair market value on the date of grant of $1,000,000, which is a
significant multiple of any past or anticipated individual award,
- Conditioned by the fact that no discretionary adjustments can be made
to either, 1) the market value of restricted stock grant or 2) the number
of restricted Shares granted to any individual during or at the conclusion
of any given three year vesting period, and
- - Certified to in writing prior to payment of the compensation by the
Compensation Committee that the performance goals and any other material
terms were in fact satisfied.
The Performance Unit. The Performance Unit is described in full under
"Executive Compensation and Other Transactions with Management -- Long-Term
Incentive Plan" and in "Proposal 2" of this Proxy Statement. In order to
qualify it as performance based as relates to Section 162(m) of the Code, the
Plan is:
- Administered by the Compensation Committee composed of two or more
outside directors,
- Based upon the attainment of three year performance goals pertaining
to growth in operating earnings. Within the first quarter of each three
year performance period the Compensation Committee will establish a
threshold, target and superior growth in operating Income Goal for the
three year period. The Committee may for future performance periods
utilize some other, or a combination of predetermined financial goal(s)
such as growth in premium and premium equivalent revenues. However, if
multiple goals are chosen, a relative weighting for each goal to total
100% will be determined and approved by the Committee,
- Limited in that Performance Units will be determined and awarded to
the CEO and other eligible senior executives based upon their respective
levels of responsibility within the Company. If a target
performance result is obtained the CEO can receive a Performance Unit
payment equal to 25% of his/her salary at the beginning of the three year
performance period and a maximum Performance Unit payment of 37.5% of
his/her salary at the
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<PAGE> 23
beginning of the performance period. Because Section 162(m) of
the Code requires a stated maximum award (either as a dollar amount or
as a percent of the total amount funded) the maximum payment at the
end of each three year performance period to any individual under
this plan shall be limited to $1,000,000, which is a significant
multiple of any past or anticipated individual award,
- Conditioned by the fact that no discretionary adjustments can be made
to either, 1) the value of Performance Units or 2) the number of
Performance Units granted to any individual during or at the
conclusion of any given three year performance period, and
- Certified to in writing prior to payment of the compensation by the
Compensation Committee that the performance goals and any other
material terms were in fact satisfied.
The Stock Option Plans. The Stock Option Plans are described under
"Executive Compensation and Other Transactions with Management -- Long-Term
Incentive Plan" and in "Proposal 2" and "Proposal 3" of this Proxy Statement.
In order to qualify it as performance based as relates to Section 162(m) of the
Code, the Plans:
- Are administered by the Compensation Committee composed of two or
more outside directors,
- Are limited to the granting of stock options at no less than the
fair market value of a share at its time of grant,
- Provide for a ten year exercise period from date of grant with
one-third of the Shares granted exercisable after one year,
one-third of the Shares exercisable after two years and the final
third exercisable after three years from their date of grant, and
- Provide for a method of determining the present value of a stock
option as being, generally, one-third its exercise price at time
of grant. This amount is then applied to a targeted grant value
as a percent of salary where in the position's impact on longer
term results is a primary consideration. As relates to the CEO
position the award guideline calls for annual grants having an
approximate present value of 25% of his/her base salary at target.
Because Section 162(m) of the Code requires a stated maximum award
(either as a dollar amount, specified number of Shares, or as a
percent of the total number of Shares to be awarded) the maximum
grant to any individual shall be limited to not more than 100,000
Shares per year, which is a significant multiple of any past or
anticipated individual stock option award.
The favorable vote of the holders of a majority of the outstanding Shares
represented in person or by proxy at the Annual Meeting and voting for or
against the proposal is required for approval of this proposal. Under Florida
law, abstentions and broker non-votes will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL 4 IN ORDER TO QUALIFY
THE COMPANY'S
- ANNUAL INCENTIVE PLAN,
- RESTRICTED STOCK FEATURE OF THE LONG-TERM INCENTIVE PLAN,
- PERFORMANCE UNIT FEATURE OF THE LONG-TERM INCENTIVE PLAN, AND
- 1996 STOCK OPTION PLAN AND ITS PREDECESSOR STOCK OPTION PLANS AND
THE STOCK OPTION FEATURE OF THE LONG-TERM INCENTIVE PLAN
As performance-based compensation as relates to Section 162(m) of the Internal
Revenue Code.
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<PAGE> 24
PROPOSAL 5
TO AMEND THE COMPANY'S AMENDED AND RESTATED
ARTICLES OF INCORPORATION
PROPOSED AMENDMENT TO INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has determined that it would be in the best
interest of the Company to amend Article V A.1. of the Company's Amended and
Restated Articles of Incorporation to increase the authorized number of shares
of the Company's common stock, par value $1.00 per share (the "Shares") from
20,000,000 to 35,000,000. As of February 16, 1996, there were issued and
outstanding 13,837,893 Shares. At that date an additional 936,209 Shares were
reserved for issuance under the Dividend Reinvestment Plan for the Company's
shareholders and 1,166,003 Shares were reserved for issuance under options,
stock and restricted stock granted or to be granted pursuant to the Company's
stock option and long-term incentive plans (including the 650,000 Shares for
which approval for issuance is sought in "Proposal 2" and "Proposal 3" of this
Proxy Statement).
While the Board of Directors may from time to time authorize the issuance
of Shares from the currently authorized, but unissued Shares, there are no
past, present or proposed negotiations, understandings, plans or commitments
for the issuance of Shares from the Shares to be authorized by the proposed
increase of authorized Shares, nor are there any plans, arrangements, or
negotiations, which call for the issuance of any of the currently authorized
common stock except Shares reserved for issuance under the Company's Dividend
Reinvestment Plan and the Company's stock option and long-term incentive plans.
The Board of Directors believes that it is in the best interests of the
Company to authorize additional Shares to be available for issuance, without
further shareholder action, for possible future financings, stock dividends,
stock distributions, employee stock plans, dividend reinvestment and common
stock purchase plans, or other corporate purposes. In the opinion of the Board
of Directors, additional authorized Shares will provide the Company greater
flexibility in planning for the Company's future development.
The increase to 35,000,000 Shares of authorized common stock must be
accomplished by amending Article V A.1. of the Amended and Restated Articles of
Incorporation of the Company, so that Article V A., as amended will read as
follows:
ARTICLE V - CAPITAL STOCK
"A. The maximum number of shares of stock which this
corporation is authorized to have outstanding at any one time is:
1. 35,000,000 shares of common stock, par value $1.00
per share;
2. 500, 000 shares of non-convertible preferred stock,
par value of $10.00 per share; and
3. 500,000 shares of convertible preferred stock, par
value of $10.00 per share."
The amount of shares of the two classes of preferred stock will remain
unchanged.
