<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
JEFFERSON-PILOT CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Charter)
John D. Hopkins, Senior Vice President, General Counsel and Secretary
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(j)(2).
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:
(4) Proposed maximum aggregate value of transaction:
Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / 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
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
MEETING DATE: MAY 2, 1994
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MARCH 29, 1994
DEAR SHAREHOLDER:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at the Corporation's offices in Greensboro, North Carolina on Monday, May
2, 1994, at 10:00 A.M., Eastern Daylight Time. The meeting is for the purpose of
(i) electing five persons as Class II directors with terms continuing until the
Annual Meeting of Shareholders in 1997, one person as a Class I director with a
term continuing until the Annual Meeting of Shareholders in 1996, and one person
as a Class III director with a term continuing until the Annual Meeting of
Shareholders in 1995, (ii) approving amendments to the Articles of Incorporation
and By-laws of the Corporation reducing the size of the Board of Directors of
the Corporation from 20 to a range of 11 to 15 in accordance with corporate
governance principles ratified at the 1993 Annual Meeting of Shareholders by the
affirmative vote of 94% of votes cast at the 1993 Annual Meeting, and (iii)
conducting any other business that may be brought before the meeting.
Detailed information relating to the Corporation's activities and operating
performance during 1993 is contained in the Corporation's Annual Report to
Shareholders furnished to you herewith.
BECAUSE THE PROPOSAL TO REDUCE THE SIZE OF THE CORPORATION'S BOARD OF DIRECTORS
REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST 80% OF THE OUTSTANDING
SHARES OF THE CORPORATION'S COMMON STOCK, IT IS PARTICULARLY IMPORTANT THAT YOUR
SHARES BE REPRESENTED AT THE MEETING. ACCORDINGLY, PLEASE PROMPTLY COMPLETE,
DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID
RETURN ENVELOPE.
On behalf of the Board of Directors, thank you for your continued support.
Sincerely,
/s/ David A. Stonecipher
------------------------
David A. Stonecipher
President and CEO
Jefferson-Pilot Corporation
<PAGE> 4
JEFFERSON-PILOT CORPORATION
100 North Greene Street
Greensboro, North Carolina 27401
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS, MAY 2, 1994
Notice is Hereby Given that the Annual Meeting of Shareholders of
Jefferson-Pilot Corporation (the "Meeting") will be held at the Jefferson-Pilot
Building (4th Floor), 100 North Greene Street, Greensboro, North Carolina, at
10:00 o'clock A.M., Eastern Daylight Time, on Monday, May 2, 1994, for the
purpose of:
(1) electing five persons as Class II directors with terms continuing until
the Annual Meeting of Shareholders in 1997 and until their successors
are duly elected and qualified;
(2) electing one person as a Class I director with a term continuing until
the Annual Meeting of Shareholders in 1996 and until his successor is
duly elected and qualified;
(3) electing one person as a Class III director with a term continuing
until the Annual Meeting of Shareholders in 1995 and until his
successor is duly elected and qualified;
(4) approving amendments to the Articles of Incorporation and By-laws of
the Corporation providing that the business and affairs of the
Corporation are to be managed under the direction of a Board of
Directors consisting of no less than eleven and no more than fifteen
directors, with the exact number of directors to be established from
time to time by the Board of Directors; and
(5) transacting any other business as may be properly brought before the
Meeting or any adjournment thereof.
Holders of common stock of the Corporation at the close of business on March 7,
1994 will be entitled to vote at the Meeting or any adjournment thereof.
Whether or not you expect to attend the Meeting, please date, sign and return
promptly the enclosed proxy card in order to ensure that your shares are voted.
A shareholder giving a proxy may revoke it at any time before it is exercised,
and any shareholder who attends in person may vote in person at the Meeting, if
he or she wishes to do so, even though he or she has sent in a proxy.
Senior Vice President,
General Counsel and Secretary
/s/ John D. Hopkins
- -------------------
John D. Hopkins
Greensboro, North Carolina
March 29, 1994
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<PAGE> 5
JEFFERSON-PILOT CORPORATION
100 North Greene Street
Greensboro, North Carolina 27401
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS MAY 2, 1994
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors (the "Board of
Directors" or the "Board") of Jefferson-Pilot Corporation (the "Corporation") in
connection with the Annual Meeting of Shareholders to be held on May 2, 1994
(the "Meeting"). At the Meeting, the shareholders will be asked to elect five
Class II directors for a term of three years, one Class I director to serve the
two years remaining in the original three-year term of a Class I director, and
one Class III director to serve the one year remaining in the original three-
year term of a Class III director. The shareholders will also be asked to
approve amendments to the Articles of Incorporation and By-laws of the
Corporation reducing the size of the Board of Directors from 20 to a range of 11
to 15 in accordance with corporate governance principles ratified at the 1993
Annual Meeting of Shareholders by the affirmative vote of 94% of votes cast at
the 1993 Annual Meeting. This proxy statement and the enclosed proxy are being
first mailed to shareholders on or about March 29, 1994.
The enclosed proxy, if executed, will be revocable by a shareholder at any time
before its use by giving written notice of revocation to the Secretary of the
Corporation, by submitting a properly executed, subsequently-dated proxy to the
Corporation, by the shareholder requesting the return of the proxy or by the
shareholder voting in person at the Meeting. If the enclosed proxy card is
executed, returned to the Corporation and unrevoked, it will be voted at the
Meeting and any adjournment thereof. Where the shareholder specifies a choice
with respect to any matter to be acted upon, the shares will be voted in
accordance with such specification(s). Unless otherwise so instructed, properly
executed proxies which are returned in a timely manner will be voted for the
five nominees for Class II director, the one nominee for Class I director and
the one nominee for Class III director recommended by the Board of Directors,
and in favor of the amendments to the Articles of Incorporation and By-laws
referred to above.
Only the holders of record of the common stock, par value $1.25 per share, of
the Corporation (the "Common Stock"), the Corporation's only class of voting
securities outstanding, on the books of the Corporation at the close of business
on March 7, 1994, will be entitled to vote at the Meeting or any adjournment
thereof. As of the close of business on such date, the number of shares of
Common Stock outstanding and entitled to vote was 48,809,763. The record holders
of Common Stock are entitled to one vote per share. A majority of the
outstanding shares of Common Stock must be represented in person or by proxy at
the Meeting in order to constitute a quorum for the transaction of business.
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<PAGE> 6
PROPOSAL I --ELECTION OF DIRECTORS
The Corporation's Articles of Incorporation and By-Laws provide that the Board
of Directors be divided into three classes, such classes to be as nearly equal
in number as possible, and that each year the shareholders elect the members of
one of the three classes to three-year terms of office. The number of directors
is currently fixed by the Corporation's Articles of Incorporation and By-Laws at
20, divided into three classes. As a result of retirements and the death of one
director, there are 16 directors currently in office, with Classes I and III
each having five members and Class II having six members. In anticipation that
shareholders will approve the proposal described herein to reduce the size of
the Board of Directors, which is in accordance with corporate governance
principles ratified at the 1993 Annual Meeting of Shareholders by the
affirmative vote of 94% of votes cast at the 1993 Annual Meeting, the Board of
Directors has nominated five directors for election as Class II directors and
presently intends not to fill the four vacancies currently existing on the Board
of Directors. See "Proposal II -- Approval of Amendment to Articles of
Incorporation and By-laws."
The term of office of the Class II directors expires at the Meeting; the term of
office of the Class I directors expires at the 1996 Annual Meeting of
Shareholders; and the term of office of the Class III directors expires at the
1995 Annual Meeting of Shareholders, or in any case at such time as their
respective successors are duly elected and qualified. As of the date of this
Proxy Statement, the directors of the Corporation and the classes in which they
serve are as follows:
<TABLE>
- ----------------------------------------------------------------------------------------------------
CLASS I CLASS II CLASS III
(TERM EXPIRING (TERM EXPIRING (TERM EXPIRING
IN 1996) IN 1994) IN 1995)
<S> <C> <C>
Thomas M. Belk Edwin B. Borden William H. Cunningham
William E. Blackwell E. S. Melvin Robert G. Greer
C. Randolph Ferguson Donald S. Russell, Jr. Hugh L. McColl, Jr.
A. Linwood Holton, Jr. Robert H. Spilman Charles W. McCoy
William P. Payne Louis C. Stephens, Jr. Martha A. Walls
David A. Stonecipher
- ----------------------------------------------------------------------------------------------------
</TABLE>
The Board of Directors has nominated the incumbent Class II directors (other
than Robert H. Spilman and Louis C. Stephens, Jr.), together with William H.
