<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
JEFFERSON-PILOT 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):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ 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
LOGO
JEFFERSON-PILOT CORPORATION
100 North Greene Street
Greensboro, North Carolina 27401
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
MEETING DATE: MAY 6, 1996
Dear Shareholder:
You are cordially invited to attend the 1996 Annual Meeting of Jefferson-Pilot's
shareholders. We will meet at the Corporation's offices in Greensboro, North
Carolina on Monday, May 6, 1996, at 10:00 A.M.
The matters to be acted upon at the meeting are described in the attached Notice
of Meeting and Proxy Statement.
Detailed information relating to the Corporation's activities and performance
during 1995 is contained in our Annual Report to Shareholders.
I urge you to vote your shares by proxy, even if you plan to attend the meeting.
After you read the proxy statement, please indicate on the proxy card the way
you want your shares voted. Then date, sign and return the proxy card in the
postage-paid return envelope.
On behalf of your Board of Directors, thank you for your continued support.
Sincerely,
LOGO
David A. Stonecipher
President and CEO
Jefferson-Pilot Corporation
April 4, 1996
<PAGE> 3
NOTICE OF 1996 ANNUAL MEETING OF SHAREHOLDERS
APRIL 4, 1996
Notice is Hereby Given that the Annual Meeting of Shareholders of
Jefferson-Pilot Corporation will be held at the Jefferson-Pilot Building (4th
Floor), 100 North Greene Street, Greensboro, North Carolina, at 10:00 o'clock
a.m. local time, on Monday, May 6, 1996, for the purpose of:
(1) electing four persons as Class I directors with terms continuing until
the Annual Meeting of Shareholders in 1999 and until their successors
are duly elected and qualified;
(2) approving an amendment to the Articles of Incorporation of the
Corporation to increase the authorized common stock from 150,000,000 to
350,000,000 shares;
(3) transacting any other business that may be properly brought before the
meeting or any adjournment of the meeting.
Holders of common stock of record at the close of business on March 4, 1996 will
be entitled to vote at the meeting or any adjournment of the meeting.
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 voted at the
meeting.
On behalf of the Board of Directors,
[SIG]
Vice President and Secretary
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<TABLE>
<S> <C>
CONTENTS
Proxy Solicitation and Voting Information...................................................
Proposal I -- Election of Directors.........................................................
Security Ownership..........................................................................
Executive Compensation......................................................................
Proposal II -- Amendment to Articles of Incorporation to Increase Authorized Common Stock...
Other Information...........................................................................
Exhibit I -- Proposed Amendment to the Articles.............................................
</TABLE>
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PROXY STATEMENT
PROXY SOLICITATION AND VOTING INFORMATION
The enclosed proxy is solicited by the Board of Directors of Jefferson-Pilot
Corporation ("Corporation") in connection with the Annual Meeting of
Shareholders ("Meeting") to be held on May 6, 1996 and any and all adjournments
of the Meeting. These proxies will be voted if properly signed, received by the
Corporation prior to the close of voting at the Meeting and not revoked.
Holders of record of the Corporation's common stock ("common stock") at the
close of business on March 4, 1996 will be entitled to vote at the Meeting. On
that date, 71,224,031 shares of common stock were outstanding. Record holders
are entitled to one vote per share on each matter properly brought before the
Meeting. 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.
Under North Carolina law and the Corporation's Articles of Incorporation,
assuming a quorum is present, (i) the candidates receiving the biggest number of
votes will be elected directors, (ii) a majority of the votes cast by
shareholders on the proposed amendment to the Articles of Incorporation is
required for its approval. Abstentions and broker non-votes are counted for
purposes of determining a quorum. Abstentions, broker non-votes or failure to
vote are disregarded in tabulating voting results. Shareholders may not cumulate
their votes. Votes will be counted by employees of Georgeson & Company, Inc.
("Georgeson"), which has been appointed to serve as Inspector of Election for
the Meeting.
Proxies representing shares of common stock held of record also will represent
full and fractional shares held under the Corporation's Dividend Reinvestment
Plan. Separate voting cards are being furnished under the 401(k)/TeamShare Plan
for employees and career agents and under the Agents' Retirement Plan.
A shareholder who has returned a proxy may revoke it at any time before its use
by delivering a written notice of revocation to the Secretary of the
Corporation, by submitting a properly executed, subsequently-dated proxy to the
Corporation or by voting in person at the Meeting.
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 nominees for director and for the amendment
to the Articles of Incorporation.
All data in this Proxy Statement relating to the Corporation's common stock and
stock options have been adjusted where necessary to reflect the three-for-two
split of the Corporation's common stock that was effected through a 50% stock
dividend in December 1995.
PROPOSAL I -- ELECTION OF DIRECTORS
Jefferson-Pilot's Board of Directors presently consists of fourteen members,
divided into three classes. The terms of office of the three classes of
directors end in successive years.
Four members of the class of directors whose term of office is expiring have
been nominated to serve for a new three-year term that will end in 1999. One
director, Thomas M. Belk, is not standing for reelection in deference to the
Board's retirement policy for directors which is included in the corporate
governance principles ratified by shareholders in 1993. All of the director
nominees have previously been elected by the shareholders.
The accompanying proxy will be voted for the election of the four nominees,
unless authority to vote for one or more nominees is withheld. If any nominee is
unable or unwilling to serve as a director for any reason (which is not
anticipated), the proxy will be voted for the election of any substitute nominee
designated by the Board of Directors or its Executive Committee.
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<PAGE> 5
Certain information about these nominees and the other directors whose terms of
office will continue after the Meeting is shown below.
