<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which 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
[AHL LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1999
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 29,
1999, at 9:00 a.m., Jacksonville time, for the following purposes:
1. To elect three (3) Class II Directors to serve until the
Annual Meeting of Shareholders in 2002;
2. To approve the American Heritage Life Investment Corporation
1999 Stock Option and Equity Incentive Plan;
3. 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 17,
1999, 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,
1998, 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,
CHRISTOPHER A. VERLANDER, Corporate Secretary
March 23, 1999
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 23, 1999
----------
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation
by management of proxies for use at the 1999 Annual Meeting of Shareholders of
American Heritage Life Investment Corporation (the "Company") to be held on
April 29, 1999 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 23, 1999. 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 Corporate 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. 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 17,
1999 will be entitled to vote. On that date there were outstanding 27,906,217
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 79,588 shares of the Company's Class A
Non-Convertible Preferred Stock, par value $10.00 per share, to a wholly-owned
subsidiary 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 three (3) Class II Directors to serve until the annual meeting of
shareholders in 2002 and until their respective successors are elected and
qualified, (ii) to approve the American Heritage Life Investment Corporation
1999 Stock Option and Equity Incentive Plan, and (iii) to transact such other
business as may properly come before the meeting or any adjournment thereof.
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 2002 and until the successors of the members of that class are
elected and qualified. Class II includes A. Dano Davis, T. O'Neal Douglas and C.
Richard Morehead who are members of the present Board of the Company, Mr. Davis
and Mr. Douglas having been last elected to the Board at the 1996 Annual Meeting
of Shareholders and Mr. Morehead having been elected to the Board on July 30,
1998. The enclosed proxy, unless otherwise specified, will be voted 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 any
one 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.
1
<PAGE> 4
The bylaws of the Company provide that its Board consist of nine
directors as follows: three directors in Class I, three 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, 1999 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, Florida 17,680 .06 April 28, 1994 63 Class I
Baker Rock Industries, Inc., 2001
Jacksonville, Florida
(Construction Products Company)
Robert D. Davis Chairman of the Board of D.D.I., 27,444(1) .10 Oct. 7, 1968 67 Class I
Inc., Jacksonville, Florida 2001
(Investments)
Christopher A. Vice Chairman and Corporate 160,692(3) .58 July 30, 1987 51 Class I
Verlander(2) Secretary of the Company and the 2001
Insurance Company since August,
1997; President and Chief
Operating Officer of the Company
1996-1997; President of the
Insurance Company 1994-1997;
Executive Vice President of the
Company 1990-1996
A. Dano Davis Chairman of the Board and 113,062(1) .40 June 25, 1993 53 Class II
Principal Executive Officer, 1999
Winn-Dixie Stores, Inc.,
Jacksonville, Florida (Retail
Grocery Chain)
T. O'Neal Chairman of the Board since 268,254(4) .96 July 30, 1987 63 Class II
Douglas 1994, Chief Executive Officer 1999
since 1990, President of the
Company, 1990-April 1996,
Chairman of the Board since 1994
and Chief Executive Officer
since 1990 and President
1986-1994 of the Insurance
Company
C. Richard President and Chief Operating 71,913(5) .26 July 30, 1998 52 Class II
Morehead Officer of the Company and the 1999
Insurance Company since August,
1997; Executive Vice President
of the Company and the Insurance
Company 1994-1997
H. Corbin Day Chairman of the Board of Jemison 150,436(6) .54 June 25, 1993 61 Class III
Investment Co., Inc., 2000
Birmingham, Alabama (Investment
Banking Firm)
</TABLE>
2
<PAGE> 5
<TABLE>
<CAPTION>
CLASS AND
ANNUAL
BENEFICIALLY OWNED MEETING
PRINCIPAL AT JANUARY 31, 1999 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>
Radford D. Chairman of the Board, 29,739 .11 Feb. 9, 1989 65 Class III
Lovett Commodores Point 2000
Terminal Corp.,
Jacksonville, Florida
(Marine Terminal)
W. Ashley Retired Chairman of 320,362(7) 1.15 Oct. 7, 1968 79 Class III
Verlander(2) the Board, President and Chief 2000
Executive Officer of the Company
and the Insurance Company
Other Named Officers (not included above):
John K. Anderson, Jr. 15,568(8) .06
David A. Bird 27,410(9) .10
All Directors of the Company and
Executive Officers of the Company and
its subsidiaries as a group (18 persons) 1,352,801(10) 4.85
</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.
Trusts, of which Robert D. Davis and A. Dano Davis are sole or
co-trustees, and, of certain trusts, beneficiaries, Estuary
Corporation, FND, Ltd., ADSONS, Inc. and ADFAM Partners, Ltd., are
shareholders of D.D.I., Inc. Trusts, of which A. Dano Davis is sole or
co-trustee, and, of certain trusts, beneficiary, are the principal
shareholders of Estuary Corporation. D.D.I., Inc. and Estuary
Corporation are limited partners of AHLI, Ltd., a limited partnership,
and D.D.I., Inc. and Estuary Corporation are the members of a limited
liability corporation, the sole general partner of AHLI, Ltd. Robert D.
Davis is an officer and manager and A. Dano Davis is a manager of the
limited liability corporation for which they have shared voting and
dispositive powers.
A. Dano Davis is a director and officer of James E. Davis Family--WD
Charities, Inc. a private charitable foundation. Estuary Corporation is
the sole general partner of FND, Ltd. and Robert D. Davis and A. Dano
Davis share voting and dispositive power for shares held by FND, Ltd.
Robert D. Davis is sole trustee and beneficiary of his revocable trust
and sole trustee of three additional trusts, all of which are limited
partners of ADFAM Partners, Ltd. and his revocable 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. Robert D. Davis is a director and officer of
ADSONS, Inc., which is wholly owned by ADFAM Partners, Ltd. A. Dano
Davis disclaims any beneficial interest in the shareholdings of James
E. Davis Family--WD Charities, Inc.
At January 31, 1999, these entities held the following Shares:
<TABLE>
<CAPTION>
Percentage Of
Named Entity No. of Shares Outstanding Shares
<S> <C> <C>
AHLI, Ltd. 10,797,178 38.38%
D.D.I., Inc. 264,800(*) .94%
FND, Ltd. 76,798 .27%
ADFAM Partners, Ltd. 47,696 .17%
James E. Davis Family--
WD Charities, Inc. 39,998 .14%
</TABLE>
(*) The shares reported for DDI represent the equivalent shares of common
stock which would be received upon the settlement of 100,000 purchase
contracts held by DDI. Such contracts which are required to be settled
on August 16, 2000, may be settled earlier at the option of the holder.
3
<PAGE> 6
(1)cont'd A. Dano Davis is co-trustee for trusts for the benefit of his sister
and his sister's children which hold an aggregate of 116,756 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 38,246
Shares. Principally through a limited partnership, the Davis Family
holds 42.04% 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 55,808 Shares which are subject to presently exercisable
options.
(4) Includes 35,483 Shares which are subject to presently exercisable
options.
(5) Includes 17,940 Shares which are subject to presently exercisable
options.
(6) Includes 94,494 Shares held by Jemison Investment Co., Inc. of which
Mr. Day has shared voting and dispositive power.
(7) Includes 53,330 Shares owned by the wife of Mr. Verlander as to which
beneficial ownership is disclaimed.
(8) Includes 10,000 Shares which are subject to presently exercisable
options.
(9) Includes 17,940 Shares which are subject to presently exercisable
options.
(10) Includes 196,582 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 shareholders meeting also to be held on April 29, 1999, all of whom are
presently members of the Board thereof. The term of office for that Board is for
one year and until the 2000 annual meeting.
<TABLE>
<S> <C>
F. Duane Ackerman H. Corbin Day
Chairman and Chief Executive Officer, Chairman of the Board
BellSouth Corporation Jemison Investment Co., Inc.
Atlanta, Georgia Birmingham, Alabama
(Telecommunications) (Investment Banking Firm)
Edward L. Baker T. O'Neal Douglas
Chairman of the Board Chairman of the Board and
Florida Rock Industries, Inc. Chief Executive Officer of the Company
Jacksonville, Florida and the Insurance Company
(Construction Products Company)
Langdon S. Flowers
Alvin R. "Pete" Carpenter Retired Chairman of the Board
President and Chief Executive Officer, Flowers Industries, Inc.
CSX Transportation, Inc. Thomasville, Georgia
Jacksonville, Florida (Food Manufacturing and Distribution)
(Transportation)
Radford D. Lovett
A. Dano Davis Chairman of the Board
Chairman of the Board Commodores Point Terminal Corp.
and Principal Executive Officer Jacksonville, Florida
Winn-Dixie Stores, Inc. (Marine Terminal)
Jacksonville, Florida
(Retail Grocery Chain) Clarence V. McKee
Chairman of the Board,
Robert D. Davis Chief Executive Officer
Chairman of the Board and President
D.D.I., Inc. McKee Communications, Inc.
Jacksonville, Florida Tampa, Florida
(Investments) (Communications)
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C>
Patricia G. Moran Jay Stein
President and Chief Executive Officer, Chairman of the Board and Chief
JM Family Enterprises, Inc. Executive Officer
Deerfield Beach, Florida Stein Mart, Inc.