Cunningham, who is currently a Class III director, for election as Class II
directors at the Meeting to serve until the 1997 Annual Meeting of Shareholders
(or until such time as their respective successors are duly elected and
qualified). The Board of Directors has nominated Mr. Spilman, who is currently a
Class II director, to serve as a Class I director and A. Linwood Holton, Jr.,
who is currently a Class I director, to serve as a Class III director. If
elected, they would serve until the Annual Meeting of Shareholders in 1996 and
1995, respectively (or until such time as their respective successors are duly
elected and qualified). The Board of Directors has recommended the realignment
of Mr. Spilman from Class II to Class I, Mr. Holton from Class I to Class III
and Mr. Cunningham from Class III to Class II so that the Corporation may
receive from Mr. Holton the maximum possible length of service that is
consistent with the corporate governance principles of the Corporation and so
that each class of directors will have five members. Mr. Stephens is not
standing for re-election as a director. Accordingly, if the enclosed proxy card
is duly executed and received in time for the Meeting, and if no contrary
specification is made as provided therein, it will be voted in favor of the
election as Class II directors of Messrs. Borden, Cunningham, Melvin, Russell
and Stonecipher and in favor of the election as Class I and III directors of Mr.
Spilman and Mr. Holton, respectively. If any nominee should be unwilling or
unable to serve, which is not now anticipated, the proxy may be voted with
discretionary authority for a substitute or substitutes as shall be designated
by the Board of Directors.
Pursuant to Section 55-7-28(a) of the North Carolina Business Corporation Act
(the "NCBCA"), (i) the five candidates receiving the highest number of votes as
Class II directors will be elected as Class II directors of the Corporation,
(ii) the candidate receiving the highest number of votes as a Class I director
will be elected as a Class I director, and (iii) the candidate receiving the
highest number of votes as a Class III director will be elected as a Class III
director. Shareholders may not cumulate their votes. Votes will be counted by
employees of Georgeson & Company Inc. ("Georgeson"), who will be appointed to
serve as Inspectors of Election at the Meeting.
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If the nominees of the Board of Directors are elected at the Meeting, the
directors of the Corporation and the classes in which they will serve will be as
follows:
<TABLE>
- ------------------------------------------------------------------------------------------------------
CLASS I CLASS II CLASS III
(TERM EXPIRING (TERM EXPIRING (TERM EXPIRING
IN 1996) IN 1997) IN 1995)
<S> <C> <C>
Thomas M. Belk Edwin B. Borden Robert G. Greer
William E. Blackwell William H. Cunningham A. Linwood Holton, Jr.
C. Randolph Ferguson E. S. Melvin Hugh L. McColl, Jr.
William P. Payne Donald S. Russell, Jr. Charles W. McCoy
Robert H. Spilman David A. Stonecipher Martha A. Walls
- ------------------------------------------------------------------------------------------------------
</TABLE>
Listed below are the names and other information pertaining to the Board's
nominees and other directors whose terms of office will continue after the
Meeting.
<TABLE>
<CAPTION>
NAME, AGE PRINCIPAL OCCUPATION DURING LAST SHARES OF COMMON
AND YEAR FIVE YEARS AND OFFICES OR POSITIONS, STOCK BENEFICIALLY
FIRST BECAME IF ANY, HELD WITH THE CORPORATION OWNED
A DIRECTOR (IN ADDITION TO DIRECTOR)(A) ON MARCH 7, 1994(B)(C)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Thomas M. Belk President, Belk Stores Services, Inc., 3,336
age 69 Charlotte, NC and President of numerous
Director since 1989 department stores in the Southeast and
Southwest operating under the Belk name
William E. Blackwell President, Jefferson-Pilot Communications 48,436
age 61 Company since July, 1991; Executive Vice
Director since 1985 President of the Corporation(d)
Edwin B. Borden President and Chief Executive Officer, The 11,000
age 59 Borden Manufacturing Co. (Textiles),
Director since 1991 Goldsboro, NC
William H. Cunningham* Chancellor, The University of Texas 2,999
age 50 System, Austin, TX since September, 1992;
Director since 1986 prior thereto, President, The University
of Texas at Austin, Austin, TX
C. Randolph Ferguson Senior Vice President of the Corporation 32,101
age 48 since May, 1989 and prior thereto, Vice
Director since 1989 President-Planning & Internal Auditing;
Executive Vice President-Group, Jefferson-
Pilot Life Insurance Company since August,
1988(d)
Robert G. Greer* Chairman of the Board, Tanglewood Bank, 3,600
age 59 Houston, TX
Director since 1975
A. Linwood Holton, Jr. President, Center for Innovative 2,820
age 70 Technology, Herndon, VA, since December,
Director since 1985 1988; former Governor of Virginia
</TABLE>
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<PAGE> 8
<TABLE>
<CAPTION>
NAME, AGE PRINCIPAL OCCUPATION DURING LAST SHARES OF COMMON
AND YEAR FIVE YEARS AND OFFICES OR POSITIONS, STOCK BENEFICIALLY
FIRST BECAME IF ANY, HELD WITH THE CORPORATION OWNED
A DIRECTOR (IN ADDITION TO DIRECTOR)(A) ON MARCH 7, 1994(B)(C)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Hugh L. McColl, Jr. Chairman and Chief Executive Officer, 2,250(e)
age 58 NationsBank Corporation, Charlotte, NC
Director since 1993 since November, 1993; Chairman, President
and Chief Executive Officer from December,
1992 to October, 1993 and prior to
December, 1991; President and Chief
Executive Officer from December, 1991 to
December, 1992; also serves as Chief
Executive Officer of each of that
company's subsidiary banks
Charles W. McCoy* Retired December, 1989; prior thereto, 18,686
age 74 Chairman of the Board, President and CEO,
Director since 1970 Premier Bancorp, Inc. (formerly Louisiana
Bancshares, Inc.), Baton Rouge, LA
E. S. Melvin Senior Vice President, Central Carolina 7,325
age 60 Bank & Trust Company since June, 1993;
Director since 1988 prior thereto, Chairman of the Board and
Chief Executive Officer, 1st Home Federal
Savings and Loan Association of the
Carolinas, F.A., Greensboro, NC
William Porter Payne President and Chief Executive Officer, 2,802(e)
age 46 Atlanta Committee for the Olympic Games,
Director since 1993 Atlanta, GA since January, 1991; prior
thereto, President and Chief Executive
Officer, Georgia Amateur Athletics
Foundation, d/b/a Atlanta Organizing
Committee, Atlanta, GA
Donald S. Russell, Jr. Attorney in sole practice in Columbia, SC 79,875
age 54
Director since 1977
Robert H. Spilman* Chairman of the Board of the Corporation 11,106
age 66 since March, 1993; Chairman of the Board
Director since 1984 and Chief Executive Officer, Bassett
Furniture Industries, Inc. (Furniture
Manufacturer), Bassett, VA; prior to
November, 1989 also served as President of
that company
</TABLE>
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<TABLE>
<CAPTION>
NAME, AGE PRINCIPAL OCCUPATION DURING LAST SHARES OF COMMON
AND YEAR FIVE YEARS AND OFFICES OR POSITIONS, STOCK BENEFICIALLY
FIRST BECAME IF ANY, HELD WITH THE CORPORATION OWNED
A DIRECTOR (IN ADDITION TO DIRECTOR)(A) ON MARCH 7, 1994(B)(C)
- -------------------------------------------------------------------------------------------
<S> <C> <C>
David A. Stonecipher* President and CEO of the Corporation since 95,020
age 53 March, 1993 and President-Elect and CEO-
Director since 1993 Elect from September 8, 1992 to February
28, 1993; President and CEO since March 1,
1993, Jefferson-Pilot Life Insurance
Company(d); President, GeorgiaUS (holding
company), Atlanta, GA, from February, 1991
to August, 1992 and Executive Vice
President from April, 1989 to February,
1991; also served as President and CEO of
that company's subsidiaries, Life
Insurance Company of Georgia and Southland
Life Insurance Company, from July, 1991 to
August, 1992 and as President and Chief
Operating Officer of the former from May,
1989 to July, 1991 (and prior thereto was
Executive Vice President) and as President
of the latter from January, 1990 to July,
1991 (and prior thereto was Executive Vice
President)
Martha A. Walls President, Southern Newspapers, Inc., 9,005
age 66 Houston, TX
Director since 1990
26 directors and executive officers as a group (including Louis C. 468,048
Stephens, Jr., who is retiring as a director when his term expires
at the Meeting and who beneficially owns 3,402 shares of Common
Stock)
</TABLE>
- ---------------
* Member of the Corporation's Executive Committee.
(a) In addition to the directorships shown in the table, Mr. Belk is a director
of NationsBank Corporation and Ruddick Corporation; Mr. Borden is a director of
Carolina Power & Light Company, Triangle Bancorp and Ruddick Corporation; Mr.