<TABLE>
<CAPTION>
NAME, AGE AND YEAR
FIRST BECAME A
DIRECTOR PRINCIPAL OCCUPATION DURING LAST FIVE YEARS AND OTHER POSITIONS(1)
- -------------------------------------------------------------------------------------------
<S> <C>
NOMINEES TO SERVE FOR A THREE-YEAR TERM EXPIRING 1999 -- CLASS I
WILLIAM E. BLACKWELL President, Jefferson-Pilot Communications Company since July 1991;
age 63 Executive Vice President of the Corporation(2)
Director since 1985
C. RANDOLPH FERGUSON Senior Vice President of the Corporation since May 1989; prior
age 50 thereto, Vice President -- Planning & Internal Auditing; Executive
Director since 1989 Vice President -- Group, Jefferson-Pilot Life Insurance Company
since August 1988(2)
WILLIAM PORTER PAYNE President and Chief Executive Officer, Atlanta Committee for the
age 48 Olympic Games, Atlanta, GA since January, 1991; prior thereto,
Director since 1993 President and Chief Executive Officer, Georgia Amateur Athletics
Foundation, d/b/a Atlanta Organizing Committee, Atlanta, GA
ROBERT H. SPILMAN* Chairman of the Board of the Corporation since March 1993; Chairman
age 68 of the Board and Chief Executive Officer, Bassett Furniture
Director since 1984 Industries, Inc. (furniture manufacturer), Bassett, VA
CONTINUING DIRECTORS FOR THE TERM EXPIRING 1997 -- CLASS II
EDWIN B. BORDEN President and Chief Executive Officer, The Borden Manufacturing Co.
age 61 (textiles), Goldsboro, NC
Director since 1991
WILLIAM H. CUNNINGHAM* Chancellor, The University of Texas System, Austin, TX since
age 52 September 1992; prior thereto, President, the University of Texas
Director since 1986 at Austin
E. S. MELVIN Senior Vice President, Central Carolina Bank & Trust Company since
age 62 June 1993; prior thereto, Chairman of the Board and Chief Executive
Director since 1988 Officer, 1st Home Federal Savings and Loan Association of the
Carolinas, F.A., Greensboro, NC
DONALD S. RUSSELL, JR. Attorney in sole practice in Columbia, SC
age 55
Director since 1977
DAVID A. STONECIPHER* President and CEO of the Corporation; President-Elect and CEO-Elect
age 54 from September 1992 to February 1993; President and CEO since March
Director since 1993 1993, Jefferson-Pilot Life Insurance Company(2); President
GeorgiaUS (holding company), Atlanta, GA from February 1991 to
August 1992 and Executive Vice President from April 1989
</TABLE>
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<TABLE>
<CAPTION>
NAME, AGE AND YEAR
FIRST BECAME A
DIRECTOR PRINCIPAL OCCUPATION DURING LAST FIVE YEARS AND OTHER POSITIONS(1)
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<S> <C>
CONTINUING DIRECTORS FOR THE TERM EXPIRING 1998 -- CLASS III
ROBERT G. GREER* Vice Chairman and Advisory Director, Northern Trust Bank of Texas,
age 61 Houston, Texas, since August 1995; prior thereto, Chairman of the
Director since 1975 Board of Tanglewood Bank
GEORGE W. HENDERSON, President and Chief Executive Officer, Burlington Industries, Inc.
III (manufacturer of textile products), Greensboro, NC since January 1,
age 47 1995; President and Chief Operating Officer from April 1993; prior
Director since 1995 thereto, Group Vice President; also a director since 1990
HUGH L. MCCOLL, JR. Chairman and Chief Executive Officer, NationsBank Corporation,
age 60 Charlotte, NC since November 1993; Chairman, President and Chief
Director since 1993 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
that company's subsidiary banks
MARTHA A. WALLS President and Chief Executive Officer, Southern Newspapers, Inc.,
age 68 Houston, TX
Director since 1990
</TABLE>
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* Member of the Corporation's Executive Committee.
(1) In addition to the directorships shown in the table, Mr. Borden is a
director of Carolina Power & Light Company, Triangle Bancorp, Ruddick
Corporation and Winston Hotels, Inc.; Mr. Cunningham is a director of La
Quinta Motor Inns, Inc., thirty-seven funds in the John Hancock family of
mutual funds and Texas Commerce Bank (Advisory Director); Mr. McColl is a
director of CSX Corporation, Ruddick Corporation and Sonoco Products
Company; Mr. Melvin is a director of Beamon Corporation; Mr. Russell is a
director of Piedmont Natural Gas Company; and Mr. Spilman is a director of
Dominion Resources, Inc., Dominion Energy, Inc., NationsBank Corporation,
The Pittston Co., Reliable Stores, Inc., Trinova Corporation and Virginia
Electric and Power Company.
(2) Jefferson-Pilot Communications Company and Jefferson-Pilot Life Insurance
Company are wholly-owned subsidiaries of the Corporation.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors held five meetings during 1995. Attendance by directors
at meetings of the Board and of committees on which they served averaged
approximately 91%. All directors attended at least 75% of the meetings of the
Board and of committees on which they served except Messrs. Belk (family
emergency), McColl (foreign travel), and Payne (foreign travel).
To assist the Board of Directors in carrying out its duties and
responsibilities, it has appointed several standing committees, including the
four described below.
Under the Statement of Principles of Jefferson-Pilot Corporation with Respect to
Certain Corporate Governance Matters, which were adopted by the Board and
ratified overwhelmingly by shareholders in 1993, the Audit, Compensation and
Conflict of Interests Committees may not include any inside director (a current
or recent executive officer or any relative thereof) or any other director who
is an executive officer of another public corporation on whose board an
executive officer and director of the Corporation serves. Each of these
Committees is authorized to engage independent advisers with an appropriate
budget made available for this purpose. The Nominating Committee may not include
more than one inside director.
The Audit Committee, which met three times in 1995, is currently composed of
Directors Russell (Chairman), Belk, Henderson, Melvin and Walls. The duties of
the 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
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<PAGE> 7
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 internal 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.
The Compensation Committee, which met twice in 1995, is currently composed of
Directors Cunningham (Chairman), Belk, McColl, Melvin, and Spilman. The duties
of the Committee include approval of 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; 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 as well as determining the awards
thereunder for senior executive officers.
The Nominating Committee, which met once in 1995, is currently composed of
Directors Spilman (Chairman), Cunningham, Greer, Henderson and McColl. The
duties of the Committee include recommendation to the Board with respect to
nominees for election as directors; 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
Committee will consider nominees recommended in writing by shareholders to the
same extent as nominees recommended by management. The 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.
The Conflict of Interests Committee, which met once in 1995, is currently
composed of Directors Walls (Chairperson), Borden, Melvin, Payne and Russell.