(Automotive Distributor) Jacksonville, Florida
(Retail Department Store Chain)
C. Richard Morehead
President and Chief Operating Officer Rolf H. Towe
of the Company and the Senior Managing Director
Insurance Company The Clipper Group, L.P.
New York, New York
Herbert H. Peyton (Investments )
President
Gate Petroleum Company Christopher A. Verlander
Jacksonville, Florida Vice Chairman and Corporate Secretary
(Petroleum Products Retailing) of the Company and the Insurance
Company
Frederick H. Schultz
Private Investor W. Ashley Verlander
Jacksonville, Florida; Retired Chairman of the Board of the
Former Vice Chairman of the Company and the Insurance Company
Board of Governors of the
Federal Reserve System
Washington, D.C.
</TABLE>
CORPORATE GOVERNANCE
The Company's Board of Directors had four regular quarterly meetings
during 1998. The Company's Executive Committee, consisting of Edward L. Baker,
Robert D. Davis, T. O'Neal Douglas, Radford D. Lovett, C. Richard Morehead,
Christopher A. Verlander and W. Ashley Verlander, had five regular monthly
meetings during 1998, in the months of March, May, August, September and
November. The Finance and Investment Committee, which consists of the same
members as the Executive Committee except for Mr. Baker, had five meetings in
1998. 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
Radford D. Lovett and H. Corbin Day. This committee met four times during 1998.
The Company's Audit Committee met three times during 1998 with the Company's
independent auditors and certain officers of the Company and its subsidiaries.
This committee currently consists of Radford D. Lovett, Edward L. Baker and
Robert D. Davis. 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. 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, 1998, 1997 and 1996, of those persons who were
at December 31, 1998, (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(2) Payouts
------------------------------- -------------------- -------
Name Other
and Annual Restricted LTIP All Other
Principal Incentive Compen- Stock Options/ Pay- Compen-
Position Year Salary Award(2) sation Awards(3) SARs(#) outs(4) sation
-------- ---- ------ -------- ------ --------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T. O'Neal Douglas 1998 $524,712 $458,240 $ 9,775 $170,109 158,921 $122,323 $ 34,721(5)
Chairman of the Board and 1997 500,000 248,500 5,762 124,236 119,814 84,177 150,488
Chief Executive Officer(1) 1996 471,955 237,500 21,348 118,755 27,536 93,443 31,351
Christopher A. Verlander 1998 227,363 147,498 1,014 50,048 9,470 47,985 24,626(5)
Vice Chairman of the Board 1997 242,190 96,295 598 48,132 77,678 32,114 22,688
and Corporate Secretary(1) 1996 231,382 93,150 1,326 46,568 10,800 33,958 21,334
C. Richard Morehead 1998 287,221 229,400 817 77,760 104,049 34,896 25,334(5)
President and Chief 1997 229,102 104,370 482 52,200 78,322 17,647 82,317
Operating Officer and 1996 198,013 79,716 1,051 33,889 7,856 18,649 21,646
Director(1)
John K. Anderson Jr. 1998 239,335 165,800 32 55,082 70,421 -- 27,376(5)
Executive Vice-President, 1997 218,077 77,056 -- 32,760 55,222 -- 26,530
Treasurer and Chief
Financial Officer(1)
David A. Bird
Executive Vice-President 1998 189,942 135,808 190 41,861 67,920 16,369 22,088(5)
and Chief Marketing 1997 155,524 66,304 112 28,188 54,494 11,142 20,715
Officer(1) 1996 126,287 47,750 122 15,881 3,684 9,807 19,894
</TABLE>
- ----------
(1) Of the Company and the Insurance Company.
(2) Represents awards and amounts earned in specified year.
(3) 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, 1998 were as follows: Mr. Douglas 22,182 Shares, $542,073;
Mr. Verlander 8,600 Shares, $210,163; Mr. Morehead 6,788 Shares,
$165,882; Mr. Anderson 1,820 Shares, $44,476 and Mr. Bird 3,600 Shares,
$87,975. Shares and market values at December 31, 1998 do not include
awards earned in 1998 but granted in 1999.
(4) Represents cash award and market value of Shares on date of grant made
during specified year.
(5) Includes (a) Contributions to the Employees' Profit Sharing Retirement
Program of American Heritage Life Insurance Company (Mr. Douglas
$16,000, Mr. Verlander $16,000, Mr. Morehead $16,000, Mr. Anderson
$16,000, and Mr. Bird $16,000), (b) Premiums on group life and accident
and health policies (Mr. Douglas $15,976, Mr. Verlander $8,491, Mr.
Morehead $8,569, Mr. Anderson $8,631 and Mr. Bird $5,593), (c)
Contributions to the Stock Investment Plan (Mr. Douglas $2,745, Mr.
Verlander $135, Mr. Morehead $765, Mr. Anderson $2,745 and Mr. Bird
$495).
6
<PAGE> 9
Option Grants Table
Shown below is information for the year ended December 31, 1998, with
respect to option grants to purchase the Shares granted to the Named Officers.
Option Grants in Last Fiscal Year
<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 Year Share Date 0%(4) 5% 10%
- ------------------------ ---------- ---------- -------- -------- ----- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
T. O'Neal Douglas 19,814(1) 6% $ 18.81 2/08 $ 0 $ 234,421 $ 594,069
T. O'Neal Douglas 100,000(2) 28 23.00 12/08 0 1,446,458 3,665,608
Christopher A. Verlander 7,678(1) 2 18.81 2/08 0 90,839 230,204
C. Richard Morehead 8,322(1) 2 18.81 2/08 0 98,458 249,513
C. Richard Morehead 80,000(2) 22 23.00 12/08 0 1,157,166 2,932,486
John K. Anderson, Jr. 5,222(1) 1 18.81 2/08 0 61,782 156,567
John K. Anderson, Jr. 60,000(2) 17 23.00 12/08 0 867,875 2,199,365
David A. Bird 4,494(1) 1 18.81 2/08 0 53,169 134,740
David A. Bird 60,000(2) 17 23.00 12/08 0 867,875 2,199,365
</TABLE>
(1) Options become exercisable at a cumulative annual rate of 33%
commencing in 1999. Represents grants made in 1998 which were earned
in 1997.
(2) Options become exercisable at a rate of 20% per year commencing in
1999, contingent upon achieving specified annual increases in the
earnings from operations of the Company. Options granted and earned in
1998.
(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, 1998, the values realized and
the number of unexercised options and the value of the unexercised options
appreciation value at December 31, 1998.
Aggregate Option Exercises in 1998 and December 31, 1998 Option Values
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Number 12/31/98 12/31/98
of Shares
Acquired Value Exercisable/ Exercisable/
Name on Exercise Realized Unexercisable Unexercisable
- ------------------------ ----------- ----------- ------------- --------------------
<S> <C> <C> <C> <C>
T. O'Neal Douglas 17,224 $ 1,208,930 20,000/236,494 $ 138,750/$1,320,037
Christopher A. Verlander -- -- 49,804/79,290 619,620/651,053
C. Richard Morehead 9,226 367,776 14,000/156,886 97,125/729,921
John K. Anderson -- -- 10,000/105,222 69,375/393,124
David A. Bird -- -- 15,879/107,785 152,543/431,910
</TABLE>
7
<PAGE> 10
Long-Term Incentive Plan Awards Table
The restricted stock awards to Named Officers are listed in the
"Executive Compensation--Summary Compensation Table" on page 6. The
performance unit feature of the Long-Term Incentive Plan provides the
participating employee the opportunity to earn cash and Shares if corporate
performance meets predetermined three-year financial goals.
The plan awards are earned over a three-year period. The performance
unit grants outlined below, if earned, would be paid in early fiscal year 2001
for results in the 1998-2000 performance period.
Long-Term Incentive Plan--Awards in Last Fiscal Year
<TABLE>
<CAPTION>
Estimated Future Payouts
Amount of Under Non-Stock Price Based Plans
Performance Performance ------------------------------------
Units Period Threshold Target Maximum
Name Granted Covered ($) ($) ($)
- ------------------------ ----------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
T. O'Neal Douglas $ 170,109 1998-2000 $ 65,625 $ 131,250 $ 229,688
Christopher A. Verlander 50,048 1998-2000 19,311 38,622 67,589
C. Richard Morehead 77,760 1998-2000 30,000 60,000 105,000
John K. Anderson, Jr. 55,082 1998-2000 21,250 42,500 74,375
David A. Bird 41,861 1998-2000 16,150 32,300 56,525
</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
175% 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 per share of the Company or the growth in operating
earnings per share and/or the growth in sales 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 1999, aggregate annual incentive awards in the
amount of $1,914,376 with respect to 1998 performance. For information
concerning awards to Named Officers pursuant to the Annual Incentive Plan
reference is made to "Executive Compensation--Summary Compensation Table."
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 officers of the
Company and its subsidiaries of (1) stock options, (2) restricted stock and (3)
performance units (as described below).
The stock option feature of the Long-Term Incentive Plan provides to
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, disability or death, or is
involuntary, the Compensation Committee may extend the right to exercise
8
<PAGE> 11
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 1998, options to purchase 157,080
Shares were granted relative to 1997 performance.
The restricted stock featureof 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 1998, 28,028 Shares were granted
relative to 1997 performance.