Cunningham is a director of La Quinta Motor Inns, Inc., Transamerica Capital
Growth Fund, Transamerica Bond Fund, Transamerica Investment Trust, Transamerica
Investment Portfolios, Transamerica Special Series, Inc., Transamerica Current
Interest, Inc., Transamerica California Tax-Free Income Fund, Transamerica Cash
Reserve, Inc., Transamerica Tax-Free Bond Fund and Freeport-McMoRan Inc.; Mr.
Holton is a director of Westmoreland Coal Company; Mr. McColl is a director of
Sonoco Products Company, CSX Corporation and Ruddick Corporation; Mr. Russell is
a director of Piedmont Natural Gas Company; and Mr. Spilman is a director of
NationsBank Corporation, Trinova Corporation and The Pittston Co.
(b) The number of shares owned for each of Messrs. Blackwell, Ferguson and
Stonecipher and all executive officers and directors as a group assumes that
options held by each of them covering shares of Common Stock in the amounts
indicated, which are exercisable within 60 days of March 7, 1994, have been
exercised: Mr. Blackwell -- 8,750; Mr. Ferguson -- 1,198; Mr.
Stonecipher -- 75,000; all executive officers and directors as a
group -- 195,221. The number of shares owned by the directors and executive
officers as a group represented less than 1% of the 48,809,763 shares
outstanding at March 7, 1994.
(c) The directors have sole voting and investment power with respect to the
shares shown, except as follows: Mr. Belk: 135 shares are held by Mr. Belk's
wife; Mr. Melvin: 150 shares are held by each of two sons; Mr. Russell: 74,250
shares are held of record by his father under an arrangement under which Mr.
Russell has sole voting power; Mr. Spilman: 700 shares are held by Mr. Spilman's
wife; Mr. Stonecipher: 2,000 shares are held by Mr. Stonecipher's wife; and Ms.
Walls: 5,437 shares are owned jointly with her husband and 1,281 shares are held
by a corporation of which she is an officer, director and principal shareholder.
Except as
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<PAGE> 10
specifically indicated, the directors named in this note (c) have no authority
to vote the shares described in this note (c).
(d) Jefferson-Pilot Communications Company and Jefferson-Pilot Life Insurance
Company are wholly-owned subsidiaries of the Corporation.
(e) Included in the shares reported are 750 shares reserved for Mr. McColl and
1,500 shares for Mr. Payne as a non-employee director stock grant under the
Corporation's Stock Option Plan. In the case of Mr. McColl, such shares are
scheduled to vest on February 8, 1995. In the case of Mr. Payne, 750 of such
shares are scheduled to vest on May 3, 1994 and the remainder are scheduled to
vest on May 3, 1995. Upon the death, disability or retirement of Mr. McColl or
Mr. Payne, any of his shares which have not theretofore vested will become
vested. If Mr. McColl or Mr. Payne otherwise leaves the Board of Directors prior
to becoming vested in a portion of the grant, he shall forfeit all rights with
regard to his non-vested shares. Messrs. McColl and Payne are entitled to all
dividends declared on such shares and to exercise any voting rights prior to
becoming vested in such shares or forfeiting the right to such shares.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires the Corporation's directors and executive officers, and persons
who beneficially own more than 10% of the Common Stock, to file with the
Securities and Exchange Commission (the "SEC") and the New York Stock Exchange
(the "NYSE") reports of ownership and changes in ownership of the Common Stock.
Officers, directors and greater than 10% shareholders are required by SEC
regulations to furnish the Corporation with copies of all Section 16(a) reports
they file. Based solely on review of the copies of such reports furnished to the
Corporation and written representations that no other reports were required, the
Corporation believes that, during the 1993 fiscal year, all filing requirements
applicable to its officers, directors and greater than 10% beneficial owners
were complied with, except that one report covering one transaction was filed
late by Martha A. Walls. In addition, eight transactions during 1990 and 1991
involving changes in the beneficial ownership by Charles E. Hayworth, a former
director of the Corporation, of an aggregate of 94 shares of Common Stock were
not reported until February 15, 1994.
The Board of Directors met five times during the year and no incumbent director
attended fewer than 75% of the aggregate of all meetings held by the Board and
committees on which he or she served during the period for which he or she has
been a director.
COMMITTEES OF THE BOARD
The Board of Directors has standing Audit, Compensation, Nominating and Conflict
of Interests Committees, among others. The following information relates to
those committees.
AUDIT COMMITTEE
The Audit Committee, which met two times in 1993, is currently composed of
Donald S. Russell, Jr., Chairman, Thomas M. Belk, Edwin B. Borden, A. Linwood
Holton, Jr., E. S. Melvin and Martha A. Walls. In accordance with the rules of
the NYSE, no member of the Audit Committee is an officer or employee of the
Corporation or any of its subsidiaries. The duties of the Audit Committee
include recommendation of the independent accountants to be appointed by the
Board; approval of the scope of the accountants' examination and other services;
review of the financial statements, including auditors' opinions and management
letters, and reporting to the Board the Committee's recommendation with respect
thereto; review of financial and/or fiscal policies and policy decisions;
determination of the duties and responsibilities of the officer with auditing
responsibility; approval of the scope of such officer's work and review of the
results thereof; approval of such officer's staffing requirements and budget;
and, through review of the results of internal and external audits, monitoring
of internal programs to ensure compliance with laws, regulations, and the
Corporation's responsibilities for financial reporting to the public.
COMPENSATION COMMITTEE
The Compensation Committee, which met three times in 1993, is currently composed
of Charles W. McCoy, Chairman, Thomas M. Belk, Hugh L. McColl, Jr., E. S.
Melvin, and Robert H. Spilman. No members of the Compensation Committee are
employees of the Corporation or any of its subsidiaries. The duties of the
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<PAGE> 11
Compensation Committee include recommendation to the Board of action to be taken
with respect to salaries to be paid to senior executive officers; approval of or
delegation to the President or a Vice President of the authority to approve the
salaries of all other officers; approval of a plan or plans of position
evaluation and salary administration under which compensation of employees is
fixed; review of the qualified employee benefit plans maintained by the
Corporation; review of all recommendations for changes in any plan which must be
approved by the Board; and administering officer incentive plans and determining
the awards thereunder.
NOMINATING COMMITTEE
The Nominating Committee, which met two times in 1993, is currently composed of
David A. Stonecipher, Chairman, William H. Cunningham, Robert G. Greer, Charles
W. McCoy and Robert H. Spilman. The duties of the Nominating Committee include
recommendation to the Board with respect to nominees for election as directors
at the annual meeting or any special meeting of shareholders or to fill
vacancies on the Board, and recommendation to the Board with respect to the
composition of all Committees of the Board other than the Executive and
Nominating Committees. In selecting nominees for the Board of Directors, the
Nominating Committee shall consider nominees recommended in writing by
shareholders to the same extent as nominees recommended by management.
Shareholders may make recommendations to the Nominating Committee by letter
addressed to any member of the Nominating Committee or to the Nominating
Committee, P.O. Box 21008, Greensboro, NC 27420. The Nominating Committee will
not be able to consider recommendations received less than 120 days prior to the
date of the meeting at which directors are to be elected.
CONFLICT OF INTERESTS COMMITTEE
The Conflict of Interests Committee, which met one time in 1993, is currently
composed of Martha A. Walls, Chairman, Edwin B. Borden, William H. Cunningham,
William Porter Payne and Donald S. Russell, Jr. No members of the Conflict of
Interests Committee are employees of the Corporation or any of its subsidiaries.
The duties of the Conflict of Interests Committee include investigation of any
complaints concerning a possible conflict of interests involving directors or
officers of the Corporation, recommendation to the Board of Directors of action
to be taken to remove any such conflict of interests and recommendation to the
Board of Directors of policies or procedures designed to avoid such conflicts of
interests.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
PRINCIPLES OF THE EXECUTIVE PAY PROGRAM
COMPENSATION PRINCIPLES
The foundation of the executive compensation program is based on guiding
principles designed to align compensation with the Corporation's mission,
business strategy, and values. Building on this foundation, the executive
compensation program is designed to retain and motivate the executive talent
needed to maximize the Corporation's return to shareholders by:
- providing base compensation levels that are competitive with that
provided in the various markets in which the Corporation competes for
executive talent;
- rewarding executives for the achievement of specific corporate and unit
earnings goals, as well as market-related goals necessary to build value
over the long-term; and
- creating earned share ownership opportunities so that the long-term
maximization of shareholder value truly links executive and shareholder
interests.
In the executive compensation program's implementation, the Compensation
Committee considers each of these principles, which are described in greater
detail below.