The duties of the Committee include annual review of all significant
relationships which directors have with the Corporation, directly or indirectly,
and making appropriate recommendations to the Board based thereon concerning
Committee assignments. The duties also include investigation of any complaints
concerning a possible conflict of interests involving directors or officers of
the Corporation, recommendation to the Board of action to be taken to remove any
such conflict and recommendation of policies or procedures designed to avoid any
such conflicts of interests.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Corporation or one of its subsidiaries
receive a retainer of $30,000 per year, plus a fee of $1,000 for each Board or
committee meeting of the Corporation or one of its subsidiaries attended ($500
for a committee meeting held in connection with a Board meeting). Committee
chairpersons receive an additional annual retainer of $3,000. The Chairman of
the Board receives an additional annual retainer of $50,000.
Directors may elect to defer receipt of some or all cash directors' fees.
Deferred accounts are credited with phantom stock of the Corporation or with
interest at rates representative of market rates, as selected by the director.
Deferred accounts are unfunded and are paid out in up to ten annual installments
after Board service ends.
Under the Non-Employee Directors' Stock Option Plan approved by shareholders in
1995, non-employee directors receive non-discretionary stock option awards, each
exercisable at the fair market value of the Corporation's common stock on the
date of the award, as follows: in 1995 or at such later date as they may join
the Board, options to purchase 7,500 shares; and on the first regularly
quarterly Board meeting date in each year from 1996 through 1999, options to
purchase 3,375 shares. The Plan, unless earlier terminated, will expire on March
31, 1999.
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SECURITY OWNERSHIP
The following table shows the beneficial ownership of the Corporation's common
stock as of March 4, 1996 for each director and each of the five highest paid
executive officers, and for all such persons and other executive
officers as a group, based on information they supplied.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
NAME OWNED(1)(2)
- ----------------------------------------------------------------------------------------------------
<S> <C>
Thomas M. Belk................................................................... 13,693
William E. Blackwell............................................................. 90,193
Edwin B. Borden.................................................................. 24,000
William H. Cunningham............................................................ 12,025
C. Randolph Ferguson............................................................. 63,132
Robert G. Greer.................................................................. 12,900
George W. Henderson, III......................................................... 2,800
Hugh L. McColl, Jr............................................................... 10,875(2)
E. S. Melvin..................................................................... 18,647(2)
William Porter Payne............................................................. 11,920
Donald S. Russell, Jr............................................................ 127,312
Robert H. Spilman................................................................ 25,143
David A. Stonecipher............................................................. 186,559
Martha A. Walls.................................................................. 35,357
Dennis R. Glass.................................................................. 70,339
John D. Hopkins.................................................................. 60,819
Kenneth C. Mlekush............................................................... 72,624
Directors and executive officers as a group (18 persons)......................... 893,330
</TABLE>
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(1) The individuals have sole voting and investment power with respect to the
shares shown, except as follows: Mr. Belk: 1,393 shares are held by his
wife and 4,800 shares are held by a corporation of which he is the sole
shareholder; Mr. Blackwell: 2,250 shares are held by his wife; Mr. Melvin:
610 total shares are held by his two sons and wife; Mr. Russell: 111,375
shares are held of record by his father under an arrangement under which
Mr. Russell has sole voting power; Mr. Spilman: 1,050 shares are held by
his wife; Mr. Stonecipher: 3,000 shares are held by his wife; and Ms.
Walls: 29,670 shares are owned jointly with her husband and 2,042 shares
are held by a corporation of which she is an officer, director and
principal shareholder. Except as specifically indicated, the directors
named in this note have no authority to vote these shares. The shares
reported include shares held for each officer under the Corporation's
401(k)/TeamShare plan, and the following shares which the individuals had
the right to acquire within 60 days through the exercise of options:
employee plan: Mr. Blackwell, 17,500; Mr. Ferguson, 13,500; Mr.
Stonecipher, 137,500; Mr. Glass, 63,750; Mr. Hopkins, 56,250; Mr. Mlekush,
70,000; non-employee director plan: Messrs. Belk, Borden, Cunningham,
Greer, McColl, Melvin, Payne, Russell and Spilman, 7,500 each; Mr.
Henderson, 2,500; and the group, 477,250.
(2) None of the individuals reported beneficial ownership of more than 1% of the
total shares outstanding. Mr. McColl reported that NationsBank Corporation,
of which he is Chairman and Chief Executive Officer, holds 3,532,500 shares
(4.94%) for its own account, as to which he disclaims beneficial ownership.
Mr. Melvin reported that he is co-executor of the estate of Joseph M.
Bryan, which owns 837,675 shares of common stock of the Corporation (1.2%),
as to which Mr. Melvin disclaims beneficial ownership; these shares
ultimately will be distributed to the Joseph M. Bryan Foundation, of which
Mr. Melvin is President and Chief Executive Officer.
The Corporation believes that all of its executive officers and directors
complied for 1995 with all applicable stock ownership reporting requirements
under Section 16(a) of the Securities Exchange Act of 1934, except as follows.
Mr. Belk was two days late in filing one report disclosing a purchase of the
Corporation's stock by his spouse. Form 5's for all the non-employee directors
named above, reporting the shares issued in the 50%
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stock dividend in December 1995 and, for six directors, shares acquired through
dividend reinvestment, were timely submitted to the Corporation but due to
clerical oversight were sent two days late to the SEC. Form 5's for all the
executive officers names in the above table and two others, Reggie D. Adamson
and E. Jay Yelton, reporting the 50% stock dividend and the shares acquired
throughout 1995 under the new 401(k)/Team Share Plan, were sent three days late
to the SEC; problems in reporting data for this new Plan contributed to the
delay in filing.
The following table shows ownership of the Corporation's common stock by all
persons known to the Corporation to own beneficially five percent or more of
such stock as of March 4, 1996.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
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<S> <C> <C>
INVESCO PLC 4,399,798(1) 6.179%
11 Devonshire Square
London EC2M 4YR, England
</TABLE>
- ---------------
(1) INVESCO PLC has furnished the Corporation with an SEC Schedule 13G dated
February 2, 1996 indicating that it and a number of its affiliates
including INVESCO Capital Management, Inc. may be deemed to beneficially
own these shares by virtue of having shared voting power and shared
dispositive power over the shares, which are reported to be held on behalf
of other persons who have the power to direct the receipt of dividends and
proceeds from sales.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Principles of the Executive Pay Program
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.