The performance units featureof the Long-Term Incentive Plan provides
to a participating employee the opportunity to earn cash and Shares if
performance meets predetermined three-year financial goals. A target award is
established for each participating employee, and payments ranging from 0% to
175% 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 1998 the Company made aggregate awards pursuant to the performance
unit feature of the Long-Term Incentive Plan of 7,892 Shares and $141,997 for
the three year period ended December 31, 1997.
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, 1998, benefits for
31 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 years in the event of the participant's
death between the ages of 55 and 65. In February, 1999, the plan was amended to
add a spousal benefit that extends one quarter of the senior officer's benefit
9
<PAGE> 12
beyond the officer's death to the surviving spouse after the ten years certain
providing the spouse is the same spouse the officer had upon the date of his or
her retirement. The spousal benefit will exist until the death of the spouse at
the one quarter level of the retired officer's life time benefit and after the
ten years certain period. 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, Anderson and Bird would be $487,968,
$237,804, $197,760, $122,532, and $148,560, 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, 1998, the Company's
participating subsidiaries contributed pursuant to this plan an aggregate of
$100,048 and $4,891 on behalf of participating employees and two directors of
the Company, respectively. The two directors were Mr. Baker and Mr. Day for
which the Company made a contribution of $2,708 and $2,183, respectively.
Directors Compensation
Except for T. O'Neal Douglas, C. Richard Morehead 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 by participation in the Company's Stock Investment
Plan 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> 13
Compensation Committee Report on Executive Compensation
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
report and the information included under the "Shareholder Return Performance
Presentation" including the performance graph which follows, shall not be
deemed to be incorporated by reference into any such filings.
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") continues to review
and monitor this program.
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.
Incentive Compensation--Performance Measurement: Earnings from
operations per share and sales growth are the Company's key measures of
success. The magnitude of award distributions under both the annual and
long-term incentive plans is primarily tied to these measures.
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 seven 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 1999.
As pertaining to the Chief Executive Officer (the "CEO"), the
Committee established his base salary at $525,000 for fiscal 1998 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 per share growth goals of: (1) threshold (8%), (2) target (12%), and
(3) superior (18%) represented a very challenging range of goals in light of
both the Company's strong fiscal 1997 operating income results and industry
results. The Compensation Committee was therefore pleased with the resultant
14.3% increase in diluted operating earnings per share for 1998 and to pay the
annual incentive amount of $458,240, which appears in the "Executive
Compensation--Summary Compensation Table" in the incentive award column.
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<PAGE> 14
Under the Long-Term Incentive Plan, the granting of stock options and
restricted Shares is dependent upon meeting predetermined performance goals.
For fiscal 1998 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 per share
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 1999 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 Share. This relationship was reflected in the
granting of stock options and restricted Shares to the CEO, as well as to all
other 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. For the CEO, the Company performance
criteria upon which the value of the performance units granted in 1998 will be
based is that of annualized growth in diluted operating earnings per share for
the period 1998- 2000.
A minimum of at least an 8% annualized growth in diluted operating
earnings per share is required before the performance units will have any
value. The Company's 1998 growth in diluted operating earnings per share of
14.3% 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.
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 1998, 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 1998,
will result in stock option grants and restricted stock awards being made
during 1999.
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.
The foregoing report has been furnished by the Compensation Committee
of the Company consisting of the following individuals: Radford D. Lovett and
H. Corbin Day.
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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, the old peer group and a
new peer group, the Standard and Poors Life Insurance Index (S&P Life) for the
period commencing January 1, 1994 (closing price December 31, 1993) and ending
December 31, 1998. The Company plans to use the S&P Life Insurance Index in
lieu of its previously self constructed peer group because the Company believes
that the S&PLife Index is more relevant and meaningful to it's stockolders.
Comparison of Five Year Cumulative Return (1) Among the Company, S&P 500 and
Peer Groups
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997 1998
<S> <C> <C> <C> <C> <C> <C>
Old Peer Group (2) 100.0 110.49 147.00 184.26 260.33 331.77
S&P 500 100.0 101.82 139.09 170.91 228.18 293.00
New Peer Group (3) 100.0 83.59 122.55 173.14 265.77 259.51
Company 100.0 104.72 129.14 152.37 213.49 294.76
</TABLE>
(1) Assumes a reinvestment of dividends and a $100 initial investment on
January 1, 1994 in the Company, S&P 500, and the Peer Groups.
(2) The members of the old 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) The new new peer group is represented by the S&PLife. S&PLife
includes: Conseco, Inc., Jefferson-Pilot, Corp., Lincoln National
Corp., Provident Companies, Inc., Torchmark Corp. and Unum Corp. The
returns of each company have been weighted according to their
respective stock market capitalization for purposes of arriving at a
peer group average.
Other Transactions and Relationships
The Insurance Company is the carrier of 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 1998, the
Insurance Company received premiums of $4,338,038 for such group insurance. The
Insurance Company also received a net premium of $11,421,591 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
life insurance policies on the lives of certain members of the Davis family and
on employees of a corporation owned by them. During 1998, the Insurance Company
received $288,306 in net premiums with respect to this insurance.
T. O'Neal Douglas, Chairman of the Board and Chief Executive Officer
of the Company, is also a director of PSS/World Medical Inc.; A. Dano Davis, a
director of the Company, is also Chairman of the Board of Directors of
Winn-Dixie,and a director of First Union Corporation; Robert D. Davis, a
director of the Company, is also a director of Winn-Dixie; Radford D. Lovett, a
director of the Company, is also a director of Winn-Dixie, First Union
Corporation, Florida Rock Industries, Inc. and FRP Properties, Inc.; Edward L.
Baker, a director of the Company, is also Chairman of the Board of Directors of
Florida Rock Industries, FRP Properties, Inc., and a director of Flowers
Industries, Inc.; H. Corbin Day, a director of the Company, is also a director
of Blount International, Inc., Hughes Supply, Inc. and Champion International
Corporation, 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.
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<PAGE> 16
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, 1998, all
Section 16(a) filing requirements applicable to its executive officers and
directors were complied with, except a Form 4 report, filed by Mr. Charles C.
Baggs, Senior Vice President of the Insurance Company on May 6, 1998,
reflecting the exercise of an employee stock option, which resulted in his
acquisition of 3,945 Shares in March, 1998.
APPROVAL OF THE COMPANY
1999 STOCK OPTION AND EQUITY INCENTIVE PLAN
On February 4, 1999, the Company's Board of Directors approved,
subject to shareholder approval, the Company's 1999 Stock Option and Equity
Incentive Plan (the "1999 Incentive Plan") and the issuance of up to 1,000,000
Shares pursuant to awards thereunder. Attached as Exhibit I to this Proxy
Statement is the full text of the 1999 Incentive Plan and the following
description of the Plan is qualified by reference to Exhibit I hereto.
The purpose of the 1999 Incentive Plan is to advance the interests of
the Company and its subsidiaries by enhancing their ability to attract and
retain employees and other persons or entities including, but not limited to,
directors of the Company and its subsidiaries who are in a position to make
significant contributions to the success of the Company and its subsidiaries,
and to reward participants for such contributions through ownership of Shares
and cash incentives. The 1999 Incentive Plan is intended to accomplish these
goals by enabling the Company the flexibility to grant awards in the form of
options, stock appreciation rights, restricted stock, unrestricted stock,
deferred stock, or performance awards (in cash or stock), or combinations
thereof, all as more fully described below (the "Awards").
General
The 1999 Incentive Plan will be administered by a committee of the
Board of Directors designated for such purposes consisting of at least two
directors (the "Committee"). During such times as the Shares are registered
under the Securities Exchange Act of 1934 (the "1934 Act"), all members of the
Committee will be "non-employee directors" within the meaning of Rule 16b-3 as
promulgated under the 1934 Act and "outside directors" within the meaning of
Section 162(m)(4)(C)(I) of the Internal Revenue Code of 1986 (the "Code").
Under the 1999 Incentive Plan, the Committee may grant stock options, stock
appreciation rights, restricted stock, unrestricted stock, deferred stock and
performance Awards (in cash or stock), or combinations thereof, and may waive
the terms and conditions of any award. A total of 1,000,000 Shares is reserved
for issuance under the 1999 Incentive Plan. The Committee will have the
authority, among other things, to waive compliance by a holder of an Award with
any obligations imposed under the Award, waive any terms or conditions of an
Award, and amend or cancel an existing Award in whole or in part, and if an
Award is canceled, grant another Award in its place on terms and conditions
determined by the Committee.
Awards under the 1999 Incentive Plan may also include provision for
the payment of dividend equivalents with respect to shares subject to Awards.
Employees of the Company and its subsidiaries and other persons or entities,
including, but not limited to, directors of the Company and its subsidiaries
who are in a position to make a significant contribution to the success of the
Company, are eligible to receive Awards under the 1999 Incentive Plan.
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<PAGE> 17
Section 162(m) of the Code places annual limitations on the
deductibility by public companies of compensation in excess of $1,000,000 paid
to any of the chief executive officer and the other four most highly
compensated officers, unless, among other things, the compensation is
performance-based. For compensation attributable to stock options and stock
appreciation rights to qualify as performance-based, among other required
events, the plan, under which the stock options or stock appreciation rights
are granted, must state a maximum number of shares with respect to which
options and rights may be granted to an individual during a specified period
and must be approved by the company's shareholders. To comply with these
requirements, the 1999 Incentive Plan provides that the maximum number of
shares as to which Awards may be granted to any participant in any one calendar
year is 250,000, and the 1999 Incentive Plan is being submitted for shareholder
approval.