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<PAGE> 12
COMPETITIVE COMPENSATION LEVELS
Total compensation (base salary and incentive) targets for expected levels of
performance are developed for executive officers. Published survey materials,
proxy statement analyses, and counsel with consultants form the basis for
establishing targeted compensation levels, including the incentive compensation
described below. Companies listed as the "Similarly Diversified Companies" in
the Performance Graph are included in the compensation survey data, as are other
companies. The Corporation uses broad financial services and insurance industry
surveys to determine competitive data since executives may be recruited from or
attracted to companies other than those included in the "Similarly Diversified
Companies." In general, total compensation is targeted at the second quartile
(i.e., the 50 to 75 percent range) of the relevant marketplace for each
executive's area of responsibility (e.g., life, property & casualty,
broadcasting, etc.). Actual compensation of the individuals named in the Summary
Compensation Table for 1993, including Mr. Stonecipher, fell within the second
quartile of the relevant marketplace.
INCENTIVE AND REWARD
Achieving both the short-and long-term goals described below is necessary for
executives to earn competitive total compensation. Depending on position,
between 25 and 50 percent of each executive's total targeted compensation is
based upon performance. Performance-related elements include annual bonus,
long-term incentive compensation plan ("Long-Term Plan") payments and stock
options.
An annual incentive compensation plan is keyed to competitive annual incentive
norms and is based on the achievement of short-term goals consisting of the
Corporation's earnings per share ("EPS") and operating income targets set for
the Corporation and each line of business. Additional short-term goals such as
market share, premium growth, and new business issued may also affect incentive
awards. The short-term goals for executives are developed based on the
Corporation's annual budgets and operating plans. Under the annual incentive
plan, the weights accorded to the short-term goals vary depending on the
participant in the Plan. The actual performance of the Corporation and of the
individuals named in the Summary Compensation Table in 1993 resulted in bonuses
varying from 30% to 43% of base salary.
Long-term incentives come in two forms: the Long-Term Plan, which is a
three-year plan based on cumulative growth of EPS, and stock options. The
Long-Term Plan is set forth in the Long-Term Incentive Plan Table. Participants
in the Long-Term Plan are eligible for an annual payment, commencing in 1995,
contingent upon the Corporation's achieving specified levels of compound growth
rate in the cumulative EPS ("CGR") during the preceding three years (or, in the
case of the phase-in period ending December 31, 1994, the preceding two years).
Pay-outs are expressed as a percentage (which varies according to the
participant and the level of CGR achieved) of each participant's salary during
the last year of the relevant period and are established in combination with the
expected value of stock option grants such that competitive and
performance-related long-term incentive opportunities are available. The target
amount will be payable if the targeted CGR is achieved. The threshold amount
will be payable if 50% of the targeted CGR is achieved. The maximum amount will
be payable if 150% or more of the targeted CGR is achieved. No amounts will be
payable under the Long-Term Plan if the CGR during the relevant period is less
than 50% of the targeted CGR. Pay-outs for Mr. Stonecipher are based on a
percentage that is 33% greater than the percentage for other current
participants in the Long-Term Plan due to differences in competitive practice
for the Chief Executive Officer position versus that of other executive
officers. All stock options awarded in 1993, including those awarded to the
individuals named in the Summary Compensation Table, were granted pursuant to
employment agreements. The employment agreements provide for grants of options
in amounts that, when combined with long-term incentives under the three-year
plan, provide total long-term incentive compensation that is competitive with
other large insurance companies, based on data from an industry survey. Actual
gains from stock option grants are dependent upon stock price increases from the
time of grant. The Compensation Committee does not consider levels of share
ownership or past option grants in making current stock option awards as it
desires to continually reinforce the goal of stock price improvement.
In addition to the employment agreements with Messrs. Stonecipher, Mlekush and
Hopkins described below under "Employment Contracts", the Corporation has
employment agreements with two other executive officers not included in the
Summary Compensation Table. All such agreements provide for a specified minimum
base salary, an annual bonus contingent upon performance (including a specified
minimum bonus,
10
<PAGE> 13
for 1993 only, equal to 30% of base salary in the case of Messrs. Stonecipher,
Mlekush and Hopkins and a specified minimum bonus, for 1994 only, in the case of
the two officers not included in the table), awards of stock options and, except
for the agreement with Mr. Hopkins, participation by the employee in the
Long-Term Plan.
EQUITY OWNERSHIP
Sustained and increasing ownership by executives of the Corporation's stock is
expected upon shares being earned through performance. Half of the value earned
under the Long-Term Plan is delivered in shares. The direct link between
shareholders and executives is strengthened by using stock options as an
important incentive vehicle. Expectations are established regarding the
continued ownership by executives during their employment of shares acquired
upon exercise of options.
CHIEF EXECUTIVE OFFICERS' COMPENSATION
Mr. Stonecipher's salary for 1993 was specified pursuant to his employment
agreement with the Corporation, which was negotiated on an arms' length basis
and entered into on August 11, 1992. Under his employment agreement, which is
described below under "Employment Contracts," Mr. Stonecipher's bonus for 1993
was determined in accordance with a formula based on growth in EPS over the
prior year. In 1993 (before the initial application of FAS 106) EPS increased
9.3% compared with 1992. In addition, pursuant to his employment agreement, Mr.
Stonecipher is eligible to participate in the Long-Term Plan, which is set forth
in the Long-Term Incentive Plan Table, and in 1993 received the grant of stock
options set forth in the Option Grants During 1993 Table.
The compensation received in 1993 by W. Roger Soles, who retired as Chairman and
President of the Corporation on March 1, 1993, was paid on the same terms as
provided in the 1987 Employment Contract (as defined below under "Employment
Contracts"). Mr. Soles' 1993 compensation is set forth in columns (c), (e) and
(i) of the Summary Compensation Table. Mr. Soles did not receive any bonus for
1993.
The Corporation has not awarded any compensation that is non-deductible under
Section 162(m) of the Internal Revenue Code. In the event that the Compensation
Committee considers awarding compensation in the future which would not be
deductible under Section 162(m), the Committee will consider what actions, if
any, should be taken to seek to make such compensation deductible.
COMPENSATION COMMITTEE
Charles W. McCoy, Chairman
Thomas M. Belk
Hugh L. McColl, Jr.
E. S. Melvin
Robert H. Spilman
* * * * * * * *
11
<PAGE> 14
The following table summarizes all compensation awarded to, earned by, or paid
to the named individuals for services rendered to the Corporation or its
subsidiaries during the years ended December 31, 1991-1993. These individuals,
each of whom (other than Messrs. Soles and Fee) was serving as an executive
officer of the Corporation as of December 31, 1993, include the Corporation's
chief executive officers during 1993, the four most highly compensated executive
officers as of December 31, 1993 (other than such chief executive officers) and
one officer, Mr. Fee, who would have been among the four most highly compensated
executive officers as of that date, if still employed by the Corporation. Mr.
Soles retired on March 1, 1993, and Mr. Fee retired on December 1, 1993.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
------------
ANNUAL COMPENSATION AWARDS
-------------------------------------- ------------
OTHER SECURITIES ALL
ANNUAL UNDERLYING OTHER
COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) (#)(3) ($)(4)
(A) (B) (C) (D) (E) (G) (I)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Stonecipher/President 1993 750,000 235,500 -- 25,000 --
and Chief Executive Officer of 1992 242,308 -- 221,790 25,000 --
the Corporation and President
and Chief Executive Officer of
Jefferson-Pilot Life Insurance
Company(5)
W. Roger Soles/Chairman and 1993 251,440 -- 37,509 -- 280,906
President of the Corporation and 1992 1,074,443 621,456 -- -- --
Chairman, President and Chief 1991 968,000 2,737,050 -- -- --
Executive Officer of
Jefferson-Pilot Life Insurance
Company
Kenneth C. Mlekush/Senior Vice 1993 325,000 122,900 36,508 15,000 --
President of the Corporation and 1992 -- -- 125,000 -- --
Executive Vice President -
Individual of Jefferson-Pilot
Life Insurance Company(5)
C. Randolph Ferguson/Senior Vice 1993 240,000 80,160 -- -- --
President of the Corporation and 1992 223,269 103,200 -- -- --
Executive Vice President-Group of 1991 190,000 63,684 -- -- --
Jefferson-Pilot Life Insurance
Company
William E. Blackwell/Executive 1993 305,000 132,370 -- -- --
Vice President of the Corporation 1992 261,192 133,875 -- -- --
and President, Jefferson-Pilot 1991 230,000 111,360 -- -- --
Communications Company
John D. Hopkins/Senior Vice 1993 188,558 56,567 41,300 15,000 --
President, General Counsel and
Secretary of the Corporation and
Executive Vice President, General
Counsel and Secretary of
Jefferson-Pilot Life Insurance
Company(5)
Thomas Fee/Senior Vice President 1993 246,154 52,709 -- -- --
and Treasurer of the 1992 238,846 110,400 -- -- --
Corporation and Executive Vice 1991 210,000 84,461 -- -- --
President and Treasurer of
Jefferson-Pilot Life Insurance
Company
</TABLE>
- ---------------
(1) Of the amount shown in column (d) for Mr. Soles for 1991, $2,156,250
represents the fair market value at the time of award of 75,000 shares of Common
Stock awarded on May 5, 1991, under the Corporation's Stock Option Plan as
amended in 1990, which vested immediately upon award. Such number of shares has
been adjusted to reflect a three-for-two stock split effected on April 15, 1992.