The favorable vote of the holders of a majority of the outstanding Shares
represented in person or by proxy at the Annual Meeting and voting for or
against the proposal is required for approval of this proposal. Under Florida
law, abstentions and broker non-votes will have no effect.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
PROPOSED AMENDMENT TO ARTICLE V A.1.
PRINCIPAL SHAREHOLDERS
A beneficial owner of a security includes any person who directly or
indirectly has or shares voting power and/or investment power with respect to
such security. Voting power is the power to vote or direct the voting of
securities and investment power is the power to dispose of or direct the
disposition of securities.
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<PAGE> 25
The following table sets forth as of January 31, 1996, that group of
persons known to management owning of record or beneficially, more than 5% of
the Shares:
<TABLE>
<CAPTION>
NUMBER OF PERCENTAGE OF
OWNER SHARES OWNERSHIP
- ------- ------------- ---------------
<S> <C> <C>
D.D.I., Inc. (1)........................... 4,189,263 30.30%
Estuary Corporation (2) .................... 1,209,326 8.75%
Other Davis Family Shareholdings (3) ....... 384,832 2.77%
--------- ------
P.O. Box 2088; Jacksonville, Florida 32203 5,783,421 41.82%
========= ======
</TABLE>
(1) A corporation wholly owned by certain members of the Davis family. Robert
D. Davis, a director of the Company, and his cousins, A. Dano Davis, a
director of the Company and T. Wayne Davis and Charles P. Stephens,
son-in-law of M. Austin Davis, deceased uncle of Robert D. Davis and A.
Dano Davis, have shared voting and dispositive powers of the Shares owned
by that corporation.
(2) Corporation principally owned by trusts for the benefit of A. Dano Davis,
his mother, his sister, his children and his sister's children. As to the
Shares held by Estuary Corporation, A. Dano Davis has sole voting and
dispositive power.
(3) Represents Shares as to which sole voting and dispositive power is held
by Robert D. Davis with respect to 13,722 Shares, T. Wayne Davis with
respect to 10,322 Shares, Charles P. Stephens with respect to 1,315
Shares, T. Wayne Davis' mother, with respect to 27,609 Shares, A. Dano
Davis with respect to 58,031 Shares held by trusts for the benefit of A.
Dano Davis and his children, A. Dano Davis with respect to 38,399 Shares
held by FND, Ltd. of which Estuary Corporation is the sole general
partner, A. Dano Davis' sister with respect to 25,327 Shares held by
trusts for the benefit of her children and other family members with
respect to 8,469 Shares held individually or in a trust for their benefit.
Also, includes 19,999 Shares held by a charitable foundation as to which
A. Dano Davis, his wife, his mother and his sister have shared voting and
dispositive power, 19,999 Shares held by Sandra D. Stephens, Charles P.
Stephens' wife and M. Austin Davis' daughter, who is a co-trustee of a
trust for the benefit of M. Austin Davis' family members as to which she
shares voting and dispositive power, 14,907 Shares held by Trusts for the
benefit of Charles P. Stephens' wife and their children as to which he and
his wife share voting and dispositive power, and 58,378 Shares held by
trusts for the benefit of A. Dano Davis' sister and her children as to
which A. Dano Davis and his sister, who are co-trustees, have shared
voting and dispositive power, 22,864 Shares held by trusts for the benefit
of A. Dano Davis, his children, his cousin and his cousin's children, as
to which A. Dano Davis, who is a co-trustee, has shared voting and
dispositive power, 23,848 Shares held by ADFAM Partners, Ltd. as to which
Robert D. Davis and/or his brother share voting and dispositive power
through a corporation and a trust, both of which are general partners,
18,245 Shares held by trusts for the benefit of T. Wayne Davis and his
sister, and their children, as to which T. Wayne Davis, who is a
co-trustee, has shared voting and dispositive power, 18,398 Shares held by
trusts for the benefit of T. Wayne Davis' sister, and her children, as to
which T. Wayne Davis and his sister, who are co-trustees, have shared
voting and dispositive power and 5,000 Shares held by a charitable
foundation as to which T. Wayne Davis and his mother have shared voting
and dispositive power.
ACCOUNTANTS
KPMG Peat Marwick LLP ("PM"), the Company's auditors, has completed its
examination of the Company's financial statements for the year ended December
31, 1995; and it is expected that representatives of PM will attend the Annual
Meeting and be available to respond to appropriate questions and make
appropriate comments concerning the Company.
Neither PM nor any of its associates has any relationship with the Company
or any of its subsidiaries except in its capacity as auditors. The Company has
not selected auditors to examine its financial statements for its fiscal year
ending December 31, 1996. It is the policy of the Company to delay this
selection until later in its fiscal year.
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<PAGE> 26
GENERAL
The Company will bear the costs of solicitation of proxies. In addition to
the use of the mails, proxies, may be solicited by personal interview,
telephone and telegram by directors and officers and other employees of the
Company, and no additional compensation will be paid to such individuals.
Arrangements may also be made with the stock transfer agent and with brokerage
houses and other custodians, nominees and fiduciaries who are record holders of
Shares for the forwarding of solicitation material to the beneficial owners of
the Shares. The Company will, upon the request of such entities, pay their
reasonable expenses for completing the mailing of such material to such
beneficial owners.
Consistent with state law and under the Company's Articles of
Incorporation and By-laws, a majority of the Shares entitled to vote on
particular matters for which proxies are being solicited, present in person or
represented by a proxy, constitutes a quorum as to such matter.
The two nominees for election as directors at the Company's Annual Meeting
of Shareholders who receive the greatest number of votes properly cast for the
election of directors shall be elected directors. A majority of the votes
properly cast on the matter is necessary to approve any other matter which
comes before the Annual Meeting, except where law or the Company's Articles of
Incorporation or By-laws require otherwise.
The Company will count the total number of votes cast "for" approval of
proposals, other than the election of directors, for purposes of determining
whether sufficient affirmative votes have been cast. The Company will count
Shares represented by proxies that withhold authority to vote for a nominee for
election as a director or that reflect abstentions and "broker non-votes"
(i.e., Shares represented at the annual meeting held by brokers or nominees as
to which (i) instructions have not been received from the beneficial owners or
persons entitled to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) only as Shares that are
present and entitled to vote on the matter for purposes of determining the
presence of a quorum, but neither abstentions nor broker non-votes will have
any effect on the outcome of voting on the matter.
The Company's Annual Report to Shareholders for the fiscal year ended
December 31, 1995, which contains financial statements and other information,
is mailed herewith to shareholders, but is not to be regarded as proxy
soliciting material.