Stock Options. The exercise price of an incentive stock option ("ISO")
granted under the 1999 Incentive Plan or an option intended to qualify as
performance-based compensation under Section 162(m) of the Code shall not be
less than 100% of the fair market value of the Shares at the time of grant.
Subject to the foregoing, the exercise price of options granted under the 1999
Incentive Plan is determined by the Committee. Options granted under the 1999
Incentive Plan will expire and terminate no later than 10 years from the date
of grant. The exercise price may be paid in cash or check acceptable to the
Company. Subject to certain additional limitations, the Committee may also
permit the exercise price to be paid by tendering Shares, by delivering to the
Company an undertaking by a broker, bank or other financial institution,
acceptable to the Company, to deliver promptly sufficient funds to pay the
exercise price, or a combination of the foregoing. An Option may also provide
that the optionee may exercise an option by electing to receive the difference
in shares having a value equal to the difference between the exercise price and
the fair market value on the date of exercise and with the Committee's
permission less shares having a market value equal to the applicable
withholding tax.
Stock Appreciation Rights (SARs). Stock appreciation rights ("SARs")
may be granted either alone or in tandem with stock option grants. Each SAR
entitles the holder, upon exercise, to receive an amount in cash or Shares or a
combination thereof (such form to be determined by the Committee) determined in
whole or in part by reference to appreciation in the fair market value of a
Share. SARs may be based solely on appreciation in the fair market value of the
Shares or on a comparison of such appreciation with some other measure of
market growth. The date as of which such appreciation or other measure is
determined shall be the exercise date unless another date is specified by the
Committee. If a SAR is granted in tandem with an option, the SAR will be
exercisable only to the extent the option is exercisable. To the extent the
option is exercised, the accompanying SAR will cease to be exercisable, and
vice versa.
Stock Awards; Deferred Stock. The 1999 Incentive Plan provides for
Awards of nontransferable Shares of restricted stock subject to forfeiture
("Restricted Stock"), as well as for Awards of unrestricted Shares. Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated until the end of the applicable restricted period and
the satisfaction of any other conditions or restrictions established by the
Committee. Other Awards under the 1999 Incentive Plan may also be settled with
Restricted Stock. The 1999 Incentive Plan also provides for deferred grants
entitling the recipient to receive Shares in the future at such times and on
such conditions as the Committee may specify.
Performance Awards. The 1999 Incentive Plan provides for performance
Awards entitling the recipient to receive cash or Shares following the
attainment of performance goals determined by the Committee. Performance
conditions and provisions for deferred stock may also be attached to other
Awards under the 1999 Incentive Plan. In the case of any performance award
intended to qualify for the performance-based remuneration exception described
in Section 162(m) of the Code (an "Exempt Award"), the Committee will
pre-establish specific performance goals in writing that are based upon any one
or more of the following (determined on a consolidated, divisional, subsidiary,
line of business or geographical basis or in combinations thereof): (i) sales;
revenues; assets; expenses; earnings before or after deduction for all or any
portion of interest, taxes, depreciation or amortization, whether or not on a
continuing operations or an aggregate or per share basis; return on equity,
investment, capital or assets; one or more operating ratios; borrowing levels,
leverage ratios or credit rating; market share; capital expenditures; cash
flow;
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<PAGE> 18
Share price; shareholder return; or any combination of the foregoing; or (ii)
acquisitions and divestitures (in whole or in part); joint ventures and
strategic alliances; spin-offs, split-ups and the like; reorganizations;
recapitalizations, restructurings, financings (issuance of debt or equity) and
refinancings; transactions that would constitute a change of control (as
defined under the 1999 Incentive Plan); or any combination of the foregoing.
Performance goals need not be based upon an increase, a positive or improved
result or avoidance of loss. The maximum Exempt Award payable to an individual
in respect of any performance goal for any year cannot exceed $2,500,000.
Payment of performance Awards based upon a performance goal for calendar years
2005 and thereafter is conditioned upon re-approval by the Company's
stockholders no later than the first meeting of shareholders in 2004.
Loans and Supplemental Grants. The 1999 Incentive Plan provides that
the Company may make loans to assist Participants with the purchase of Shares
under the Plan and/or the payment of taxes due with respect to an Award. The
Plan also provides that the Board may cause the Company to make supplemental
cash Awards ("Supplemental Grants") to assist Participants with the payment of
taxes relating to an Award and that Supplemental Grants may be made on a grossed
- -up basis.
Termination. Except as otherwise provided by the Committee, (i) in the
case of a participant's death, options and SARs become fully exercisable
immediately without regard to any vesting requirements and may be exercised by
the participant's executor, administrator or personal representative or the
person to whom the option or SAR passes at death during a period of one year
following such death (or for the remainder of their original term, if less),
(ii) in the case of retirement or disability, options and SARs may be exercised
by the participant at any time in accordance with their original terms, except
that in the case of disability, options and SARs will become fully exercisable
without regard to any vesting requirements, (iii) in the case of termination
for any reason, outstanding Awards of Restricted Stock must be transferred to
the Company and deferred stock grants, performance Awards and Supplemental
Awards to which a participant is not irrevocably entitled will be forfeited
unless otherwise provided, and (iv) in the case of termination for reasons
other than death, retirement or disability, options and SARs remain
exercisable, to the extent they were exercisable immediately prior to
termination, for three months (or for the remainder of their original term, if
less), shares of Restricted Stock must be resold to the Company, and other
Awards terminate, except as otherwise provided.
In the case of a change of control as defined in the 1999 Incentive
Plan, except as provided by the Committee at the time of grant, all Awards
pursuant to the plan shall immediately vest with options and SARs being
immediately exercisable, Restricted Stock becoming unrestricted and performance
Awards being fully due and payable to the participant. In the case of certain
mergers, consolidations or other transactions in which the Company is acquired
or is liquidated or otherwise ceases to exist, Awards payable in Shares will
then terminate.
Amendment. The Committee may amend the 1999 Incentive Plan or any
outstanding Award at any time or may at any time terminate the Plan, provided
that no such amendment will, without the approval of the shareholders of the
Company, effectuate a change for which shareholder approval is required in
order for the 1999 Incentive Plan to continue to qualify for the award of ISOs
under section 422 of the Code or for the Award of performance-based
compensation under Section 162(m) of the Code.
New Plan Benefit
The future benefits or amounts that would be received under the 1999
Incentive Plan by the executive officers, the non-executive officer directors
and the non-executive officer employees are not determinable at this time.
Federal Tax Effects
The following discussion summarizes certain federal income tax
consequences of the issuance and receipt of options under the 1999 Incentive
Plan. The summary does not purport to cover federal employment tax or other
federal tax consequences that may be associated with the 1999 Incentive Plan,
nor does it cover state, local or non-U.S. taxes.
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<PAGE> 19
Incentive Stock Options. In general, an optionee realizes no taxable
income upon the grant or exercise of an ISO. However, the exercise of an ISO
may result in an alternative minimum tax liability to the optionee. With
certain exceptions, a disposition of Shares purchased under an ISO within two
years from the date of grant or within one year after exercise produces
ordinary income to the optionee (and a deduction to the Company) equal to the
value of the Shares at the time of exercise less the exercise price. Any
additional gain recognized in the disposition is treated as a capital gain for
which the Company is not entitled to a deduction. If the optionee does not
dispose of the Shares until after the expiration of these one- and two-year
holding periods, any gain or loss recognized upon a subsequent sale is treated
as a long-term capital gain or loss for which the Company is not entitled to a
deduction.
Nonstatutory (Non-ISO) Options. In general, in the case of a non-ISO,
the optionee has no taxable income at the time of grant but realizes income in
connection with exercise of the option in an amount equal to the excess (at the
time of exercise) of the fair market value of the Shares acquired upon exercise
over the exercise price; a corresponding deduction is available to the Company;
and upon a subsequent sale or exchange of the Shares, appreciation or
depreciation after the date of exercise is treated as capital gain or loss for
which the Company is not entitled to a deduction.
In general, an ISO that is exercised more than three months after
termination of employment (other than termination by reason of death) is
treated as a non-ISO. ISOs are also treated as non-ISOs to the extent they
first become exercisable by an individual in any calendar year for Shares
having a fair market value (determined as of the date of grant) in excess of
$100,000.
Under the so-called "golden parachute" provisions of the Code, the
vesting or accelerated exercisability of Awards in connection with a change in
control of the Company may be required to be valued and taken into account in
determining whether participants have received compensatory payments,
contingent on the change in control, in excess of certain limits. If these
limits are exceeded, a substantial portion of amounts payable to the
participant, including income recognized by reason of the grant, vesting or
exercise of Awards under the 1999 Incentive Plan, may be subject to an
additional 20% federal tax and may be nondeductible to the Company.
The Board of Directors recommends a vote "FOR" the approval of the American
Heritage Life Investment Corporation 1999 Stock Option and Equity Incentive
Plan.