12
<PAGE> 15
(2) Except as noted in column (e), the amount of other annual compensation paid
to each of the individuals listed in this table during the years shown does not
include perquisites and other personal benefits since such benefits totaled less
than the lesser of either $50,000 or 10% of the total of annual salary and bonus
reported for each of the named individuals. The amount shown in column (e) for
Mr. Soles in 1993 represents additional term life insurance provided by the
Corporation. The amounts shown in column (e) for Mr. Mlekush represent, in 1993,
reimbursement of $20,580 for temporary rental expenses and $15,928 for mortgage
origination fees incurred in connection with his relocation and, in 1992, a
transition payment of $50,000 and a payment for bonus foregone from his previous
employer of $75,000. The amount shown in column (e) for Mr. Hopkins in 1993
includes a relocation payment of $35,000. The amount shown in column (e) for Mr.
Stonecipher in 1992 includes a transition payment of $150,000 and a payment of
$70,640 for costs in connection with the sale of his former residence.
(3) During the years 1991-1993 none of the named individuals were granted any
stock appreciation rights ("SARs"), none of them received any payments under a
long term incentive plan and, except as described in Note (1) as to Mr. Soles,
none of them received any restricted stock awards. As of December 31, 1993, none
of the individuals listed in this table held any restricted stock.
(4) The amount shown in column (i) for Mr. Soles in 1993 represents $259,731 in
retirement benefits paid as required pursuant to the 1987 Employment Contract
and $21,175 for an automobile transferred to Mr. Soles upon his retirement.
(5) Mr. Stonecipher became President and Chief Executive Officer of the
Corporation on March 1, 1993, and became President-Elect and Chief Executive
Officer-Elect of the Corporation on September 8, 1992. Messrs. Hopkins and
Mlekush first became employed by the Corporation in 1993.
The following table sets forth certain information with respect to grants of
stock options pursuant to the Corporation's Stock Option Plan, as amended in
1990, during the fiscal year ended December 31, 1993, to the executive officers
named in the Summary Compensation Table. No stock appreciation rights ("SARs")
were granted under the Plan during 1993.
OPTION GRANTS DURING 1993
<TABLE>
<CAPTION>
PERCENT
OF
TOTAL
NUMBER OF OPTIONS
SECURITIES GRANTED GRANT DATE
UNDERLYING TO PRESENT VALUE
OPTIONS EMPLOYEES EXERCISE EXPIRATION (BLACK-SCHOLES)
NAME GRANTED(#) IN 1993 PRICE($) DATE ($)(1)
(A) (B) (C) (D) (E) (F)
- ---------------------------------- ---------- --------- -------- ---------- ---------------
<S> <C> <C> <C> <C> <C>
David A. Stonecipher 25,000 26.3% 48.25 2/18/03 262,000
W. Roger Soles -- -- -- -- --
Kenneth C. Mlekush 15,000 15.8% 48.25 2/18/03 157,000
C. Randolph Ferguson -- -- -- -- --
William E. Blackwell -- -- -- -- --
John D. Hopkins 15,000 15.8% 56.00 4/19/03 195,000
Thomas Fee -- -- -- -- --
</TABLE>
- ---------------
(1) The values shown in this table have been calculated through standard
application of the Black-Scholes pricing model, using the following assumptions:
options are exercised at the end of their ten-year term; interest rates are
based on U.S. Treasury Strips available on the grant date and maturing at the
end of the option term; volatility is based on the average daily closing market
prices for December, 1989 through December, 1993; and the average annual
dividend growth rate approximates 10%. The actual value an executive officer
receives from a stock option is dependent on future market conditions, and there
can be no assurance that the value ultimately realized by the executive will not
be more or less than the amount reflected as "Grant Date Present Value." In
addition, the value shown does not take into account the nontransferability of
the options. The options are exercisable immediately upon grant.
The following table discloses for the named individuals information concerning
the exercise of stock options during 1993 and the value of unexercised stock
options as of December 31, 1993. None of these individuals
13
<PAGE> 16
exercised any SARs during 1993 or held any SARs (either freestanding or in
tandem with an option) as of December 31, 1993. The option information relates
to the Common Stock, which is the Corporation's only class of stock outstanding.
AGGREGATED OPTION EXERCISES IN 1993
AND DECEMBER 31, 1993 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT 12-31-93 (#) AT 12-31-93 ($)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
(A) (B) (C) (D) (E)
- ------------------------ ------------ ------------ --------------------------- ---------------------------
<S> <C> <C> <C> <C> <C> <C>
David A. Stonecipher -- -- 50,000 -- 190,625 --
W. Roger Soles 16,161 525,310 -- -- -- --
Kenneth C. Mlekush -- -- 15,000 -- -- --
C. Randolph Ferguson 1,300 32,442 1,948 -- 46,664 --
William E. Blackwell 2,500 64,888 8,750 -- 209,607 --
John D. Hopkins -- -- 15,000 -- -- --
Thomas Fee 1,984 49,511 -- -- -- --
</TABLE>
The dollar values listed in columns (c) and (e) represent the difference between
the fair market value of the Common Stock and the exercise price of the options
at exercise or December 31, 1993, respectively.
The following table sets forth certain information with respect to the Long-Term
Plan. Additional information regarding the Long-Term Plan is set forth under
"Incentive and Reward" above.
LONG-TERM INCENTIVE PLAN
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS
OR OTHER UNDER NON-STOCK
PERIOD UNTIL PRICE-BASED PLANS
NUMBER OF SHARES, MATURATION -----------------------------
UNITS OR OTHER OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#)(1) PAYOUT (2) ($)(3) ($)(3) ($)(3)
(A) (B) (C) (D) (E) (F)
- -------------------------------- ----------------- ------------ --------- ------- -------
<S> <C> <C> <C> <C> <C>
David A. Stonecipher -- 1993-1994 104,000 208,000 312,000
-- 1993-1995 156,000 312,000 468,000
W. Roger Soles(4) -- -- -- -- --
Kenneth C. Mlekush -- 1993-1994 33,800 67,600 101,400
-- 1993-1995 50,700 101,400 152,100
C. Randolph Ferguson -- 1993-1994 25,000 50,000 75,000
-- 1993-1995 37,500 75,000 112,500
William E. Blackwell -- 1993-1994 31,750 63,500 95,250
-- 1993-1995 47,625 95,250 142,875
John D. Hopkins(4) -- -- -- -- --
Thomas Fee(4) -- -- -- -- --
</TABLE>
- ---------------
(1) The Long-Term Plan does not provide for awards of shares, units or other
rights representing the right to receive compensation thereunder. The Long-Term
Plan provides for payouts based on the CGR during the two-and three-year periods
specified. Payouts, if any, will be in a 50/50 ratio of cash and Common Stock,
which will be valued at the fair market value on the date of award.
(2) All amounts in the table are based on each participant's current annual
salary. Actual payments, if any, will be calculated as a percentage (which
varies according to the participant and the level of CGR achieved) of each
participant's salary during the last year in each of the periods specified.
(3) Payouts are contingent upon achieving specified levels of CGR. The target
amount will be payable if the targeted CGR is achieved. The threshold amount
will be payable if 50% of the targeted CGR is achieved. The
14
<PAGE> 17
maximum amount will be payable if 150% or more of the targeted CGR is achieved.
No amounts will be payable under the Long-Term Plan if the CGR during the
relevant period is less than 50% of the targeted CGR.
(4) Messrs. Soles, Hopkins and Fee are not participants in the Long-Term Plan.