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 insurance, broadcasting, etc.).
Actual compensation of
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the individuals named in the Summary Compensation Table for 1995, 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 50 and 60 percent of each executive officer's total targeted
compensation is based upon performance. Performance-related elements include
annual bonus, long-term incentive compensation ("Long-Term Plan") payouts and
stock options.
The 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 a specific
individual's incentive award. The short-term goals for executives are developed
based on the Corporation's annual budgets and operating plans. The weights
accorded to the goals vary depending on the participant's position. For most
executive officers, the 1995 bonuses were above the normal range, reflecting the
extraordinary effort expended in the closure of two major acquisitions. The
actual performance of the Corporation and of the individuals named in the
Summary Compensation Table in 1995 resulted in annual bonuses varying from 45%
to 73% of base salary.
Long-term incentives come in two forms under the Long Term Stock Incentive Plan:
the Long-Term Plan, which is a three-year plan based on cumulative growth of
operating EPS, and stock options. Participants in the Long-Term Plan are
eligible for an annual payment, the first having been made in early 1995,
contingent upon the Corporation's achieving specified levels of compound growth
rate in the cumulative operating earnings per share ("CGR") during the preceding
three years (or, in the case of the phase-in period through December 31, 1994,
the preceding two years). Payouts 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 arc
established in combination with the expected value of stock option grants such
that competitive and performance-related long-term incentive opportunities are
available. 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. Payouts 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.
Some of the stock options awarded in 1995 to executive officers were granted
pursuant to employment agreements, which are described below under "Employment
Contracts." The 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 industry surveys. Actual gains from stock option
grants are dependent upon stock price increases from the fair market value at
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.
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. In the payout for the
three-year performance cycle which ended in 1995, an aggregate of 7,899 shares
were delivered to six executive officers. The direct link between shareholders
and executives is strengthened by using stock options as an important incentive
vehicle. Expectations are established informally regarding the continued
ownership by executives during their employment of Corporation shares.
Chief Executive Officer's Compensation
Mr. Stonecipher's salary for 1995 reflected a 4% increase over his 1994 salary.
Under his employment agreement with the Corporation, which was negotiated on an
arms' length basis and entered into on August 1,
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1992, a substantial majority of Mr. Stonecipher's bonus for 1995 was determined
in accordance with a formula based on growth in EPS over the prior year. In
1995, EPS increased 16.2% compared with 1994. The additional bonus amount
reflected Mr. Stonecipher's outstanding leadership and progress on a key
strategic objective of redeploying capital into the life insurance and annuity
businesses to improve the return to shareholders. In addition, pursuant to his
employment agreement, Mr. Stonecipher participates in the Long-Term Plan and
received a payout in early 1996 based on achievement of above-target CGR over
the three-year period 1993-95, and in 1995 received a stock option to purchase
75,000 shares at the fair market value on the date of grant.
Deductibility of Compensation
The Compensation Committee has taken steps to minimize any compensation that
would be non-deductible under Section 162(m) of the Internal Revenue Code. In
the event that any material amount might potentially 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 without compromising its
ability to motivate and reward excellent performance.
COMPENSATION COMMITTEE
William C. Cunningham, Chairman
Thomas M. Belk
Hugh L. McColl, Jr.
E. S. Melvin
Robert H. Spilman
* * * * * * * *
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<PAGE> 12
A summary of the compensation for the Corporation's chief executive officer, and
for the four other executive officers who were the highest paid for 1995 ("named
officers"), for services to the Corporation or its subsidiaries is shown in the
following table.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-------------------
ANNUAL COMPENSATION AWARDS(2) PAYOUTS
--------------------------------- ---------- -------
OTHER ANNUAL SECURITIES LTIP ALL OTHER
COMPENSATION UNDERLYING PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(1) OPTIONS(#) ($)(3) ($)(4)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
David A. Stonecipher............. 1995 811,200 540,000 -- 75,000 350,763 5,895
President and Chief Executive 1994 780,000 338,520 -- 37,500 203,840 --
Officer of the Corporation and 1993 750,000 235,500 -- 37,500 -- --
Jefferson-Pilot Life Insurance
Company(5)
Kenneth C. Mlekush............... 1995 351,500 200,000 -- 30,000 113,991 5,700
Senior Vice President of the 1994 338,000 140,000 -- 22,500 66,248 --
Corporation and Executive Vice 1993 325,000 122,900 36,508 22,500 -- --
President -- Individual of
Jefferson-Pilot Life Insurance
Company(5)
Dennis R. Glass.................. 1995 315,100 230,000 -- 22,500 102,187 6,045
Senior Vice President and 1994 303,000 125,000 30,000 11,250 59,388 --
Treasurer of the Corporation 1993 63,462 13,992 125,000 37,500 -- --
and Executive Vice President and
Treasurer of Jefferson-Pilot Life
Insurance Company(5)
John D. Hopkins.................. 1995 300,000 210,000 -- 22,500 -- 6,045
Senior Vice President and General 1994 282,500 115,000 -- 22,500 -- --
Counsel of the Corporation and 1993 188,558 56,567 41,300 22,500 -- --
Executive Vice President and
General Counsel of
Jefferson-Pilot Life Insurance
Company(5)
William E. Blackwell............. 1995 330,200 150,000 -- 22,500 107,084 6,207
Executive Vice President of the 1994 317,500 156,464 -- 15,000 62,230 --
Corporation and President of 1993 305,000 132,370 -- -- -- --
Jefferson-Pilot Communications
Company
</TABLE>
- ---------------
(1) Other annual compensation for Mr. Glass includes a transition payment of
$25,000 and a payment for bonus foregone from his previous employer of
$130,000 of which $30,000 was paid in 1994. For Mr. Hopkins it includes a
transition payment of $35,000.
(2) During the years 1993-1995, none of the named individuals were granted any
stock appreciation rights ("SAR's") or restricted stock awards.
(3) LTIP payouts were made 50% in shares of the Corporation's common stock.
(4) Company matching and gain sharing contributions to the 401(k)/TeamShare Plan
which became effective in 1995 are shown in this column.