Unless instructions are given to the contrary, it is the intention of the
persons named as proxies to vote the Shares to which the proxy is related FOR
approval of the 1999 Incentive Plan, authorizing the adoption of the plan by
the Company, with 1,000,000 Shares reserved for issuance under the terms of the
plan.
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<PAGE> 20
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.
The following table sets forth as of January 31, 1999, 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>
AHLI, Ltd. ( 1 ) .................................. 10,797,178 38.38%
Other Davis Family Shareholdings (2) .............. 1,029,717 3.66%
P.O. Box 19366; Jacksonville, Florida 32245-9366
---------- -----
11,826,895 42.04%
========== =====
</TABLE>
(1) A limited partnership of which D.D.I., Inc. and Estuary Corporation
are (a) limited partners and (b) members of a limited liability
corporation which is the sole general partner. Robert D. Davis is an
officer and manager and A. Dano Davis is a manager of the sole general
partner, and they have shared voting and dispositive powers for the
Shares owned by the limited partnership.
D.D.I., Inc. is wholly owned directly or indirectly 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 for that corporation.
Estuary Corporation is principally owned by trusts for the benefit of
A. Dano Davis, his mother, his sister, his children and his sister's
children. As to Estuary Corporation, A. Dano Davis and Robert D. Davis
share voting and dispositive power.
(2) Includes Shares held directly or indirectly by trusts for the benefit
of various members of the Davis family, by Davis family members,
individually, or by entities which such family members control. Robert
D. Davis and A. Dano Davis have sole or shared voting and dispositive
power for 724,800 of such Shares.
ACCOUNTANTS
Ernst and Young LLP ("E&Y"), the Company's auditors, has completed its
examination of the Company's financial statements for the year ended December
31, 1998; and it is expected that representatives of E&Y will attend the Annual
Meeting and be available to respond to appropriate questions and make
appropriate comments concerning the Company.
Neither E&Y 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, 1999. It is the policy of the Company to delay
this selection until later in its fiscal year.
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<PAGE> 21
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 three 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, 1998, 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 AND NOMINATIONS TO THE BOARD
If a shareholder intends to present a proposal for action at the 2000
Annual Meeting and wishes to have such proposal considered for inclusion in the
Company's proxy materials in reliance on Rule 14a-8 under the Securities
Exchange Act of 1934, the proposal must be submitted in writing and received by
the Company by November 21, 1999. Such proposals must also meet the other
requirements of the rules of the Securities and Exchange Commission relating to
shareholders' proposals.
The ByLaws of the Company establish an advance notice procedure with
regard to certain matters, including shareholder proposals and nominations of
individuals for election to the Board of Directors. In general, notice of a
shareholder proposal or a director nomination for a shareholders meeting must
be received by the Company not less than 70 days, nor more than 90 days before
the date of the annual meeting and must contain specified information and
conform to certain requirements, as set forth in the ByLaws. If the presiding
officer at any shareholders' meeting determines that a shareholder proposal or
director nomination was not made in accordance with the ByLaws, the Company may
disregard such proposal or nomination.
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<PAGE> 22
In addition, if a shareholder submits a proposal outside of Rule 14a-8
for the 2000 Annual Meeting, and the proposal fails to comply with the advance
notice procedure prescribed by the ByLaws, then the Company's proxy may confer
discretionary authority on the persons being appointed as proxies on behalf of
management to vote on the proposal. Proposals and nominations should be
addressed to the Corporate Secretary of the Company, Christopher A. Verlander,
American Heritage Life Investment Corporation, 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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<PAGE> 23
EXHIBIT I
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
1999 STOCK OPTION AND EQUITY INCENTIVE PLAN
1. PURPOSE
The purpose of this Stock Option and Equity Incentive Plan (the "Plan")
is to advance the interests of American Heritage Life Investment Corporation
(the "Company") and its subsidiaries by enhancing their ability to attract and
retain employees and other persons or entities who are in a position to make
significant contributions to the success of the Company and its subsidiaries
through ownership of shares of the Company's Common Stock, par value $1.00 per
share, ("Stock") and cash incentives.
The Plan is intended to accomplish these goals by enabling the Company
to grant Awards in the form of Options, Stock Appreciation Rights, Restricted
Stock or Unrestricted Stock Awards, Deferred Stock Awards or Performance Awards
in Stock, cash or both, Loans or Supplemental Grants, or combinations thereof,
(the "Award(s)") all as more fully described below.
2. ADMINISTRATION
Unless otherwise determined by the Board of Directors of the Company
(the "Board"), the Plan will be administered by the Compensation Committee of
the Board designated for such purpose (the "Committee"). The Committee shall
consist of at least two directors. A majority of the members of the Committee
shall constitute a quorum, and all determinations of the Committee shall be made
by a majority of its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee by a writing signed by a
majority of the Committee members. During such times as the Company's Common
Stock is registered under the Securities Exchange Act of 1934 (the "1934 Act"),
all members of the Committee shall be "non-employee directors" within the
meaning of Rule 16b-3 promulgated under the 1934 Act and "outside directors"
within the meaning of Section 162(m)(4)(C)(I) of the Internal Revenue Code of
1986, as amended (the "Code").
The Committee will have authority, not inconsistent with the express
provisions of the Plan and in addition to other authority granted under the
Plan, to (a) grant Awards at such time or times as it may choose; (b) determine
the size of each Award, including the number of shares of Stock subject to the
Award; (c) determine the type or types of each Award; (d) determine the terms
and conditions of each Award; (e) waive compliance by a holder of an Award with
any obligations to be performed by such holder under an Award and waive any
terms or conditions of an Award; (f) amend or cancel an existing Award in whole
or in part (and if an Award is canceled, grant another Award in its place on
such terms and conditions as the Committee shall specify), except that the
Committee may not, without the consent of the holder of an Award, take any
action under this clause with respect to such Award if such action would
adversely affect the rights of such holder; (g) prescribe the form or forms of
instruments that are required or deemed appropriate under the Plan, including
any written notices and elections required of Participants (as defined below),
and change such forms from time to time; (h) adopt, amend and rescind rules and
regulations for the administration of the Plan; and (i) interpret the Plan and
decide any questions and settle all controversies and disputes that may arise in
connection with the Plan. Such determinations and actions of the Committee, and
all other determinations and actions of the Committee made or taken under
authority granted by any provision of the Plan, will be conclusive and will bind
all parties. Nothing in this paragraph shall be construed as limiting the power
of the Committee to make adjustments under Section 8.6.
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<PAGE> 24
3. EFFECTIVE DATE AND TERM OF PLAN
The Plan will become effective on the date on which it is approved by
the stockholders of the Company. Awards may be made prior to such stockholder
approval if made subject thereto. No Award may be granted under the Plan after
April 28, 2009, but Awards previously granted may extend beyond that date.
4. SHARES SUBJECT TO THE PLAN
Subject to adjustment as provided in Section 8.6, the aggregate number
of shares of Stock that may be delivered under the Plan will be 1,000,000. If
any Award requiring exercise by the Participant for delivery of Stock terminates
without having been exercised in full, or if any Award payable in Stock or cash
is satisfied in cash rather than Stock, the number of shares of Stock as to
which such Award was not exercised or for which cash was substituted will be
available for future grants.
Subject to Section 8.6(a), the maximum number of shares of Stock as to
which Options or Stock Appreciation Rights may be granted to any Participant in
any one calendar year is 250,000, which limitation shall be construed and
applied consistently with the rules under Section 162(m) of the Code.
Stock delivered under the Plan may be either authorized but unissued
Stock or previously issued Stock acquired by the Company and held in treasury.
No fractional shares of Stock will be delivered under the Plan.
5. ELIGIBILITY AND PARTICIPATION
Each employee of the Company or any of its subsidiaries (an "Employee")
and each other person or entity (including without limitation non-Employee
directors of the Company or a subsidiary of the Company) who, in the opinion of
the Committee, is in a position to make a significant contribution to the
success of the Company or its subsidiaries will be eligible to receive Awards
under the Plan (each such Employee, person or entity receiving an Award, a
"Participant"). A "subsidiary" for purposes of the Plan will be a corporation in
which the Company owns, directly or indirectly, stock possessing 50% or more of
the total combined voting power of all classes of stock.
6. TYPES OF AWARDS
6.1. Options
(a) Nature of Options. An Option is an Award giving the recipient
the right, on exercise thereof, to purchase Stock.
Both "incentive stock options," as defined in Section 422(b) of the
Code (any Option intended to qualify as an incentive stock option being
hereinafter referred to as an "ISO"), and Options that are not ISOs, may be
granted under the Plan. ISOs shall be awarded only to Employees. An Option
awarded under the Plan shall be a non-ISO unless it is expressly designated as
an ISO at time of grant.
(b) Exercise Price. The exercise price of an Option will be
determined by the Committee subject to the following:
(1) The exercise price of an ISO or an Option intended to
qualify as performance based compensation under Section 162(m) of the Code shall
not be less than 100% of the fair market value of the Stock subject to the
Option, determined as of the time the Option is granted.
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<PAGE> 25
(2) In no case may the exercise price paid for Stock
which is part of an original issue of authorized Stock be less than the par
value per share of the Stock.