RETIREMENT PLANS
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
FINAL -------------------------------------------------------------------------
AVERAGE 35 YEARS
EARNINGS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS OR MORE
- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 200,000 $ 50,000 $ 75,000 $100,000 $100,000 $101,077 $103,647
$ 400,000 $100,000 $150,000 $200,000 $200,000 $208,762 $214,086
$ 600,000 $150,000 $225,000 $300,000 $300,000 $316,446 $324,524
$ 800,000 $200,000 $300,000 $400,000 $400,000 $424,130 $434,963
$1,000,000 $250,000 $375,000 $500,000 $500,000 $531,815 $545,402
$1,200,000 $300,000 $450,000 $600,000 $600,000 $639,499 $655,841
</TABLE>
The foregoing table illustrates straight life annuity annual benefits that would
be payable upon normal retirement at age 65 on January 1, 1994 to participants
in specified earnings and years of service classifications. Benefits shown are
not subject to offset for amounts payable under Social Security, but are subject
to reduction in the event of early retirement. The benefits shown include
benefits under qualified plans and under a non-qualified supplemental benefit
plan maintained by the Corporation's subsidiary companies. For purposes of the
table, final average earnings are assumed to include a bonus payable for 1993
equal to 30% of the salary disclosed in column (c) of the Summary Compensation
Table.
The compensation covered by the qualified plans consists of the salary disclosed
in column (c) of the Summary Compensation Table. The credited years of service
in the qualified plans for the named individuals are as follows: Mr.
Stonecipher, none; Mr. Mlekush, none; Mr. Ferguson, 15 years; Mr. Blackwell, 32
years; and Mr. Hopkins, none. As of his retirement on March 1, 1993, Mr. Soles
had 43 years of credited service. As of his retirement on December 1, 1993, Mr.
Fee had 31 years of credited service.
The compensation covered by the non-qualified supplemental benefit plan consists
of the amounts disclosed in column (c) and, for years after 1992, column (d) of
the Summary Compensation Table. The credited years of service in the
supplemental benefit plan for the named individuals are as follows: Mr.
Stonecipher, 1 year; Mr. Mlekush, 1 year; Mr. Ferguson, 16 years; Mr. Blackwell,
36 years; and Mr. Hopkins, 1 year.
Messrs. Soles and Stonecipher are entitled to additional retirement benefits
pursuant to the terms of their employment agreements with the Corporation, which
are described below under "Employment Contracts."
COMPENSATION OF DIRECTORS
Directors who are not employees of the Corporation or one of its subsidiaries
receive a retainer of $25,000 per year, plus a fee of $1,000 for each meeting of
the Board of Directors of the Corporation attended and $500 for each meeting of
a board of directors of one of its subsidiaries attended. Such directors who
also serve on committees of the Board of Directors of the Corporation receive a
fee of $1,000 for each committee meeting attended unless such meeting is held on
the same day as a Board of Directors meeting, in which event such directors are
paid a fee of $500 for each committee meeting attended. Any such director who
serves as a committee chairman receives an additional retainer of $3,000 per
year. The Chairman of the Board of Directors of the Corporation receives an
additional retainer of $50,000 per year. Messrs. McColl and Payne each received
a non-employee director stock grant of 2,250 shares of the Corporation's Common
Stock during 1993. The Corporation has since discontinued the practice of making
such one-time awards to non-employee directors.
15
<PAGE> 18
EMPLOYMENT CONTRACTS
A long-term employment contract entered into on February 9, 1987, among the
Corporation, one of the Corporation's subsidiaries and W. Roger Soles (the "1987
Employment Contract"), who retired as Chairman and President of the Corporation
on March 1, 1993, provided for employment of Mr. Soles to December 31, 1992 at a
minimum annual salary of $1,035,760, of which $30,000 annually was deferred. Mr.
Soles' employment continued until March 1, 1993 on the same terms as provided in
the 1987 Employment Contract. Pursuant to the 1987 Employment Contract, the
accumulated deferrals, which currently bear interest at 5% per annum, are being
paid to Mr. Soles in 100 monthly installments, which are currently in the amount
of $8,602.13 each. The amount of salary deferred during 1993 for Mr. Soles is
included in column (c) of the Summary Compensation Table. The 1987 Employment
Contract also provides that Mr. Soles receive a monthly retirement benefit of
$44,295.09 for life, with 180 monthly installments guaranteed. The portion of
this monthly payment which is in excess of the amounts payable under the
Corporation's benefit plans is included in column (i) of the Summary
Compensation Table.
On March 1, 1993, David A. Stonecipher became the President and Chief Executive
Officer of the Corporation and Jefferson-Pilot Life Insurance Company pursuant
to an employment agreement dated August 11, 1992, which expires on December 31,
1997. Mr. Stonecipher's 1993 base salary under the agreement is $750,000 per
year and is subject to review and increase by the Board of Directors in
subsequent years as appropriate. An annual bonus of up to 50% of base salary may
be earned, determined in accordance with a formula based on growth in EPS over
the prior year. A bonus of 30% of base salary was guaranteed for 1993. Pursuant
to the agreement, Mr. Stonecipher has been granted options to purchase at the
market price on the date of grant 75,000 shares of Common Stock under the
Corporation's Stock Option Plan. Mr. Stonecipher, currently age 53, is entitled
to an annual retirement benefit at age 65 equal to 67% (reduced in the case of
termination of service before age 65) of the average annual base salary and
annual bonus payments over the last 60 months of employment, reduced by other
retirement benefits received by Mr. Stonecipher from his former employer or
under retirement plans of the Corporation, including the pension plans described
above.
On January 1, 1993, Kenneth C. Mlekush became Senior Vice President of the
Corporation and Executive Vice President - Individual of Jefferson-Pilot Life
Insurance Company pursuant to an employment agreement expiring on December 31,
1995. Mr. Mlekush's 1993 base salary under the agreement is $325,000 per year
and is subject to review and increase by the Board of Directors in subsequent
years as appropriate. An annual bonus of up to 48% of base salary may be earned,
determined in accordance with a formula based on growth in EPS, earnings from
individual insurance operations and annualized individual insurance premium
sales over those of the prior year. A bonus of 30% of base salary was guaranteed
for 1993. Pursuant to the agreement, Mr. Mlekush has been granted options to
purchase at the market price on the date of grant 25,000 shares of Common Stock
under the Corporation's Stock Option Plan and will be granted options to
purchase at least an additional 10,000 shares in 1995.
On April 19, 1993, John D. Hopkins became Senior Vice President and General
Counsel of the Corporation and Executive Vice President and General Counsel of
Jefferson-Pilot Life Insurance Company pursuant to an employment agreement
expiring on December 31, 1995. Mr. Hopkins' 1993 base salary under the agreement
is $265,000 per year and is subject to review and increase by the Board of
Directors in subsequent years as appropriate. An annual bonus of up to 48% of
base salary may be earned, determined in accordance with a formula based on
growth in EPS over the prior year. A bonus of 30% of base salary was guaranteed
for 1993. Pursuant to the agreement, Mr. Hopkins has been granted options to
purchase at the market price on the date of grant 22,500 shares of Common Stock
under the Corporation's Stock Option Plan and will be granted options to
purchase at least an additional 7,500 shares in 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Charles W. McCoy, E. S. Melvin, Robert H. Spilman and Charles E. Hayworth, a
former director of the Corporation, served as members of the Compensation
Committee of the Board of Directors during all of 1993. In addition, Hugh L.
McColl, Jr. joined the Compensation Committee on February 8, 1993, and served as
a member during the remainder of 1993. C. D. Spangler, a former director of the
Corporation, served as a member of the Compensation Committee until February 3,
1993. None of such persons was an officer or employee of the Corporation or any
of its subsidiaries.
16
<PAGE> 19
Jefferson-Pilot Life Insurance Company ("Life Company"), a subsidiary of the
Corporation, leases office space in Greensboro, North Carolina to NationsBank of
North Carolina, N.A. ("Bank"), a subsidiary of NationsBank Corporation, of which
Hugh L. McColl, Jr., a director of the Corporation and member of the
Compensation Committee of the Board of Directors of the Corporation, is Chairman
of the Board and Chief Executive Officer (in addition to serving as Chief
Executive Officer of the Bank). The annual rent paid for the space, which is
approximately 50,000 square feet, in 1993 was $617,000. The space was leased to
the Bank in 1975 at rentals which at the time the lease agreement was negotiated
were no more or less favorable, in the opinion of management of the Life
Company, than those which an unaffiliated company would be required to pay for
similar space.
The Life Company has for many years provided group life insurance to the
employees of NationsBank Corporation and its subsidiaries and administered
NationsBank Corporation's self-insured medical plan for employees of NationsBank
Corporation and its subsidiaries. During 1993, the Life Company received from
NationsBank Corporation an aggregate of approximately $10,820,000 in group life
insurance premiums (including employee-paid premiums) and administrative fees
for servicing the said medical plan. The premiums and fees charged NationsBank
Corporation were negotiated in an arms' length transaction. As a result,
management believes that those premiums and fees are no more or less favorable
than those which an unaffiliated company of comparable size would be charged for
similar insurance and services.