(5) Mr. Stonecipher became President and Chief Executive Officer on March 1,
1993, having joined the Corporation as President-Elect and Chief Executive
Officer-Elect on September 8, 1992. Messrs. Glass,
11
<PAGE> 13
Hopkins and Mlekush first became employed by the Corporation in 1993. See
"Employment Contracts" below.
LONG TERM STOCK INCENTIVE PLAN
This plan provides long term incentives, based on Jefferson-Pilot common stock
and on growth in earnings per share ("EPS"), to employees who may influence the
long term performance of the Corporation and its subsidiaries. Key features of
the plan include stock options and long term incentive awards. The option price
may not be less than 100% of the fair market value of the stock on the award
date. The following table shows options awarded by the Compensation Committee in
1995 to the named officers.
The price of the common stock must appreciate in order for optionees to realize
any gain. As the stock price increases, all shareholders benefit
proportionately.
OPTION GRANTS DURING 1995
<TABLE>
<CAPTION>
PERCENT OF
NUMBER OF TOTAL
SECURITIES OPTIONS GRANT DATE
UNDERLYING GRANTED TO PRESENT VALUE
OPTIONS EMPLOYEES EXERCISE EXPIRATION (BLACK-SCHOLES)
NAME GRANTED(#) IN 1995 PRICE($) DATE ($)(1)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
David A. Stonecipher.................. 75,000 19.5 36.4167 2/13/05 595,156
Kenneth C. Mlekush.................... 30,000 7.8 36.4167 2/13/05 238,062
William E. Blackwell.................. 22,500 5.8 36.4167 2/13/05 178,547
Dennis R. Glass....................... 22,500 5.8 36.4167 2/13/05 178,547
John D. Hopkins....................... 22,500 5.8 36.4167 2/13/05 178,547
</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 1990 through December
1994; 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 granted under employment agreements are exercisable immediately and
the discretionary options (15,000 for Mr. Mlekush, 22,500 for Mr.
Blackwell, 11,250 for Mr. Glass and 11,250 for Mr. Hopkins) become
exercisable in one-third increments over three years, or upon earlier
death, disability, retirement, completion of the term of an employment
agreement, or a change in control.
The following table shows the value of unexercised options as of December 31,
1995. There were no stock option exercises during 1995 by executive officers.
AGGREGATED OPTION EXERCISES IN 1995
AND DECEMBER 31, 1995 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT 12-31-95(#) AT 12-31-95($)
--------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
David A. Stonecipher............................. 112,500 75,000 1,915,624 756,248
Kenneth C. Mlekush............................... 55,000 20,000 761,041 233,334
William E. Blackwell............................. 5,000 32,500 82,084 391,041
Dennis R. Glass.................................. 60,000 11,250 735,625 113,437
John D. Hopkins.................................. 48,750 18,750 565,939 236,562
</TABLE>
12
<PAGE> 14
The dollar values shown above represent the difference between the fair market
value of the common stock and the exercise price of the options at December 31,
1995.
The following table shows potential future payouts under awards for the cycle
commencing in 1995 under the Long-Term Plan, which is described under "Incentive
and Reward" above.
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1995
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
PERFORMANCE UNDER NON-STOCK
OR OTHER PRICE-BASED PLANS
NUMBER OF SHARES PERIOD UNTIL -----------------------------
UNITS OR OTHER MATURATION OR THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#)(1) PAYOUT(2) ($)(3) ($)(3) ($)(3)
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
David A. Stonecipher.................. -- 1995-1997 162,240 324,480 486,720
Kenneth C. Mlekush.................... -- 1995-1997 52,725 105,450 158,175
William E. Blackwell.................. -- 1995-1997 49,530 99,060 148,590
Dennis R. Glass....................... -- 1995-1997 47,265 94,530 141,795
John D. Hopkins....................... -- -- -- -- --
</TABLE>
- ---------------
(1) Long-term awards are not designated in shares, units or other rights.
Payouts are based on the compound growth rate ("CGR") in earning per share
during the three-year period. Payouts, if any, are in a 50/50 ratio of cash
and common stock valued at the fair market value on the date of payout.
(2) Amounts in the table are based on 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 salary during the last year
in the period.
(3) Payouts are contingent upon achieving specified levels of CGR and service to
the end of the three-year cycle. 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; below 50% no payout will be made. The maximum
amount will be payable if 150% or more of the targeted CGR is achieved.
RETIREMENT PLANS
Retirement benefits are provided under both a qualified plan and a nonqualified
supplemental benefit plan maintained by the Corporation for certain senior
executives, and the following table includes benefits under both plans.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------
20 YEARS
FINAL AVERAGE EARNINGS 10 YEARS 15 YEARS OR MORE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 200,000.............................................. $ 50,000 $ 75,000 $100,000
$ 400,000.............................................. $100,000 $150,000 $200,000
$ 600,000.............................................. $150,000 $225,000 $300,000
$ 800,000.............................................. $200,000 $300,000 $400,000
$1,000,000............................................. $250,000 $375,000 $500,000
$1,200,000............................................. $300,000 $450,000 $600,000
$1,400,000............................................. $350,000 $525,000 $700,000
</TABLE>
The table illustrates straight life annuity annual benefits that would be
payable upon normal retirement at age 65 on January 1, 1996 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.
For purposes of the table, covered compensation consists of the amounts
disclosed in the Summary Compensation Table as salary and, for years after 1992,
bonus. The credited years of service for the named
13
<PAGE> 15
individuals are as follows: Mr. Stonecipher, 3 years; Mr. Mlekush, 3 years; Mr.
Blackwell, 38 years; Mr. Hopkins, 3 years; and Mr. Glass, 2 years.
Mr. Stonecipher is entitled to additional retirement benefits pursuant to the
terms of his employment agreement.
EMPLOYMENT CONTRACTS
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 was $750,000 and is
subject to review and increase by the Compensation Committee in subsequent years
as appropriate. An annual bonus calculated as a percent of base salary may be
earned, determined in accordance with a formula based on growth in EPS over the
prior year. Pursuant to the agreement, in 1992-1994 Mr. Stonecipher was granted
options to purchase at the market prices on the dates of grant an aggregate of
112,500 shares of Common Stock under the Corporation's stock option plan. Mr.
Stonecipher, currently age 54, 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.