(c) Duration of Options. The latest date on which an Option may be
exercised will be the tenth anniversary of the day immediately preceding the
date the Option was granted, or such earlier date as may have been specified by
the Committee at the time the Option was granted.
(d) Exercise of Options. An Option will become exercisable at such
time or times, and on such conditions, as the Committee may specify. The
Committee may at any time and from time to time accelerate the time at which all
or any part of the Option may be exercised. Any exercise of an Option must be in
writing, signed by the proper person and delivered or mailed to the Company,
accompanied by (1) any documents required by the Committee and (2) payment in
full in accordance with paragraph (e) below for the number of shares for which
the Option is exercised.
(e) Payment for Stock. Stock purchased on exercise of an Option
must be paid for as follows: (1) in cash or by check (acceptable to the Company
in accordance with guidelines established for this purpose), bank draft or money
order payable to the order of the Company or (2) if so permitted by the
Committee at or after the grant of the Option or by the instrument evidencing
the Option, (i) through the delivery of shares of Stock which have been held for
at least six months (unless the Committee approves a shorter period) and which
have a fair market value equal to the exercise price, (ii) by delivery of an
unconditional and irrevocable undertaking by a broker, bank or other financial
institution, acceptable to the Company, to deliver promptly to the Company
sufficient funds to pay the exercise price, or (iii) by any combination of the
foregoing permissible forms of payment. An Option may also provide that the
optionee may exercise an option by electing to receive the difference in shares
having a value equal to the difference between the exercise price and the fair
market value on the date of exercise and with the committee's permission less
shares having a market value equal to the applicable withholding tax.
(f) Discretionary Payments. If (i) the market price of shares of
Stock subject to an Option (other than an Option which is in tandem with a Stock
Appreciation Right as described in Section 6.2) exceeds the exercise price of
the Option at the time of its exercise, and (ii) the person exercising the
Option so requests the Committee in writing, the Committee may in its sole
discretion cancel the Option and cause the Company to pay in cash or in shares
of Stock (at a price per share equal to the fair market value per share) to the
person exercising the Option an amount equal to the difference between the fair
market value of the Stock which would have been purchased pursuant to the
exercise (determined on the date the Option is canceled) and the aggregate
exercise price which would have been paid.
6.2. Stock Appreciation Rights.
(a) Nature of Stock Appreciation Rights. A Stock Appreciation
Right (or "SAR") is an Award entitling the holder, on exercise, to receive an
amount in cash or Stock or a combination thereof (such form to be determined by
the Committee) determined in whole or in part by reference to appreciation, from
and after the date of grant, in the fair market value of a share of Stock. SARs
may be based solely on appreciation in the fair market value of Stock or on a
comparison of such appreciation with some other measure of market growth such as
(but not limited to) appreciation in a recognized market index. The date as of
which such appreciation or other measure is determined shall be the exercise
date unless another date is specified by the Committee.
(b) Grant of Stock Appreciation Rights. SARs may be granted in
tandem with, or independently of, Options granted under the Plan.
(1) Rules Applicable to Tandem Awards. When SARs are
granted in tandem with Options, (a) the SAR will be exercisable only at
such time or times, and to the extent, that the related Option is
exercisable and will be exercisable in accordance with the procedure
required for exercise of the related Option; (b) the SAR will terminate
and no
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<PAGE> 26
longer be exercisable upon the termination or exercise of the related
Option, except that a SAR granted with respect to less than the full
number of shares covered by an Option will not be reduced until the
number of shares as to which the related Option has been exercised or
has terminated exceeds the number of shares not covered by the SAR; (c)
the Option will terminate and no longer be exercisable upon the
exercise of the related SAR; and (d) the SAR will be transferable only
with the related Option.
(2) Exercise of Independent SARs. A SAR not granted in
tandem with an Option will become exercisable at such time or times,
and on such conditions, as the Committee may specify. The Committee may
at any time accelerate the time at which all or any part of the SAR may
be exercised.
Any exercise of an independent SAR must be in writing, signed by the
proper person and delivered or mailed to the Company, accompanied by any other
documents required by the Committee.
6.3. Restricted and Unrestricted Stock.
(a) Grant of Restricted Stock. Subject to the terms and provisions
of the Plan, the Committee may grant shares of Stock in such amounts and upon
such terms and conditions as the Committee shall determine subject to the
restrictions described below ("Restricted Stock").
(b) Restricted Stock Agreement. The Committee may require, as a
condition to an Award, that a recipient of a Restricted Stock Award enter into a
Restricted Stock Award Agreement, setting forth the terms and conditions of the
Award. In lieu of a Restricted Stock Award Agreement, the Committee may provide
the terms and conditions of an Award in a notice to the Participant of the
Award, on the Stock certificate representing the Restricted Stock, in the
resolution approving the Award, or in such other manner as it deems appropriate.
(c) Transferability and Other Restrictions. Except as otherwise
provided in this Section 6.3, the shares of Restricted Stock granted herein may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated until the end of the applicable period or periods established by
the Committee and the satisfaction of any other conditions or restrictions
established by the Committee (such period during which a share of Restricted
Stock is subject to such restrictions and conditions is referred to as the
"Restricted Period"). Except as the Committee may otherwise determine under
Section 7.1, if a Participant suffers a Termination of Service (as defined at
Section 7.1) for any reason during the Restricted Period, the Company may
purchase the shares of Restricted Stock subject to such restrictions and
conditions for the amount of cash paid by the Participant for such shares;
provided, that if no cash was paid by the Participant such shares of Restricted
Stock shall be automatically forfeited to the Company. During the Restricted
Period with respect to any shares of Restricted Stock, the Company shall have
the right to retain in the Company's possession the certificate or certificates
representing such shares.
(d) Removal of Restrictions. Except as otherwise provided in this
Section 6.3, a share of Restricted Stock covered by a Restricted Stock grant
shall become freely transferable by the Participant upon completion of the
Restricted Period, including the passage of any applicable period of time and
satisfaction of any conditions to vesting. The Committee, in its sole
discretion, shall have the right at any time immediately to waive all or any
part of the restrictions and conditions with regard to all or any part of the
shares held by any Participant.
(e) Voting Rights, Dividends and Other Distributions. During the
Restricted Period, Participants holding shares of Restricted Stock granted
hereunder may exercise full voting rights and shall receive all regular cash
dividends paid with respect to such shares. Except as the Committee shall
otherwise determine, any other cash dividends and other distributions paid to
Participants with respect to shares of Restricted Stock, including any dividends
and distributions paid in shares, shall be subject to the same restrictions and
conditions as the shares of Restricted Stock with respect to which they were
paid.
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<PAGE> 27
(f) Other Awards Settled with Restricted Stock. The Committee may,
at the time any Award described in this Section 6 is granted, provide that any
or all the Stock delivered pursuant to the Award will be Restricted Stock.
(g) Unrestricted Stock. Subject to the terms and provisions of the
Plan, the Committee may grant shares of Stock free of restrictions under the
Plan in such amounts and upon such terms and conditions as the Committee shall
determine.
(h) Notice of Section 83(b) Election. Any Participant making an
election under Section 83(b) of the Code with respect to Restricted Stock must
provide a copy thereof to the Company within 10 days of filing such election
with the Internal Revenue Service.
6.4. Deferred Stock.
A Deferred Stock Award entitles the recipient to receive shares of
Stock to be delivered in the future. Delivery of the Stock will take place at
such time or times, and on such conditions, as the Committee may specify. The
Committee may at any time accelerate the time at which delivery of all or any
part of the Stock will take place. At the time any Award described in this
Section 6.4 is granted, the Committee may provide that, at the time Stock would
otherwise be delivered pursuant to the Award, the Participant will instead
receive an instrument evidencing the Participant's right to future delivery of
Deferred Stock.
6.5. Performance Awards; Performance Goals.
(a) Nature of Performance Awards. A Performance Award entitles the
recipient to receive, without payment, an amount in cash or Stock or a
combination thereof (such form to be determined by the Committee) following the
attainment of Performance Goals (as hereinafter defined). Performance Goals may
be related to personal performance, corporate performance, departmental
performance or any other category of performance established by the Committee.
The Committee will determine the Performance Goals, the period or periods during
which performance is to be measured and all other terms and conditions
applicable to the Award.
(b) Other Awards Subject to Performance Condition. The Committee
may, at the time any Award described in this Section 6.5 is granted, impose the
condition (in addition to any conditions specified or authorized in this Section
6 or any other provision of the Plan) that Performance Goals be met prior to the
Participant's realization of any payment or benefit under the Award. Any such
Award made subject to the achievement of Performance Goals (other than an Option
or SAR) shall be treated as a Performance Award for purposes of Section 6.5(c)
below.
(c) Limitations and Special Rules. In the case of any Performance
Award intended to qualify for the performance-based remuneration exception
described in Section 162(m)(4)(C) of the Code and the regulations thereunder (an
"Exempt Award"), the Committee shall in writing preestablish specific
Performance Goals. A Performance Goal must be established prior to passage of
25% of the period of time over which attainment of such goal is to be measured.