The Company is not aware of any matter which may be presented for action
at the meeting, or at any adjournment thereof, other than the matters set forth
herein. However, should any other matter requiring a vote of the shareholders
arise, it is intended proxies in the accompanying form will be voted in respect
thereof in accordance with the best judgment of the person or persons voting
the proxies, discretionary authority to do so being included in the proxy in
the interest of the Company.
Shareholders are urged to specify choices, date, sign and return the
accompanying proxy in the enclosed envelope to which no postage need be affixed
if mailed in the United States. Prompt response is helpful and your cooperation
will be appreciated.
SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
The deadline for the receipt of shareholder proposals for inclusion in the
Company's 1997 Proxy Statement and form of proxy and presentation at the 1997
Annual Meeting of Shareholders is November 22, 1996. Such proposals should be
sent to the Corporate Secretary of the Company at 1776 American Heritage Life
Drive, Jacksonville, Florida 32224.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION MAY BE OBTAINED, WITHOUT CHARGE, BY ANY
SHAREHOLDER UPON WRITTEN REQUEST TO THE CORPORATE SECRETARY, AMERICAN HERITAGE
LIFE INVESTMENT CORPORATION, 1776 AMERICAN HERITAGE LIFE DRIVE, JACKSONVILLE,
FLORIDA 32224. EXHIBITS TO THE FORM 10-K WILL NOT BE SUPPLIED UNLESS
SPECIFICALLY REQUESTED, FOR WHICH THERE MAY BE A REASONABLE CHARGE.
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EXHIBIT I
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
I. PURPOSE OF THE PLAN
The purpose of the American Heritage Life Investment Corporation (the
"Company") Long-Term Incentive Plan (the "Plan") is to provide officers with
financial motivation to act in the long-term interests of the Company and its
shareholders. By providing increased capital building opportunities to the
officers of the Company and its subsidiaries linked to the achievement of
long-term goals, the Company believes the Plan will promote an increased focus
by those people primarily responsible for its long-term success on their
longer-term impact of the decisions.
II. PLAN LIFE
The Plan became effective on the first day of the 1992 fiscal year and is
amended and restated as of February 6, 1996. The Plan will continue in effect
until and unless terminated by the Board of Directors of the Company or its
executive committee or the Company's Compensation Committee.
III. DEFINITIONS
1. Base Compensation" is the fixed portion of officers' compensation.
It specifically excludes any amounts paid pursuant to the Company's Annual
or the Long-Term Incentive Plans.
2. "Performance Period" means a period of three consecutive fiscal years
of the Company.
3. "Participant" means any employee designated by the Compensation
Committee of the Company (the "Committee") to participate in the Plan.
4. "Retirement" shall be defined as the first day of the month following
the month in which the Participant attains his or her 65th birthday or
when agreed upon by the Committee.
5. "Disability" shall be defined as when a Participant becomes totally
disabled before attaining his or her 65th birthday and if such total
disability continues for more than three months. It does not include
disability that is either intentionally self-inflicted or caused by
illegal or criminal acts of the Participant.
6. "Stock" means the Common Stock, par value $1.00 per share, of the
Company.
7. "Stock Option" means the right to purchase shares of Stock pursuant
to Section VII of the Plan.
8. "Period of Restriction" means the period during which the transfer of
shares of Restricted Stock is restricted pursuant to Section VIII of the
Plan.
9. "Restricted Stock" means Stock granted to a Participant pursuant to
Section VIII of the Plan.
10. "Fair Market Value" means the closing price of the Stock as reported
by the New York Stock Exchange on a particular date.
11. "Board" means the Board of Directors of the Company.
12. "Committee" means the Compensation Committee of the Board of
Directors of the Company as such Committee may be constituted from time
to time. The Committee shall consist of at least two (2) members of the
Board selected by the Board, all of whom shall be disinterested persons
within the meaning of Rule 16b-3 as promulgated pursuant to the
Securities Exchange Act of 1934 and outside directors within the meaning
of Section 162(m)(4)(c)(i) of the Internal Revenue Code of 1986 (the
"Code"), and the selection of persons subject to Section 16(b) of the
Exchange Act for participation in the Plan, decisions concerning the
timing, pricing and amount of any grant pursuant to the Plan to such a
person, and (to the
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extent required in order to qualify for the performance-based
remuneration exception under Section 162(m) of the Code) all other
decisions under the Plan shall be made by a vote of at least a majority
of such members.
IV. ELIGIBILITY AND PARTICIPATION
In general, corporate officers will participate in one or more Plan
elements. The Committee, at its discretion may exclude one or more officers
from participation in the Plan.
An employee shall become eligible to participate on the first day of the
fiscal year immediately subsequent to the employee's appointment as an officer
or is selected by the Committee as the case may be.
V. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE
1. ADMINISTRATION. The Committee shall be responsible for the
administration of the Plan. The Committee is authorized to interpret
the Plan, to prescribe, amend, and rescind rules and regulations
relating to the Plan, to provide for conditions and assurances deemed
necessary or advisable to protect the interests of the Company, and to
make all other determinations necessary or advisable for the
administration of the Plan, but only to the extent not contrary to the
express provisions of the Plan. Determinations, interpretations, or
other actions made or taken by the Committee pursuant to the provisions
of the Plan shall be final and binding and conclusive for all purposes
and upon all persons whomsoever. The Committee may delegate ministerial
tasks to such persons (including Employees) as it deems appropriate. A
majority of the members of the Committee shall constitute a quorum. All
determinations of the Committee shall be made by a majority of its
members. Any decision or determination reduced to writing and signed by
all of the members of the Company Committee shall be fully effective as
if it has been made by a majority voice at a meeting duly called and
held. The transactions contemplated by the Plan are intended to qualify
for the exemption provided in Rule 16b-3 as promulgated under the
Securities and Exchange Act of 1934, as amended, and to qualify for the
performance-based remuneration exception under Section 162(m) of the
Code. The Committee may from time to time make amendments to the Plan
as it, in its sole discretion, determines are necessary in order to
preserve such exemption under such rule and such exception under such
section or other similar rule and section which might be in effect.
2. AMENDMENT, MODIFICATION, AND TERMINATION OF THE PLAN. The Committee
may at any time terminate, and from time to time may amend or modify the
Plan, except that no amendment shall increase the amount of an award
payable to a Participant or class of Participants and except that no
such termination shall be effective with respect to the Plan Year in
which it occurs.
VI. STOCK SUBJECT TO THE PLAN
1. STOCK AVAILABLE. There shall be available and reserved for issuance
effective February 6, 1996, a total of 300,000 shares of Stock for the
grant of Stock Options, Restricted Stock and Performance Units pursuant
to the Plan. No Participant may be granted options to purchase Stock,
Restricted Stock or stock issued in connection with Performance Units
pursuant to the Plan together with any other stock plan of the Company
representing in the aggregate more than 100,000 shares of Stock per
year.