Messrs. Mlekush, Glass and Hopkins and one other executive officer joined the
Corporation in 1993 under three-year employment agreements providing for annual
salary, and guaranteed options over three years covering shares, as follows: Mr.
Mlekush, $325,000 and 52,500 shares; Mr. Glass, $300,000 and 60,000 shares; and
Mr. Hopkins, $265,000 and 45,000 shares. Mr. Mlekush's agreement was renewed at
the end of 1995 for an additional three years, and in connection with the
renewal the Compensation Committee approved the award of a guaranteed stock
option for 7,500 shares exercisable at the fair market value on January 2, 1996.
Base salaries are subject to review and increase by the Compensation Committee
in subsequent years as appropriate. The agreements also provide that annual
bonuses of up to 48% of base salary may be earned in accordance with a formula
based on growth in operating EPS and, in the case of Mr. Mlekush, on growth in
earnings from individual insurance operations and annualized individual
insurance premium sales. Additional amounts may be paid for exceptional
individual and company performance. The agreements also provide for
participation in the Long-Term Plan (except for Mr. Hopkins) and for transition
payments, moving expense reimbursements and certain foregone bonus
reimbursements, some of which were paid prior to the years shown in the Summary
Compensation Table.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Directors Belk, Cunningham, McColl, Melvin and Spilman served as members of the
Compensation Committee of the Board during all of 1995. None of such persons was
an officer or employee of the Corporation or any of its subsidiaries.
In the ordinary course of their businesses the Corporation and its subsidiaries
engage in transactions with a large number of other persons and entities
including NationsBank Corporation ("NationsBank"), of which Hugh L. McColl, Jr.,
a member of the Compensation Committee, is Chairman of the Board and Chief
Executive Officer (in addition to serving as Chief Executive Officer of the Bank
referred to below).
Jefferson-Pilot Life Insurance Company ("Life Company"), a subsidiary of the
Corporation, leases office space in Greensboro, North Carolina to NationsBank,
N.A. (Carolinas) ("Bank"), a subsidiary of NationsBank. With escalation, the
annual rent now exceeds $625,000 for approximately 50,000 square feet. 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 and its subsidiaries and administered the self-insured
medical plan for their employees. During 1995, the Life
14
<PAGE> 16
Company received from NationsBank an aggregate of approximately $15 million in
group life insurance premiums (including employee-paid premiums) and
administrative fees for servicing the medical plan. The premiums and fees
charged 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.
The Corporation and its subsidiaries entered into a $450 million committed
credit agreement in October 1995 with NationsBank of Georgia, N.A., a subsidiary
of NationsBank, as agent for a group of five banks including the agent bank,
replacing smaller, uncommitted bank lines. The agent bank's commitment is $125
million. Peak borrowings in 1995 under this agreement were $390 million.
In 1995 a subsidiary of the Corporation sold 1,000,000 shares of common stock of
NationsBank, and the proceeds later were used in connection with the
Corporation's acquisition of Alexander Hamilton Life Insurance Company of
America. NationsBank purchased 648,000 of these shares at a price slightly above
the prevailing market price.
15
<PAGE> 17
SHAREHOLDER RETURN
The following graph illustrates the cumulative total shareholder return on
Jefferson-Pilot's common stock compared to total returns on Standard & Poor's
500 Stock Index and on certain other similarly diversified life insurance
companies. The graph assumes that $100 was initially invested on December 31,
1990 and that all dividends were reinvested.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG JEFFERSON-PILOT CORPORATION, S&P 500 INDEX, AND SIMILARLY DIVERSIFIED
COMPANIES
<TABLE>
<CAPTION>
CUSTOM
COMPOSITE
MEASUREMENT PERIOD JEFFERSON- INDEX (10
(FISCAL YEAR COVERED) PILOT S&P 500 STOCKS)
<S> <C> <C> <C>
DEC. '90 100 100 100
DEC. '91 158 130 146
DEC. '92 209 140 197
DEC. '93 210 155 205
DEC. '94 240 157 186
DEC. '95 334 215 261
</TABLE>
The similarly diversified companies included in the custom composite index are
American General Corporation, American National Insurance Company, The Liberty
Corporation, Lincoln National Corporation, Protective Life Corporation,
Provident Life & Accident Insurance Company of America (Class B Common),
Providian Corporation (formerly Capital Holding Corporation), ReliaStar
Financial Corp. (formerly The NWNL Companies, Inc.), Torchmark Corporation, and
USLife Corporation. Each company is weighted according to its respective stock
market capitalization at the beginning of each calendar quarter included in the
graph.
16
<PAGE> 18
PROPOSAL II -- AMENDMENT TO ARTICLES OF INCORPORATION TO
INCREASE AUTHORIZED COMMON STOCK
The Board of Directors has unanimously adopted and recommended for shareholder
approval, an amendment to the Corporation's Articles of Incorporation to
increase the authorized common stock from 150,000,000 to 350,000,000 shares, for
the reasons discussed below. A copy of the proposed amendment to Article IV of
the Corporation's Articles of Incorporation is attached to this Proxy Statement
as Exhibit 1.
Article IV of the Articles currently provides for the issuance of up to
150,000,000 shares of common stock, $1.25 par value, and 20,000,000 shares of
preferred stock. As of March 4, 1996 the Corporation had 71,224,031 common
shares outstanding. No preferred shares are outstanding. In addition,
approximately 78,800,000 common shares in the aggregate were reserved for
issuance pursuant to the Corporation's Long Term Stock Incentive Plan, its
Non-Employee Directors' Stock Option Plan and its shareholder rights plan. In
December 1995 the Corporation effected a three-for-two stock split through a 50%
stock dividend. As a result, there currently are essentially no shares of common
stock available for issuance for other corporate purposes.
The Board believes that it is desirable to have additional shares of common
stock authorized to accommodate a possible future stock split and/or possible
future acquisitions and stock offerings and for other general corporate
purposes. The Board has no current commitments, agreements or plans to engage in
any of the above transactions, although the strategy for growth includes
acquisitions as well as internal growth. The Board believes that the proposed
increase in the number of authorized shares of common stock is desirable to
provide greater flexibility and efficient corporate management. Like the
presently authorized but unissued common shares and the authorized preferred
shares, the additional authorized common shares would be available for any
proper corporate purpose without the delay and expense of further action by the
shareholders, unless such action is required by applicable law or by the rules
of the New York Stock Exchange. The additional shares of common stock for which
authorization is sought would be identical to the shares of common stock now
authorized. Holders of shares of the Corporation do not have preemptive rights
to subscribe to additional common or preferred stock which the Corporation may
issue.