"Performance Goal" means criteria based upon any one or more of the following
(on a consolidated, divisional, subsidiary, line of business or geographical
basis or in combinations thereof): (i) sales; revenues; assets; expenses;
earnings before or after deduction for all or any portion of interest, taxes,
depreciation or amortization, whether or not on a continuing operations or an
aggregate or per share basis; return on equity, investment, capital or assets;
inventory level or turns; one or more operating ratios; borrowing levels,
leverage ratios or credit rating; market share; capital expenditures; cash flow;
stock price; stockholder return; or any combination of the foregoing; or (ii)
acquisitions and divestitures (in whole or in part); joint ventures and
strategic alliances; spin-offs, split-ups and the like; reorganizations;
recapitalizations, restructurings, financings (issuance of debt or equity) and
refinancings; transactions that would constitute a Change of Control; or any
combination of the foregoing. A Performance Goal and targets with respect
thereto determined by the Committee need not be based upon an increase, a
positive or improved result or avoidance of loss. The maximum Exempt Award
payable to any Participant in respect of any such Performance
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<PAGE> 28
Goal for any year shall not exceed $2,500,000. Payment of Exempt Awards based
upon a Performance Goal for calendar years 2005 and thereafter is conditioned
upon reapproval by Company's shareholders no later than Employer's first meeting
of shareholders in 2004.
6.6 Loans and Supplemental Grants.
(a) Loans. The Company may make a loan to a Participant ("Loan"),
either on the date of or after the grant of any Award to the Participant. A Loan
may be made either in connection with the purchase of Stock under the Award or
with the payment of any Federal, state and local income tax with respect to
income recognized as a result of the Award. The Committee will have full
authority to decide whether to make a Loan and to determine the amount, terms
and conditions of the Loan, including the interest rate (which may be zero),
whether the Loan is to be secured or unsecured or with or without recourse
against the borrower, the terms on which the Loan is to be repaid and the
conditions, if any, under which it may be forgiven. However, no Loan may have a
term (including extensions) exceeding ten years in duration.
(b) Supplemental Grants. In connection with any Award, the
Committee may at the time such Award is made or at a later date, provide for and
grant a cash award to the Participant ("Supplemental Grant") not to exceed an
amount equal to (1) the amount of any federal, state and local income tax on
ordinary income for which the Participant may be liable with respect to the
Award, determined by assuming taxation at the highest marginal rate, plus (2) an
additional amount on a grossed-up basis intended to make the Participant whole
on an after-tax basis after discharging all the Participant's income tax
liabilities arising from all payments under this Section 6. Any payments under
this subsection (b) will be made at the time the Participant incurs Federal
income tax liability with respect to the Award.
7. EVENTS AFFECTING OUTSTANDING AWARDS
7.1. Termination of Service.
If a Participant who is an Employee ceases to be an Employee, or if
there is a termination of the consulting, service or similar relationship in
respect of which a non-Employee Participant was granted an Award hereunder (such
termination of the employment or other relationship to be referred to as a
"Termination of Service"), except as otherwise provided by the Committee with
respect to an Award, the following will apply:
(a) Options and SARs.
(1) All Options and SARs held by the Participant
immediately prior to the Termination of Service may be exercised as
follows:
(i) If the Termination of Service is on account
of the Participant's death, such Awards may be fully exercised without
regard to vesting requirements by the Participant's executor,
administrator or personal representative or the person or persons to
whom the Option or Right is transferred by will or the applicable laws
of descent and distribution, at any time within the one year period
ending with the first anniversary of the Participant's death, and shall
thereupon terminate.
(ii) If Termination of Service is on account of
retirement due to disability, as determined by the Company's Employee
Policy Manual, such Award may be immediately fully exercised in
accordance with the original terms of the Award, except there shall be
no vesting requirements.
(iii) If the Termination of Service is on account
of the Participant's retirement as determined by the Company's Employee
Policy Manual other than as the result of disability, as described
above, such Awards may be exercised by the Participant at any time in
accordance with the original terms of the Award.
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(iv) If the Termination of Service is for any
other reason, such Awards may be exercised, to the extent exercisable,
by the Participant at any time within the three-month period following
the Termination, and shall thereupon terminate, unless the Award
provides by its terms for immediate termination of the Award in the
event of such a Termination of Service or unless the Termination of
Service results from a discharge for cause that, in the opinion of the
Committee, casts such discredit on the Participant as to justify
immediate termination of the Award.
(2) In no event, however, shall an Option or SAR remain
exercisable beyond the latest date on which it could have been
exercised without regard to this Section 7.
(3) Options and SARs held by a Participant immediately
prior to the Termination of Service that are not then exercisable shall
terminate upon the Termination of Service.
(b) Restricted Stock. Restricted Stock held by the Participant
must be transferred to the Company (and, in the event the certificates
representing such Restricted Stock are held by the Company, such Restricted
Stock will be so transferred without any further action by the Participant) in
accordance with Section 6.3(c).
(c) Deferred Stock and Performance Awards. Any payment or benefit
under a Deferred Stock Award, Performance Award or Supplemental Grant to which
the Participant was not irrevocably entitled prior to the Termination of Service
will be forfeited and the Award canceled upon the Termination of Service.
(d) Special Circumstances. In the case of a Participant who is an
Employee, a Termination of Service shall not be deemed to have resulted by
reason of (i) a sick leave or other bona fide leave of absence approved in
accordance with the Company's Employee Policy Manual, or (ii) a transfer of
employment between the Company and a subsidiary or between subsidiaries, or to
the employment of a corporation (or a parent or subsidiary corporation of such
corporation) issuing or assuming an option in a transaction to which Section
424(a) of the Code applies.
7.2. Change of Control Provisions.
(a) Effect of Change of Control. Notwithstanding any other
provision of the Plan to the contrary, except as otherwise explicitly provided
by the Committee in writing with respect to a particular Award at the time the
Award is granted, in the event of a Change of Control:
(1) Acceleration of Awards. As of the date on which such
Change of Control is determined to have occurred, (i) Options and SARs
that are outstanding and that are not then exercisable shall become
exercisable to the full extent of the original grants; (ii) shares of
Restricted Stock that are not otherwise vested shall vest (and any
Stock to be delivered under any other Award as Restricted Stock shall
upon delivery be unrestricted); (iii) holders of Performance Awards
granted hereunder as to which the relevant performance period has not
ended shall be entitled at the time of the Change of Control to receive
a cash payment per Performance Award equal to the full value of the
cash component of such Award (if any) plus the fair market value of any
Stock included in such Award; (iv) any Deferred Stock that has been
awarded but not delivered shall be delivered immediately; (v) any
Supplemental Grant that has been awarded but not paid shall be paid
immediately; and (vi) any Loan containing a provision for forgiveness
shall be forgiven immediately, and any other Loan may, at the
discretion of the Committee, be forgiven regardless of the original
conditions of the Loan.
(2) Termination of Awards in Certain Transactions. If, as
part of, or in connection with, the Change of Control, there occurs a
merger or consolidation in which the Company is not the surviving
corporation or which results in the acquisition of substantially all
the Company's outstanding stock by a person, entity or group of persons
and/or entities
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acting in concert or there is a dissolution or liquidation of the
Company, Awards payable in Stock that are not cashed out or otherwise
disposed of in or prior to the transaction will terminate.
(3) Restriction on Termination of Awards Due to
Termination of Employment. Awards that remain outstanding after a
Change of Control shall not be terminated as a result of a Termination
of Service, and shall continue to be exercisable in accordance with
their original terms, except in the case of a participant's death in
which case termination shall occur within the one year period ending
with the first anniversary of the participant's death.
(4) Restriction on Amendment. In connection with or
following a Change of Control, neither the Committee nor the Board may
impose additional conditions upon exercise or otherwise amend or
restrict an Award, or amend the terms of the Plan in any manner adverse
to the holder thereof, without the written consent of such holder.
Notwithstanding the foregoing, if any right granted pursuant to this
Section 7.2 would make a Change of Control transaction ineligible for pooling of
interests accounting under applicable accounting principles that but for this
Section 7.2 would otherwise be eligible for such accounting treatment, the
Committee shall have the authority to substitute stock for the cash which would
otherwise be payable pursuant to this Section 7.2 having a fair market value
equal to such cash.
(b) Definition of Change of Control. A "Change of Control" shall
be deemed to have occurred if and when:
(1) The Company ceases to be a publicly owned corporation
having at least 500 stockholders; or
(2) There occurs any event or series of events that would
be required to be reported as a change of control in response to Item
1(a) on a Form 8-K filed by the Company under the 1934 Act or in any
other filing by the Company with the Securities and Exchange Commission
unless the person ("Person"), as that term is defined or used in
Section 13(d) or 14(d)(2) of the 1934 Act, acquiring control is an
affiliate of the Company as of the date the Plan is approved by
stockholders of the Company; or
(3) The Company executes an agreement of acquisition,
merger, or consolidation which contemplates that after the effective
date provided for in the agreement all or substantially all of the
business and/or assets of the Company will be controlled by another
Person; provided, however, for purposes of this subparagraph (3) that
(i) if such an agreement requires as a condition precedent approval by
the Company's shareholders of the agreement or transaction, a Change of
Control shall not be deemed to have taken place unless and until such
approval is secured and, (ii) if the voting shareholders of such other
Person shall, immediately after such effective date, be substantially
the same as the voting shareholders of the Company immediately prior to
such effective date, the execution of such agreement shall not, by
itself, constitute a "Change of Control"; or
(4) Any Person (other than the Company, a majority-owned
subsidiary of the Company, an employee benefit plan maintained by the
Company or a majority-owned subsidiary of the Company) becomes the
beneficial owner, directly or indirectly (either as a result of the
acquisition of securities or as the result of an arrangement or
understanding, including the holding of proxies, with or among security
holders), of securities of the Company representing more than 25% of
the votes that could then be cast in an election for members of the
Board unless within 15 days of being advised that such ownership level
has been reached, the Company's board of directors adopts a resolution
approving the
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acquisition of that level of securities ownership by such Person; or
(5) During any period of 24 consecutive months,
commencing after the date this Plan is approved by stockholders of the
Company, individuals who at the beginning of such 24-month period were
directors of the Company shall cease to constitute at least a majority
of the Board, unless the election of each director who was not a
director at the beginning of such period has been approved in advance
by directors representing at least two thirds of (i) the directors then
in office who were directors at the beginning of the 24-month period,
or (ii) the directors specified in clause (i) plus directors whose
election has been so approved by directors specified in clause (i).