17
<PAGE> 20
PERFORMANCE GRAPH
The following graph compares the annual percentage change in Jefferson-Pilot's
cumulative total shareholder return on its Common Stock (as measured by dividing
(i) the sum of (A) the cumulative amount of dividends for the period January 1,
1989 to December 31, 1993, assuming dividend reinvestment, and (B) the
difference between the stock's share price at December 31, 1993 and January 1,
1989, by (ii) the share price at January 1, 1989) with the Standard & Poor's 500
Stock Index and with certain other similarly diversified life insurance
companies, which are listed below (the "Similarly Diversified Companies"). The
January 1, 1989 prices have been adjusted to reflect a three-for-two stock split
effected April 15, 1992.
COMPARISON OF FIVE YEAR CUMULATIVE RETURN(1)
AMONG JEFFERSON-PILOT CORPORATION, S&P 500 INDEX, AND SIMILARLY DIVERSIFIED
COMPANIES(2)
<TABLE>
<CAPTION>
Similarly
Measurement Period Jefferson- Diversified
(Fiscal Year Covered) Pilot S&P 500 Companies
<S> <C> <C> <C>
Dec. '88 $ 100 $ 100 $ 100
Dec. '89 146 132 139
Dec. '90 132 128 118
Dec. '91 209 166 172
Dec. '92 276 179 233
Dec. '93 277 197 242
</TABLE>
ASSUMES $100 INVESTED ON DECEMBER 31, 1988 IN JEFFERSON-PILOT CORPORATION COMMON
STOCK, S&P 500 INDEX AND SIMILARLY DIVERSIFIED COMPANIES.
(1) TOTAL RETURN ASSUMES REINVESTMENT OF DIVIDENDS.
(2) SIMILARLY DIVERSIFIED COMPANIES INCLUDE: AMERICAN GENERAL CORPORATION,
AMERICAN NATIONAL INSURANCE COMPANY, CAPITAL HOLDING CORPORATION, THE
LIBERTY CORPORATION, LINCOLN NATIONAL CORPORATION, THE NWNL COMPANIES, INC.,
PROTECTIVE LIFE CORPORATION, PROVIDENT LIFE & ACCIDENT INSURANCE COMPANY OF
AMERICA (CLASS B COMMON), TORCHMARK CORPORATION, AND USLIFE CORPORATION.
EACH SUCH COMPANY IS WEIGHTED ACCORDING TO ITS RESPECTIVE STOCK MARKET
CAPITALIZATION AT THE BEGINNING OF THE PERIOD FOR WHICH A RETURN IS
INDICATED.
18
<PAGE> 21
PRINCIPAL SHAREHOLDERS
The following table shows ownership of the Corporation's only class of
stock -- Common Stock, par value $1.25 per share -- by all persons known to the
Corporation to own beneficially five percent or more of such stock as of March
7, 1994. None of the shares shown are shares with respect to which such persons
have the right to acquire beneficial ownership as specified in Rule 13d-3(d)(1)
of the Exchange Act.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Delcor, Inc. 3,095,400 * 6.34%
1105 North Market Street
Wilmington, DE 19899
Golden Eagle Industries, Inc. 3,095,400 * 6.34%
1110 East Morehead Street
Charlotte, NC 28204
C. D. Spangler, Jr. 3,096,150 * 6.34%
910 Raleigh Road
Chapel Hill, NC 27515
W. D. Cornwell, Jr. 3,099,900 * 6.35%
1110 East Morehead Street
Charlotte, NC 28204
</TABLE>
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* 3,095,400 of these shares are included in the number of shares shown as being
owned by the other persons named in this table.
Delcor, Inc. ("Delcor"), Golden Eagle Industries, Inc. ("Golden Eagle"), C. D.
Spangler, Jr. and W. D. Cornwell, Jr. have furnished the Corporation with an SEC
Schedule 13D dated December 21, 1992 and an amendment thereto dated January 18,
1993, indicating that Delcor, a wholly-owned subsidiary of Golden Eagle, is the
record owner of 3,095,400 of the shares of Common Stock shown in the foregoing
table, that Messrs. Spangler and Cornwell may be deemed to control Golden Eagle
and Delcor, and that Messrs. Spangler and Cornwell may thus be considered to
have beneficial ownership of the shares of Common Stock beneficially owned by
Delcor. Mr. Cornwell, who is a director, President and Treasurer of Delcor and
Golden Eagle, is the record owner of 2,500 shares of Common Stock; in addition,
2,000 shares of Common Stock are held under arrangements under which Mr.
Cornwell might be deemed a beneficial owner of such shares. Mr. Spangler, who is
the record owner of 750 shares of Common Stock, is a director of Golden Eagle.
None of the shares of Common Stock are owned of record by Golden Eagle.
PROPOSAL II -- APPROVAL OF AMENDMENTS TO ARTICLES OF INCORPORATION AND BY-LAWS
The Board of Directors has unanimously recommended that the shareholders approve
a proposal to amend the Articles of Incorporation and By-laws of the Corporation
to reduce the required size of the Board of Directors from its currently
required size of 20 to a maximum of 15 and a minimum of 11, with the exact
number of directors to be established from time to time by the Board of
Directors. The proposal is in accordance with the "Statement of Principles of
Jefferson-Pilot With Respect to Certain Corporate Governance Matters," which was
ratified at the 1993 Annual Meeting of Shareholders by the affirmative vote of
94% of votes cast at the 1993 Annual Meeting. The exact number of directors to
be initially established by the Board of Directors is 15.
The Board of Directors believes that a reduction of the size of the Board is in
the best interests of the Corporation and its shareholders. The Board of
Directors believes that a smaller Board will facilitate communications among the
directors and increase the efficiency of the Board of Directors. The Board of
Directors also believes that the reduction in size can be accomplished without
sacrificing diversity of experience and points of view. In addition, if the
nominees of the Board of Directors for election as directors at the Meeting are
elected, the resulting Board will have a higher percentage of non-employee
directors and a
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lower average age than the predecessor Board. The proposal to authorize the
Board of Directors to vary its size from a minimum of 11 to a maximum of 15
directors will also afford the Board additional flexibility to adjust the size
of its membership as appropriate in the circumstances in the future.
The proposed amendments to Section 1 of Article IX of the Articles of
Incorporation and Section 1 of Article II of the By-laws of the Corporation also
provide that the business and affairs of the Corporation be managed "under the
direction of" the Board of Directors. Such sections, as currently in effect,
provide that the affairs of the Corporation be managed "by" the Board of
Directors. The proposed change from management "by" the Board of Directors to
management "under the direction of" the Board of Directors reflects a
corresponding revision to the applicable provisions of the North Carolina
Business Corporation Act, which became effective on July 1, 1990. The Official
Comment to the Act states that in the case of a publicly-held corporation, it is
appropriate to provide that the corporation's business and affairs be managed
"under the direction of" the board of directors because the board's role
consists principally of the formulation of major management policy rather than
direct involvement in day-to-day management.
FOR THE REASONS STATED ABOVE, THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE IN
FAVOR OF THE PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION AND BY-LAWS BY
EXECUTING THE ENCLOSED PROXY CARD.
The full text of Section 1 of Article IX of the Articles of Incorporation of the
Corporation and Section 1 of Article II of the By-laws of the Corporation, as
currently in effect and as proposed to be amended, is set forth in Exhibit A to
this Proxy Statement. The preceding description of the proposed amendments to
the Articles of Incorporation and By-laws of the Corporation is qualified in its
entirety by reference to Exhibit A.
Pursuant to the Articles of Incorporation and By-laws of the Corporation,
approval of the proposed amendments requires the affirmative vote of holders of
80% or more of the outstanding shares of Common Stock. Each abstention and
broker non-vote will have the same effect as a vote "against" this proposal. A
broker voting stock held in street name may vote on this proposal without
obtaining specific instructions from the beneficial owner of the stock. Votes
will be counted by the Inspectors of Election at the Meeting.
As described above, the Board of Directors has nominated for election as Class
II directors a total of five individuals, which is the number of directorships
that will exist in each class of directors if the proposal to reduce the size of
the Board of Directors is approved by the required vote of shareholders. Class
II presently consists of seven directorships, one of which is vacant. In
addition, three other directorships (one in Class I and two in Class III) are
currently vacant. Proxies cannot be voted for a greater number of persons than
the number of nominees named herein. In the event that the proposal to reduce
the size of the Board of Directors is not approved by the required vote of
shareholders, the Board of Directors presently intends not to fill the vacancies
existing on the Board of Directors after the Meeting (although it reserves the
right to do so as it deems appropriate if the proposal is not approved) and
presently intends to submit the proposal to the shareholders again at or before
the 1995 Annual Meeting of Shareholders.