2. UNUSED STOCK. In the event any shares of Stock subject to
unexercised Stock Options granted pursuant to the Plan or subject to a
Restricted Stock grant made under the Plan are reacquired by the Company
pursuant of the Plan, such share shall again become available for
issuance under the Plan.
3. ADJUSTMENT IN CAPITALIZATION. In the event that any change in the
outstanding shares of Stock (including an exchange of the Stock for
stock or other securities of another corporation) occurs after adoption
of the Plan by reason of a Stock dividend or split, recapitalization,
merger, consolidation, combination, exchange of shares or other similar
corporate changes, the aggregate number of shares of Stock available for
the grant of Stock
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Options and Restricted Stock or subject to grants then outstanding
under the Plan shall be appropriately adjusted by the Committee, whose
determination shall be conclusive; provided, however that fractional
shares shall be rounded to the nearest whole share.
In the event of any other change in the Stock, the Committee shall in
its sole discretion determine whether such change equitably requires a
change in the number or type of shares subject to any outstanding Stock
Option or Restricted Stock grant, and any adjustment made by the
Committee shall be conclusive.
VII. STOCK OPTIONS
1. GRANT OF STOCK OPTIONS. Subject to the provisions of Sections II and
VI, the Committee, at any time and from time to time, may grant Stock
Options under the Plan. Stock Options may be granted to such
Participants and in such amounts as the Committee shall determine. Each
grant of Stock Options shall be in writing.
2. OPTION PRICE. The option share exercise price will be the fair
market value of the Stock as of the day of grant.
3. OPTION EXERCISE. Stock Options may be exercised for cash only and
will commence vesting one year after grant and will vest at the rate of
1/3 per year thereafter. They can be exercised for up to 10 years after
the grant date.
4. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. The Committee may
provide in its Stock Option grant that in the event a Participant
terminates his or her employment with the Company because of retirement,
the Participant shall remain eligible to exercise her/his options.
5. TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. Similarly, the
Committee, in its sole discretion, may provide the Participant or
her/his beneficiary in the case of death, the opportunity to exercise
any outstanding Stock Options.
6. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT. In the event that a Participant terminates her/his
employment with the Company for any reason other than those set forth in
Subsections VII.4 and VII.5, then any option shares still outstanding
under the Plan shall automatically be forfeited and returned to the
Company; provided, however that in the event of an involuntary
termination of the employment of a Participant by the Company, the
Committee may, in its sole discretion, waive the automatic forfeiture of
any or all such shares as it deems appropriate.
VIII. RESTRICTED STOCK
1. GRANT OF RESTRICTED STOCK. Subject to the provisions of Sections II
and VI, the Committee, at any time and from time to time, may grant
shares of Restricted Stock under the Plan. Restricted Stock may be
granted to such Participants and in such amounts as the Committee shall
determine. Each grant of Restricted Stock shall be in writing.
2. TRANSFERABILITY. Except as provided in this Section VIII, the shares
of Restricted Stock granted hereunder may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated for such period
of time as shall be determined by the Committee and shall be specified
in the Restricted Stock grant, or upon earlier satisfaction of other
conditions as specified by the Committee in its sole discretion and set
forth in the Restricted Stock grant.
3. OTHER RESTRICTIONS. The Committee may impose such other restrictions
on any shares of Restricted Stock granted pursuant to the Plan as it may
deem advisable including, without limitation, restrictions under
applicable federal or state securities laws, and may legend the
certificates representing Restricted Stock to give appropriate notice of
such restrictions.
4. CERTIFICATE LEGEND. Each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following
legend.
"The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is
subject to certain restrictions on transfer set forth in American
Heritage Life Investment Corporation's Long-Term Incentive Plan, rules
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of administration adopted pursuant to such Plan and a Restricted Stock
grant dated _____________________. A copy of the Plan, such rules and
such Restricted Stock grant may be obtained from the Secretary of the
Company.
5. REMOVAL OF RESTRICTIONS. Except as otherwise provided in Section
VIII hereof, shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan shall become freely transferrable by the
Participant after the last day of the Period of Restriction. Once the
shares are released from the restrictions, the Participant shall be
entitled to have the legend required by Subsection VIII.4 removed from
the Participant's Stock certificate.
6. VOTING RIGHTS. During the Period of Restriction, Participants
holding shares of Restricted Stock granted hereunder may exercise full
voting rights with respect to those shares.
7. DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding shares of Restricted stock granted hereunder shall
be entitled to receive all dividends and other distributions paid with
respect to those shares while they are so held. If any such dividends
or distributions are paid in shares of Stock, the shares shall be
subject to the same restrictions on transferability as the shares of
Restricted Stock with respect to which they were paid.
8. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. The Committee may
provide in its Restricted Stock grant that in the event a Participant
terminates his or her employment with the Company because of Retirement,
any remaining Period of Restriction applicable to the Restricted Stock
pursuant to Subsection VIII.2 hereof shall automatically terminate and,
except as otherwise provided in Subsection VIII.3, the shares of
Restricted Stock shall thereby be free of restrictions and freely
transferrable. In the event the Restricted Stock grant does not
automatically terminate such restrictions and a Participant terminates
his or her employment with the Company because of Retirement, the
Committee may, in its sole discretion, waive the restrictions remaining
on any or all shares of Restricted Stock pursuant to Subsection VIII.2
hereof and/or add such new restrictions to those shares of Restricted
Stock as it deems appropriate.
9. TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. The Committee
may provide in its Restricted Stock grant that in the event a
Participant terminates his or her employment with the Company because
of death or Disability during the Period of Restriction, the
restrictions applicable to the shares of Restricted Stock pursuant to
Subsection VIII.2 hereof shall terminate automatically with respect to
all of the shares or that number of shares (rounded to the nearest whole
number) equal to the total number of shares of Restricted Stock granted
to such Participant multiplied by the number of full months which had
elapsed since the date of grant divided by the maximum number of full
months of the Period of Restriction. All remaining shares shall be
forfeited and returned to the Company; provided however, that the
Committee may, in its sole discretion, waive the restrictions remaining
on any or all such remaining shares.
10. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY OR
RETIREMENT. In the event that a Participant terminates his or her
employment with the Company for any reason other than those set forth in
Subsections VIII.8 and VIII.9 hereof during the Period of Restriction,
then any shares of Restricted Stock still subject to restrictions at the
date of such termination shall automatically be forfeited and returned
to the Company; provided, however that in the event of an involuntary
termination of the employment of a Participant by the Company, the
Committee may, in its sole discretion, waive the automatic forfeiture
of any or all such shares and/or may add such new restrictions to such
shares of Restricted Stock as it deems appropriate.