Although the proposed increase in authorized common stock was not prompted by a
belief that additional takeover defenses are needed, and the Corporation is not
aware of anyone contemplating a proposed acquisition of control of the
Corporation, the additional shares could be used to oppose persons seeking to
gain control of the Corporation without negotiating with the Board by, for
example, privately placing such shares with purchasers who might side with the
Board in opposing a hostile takeover bid or diluting the stock ownership of a
person or entity seeking to gain control of the Corporation. Such uses of
authorized but unissued common or preferred stock could render more difficult an
unsolicited tender offer or other attempt to acquire control, as would the
Corporation's existing anti-takeover devices, including: the Corporation's
shareholder rights plan, the so-called "fair price" provisions in the Articles
requiring a supermajority shareholder vote to approve certain business
combinations with major shareholders, and the provisions of the Articles
establishing a "staggered" board of directors and a supermajority vote of
shareholders in order to remove directors or amend these provisions.
Shareholders do not have cumulative voting rights.
The proposed amendment will be adopted if the votes cast for it exceed the votes
cast against it at a shareholders' meeting at which a quorum is present. The
amendment then will become effective upon filing with the North Carolina
Secretary of State.
THE BOARD RECOMMENDS A VOTE FOR THE PROPOSED AMENDMENT TO THE ARTICLES OF
INCORPORATION TO INCREASE THE AUTHORIZED COMMON STOCK TO 350,000,000 SHARES.
17
<PAGE> 19
OTHER INFORMATION
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Upon recommendation of the Audit Committee, on February 12, 1996 the Board
appointed and designated Ernst & Young LLP as the independent public accountants
for the Corporation and its consolidated subsidiaries for the fiscal year ending
December 31, 1996.
Previously, the financial statements have been audited by McGladrey & Pullen,
LLP, although McGladrey expressed reliance for 1995 upon Arthur Andersen LLP,
the auditors for 1995 for Alexander Hamilton Life Insurance Company of America
following its acquisition by the Corporation. The change in auditors reflects
the Corporation's increasing size (assets more than doubled in 1995, principally
through acquisitions) and growing needs for nationwide life insurance industry
resources for both auditing and other services particularly those related to
acquisitions. The change was made following a selection process in which
McGladrey chose not to participate although it remained willing to serve as the
auditors based on its existing life insurance industry resources.
Representatives of McGladrey and Ernst & Young will be present at the Meeting.
Each will be given the opportunity to make a statement and will be available to
respond to appropriate questions.
The reports of McGladrey on the Corporation's financial statements for 1995 and
for 1994, and the report of Andersen for the period following the acquisition,
did not contain an adverse opinion or disclaimer of opinion nor were any of them
qualified or modified as to uncertainty, audit scope or accounting principles,
except for explanatory statements in the McGladrey reports regarding a change of
method of accounting for investments in debt and marketable equity securities,
which resulted from the Corporation's adoption of SFAS 115 effective January 1,
1994.
Since January 1, 1994 there have been no disagreements between the Corporation
and McGladrey, and since the date of the acquisition there have been no
disagreements between Alexander Hamilton or the Corporation and Andersen, on any
matter of accounting principles or practices, financial statement disclosure or
auditing scope or procedure.
EXPENSES AND METHODS OF SOLICITATION
The Corporation pays the costs of soliciting proxies. Brokerage houses and other
custodians, nominees and fiduciaries will be asked to forward solicitation
materials to the beneficial owners and will be reimbursed for their reasonable
expenses. The Corporation has retained Georgeson & Co. to perform various proxy
advisory and solicitation services for a total estimated fee of $12,500, plus
out-of-pocket expenses. In addition, directors, officers and other employees of
the Corporation and its subsidiaries may solicit proxies by mail, telephone,
telecopier or telegraph or in person.
CORPORATE GOVERNANCE MATTERS
Since their adoption by the Board of Directors in 1993, the Corporation has
complied in all material respects with the Statement of Principles referred to
on page 5, which was ratified at the 1993 Annual Meeting of Shareholders by the
affirmative vote of 94% of the votes cast. The Principles have not been
modified, amended or waived in any respect since their adoption. A copy of the
Principles is available upon request to the Secretary of the Corporation and
will be available for review by shareholders at the Meeting.
SHAREHOLDER PROPOSALS FOR THE 1997 ANNUAL MEETING
Jefferson-Pilot's 1997 annual meeting of shareholders is tentatively scheduled
for May 5, 1997. Any shareholder proposal to be presented at that meeting must
be received by the Corporation's secretary by December 5, 1996 in order to be
timely received for inclusion in the Corporation's proxy statement for that
meeting.
The Corporation's Articles of Incorporation and By-Laws provide that any
shareholder entitled to vote at an annual meeting may nominate at that meeting
one or more persons for election as directors only if written
18
<PAGE> 20
notice of such shareholder's intent to make such nomination or nominations has
been given to the Secretary of the Corporation not later than 90 days in advance
of such meeting. The By-Laws similarly require 90 days' advance written notice
to the Secretary of any resolution to be presented at that meeting.
OTHER MATTERS
The Board of Directors is not aware of any other matters which may be presented
for action at the Meeting. Should any other matter requiring a vote of the
shareholders arise, the accompanying proxy will be voted with respect to the
matter, in accordance with the best judgment of the person or persons voting the
proxy, in the interest of the Corporation.
Whether or not you plan to attend the Meeting, please promptly sign, date and
return the enclosed proxy card.
By Order of the Board of Directors
Robert A. Reed
Vice President and Secretary
- --------------------------------------------------------------------------------
EXHIBIT 1
PROPOSED AMENDMENT TO THE ARTICLES
The introductory paragraph of Article IV of the Articles of Incorporation of the
Corporation, as proposed to be amended, is set forth below.