8. GENERAL PROVISIONS
8.1. Documentation of Awards.
Awards will be evidenced by such written instruments, if any, as may be
prescribed by the Committee from time to time. Such instruments may be in the
form of agreements to be executed by both the Participant and the Company, or
certificates, letters or similar instruments, which need not be executed by the
Participant but acceptance of which will evidence agreement to the terms
thereof.
8.2. Rights as a Stockholder, Dividend Equivalents.
Except as specifically provided by the Plan, the receipt of an Award
will not give a Participant rights as a stockholder; the Participant will obtain
such rights, subject to any limitations imposed by the Plan or the instrument
evidencing the Award, only upon the issuance of Stock. However, the Committee
may, on such conditions as it deems appropriate, provide that a Participant will
receive a benefit in lieu of cash dividends that would have been payable on any
or all Stock subject to the Participant's Award had such Stock been outstanding.
Without limitation, the Committee may provide for payment to the Participant of
amounts representing such dividends, either currently or in the future, or for
the investment of such amounts on behalf of the Participant.
8.3. Conditions on Delivery of Stock.
The Company will not be obligated to deliver any shares of Stock
pursuant to the Plan or to remove restriction from shares previously delivered
under the Plan (a) until all conditions of the Award have been satisfied or
removed, (b) until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with, (c) if the
outstanding Stock is at the time listed on any stock exchange or The NASDAQ
National Market, until the shares to be delivered have been listed or authorized
to be listed on such exchange or market and the Company has received official
notice of the listing of such shares, and (d) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If a sale of Stock which is required to be registered
under the Securities Act of 1933, as amended, has not been so registered, the
Company may require, as a condition to exercise of the Award, such
representations or agreements as counsel for the Company may consider
appropriate to avoid violation of such Act and may require that the certificates
evidencing such Stock bear an appropriate legend restricting transfer.
If an Award is exercised by the Participant's legal representative, the
Company will be under no obligation to deliver Stock pursuant to such exercise
until the Company is satisfied as to the authority of such representative.
8.4. Tax Withholding.
The Company will withhold from any cash payment made pursuant to an
Award an amount sufficient to satisfy all federal, state and local withholding
tax requirements (the "withholding requirements").
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In the case of an Award pursuant to which Stock may be delivered, the
Committee will have the right to require that the Participant or other
appropriate person remit to the Company an amount sufficient to satisfy the
withholding requirements, or make other arrangements satisfactory to the
Committee with regard to such requirements, prior to the delivery of any Stock
or removal of restrictions thereon. If and to the extent that such withholding
is required, the Committee may permit the Participant or such other person to
elect at such time and in such manner as the Committee provides to have the
Company hold back from the shares to be delivered, or to deliver to the Company,
Stock having a value calculated to satisfy the withholding requirement. The
Committee may make such share withholding mandatory with respect to any Award at
the time such Award is made to a Participant.
If at the time an ISO is exercised the Committee determines that the
Company could be liable for withholding requirements with respect to the
exercise or with respect to a disposition of the Stock received upon exercise,
the Committee may require as a condition of exercise that the person exercising
the ISO agree (a) to provide for withholding under the preceding paragraph of
this Section 8.4, if the Committee determines that a withholding responsibility
may arise in connection with such exercise, (b) to inform the Company promptly
of any disposition (within the meaning of section 424(c) of the Code) of Stock
received upon exercise, and (c) to give such security as the Committee deems
adequate to meet the potential liability of the Company for the withholding
requirements and to augment such security from time to time in any amount
reasonably deemed necessary by the Committee to preserve the adequacy of such
security.
8.5. Transferability of Awards.
Unless otherwise permitted by the Committee, no Award (other than an
Award in the form of an outright transfer of cash or Unrestricted Stock) may be
transferred other than by will or by the laws of descent and distribution.
8.6. Adjustments in the Event of Certain Transactions.
(a) In the event of a stock dividend, stock split or combination
of shares, recapitalization or other change in the Company's capitalization, or
other distribution to holders of Stock other than normal cash dividends, after
the effective date of the Plan, the Committee will make any appropriate
adjustments to the maximum number of shares that may be delivered under the Plan
under the first paragraph of Section 4 above and to the limits described in the
second paragraph of Section 4 and in Section 6.5(c).
(b) In any event referred to in paragraph (a), the Committee will
also make any appropriate adjustments to the number and kind of shares of Stock
or securities subject to Awards then outstanding or subsequently granted, any
exercise prices relating to Awards and any other provision of Awards affected by
such change. The Committee may also make such adjustments to take into account
material changes in law or in accounting practices or principles, mergers,
consolidations, acquisitions, dispositions or similar corporate transactions, or
any other event, if it is determined by the Committee that adjustments are
appropriate to avoid distortion in the operation of the Plan; provided, that
adjustments pursuant to this sentence shall not be made to the extent it would
cause any Award intended to be exempt under Section 162(m)(4)(c) of the Code to
fail to be so exempt.
(c) In the case of ISOs, the adjustments described in (a) and (b)
will be made only to the extent consistent with continued qualification of the
Option under Section 422 of the Code (in the case of an ISO) or Section 162(m)
of the Code.
8.7. Employment Rights, Etc.
Neither the adoption of the Plan nor the grant of Awards will confer
upon any person any right to continued retention by the Company or any
subsidiary as an Employee or otherwise, or
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affect in any way the right of the Company or subsidiary to terminate an
employment, service or similar relationship at any time. Except as specifically
provided by the Committee in any particular case, the loss of existing or
potential profit in Awards granted under the Plan will not constitute an element
of damages in the event of termination of an employment, service or similar
relationship even if the termination is in violation of an obligation of the
Company to the Participant.
8.8. Deferral of Payments.
The Committee may agree at any time, upon request of the Participant,
to defer the date on which any payment under an Award will be made.
8.9. Past Services as Consideration.
Where a Participant purchases Stock under an Award for a price equal to
the par value of the Stock, the Committee may determine that such price has been
satisfied by past services rendered by the Participant.
9. EFFECT, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of Awards to a Participant
will affect the Company's right to grant to such Participant awards that are not
subject to the Plan, to issue to such Participant Stock as a bonus or otherwise,
or to adopt other plans or arrangements under which Stock may be issued to
Employees.
The Committee may at any time or times amend the Plan or any
outstanding Award for any purpose which may at the time be permitted by law, or
may at any time terminate the Plan as to any further grants of Awards, provided
that (except to the extent expressly required or permitted by the Plan) no such
amendment will, without the approval of the stockholders of the Company,
effectuate a change for which stockholder approval is required in order for the
Plan to continue to qualify for the award of ISOs under Section 422 of the Code
or for the award of performance-based compensation under Section 162(m) of the
Code.
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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 of my (our) shares in American Heritage Life Investment
Corporation on all matters which may come before the 1999 Annual Meeting of
the Shareholders to be held on Thursday, the 29th day of April, 1999, 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 shares FOR the following proposals:
THE BOARD OF DIRECTORS RECOMMEND A VOTE "FOR" THE FOLLOWING PROPOSALS:
- -------------------------------------------------------------------------------
1. To elect Three (3) Class II Directors to serve until the Annual Meeting of
Shareholders in 2002:
[ ] FOR nominees named below [ ] WITHHOLD AUTHORITY to vote for
Class II Director: nominees (INSTRUCTION: TO
A. Dane Davis WITHHOLD AUTHORITY to vote for
T. O'Neal Douglas the nominees write that nominee's
C. Richard Morehead name on the space provided below:)
__________________________________
2. To approve the American Heritage Life Investment Corporation 1999 Stock
Option and Equity Incentive Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. 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.
PLEASE SIGN AND DATE ON REVERSE SIDE AND RETURN PROMPTLY
(Continued, and to be signed on other side)
<PAGE> 35
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.
Please sign exactly as name appears below. When
shares are held by joint tenants, both should sign.
When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If
a corporation, please sign full corporate name by
president or other authorized officer. If a
partnership, please sign in partnership name by
authorized person.
------------------------------------------------------------
SIGNATURE
------------------------------------------------------------
SIGNATURE IF HELD JOINTLY
DATED , 1999
-------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD
PROMPTLY USING THE ENCLOSED ENVELOPE.