IX. PERFORMANCE UNITS
1. AWARD OF PERFORMANCE UNITS. Each Participant will be awarded a
number of Performance Units based on the participant's base compensation
and his/her assigned Target Award opportunity as described below.
Performance Units will have a value at Target of $100, and the number of
units, awarded will be determined by multiplying each participant's base
compensation by the Target Award opportunity, and the result divided by
$100 to determine the number of Performance Units.
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2. PERFORMANCE GOALS. Company performance goals will be established by
the Committee for each performance period. Performance goals will be
financial such as, but not limited to, Growth in Operating Earnings
and/or Growth in Premium and Equivalent Revenues. Performance goals may
be singular or multiple but, if multiple goals are chosen, a relative
weighting for each goal to total 100% will be determined.
For each performance goal, the following will be assigned:
TARGET: a performance level at which performance units will be valued at
$100.
THRESHOLD: a performance level at which performance units will be valued
at $50.
SUPERIOR: a performance level at which performance units will be valued
at $150.
If multiple goals are chosen, the values above will be subject to the
relative weightings. Performance goals will be established prior to, or
as early as practical in, the performance period. Performance goals will
be communicated to each participant along with a statement of the
performance units awarded to that participant.
3. PLAN PAYOUT. At the conclusion of the performance period the
Committee shall determine the value of a performance unit based on
actual Company performance compared to performance goals.
If the performance goals are met, the value of the performance
unit is $100.
If performance goals are exceeded, the value of the performance unit
increases to a maximum of $150 for performance at or above the superior
level.
If performance goals are not achieved, the value of the performance unit
decreases to $50 for performance at the threshold level. For performance
below the threshold level, the value of the unit is $0.
In determining the value of a performance unit the Committee shall take
into account intervening performance levels between threshold and
superior generally by arithmetic interpolation as well as the relative
weighting of the performance goals. Performance unit value shall be
expressed in whole dollars (or $0 if the threshold level is not attained
on any of the performance measures).
The calculation of a participant's payout for a performance period shall
be made by multiplying the number of Performance Units granted by the
Performance Unit Value.
Once the award value has been determined, half of the award will be paid
in cash. The remaining half will be paid in the form of Stock.
4. TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. The Committee may
provide that in the event a Participant terminates his or her employment
with the Company because of retirement, the Participant shall be
entitled to a prorated payment of his or her Performance Units based on
the number of complete months of employment during the Performance
Period as a percent of the total number of months of the Performance
Period. Payment of the Performance Unit award, if earned, shall be made
at the same time as other Performance Units unless otherwise determined
by the Committee, in its sole discretion.
5. TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. The Committee,
in its sole discretion, may award to the Participant in the case of his
or her disability, or his or her beneficiary in the case of his or her
death, an award under the Plan prior to the completion of the
Performance Period. The Committee would consider the Company's progress
toward its performance goals and the number of months of employment
completed during the Performance Period as a percent of the total number
of months of the Performance Period. The Committee may also award the
Performance Units in accordance with IX.4.
6. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY,
OR RETIREMENT. In the event that a Participant terminates his or her
employment with the Company for any reason other than those set forth in
IX.4 or IX.5, during the Performance Period, then he or she shall
automatically forfeit all rights to awards for outstanding Performance
Units.
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X. RIGHTS OF EMPLOYEES AND PARTICIPANTS
Nothing in the Plan shall interfere with or limit in any way the right of
the Company to terminate any Participant's employment at any time, nor confer
upon any Participant any right to continue in the employ of the Company.
XI. BENEFICIARY DESIGNATION
Beneficiary Designation. Each Participant under the Plan may, from time
to time, name any beneficiary or beneficiaries (who may be named contingently
or successively) to whom any benefit under the Plan is to be paid in case of
the Participant's death before he or she receives any or all of such benefit.
Each designation will revoke all prior designations by the same Participant,
shall be in a form prescribed by the Committee and will be effective only when
filed by the Participant in writing with the Committee during his/her lifetime.
In the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the estate of the Participant.
XII. TAX WITHHOLDING
Whenever: (1) restrictions lapse with respect to Restricted Stock, and
(2) the performance period ends relative to Performance Units, the Company
shall have the power to require the recipient to remit to the Company an amount
sufficient to satisfy federal, state and local withholding tax requirements
prior to the issuance of the Certificate for Shares of Stock. Withholding may
be in the form of shares of Stock valued at the current Fair Market Value.
XIII. COMPLIANCE WITH OTHER LAWS AND REGULATIONS
1. The Plan, the grant of awards hereunder and the obligation of the
Company to sell and deliver shares hereunder, shall be subject to all
applicable federal and state laws, rules and regulations and to such
approvals by any government, regulatory agency or stock exchange as may
be required.
2. SECURITIES REGISTRATION. Prior to the delivery of a certificate(s)
representing the shares of Stock pursuant to the Plan, the Participant
or the Participant's personal representative(s) or legal guardian(s)
shall certify to the Company in such form as it shall require that such
Participant or personal representative(s) or legal guardian(s) will
receive and hold such shares for investment and not with a view to
resale or distribution thereof to the public, if in the opinion of the
counsel of the Company such certification is necessary or desirable to
comply with federal and/or state securities laws.
The Company shall not be required to issue or deliver any shares of
stock prior to (a) the authorization of such shares for listing on any
stock exchange on which the Stock may then be listed, and (b) the
completion of such registration or other qualification as the Company
shall determine to be necessary or desirable. The Company may at any
time prepare and file, at its own expense and without the consent of any
Participant, a registration statement under the Securities Act of 1933,
as amended, or any similar or superseding statute or statutes as then in
effect, with respect to all or any shares reserved for or transferred
under this Plan, either separately or together with other Stock or
securities of the Company. In such event, any Participant or personal
representative(s) or legal guardian(s) who shall have given the
certification referred to in the first sentence of this Subsection shall
be determined to be released therefrom upon the effective date of such
registration statement. Nothing in this Plan shall give any Participant
the right to request the Company to prepare or file such a registration
statement at any time.
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EXHIBIT II
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
1996 STOCK OPTION PLAN
1. PURPOSE
American Heritage Life Investment Corporation 1996 Stock Option Plan
(the "Plan") is hereby adopted this 6th day of February, 1996, by the Board
of Directors of American Heritage Life Investment Corporation (the
"Company"), a Florida corporation, subject to shareholder approval at the
next Annual Meeting of Shareholders of the Company. The purpose of this Plan
is to provide an incentive to persons of ability to use their best efforts to
promote the interests of the Company by granting stock options to certain key
employees of the Company and its subsidiaries who will have an opportunity to
participate in the increased value of the Company which their efforts,
initiative, and skill will help to produce. The stock options granted under
this Plan are not intended to qualify as incentive stock options within the
meaning of Section 422A of the Internal Revenue Code of 1986, as amended (the
"Code"), and accordingly shall not be treated as such.