The corporation shall be authorized to issue Three Hundred Fifty Million
(350,000,000) shares designated as common stock, with a par value of One and
25/100 Dollars ($1.25) per share, and Twenty Million (20,000,000) shares
designated as preferred stock, each with the following preferences, limitations
and relative rights:
19
<PAGE> 21
EXHIBIT 2
PROXY JEFFERSON-PILOT CORPORATION [JEFFERSON PILOT LOGO]
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 6, 1996
The undersigned hereby constitute(s) and appoint(s) David A. Stonecipher, John
D. Hopkins and Robert A. Reed, and each or any of them, attorneys and proxies of
the undersigned, with full power of substitution to each, and with all the
powers the undersigned would possess if personally present, to vote 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
on May 6, 1996, and at any adjournment thereof, upon the matters referred to in
the Notice of Meeting and Proxy Statement for said meeting and in their
discretion upon such other business as may properly come before the meeting or
any adjournment thereof
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN,
OR IF NO CHOICE IS SPECIFIED, FOR EACH OF THE PROPOSALS LISTED 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" EACH OF THE TWO PROPOSALS.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
SEE REVERSE SIDE
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Class I Directors:
Nominees: William E. Blackwell, C. Randolph Ferguson, William Porter Payne,
Robert H. Spilman
<TABLE>
<C> <S> <C>
/ / FOR all listed nominees --------------------------------------------------
/ / WITHHOLD AUTHORITY to vote / / FOR all listed nominees except as noted above
for all listed nominees
</TABLE>
2. Approval of amendment to Articles of Incorporation of the Corporation to
increase the authorized Common Stock.
FOR / / AGAINST / / ABSTAIN / /
/ / I plan to attend the meeting.
/ / See noted comments.
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. PERSONS SIGNING
AS ATTORNEY-IN-FACT, CORPORATE OFFICER OR IN A FIDUCIARY CAPACITY SHOULD STATE
THEIR TITLE. IF STOCK IS HELD BY JOINT TENANTS OR AS COMMUNITY PROPERTY, ALL
PARTIES SHOULD SIGN.
----------------------------------------------------
Date
----------------------------------------------------
Date
[JEFFERSON PILOT LOGO]
<PAGE> 22
EXHIBIT 3
PROXY JEFFERSON-PILOT CORPORATION LOGO
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 6, 1996
CONFIDENTIAL VOTING INSTRUCTIONS TO GEORGESON & COMPANY INC.,
TABULATOR FOR JP TEAMSHARE PLAN
The undersigned hereby constitute(s) and appoint(s) David A. Stonecipher, John
D. Hopkins and Robert A. Reed, and each or any of them, attorneys and proxies of
the undersigned, with full power of substitution to each, and with all the
powers the undersigned would possess if personally present, to vote 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
on May 6, 1996, and at any adjournment thereof, upon the matters referred to in
the Notice of Meeting and Proxy Statement for said meeting and in their
discretion upon such other business as may properly come before the meeting or
any adjournment thereof
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN,
OR IF NO CHOICE IS SPECIFIED, FOR EACH OF THE PROPOSALS LISTED 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" EACH OF THE TWO PROPOSALS.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
SEE REVERSE SIDE
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Class I Directors:
Nominees: William E. Blackwell, C. Randolph Ferguson, William Porter Payne,
Robert H. Spilman
<TABLE>
<C> <S> <C>
/ / FOR all listed nominees -------------------------------------------------
/ / WITHHOLD AUTHORITY to vote / / FOR all listed nominees except as noted above
for all listed nominees
</TABLE>
2. Approval of amendment to Articles of Incorporation of the Corporation to
increase the authorized Common Stock.
FOR / / AGAINST / / ABSTAIN / /
/ / I plan to attend the meeting.
/ / See noted comments.
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. PERSONS SIGNING AS
ATTORNEY-IN-FACT, CORPORATE OFFICER OR IN A FIDUCIARY CAPACITY SHOULD STATE
THEIR TITLE. IF STOCK IS HELD BY JOINT TENANTS OR AS COMMUNITY PROPERTY, ALL
PARTIES SHOULD SIGN.
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<PAGE> 23
EXHIBIT 4
PROXY JEFFERSON-PILOT CORPORATION LOGO
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 6, 1996
CONFIDENTIAL VOTING INSTRUCTIONS TO GEORGESON & COMPANY INC.,
TABULATOR FOR JEFFERSON-PILOT LIFE INSURANCE COMPANY AGENTS' RETIREMENT PLAN
The undersigned hereby constitute(s) and appoint(s) David A. Stonecipher, John
D. Hopkins and Robert A. Reed, and each or any of them, attorneys and proxies of
the undersigned, with full power of substitution to each, and with all the
powers the undersigned would possess if personally present, to vote 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
on May 6, 1996, and at any adjournment thereof, upon the matters referred to in
the Notice of Meeting and Proxy Statement for said meeting and in their
discretion upon such other business as may properly come before the meeting or
any adjournment thereof
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN,
OR IF NO CHOICE IS SPECIFIED, FOR EACH OF THE PROPOSALS LISTED 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" EACH OF THE TWO PROPOSALS.
(IMPORTANT -- TO BE SIGNED AND DATED ON REVERSE SIDE)
SEE REVERSE SIDE
/X/ PLEASE MARK VOTES AS IN THIS EXAMPLE.
1. Election of Class I Directors:
Nominees: William E. Blackwell, C. Randolph Ferguson, William Porter Payne,
Robert H. Spilman
<TABLE>
<C> <S> <C>
/ / FOR all listed nominees
---------------------------------------------
/ / WITHHOLD AUTHORITY to vote / / FOR all listed nominees except as noted above
for all listed nominees
</TABLE>
2. Approval of amendment to Articles of Incorporation of the Corporation to
increase the authorized Common Stock.
FOR / / AGAINST / / ABSTAIN / /
/ / I plan to attend the meeting.
/ / See noted comments.
IMPORTANT: PLEASE SIGN EXACTLY AS YOUR NAME(S) APPEAR HEREON. PERSONS SIGNING
AS ATTORNEY-IN-FACT, CORPORATE OFFICER OR IN A FIDUCIARY CAPACITY SHOULD STATE
THEIR TITLE. IF STOCK IS HELD BY JOINT TENANTS OR AS COMMUNITY PROPERTY, ALL
PARTIES SHOULD SIGN.
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