SHAREHOLDER PROPOSALS FOR THE 1995 ANNUAL MEETING
Any shareholder who intends to present a proposal for possible action at the
Corporation's 1995 Annual Meeting of Shareholders, tentatively scheduled for May
1, 1995, must submit such proposal to the Corporation at 100 North Greene
Street, Greensboro, North Carolina, on or before November 29, 1994 in order for
such proposal to be considered for inclusion in the Corporation's proxy and
proxy statement relating to that meeting.
The Corporation's Articles of Incorporation and By-Laws provide that any
shareholder entitled to vote at the 1995 Annual Meeting may nominate at that
meeting one or more persons for election as directors only if written notice of
such shareholder's intent to make such nomination or nominations has been given
to the Secretary of the Corporation at 100 North Greene Street, Greensboro,
North Carolina 27401, not later than 90 days in advance of such meeting.
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<PAGE> 23
INFORMATION RELATING TO THE CORPORATION'S INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee, the Board of Directors has selected
McGladrey & Pullen as the Corporation's independent public accountants for the
fiscal year ending December 31, 1994. A representative of McGladrey & Pullen is
expected to be present at the Meeting, at which time such representative will
have an opportunity to make a statement if he or she desires and to answer
questions from shareholders.
MISCELLANEOUS
EXPENSES AND METHODS OF SOLICITATION
All the expenses of soliciting proxies from shareholders will be borne by the
Corporation. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to forward solicitation materials to the
beneficial owners of Common Stock, and such persons will be reimbursed for their
expenses. The Corporation has arranged for Georgeson to perform various proxy
advisory and solicitation services for the Corporation, and Georgeson shall be
paid a fee therefor of $10,000, plus out-of-pocket expenses. It is anticipated
that up to 20 officers and other regular employees of the Corporation and its
subsidiaries (who will not receive additional compensation for doing so) may
solicit proxies by mail, telephone, telecopy or telegram or in person. The
Corporation may also request its directors and nominees as directors (who will
not receive compensation for doing so) to solicit proxies by mail, telephone,
telecopy or telegram or in person.
CORPORATE GOVERNANCE MATTERS
Since their adoption by the Board of Directors on April 3, 1993, the Corporation
has complied in all material respects with the "Statement of Principles of
Jefferson-Pilot Corporation With Respect to Certain Corporate Governance
Matters" (the "Principles"), which were ratified at the 1993 Annual Meeting of
Shareholders by the affirmative vote of 94% of votes cast at the 1993 Annual
Meeting. The Principles have not been modified, amended or waived in any respect
since their adoption. The proposal to reduce the size of the Corporation's Board
of Directors is being brought to shareholders at the 1994 Annual Meeting of
Shareholders in compliance with the Principles, which require such a proposal to
be submitted to shareholders at or before the 1995 Annual Meeting of
Shareholders. A copy of the Principles is available upon request to the
Secretary of the Corporation at 100 North Greene Street, Greensboro, North
Carolina 27401, and will be available for review by shareholders at the Meeting.
OTHER MATTERS
The Board of Directors is not aware of any matter which may be presented for
action at the Meeting other than the matters set forth herein, but should any
other matter requiring a vote of the shareholders arise, it is intended that the
proxy in the accompanying form will be voted in respect thereof, in accordance
with the best judgment of the person or persons voting the proxy, in the
interest of the Corporation, discretionary authority to do so being included in
the proxy.
Whether or not you plan to attend the Meeting, please promptly sign, date and
return the enclosed proxy card, which will be returned to you at the Meeting if
you are present and so request.
By Order of the Board of Directors
/s/ John D. Hopkins
- -------------------
John D. Hopkins
Senior Vice President,
General Counsel and Secretary
March 29, 1994
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<PAGE> 24
EXHIBIT A
The full text of Section 1 of Article IX of the Articles of Incorporation of the
Corporation and Section 1 of Article II of the By-laws of the Corporation, as
currently in effect, is set forth below:
"The affairs of the Corporation shall be managed by a Board of Directors to
consist of twenty in number."
The full text of Section 1 of Article IX of the Articles of Incorporation of the
Corporation and Section 1 of Article II of the By-laws of the Corporation, as
proposed to be amended, is set forth below:
"The business and affairs of the Corporation shall be managed under the
direction of a Board of Directors consisting of no less than eleven and no
more than fifteen directors, with the exact number of directors to be
established from time to time by the Board of Directors."
<PAGE> 25
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<S> <C> <C>
PROXY JEFFERSON-PILOT CORPORATION [LOGO]
Please date and sign on reverse side and return in the enclosed postage-paid envelope.
The undersigned, having received the Notice of Annual Meeting and Proxy Statement dated March 29, 1994, hereby constitute(s)
and appoint(s) David A. Stonecipher, William E. Blackwell and Charles W. McCoy, attorneys and proxies of the undersigned, with full
power of substitution and revocation to each, and with all the powers the undersigned would possess if personally present, to vote
for and in the name and place of the undersigned all shares of stock of Jefferson-Pilot Corporation the undersigned is entitled to
vote at the Annual Meeting of the Shareholders of Jefferson-Pilot Corporation to be held at the home office of the Corporation, 100
North Greene Street, Greensboro, North Carolina, at 10:00 o'clock A.M., Eastern Daylight Time, on Monday, May 2, 1994, and at any
adjournment thereof, upon the matters referred to in the Notice of and Proxy Statement for said meeting as stated below and on the
reverse side. The proxies are further authorized to vote, in their discretion, upon such other business as may properly come before
the meeting or any adjournment thereof. A majority of said attorneys and proxies present and acting at said Annual Meeting (or if
only one shall be present and act, then that one) shall have, and may exercise, all the powers of all said attorneys and proxies
hereunder.
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION. UNLESS OTHERWISE SPECIFIED BELOW OR ON
THE REVERSE SIDE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES OF THE BOARD OF DIRECTORS LISTED BELOW AND ON THE REVERSE SIDE AND FOR
THE PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION AND BY-LAWS OF THE CORPORATION REFERRED TO ON THE REVERSE SIDE. DISCRETIONARY
AUTHORITY IS HEREBY CONFERRED AS TO ALL OTHER MATTERS THAT MAY COME BEFORE THE MEETING.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE NOMINEES NAMED BELOW AND ON THE REVERSE SIDE AND "FOR"
THE PROPOSAL TO AMEND THE ARTICLES OF INCORPORATION AND BY-LAWS OF THE CORPORATION REFERRED TO ON THE REVERSE SIDE.
I. ELECTION OF FIVE PERSONS AS CLASS II DIRECTORS (to serve until the Annual Meeting of 1997):
The nominees are Edwin B. Borden, William H. Cunningham, E.S. Melvin, Donald S. Russell, Jr. and David A. Stonecipher.
/ / FOR all listed Class II nominees / / FOR all listed Class II nominees except those whose name(s) I have written
below
/ / WITHHOLD AUTHORITY to vote for ________________________________________________________________________________
all Class II nominees
(Continued, and to be signed, on the other side)
(Continued from other side)
II. ELECTION OF ONE PERSON AS A CLASS I DIRECTOR (to serve until the Annual
Meeting of Shareholders in 1996): The nominee is Robert H. Spilman.
/ / FOR the listed Class I nominee / / WITHHOLD AUTHORITY for Class I nominee
III. ELECTION OF ONE PERSON AS A CLASS III DIRECTOR (to serve until the Annual
Meeting of Shareholders in 1995): The nominee is A. Linwood Holton, Jr.
/ / FOR the listed Class III nominee / / WITHHOLD AUTHORITY for Class III nominee
IV. APPROVAL OF AMENDMENTS TO ARTICLES OF INCORPORATION AND BY-LAWS OF THE CORPORATION PROVIDING THAT THE BUSINESS AND
AFFAIRS OF THE CORPORATION ARE TO BE MANAGED UNDER THE DIRECTION OF A BOARD OF DIRECTORS CONSISTING OF NO LESS THAN ELEVEN AND
NO MORE THAN FIFTEEN DIRECTORS, WITH THE EXACT NUMBER OF DIRECTORS TO BE ESTABLISHED FROM TIME TO TIME BY THE BOARD OF
DIRECTORS.
FOR / / AGAINST / / ABSTAIN / /
Date:_________________________________, 1994
PLEASE SIGN HERE AND RETURN PROMPTLY
________________________________________
________________________________________
IMPORTANT: Whether or not you expect
to attend the meeting in person, please
date, sign and return this proxy. When
signing as attorney-in-fact executor,
administrator, guardian, trustee,
custodian, etc., please give your full
title as such. If stock is owned
/ / Please mark the box to the left if you plan to attend the meeting in person. jointly, all parties should sign.
[LOGO]
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