2. ADMINISTRATION
(a) The Plan shall be administered by the Compensation Committee (the
"Company Committee") of the Board of Directors of the Company (the
"Company Board") as such Company Committee may be constituted from time
to time. The Company Committee shall consist of at least two (2)
members of the Company Board selected by the Company Board, all of whom
shall be disinterested persons within the meaning of Rule 16b-3, as
promulgated pursuant to the Securities Exchange Act of 1934, and outside
directors within the meaning of Section 162(m)(4)(c)(i) of the Code.
The selection of persons subject to Section 16(b) of the Exchange Act
for participation in the Plan, decisions concerning the timing, pricing
and amount of any option grant to such a person, and (to the extent
required in order to qualify for the performance-based remuneration
exception under Section 162(m) of the Code) all other decisions under
the Plan shall be made by a vote of at least a majority of such members.
The Company Committee may delegate ministerial tasks to such persons
(including Employees) as it deems appropriate.
(b) A majority of the members of the Company Committee shall constitute a
quorum. All determinations of the Company Committee shall be made by a
majority of its members. Any decision or determination reduced to
writing and signed by all of the members of the Company Committee shall
be fully effective as if it has been made by a majority voice at a
meeting duly called and held.
(c) Subject to the express provisions of the Plan, the Company Committee
shall have complete authority to interpret the Plan, to grant stock
options (the "Options") under the Plan, to prescribe, amend and rescind
rules and regulations relating to the Plan, to make all other
determinations necessary or advisable for the administration of the Plan
and to discontinue the Plan. The transactions contemplated by the Plan
are intended to qualify for the exemption provided in Rule 16b-3 as
promulgated under the Securities and Exchange Act of 1934, as amended,
and to qualify for the performance-based remuneration exception under
Section 162(m) of the Code. The Company Committee may from time to time
make amendments to the Plan as it, in its sole discretion, determines
are necessary in order to preserve such exemption under such rule and
such exception under such section or other similar rule and section
which might be in effect. The determinations of the Company Committee
on the matters referred to in this Section 2 shall be final, binding,
and conclusive.
3. ELIGIBLE PARTICIPANTS AND SHARES SUBJECT TO PLAN
Options may be granted by the Company, by action of the Company
Committee, from time to time to certain key employees of the Company and its
affiliates (the "Participants") to purchase an aggregate of up to 350,000
shares of common stock, par value $1.00 per share, of the Company (the
"Common Stock"), and such amount of shares shall be reserved for Options
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granted under the Plan (subject to adjustment as provided in Section
5(e)). No Participant may be granted options to purchase more than 100,000
shares of Common Stock per year pursuant to the Plan or any other plan of the
Company.
Upon the expiration or termination of any Option granted under the Plan
which has not been fully exercised, the number of shares subject to such
Option which has not been exercised shall become available for future grant
under the Plan, except that if an Option is terminated as a result of the
exercise of rights granted pursuant to Section 5(b)(iv) or Section 5(b)(v)
hereof, the underlying shares shall not again become so available. The
shares of Common Stock issued upon exercise of Options granted under the Plan
shall be authorized and unissued shares or previously issued shares
reacquired and held by the Company.
4. GRANT OF OPTIONS
Subject to the provisions of the Plan, the Company Committee shall: (a)
determine and designate from time to time those Participants to which Options
are to be granted, (b) determine the number of shares of Common Stock subject
to each Option, (c) determine the time when and the manner in which each
Option shall be exercisable, and (d) if the shares of Common Stock issued
upon the exercise of each Option are not registered under the Securities Act
of 1933, as amended, determine the time when Common Stock issued by the
Company pursuant to the exercise of an Option may be sold by the Participant;
provided, however, no Option shall be granted after the expiration of ten
(10) years from the effective date of the Plan specified in Section 8 below.
5. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under the Plan shall be evidenced by a written
agreement, in a form approved by the Company Committee. Such agreement shall
specify the number of shares of Common Stock subject to the Option and shall
be subject to the following express terms and conditions and to such other
terms and conditions as the Company Committee may deem appropriate:
(a) Option Price
The Option price per share of the Common Stock of the Company shall be
determined by the Company Committee at the time the Option is granted;
provided, however, in no event shall such Option price per share be less
than 100% of the fair market value of one share of Common Stock on the
date of the grant of the Options. The term "fair market value" shall
mean the closing price at which shares of Common Stock of the Company
shall have been traded as reported by the New York Stock Exchange
composite transaction listing (or other standard daily index or trading
on such exchange) or, if the Common Stock of the Company is not so
listed, any other stock exchange on which the Company's shares are
tradable on the date of grant of such Option. In the event that any
Option shall be granted on a date on which there were no such sales of
such stock on such exchange, the fair market value of such stock on such
date shall be determined by the Company Committee. Unless the Company
Committee shall by resolution otherwise expressly provide, the date upon
which the Company Committee acts to grant an Option for all purposes of
this Plan, shall be deemed the date on which such Option is granted.
From and after such date the Participant to who such Option is granted
shall have all rights of an Option holder as provided in this Plan,
without regard to the date upon which a formal written agreement
evidencing the grant shall be executed and delivered.
(b) Exercise of Option; Payment of Purchase Price Upon Exercise.
(i) An option granted under the Plan shall not be exercised prior
to the later of (1) six (6) months after the Date of Grant or
(2) the approval of the plan by shareholders of the Company and
thereafter shall be exercisable, in whole or in part in accordance
with the terms of the Option. Subject to Section 5(e) below, the
Option shall terminate ten (10) years after the date of grant, or
such earlier date as provided in the Plan.
(ii) In the event a Participant dies or becomes totally disabled, at
any time after having been granted an Option, the Options granted to
the Participant shall immediately become fully exercisable by the
Participant's estate or heirs in the case of death for the time
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period specified in Section 5(d)(i)(B) below and by the Participant
or the Participant's legal guardian in the case of total
disability for the time period specified in Section 5(b)(i) above.
(iii)A Participant shall exercise an Option by written notice to
the Company, which notice shall specify the number of shares to be
purchased and the date of exercise (the "Date of Exercise"), which
shall be not more than seven (7) days after the date of the mailing
of such notice. On or before the Date of Exercise, the Participant
shall deliver to the Company, at the office designated in the stock
option agreement, a certified, cashier's or personal check, cash or
Common Stock previously acquired and currently owned by the
Participant having a total fair market value, as determined as
aforesaid, by the Company Committee, equal to the Option price for
such shares, or in combination of cash and Common Stock having a
total fair market value equal to the option price for such shares.
The Participant shall have no rights in the optioned stock until such
payment is made. In the event of any failure to pay for the number
of shares specified in the notice of election by a certified or
cashier's check, cash, previously acquired shares or a combination of
previously acquired shares and cash, the Option shall become
inoperative and lapse as to such number of shares, but shall continue
with respect to any remaining shares subject to the Option as to
which exercise has not yet been made.
(iv) Alternatively, by written notice the Participant may elect to
exercise the Option by receiving the number of shares represented by
the difference between the aggregate fair market value of the shares
exercised on the Date of Exercise by the Participant and the
aggregate exercise price of such shares, divided by the fair market
value of the Company's Common Stock on the Date of Exercise.
(v) Alternatively, by written notice a Participant may elect to
exercise the Option on the Date of Exercise in part by receiving for
such Participant's benefit cash equal to the minimum amount required
to be withheld for payroll tax purposes as described in Section 5(g)
below and the balance by receiving shares in the manner prescribed in
Section 5(b)(iv) above. The Company Committee shall have sole
discretion to consent to or disapprove any election of a Participant
pursuant to this Section 5(b)(v), provided that the Company Committee
shall, in the exercise of such discretion, be subject to such
limitations as may be imposed on the administrators of a plan by Rule
16b-3, as amended and adopted by the Securities and Exchange
Commission under Section 16(b) of the Securities Exchange Act of 1934
as in effect on the date hereof, and as the same may be hereafter
further amended, as a condition to the exemption from the operation
of Section 16(b) of transactions substantially identical to that
permitted by this Section 5(b)(v). Neither the Company Committee nor
the Company shall be under any liability to any person by reason of
the Company Committee's disapproval of such election.
(vi) Within fifteen (15) days after the Date of Exercise, the Company
shall deliver, or cause to be delivered to the Participant stock
certificate(s) for the number of shares of Common Stock with respect
to which the Option is being exercised, if the Company has received
the certification described in Section 5(f) below. Delivery of the
shares may be made at the office of the Company or at the offices of a
transfer agent appointed for the transfer of the shares of Common
Stock of the Company, as the Company shall determine. Shares shall be
registered in the name of the Participant. A Participant shall not
have any of the rights of a stockholder until the shares are issued as
herein provided.
Anything herein to the contrary notwithstanding, if any law or
any regulation of the Securities and Exchange Commission or of any other
body having jurisdiction shall require the Company or the Participant to
take any action in connection with the shares specified in a notice of
election before such shares can be delivered to such Participant, then
the date stated therein for the delivery of the shares shall be
postponed until the fifth business day next following the completion of
such action.
(c) Nontransferability of Option
An Option shall not be assigned, pledged, or hypothecated in any
way, shall not be subject to execution and shall not be transferable by
a Participant other than by will or by the laws of descent and
distribution.
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<PAGE> 36
(d)Termination of Options
(i) Exercise in the Event of Termination of Employment with the
Company or with one of its subsidiaries.
(A) In the event of termination of the employment of the
Participant for any cause, other than death, retirement or total
disability of the Participant, whether by reason of resignation or
discharge, this Option shall terminate immediately; provided,
however, with the consent of the Committee, which shall be a
matter of its sole discretion, such Participant (if the
Participant shall voluntarily terminate the Participant's
employment with the Company) may, within the ninety (90) days
immediately following such voluntary termination of employment and
subject to the provisions of Section 5(b) above, exercise any
unexercised Option which could have been exercised on the date of
such voluntary termination.
(B) This Option shall terminate twelve months from the date
of the Participant's death, provided the Participant at the time
of his death was in the employ of the Company or retired from such
employment, either as the result of age or total disability, as
determined by the Company's employee policy manual,
(notwithstanding Section 5(b) above). In such event, the
Participant's personal representative(s) may exercise any
unexercised Option which the Participant held at the time of the
Participant's death, provided that such exercise must be
accomplished prior to the expiration of such Option as provided by
Section 5(b) above and within said twelve-month period after the
Participant's death.
(C) Retirement, either as the result of age or total disability as
determined in accordance with the Company's employee policy
manual, shall not cause an early termination of an Option.
(ii) Exercise in the event of the termination of services by the
Company or by one of its subsidiaries.
If one of the employees' services to the Company or one of its
subsidiaries is terminated, any such employees who hold
outstanding options granted under this Plan shall have the right,
during the period ending thirty (30) days after such termination
to exercise any such Option which could have been exercised on the
date of such termination. Following such thirty (30) day period,
any option held by any employee of the Company or one of its
subsidiaries who is not then an employee of the Company or one of
its subsidiaries shall terminate.
(E) Recapitalization and Reorganization
(i) If any change is made in the Stock subject to this Plan by
reason of stock dividends, stock split-up, reverse stock split, or
other recapitalization or reclassification of the Company's Common
Stock, appropriate action consistent with such change shall be taken
by the Company Committee as to the number of shares and price per
share of the Stock subject to this Plan or to any Option granted
hereunder in order to prevent substantial dilution or enlargement of
the rights granted to, or available for, Participants in the Plan.
(ii) In the case of a reorganization, consolidation, spin-off,
merger or other similar corporate transaction affecting the Common
Stock of the Company, the Company and the spun-off corporation or the
surviving corporation, as the case may be, shall assume without cost
to any Participant all Options outstanding under this Plan or issue
equivalent new Options based upon consideration distributed in the
transaction to shareholders of the Company in respect of the Common
Stock and the Company Board shall take any appropriate action
required to effectuate the intent of this Section 5(e)(ii).
(iii)Notwithstanding the foregoing, all such Options may be
canceled by the Company as of the effective date of any such
reorganization, merger, consolidation or spin-off or of any
dissolution or liquidation of the Company by action of the Company
Committee, by giving notice to each Participant or his or her
personal representatives(s) or legal guardian(s) of its intention to
do so and by permitting, during the thirty (30) day period
34
<PAGE> 37
next preceding the effective date of any such event, the exercise in
whole or in part of each Option outstanding under the Plan, without
regard to any installment provisions of an Option, but subject to any
other limitation on the exercise of such Option in effect on the Date
of Exercise. Appropriate action shall be taken by the Company
Committee as to the number of shares and price per share of the
Common Stock subject to this Plan or to any Option granted hereunder
in order to prevent substantial dilution or enlargement or the rights
granted to, or available for, Participants in the Plan.
(iv) The Company Committee may make such additional adjustments in
the price and number of shares subject to Options as it deems
appropriate to prevent dilution on account of any issuance of shares
of the Company's Common Stock in a merger or similar corporate
transaction.
(f)Securities Registration
Prior to the delivery of a certificate(s) representing the shares
specified on any notice of election to exercise any Option, the
Participant or the Participant's personal representative(s) or legal
guardian(s) shall certify to the Company in such form as it shall require
that such Participant or personal representative(s) or legal guardian(s)
will receive and hold such shares for investment and not with a view to
resale or distribution thereof to the public, if in the opinion of the
counsel of the Company such certification is necessary or desirable to
comply with federal and/or state securities laws.
The Company shall not be required, upon the exercise of any Option, to
issue or deliver any shares of stock prior to (a) the authorization of
such shares for listing on any stock exchange on which the Company's
Common Stock may then be listed, and (b) the completion of such
registration or other qualification as the Company shall determine to be
necessary or desirable. The Company may at any time prepare and file, at
its own expense and without the consent of any Participant, a registration
statement under the Securities Act of 1933, as amended, or any similar or
superseding statute or statutes as then in effect, with respect to all or
any shares reserved for or transferred under this Plan, either separately
or together with other Common Stock or securities of the Company. In such
event, any Participant or personal representative(s) or legal guardian(s)
who shall have given the certification referred to in the first sentence
of this Section shall be determined to be released therefrom upon the
effective date of such registration statement. Nothing in this Plan shall
give any Participant the right to request the Company to prepare or file
such a registration statement at any time.
(g) Withholding
With respect to any amount, a Participant must recognize as compensation
for income tax purposes in connection with the exercise of an Option, the
Company or its subsidiary, as the case may be, will file the necessary
payroll tax returns to governmental agencies, to remit timely to such
agencies the necessary minimum payroll taxes and employee withholding
taxes, and to file timely the required calendar year-end payroll
information returns to the applicable governmental agencies and the
Participant. The Participant must agree to provide the Company in a
timely manner the funds necessary to meet the minimum withholding
requirements (including FICA and Federal, state or local income taxes or
other taxes with respect to the Option) of the applicable governmental
agencies at the time(s) such taxes must be paid, as determined by the
Company.
(h) No Rights to Continued Employment
The Plan and any Option granted under the Plan shall not confer upon any
Participant the right to continue in the employ of the Company of any of
its subsidiaries solely by reason of the grant, acceptance or
exercise of an Option nor shall it interfere in any way with the right of
the Company or any of its subsidiaries to terminate the Participant's
employment at any time.
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<PAGE> 38
(i) Stockholder's Rights
No Participant shall have any rights of a stockholder by virtue of the
grant of an Option except with respect to shares actually issued to him
and the issuance of shares shall confer no retroactive right to dividends
or other distributions.
6.COMPLIANCE WITH OTHER LAWS AND REGULATIONS
The Plan, the grant and exercise of Options thereunder and the obligation of
the Company to sell and deliver shares under such Options, shall be subject
to all applicable federal and state laws, rules and regulations and to such
approvals by any government, regulatory agency or stock exchange as may be
required.
7.AMENDMENT OR TERMINATION OF THE PLAN
The Company Committee may amend, suspend, or terminate this Plan at any time,
provided however, that no unexercised Option granted under this Plan may be
altered or canceled, except in accordance with its terms or as provided
herein, without the written consent of the Participant to whom such Option
was granted, and provided further that no amendment may change (except as
provided in Section 5(e) above) the aggregate number of shares or Option
price per share with respect to shares which may be issued under the Plan or
the Participants eligible to receive Options as provided in the Plan. No
amendment of this Plan shall be effective without shareholder approval of
such amendment if such approval is required by Rule 16b-3.
8.EFFECTIVE DATE
The Plan shall become effective upon approval thereof by affirmative vote of
the holders of a majority of the outstanding shares of Common Stock of the
Company at a meeting thereof at which a quorum is present and the Plan shall
be deemed to be adopted on the date of such meeting.
9.TERM; SHAREHOLDER APPROVAL
No Option shall be granted hereunder after the expiration of ten (10) years
from the effective date of the Plan. This Plan and all Options granted
hereunder prior to approval by the shareholders of the Company are subject to
approval by such shareholders at the next Annual Meeting of Shareholders.
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<PAGE> 39
APPENDIX A
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
PROXY
Solicited by the Board of Directors of American Heritage Life Investment
Corporation
I (we) hereby appoint T. O'Neal Douglas, Robert D. Davis and W. Ashley
Verlander and each of them as proxies with power of substitution, to represent
me (us) and to vote all my (our) shares in American Heritage Life Investment
Corporation on all matters which may come before the 1996 Annual Meeting of the
Shareholders to be held on Thursday, the 25th day of April, 1996, at 9:00 a.m.,
Jacksonville time, in the Auditorium in the American Heritage Life Building, on
the First Floor, at 1776 American Heritage Life Drive, Jacksonville, Florida,
and at any adjournment thereof.
The proxies shall vote these shares as specified below or, where no choice
is specified, shall vote the share FOR the following proposals:
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" THE NOMINEES TO THE BOARD AND THE
- -------------------------------------------------------------------------------
PROPOSALS 2, 3, 4 AND 5.
- ------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1. To elect Two (2) Class II Directors to serve until the Annual Meeting of Shareholders in 1999:
[ ] FOR nominees named below [ ] WITHHOLD AUTHORITY to vote for the nominees
Class II Directors: A. Dano Davis (INSTRUCTION: TO WITHHOLD AUTHORITY to vote for a nominee,
T. O'Neal Douglas write that nominee's name on the space provided below.)
---------------------------------------------
2. To ratify the approval of the American Heritage Life Investment Corporation Amended and Restated Long-Term Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To approve the American Heritage Life Investment Corporation 1996 Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
4. To approve the material terms under which the remuneration of the Officers of the Company and its subsidiaries is to be paid.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
5. To amend the Company's Amended and Restated Articles of Incorporation to increase the number of authorized shares of the
Company's Common Stock from 20,000,000 to 35,000,000.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
6. In their discretion, the proxies are authorized to vote upon such other business as may properly come before the meeting or at
any adjournment thereof.
</TABLE>
PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY
(CONTINUED, AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE> 40
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
Should any other matter requiring a vote of the Shareholders arise, the
proxies named on the reverse side hereof are authorized to vote the same in
accordance with their best judgement in the interest of the Company.
<TABLE>
<S> <C>
ACCOUNT NUMBER Please sign exactly as name appears below.
When shares are held by joint tenants,
SHARES HELD IN CERTIFICATE FORM both should sign. When signing as
attorney, executor, administrator, trustee
SHARES HELD IN DIVIDEND or guardian, please give full title as
REINVESTMENT PLAN such. If a corporation, please sign full
corporate name by president or other
TOTAL SHARES ELIGIBLE TO VOTE authorized officer. If a partnership,
please sign in partnership name by
authorized person.
-----------------------------------
SIGNATURE
-----------------------------------
SIGNATURE IF HELD JOINTLY
Dated , 1996
---------
</TABLE>
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
