| For the fiscal year ended December 31, 2000 | Commission File Number 1-12332 |
|---|
| DELAWARE | 95-2492236 | ||
|---|---|---|---|
| (State or other jurisdiction | (IRS Employer | ||
| incorporation or organization) | Identificiation No. |
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No[ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in the definitive proxy statement or information statements or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
Aggregate market value of voting stock held by nonaffiliates of the Registrant as of March 9, 2001: $2,030,904,516
Number of shares of Common Stock, $0.50 Par Value, outstanding as of March 9, 2001: 68,528,795
Portions of the Registrant's 2000 Annual Report To Share Owners (the "2000 Annual Report To Share Owners") are incorporated by reference into Parts I, II, and IV of this Report.
Portion of the Registrant's Proxy Statement dated March 30, 2001, are incorporated by reference into Part III of this Report.
PART I
Page
Item 1. Business..........................................................
Item 2. Properties........................................................
Item 3. Legal Proceedings.................................................
Item 4. Submission of Matters to a Vote of Security Holders...............
PART II
Item 5. Market for the Registrant's Common Equity and
Related Share-Owner Matters.....................................
Item 6. Selected Financial Data...........................................
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................
Item 7a. Quantitative and Qualitative Disclosure About Market Risk.........
Item 8. Financial Statements and Supplementary Data.......................
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.............................
PART III
Item 10. Directors and Executive Officers of the Registrant................
Item 11. Executive Compensation............................................
Item 12. Security Ownership of Certain Beneficial Owners and
Management......................................................
Item 13. Certain Relationships and Related Transactions....................
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.....................................................
Protective Life Corporation is a holding company, whose subsidiaries provide financial services through the production, distribution, and administration of insurance and investment products. Founded in 1907, Protective Life Insurance Company is the Company’s principal operating subsidiary. Unless the context otherwise requires, the “Company” refers to the consolidated group of Protective Life Corporation and its subsidiaries.
Copies of the Company’s Proxy Statement and 2000 Annual Report to Share Owners will be furnished to anyone who requests such documents from the Company. Requests for copies should be directed to: Share-Owner Relations, Protective Life Corporation, P. O. Box 2606, Birmingham, Alabama 35202, Telephone (205) 868-3573, FAX (205) 868-3541. Copies may also be requested through the Internet from the Company’s Worldwide Web Site (www.protective.com). The information incorporated herein by reference is also electronically accessible through the Internet from the “EDGAR Database of Corporate Information” on the Securities and Exchange Commission’s World Wide Web site (www.sec.gov).
The Company operates seven divisions each having a strategic focus which can be grouped into three general categories: life insurance, specialty insurance products, and retirement savings and investment products.
The following table shows the percentages of pretax operating income represented by each of the strategic focuses and the Corporate and Other segment.
RETIREMENT
SPECIALTY SAVINGS AND CORPORATE
YEAR ENDED LIFE INSURANCE INVESTMENT AND
DECEMBER 31 INSURANCE PRODUCTS PRODUCTS OTHER
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
1996 50.1% 11.0% 37.3% 1.6%
1997 49.8 18.0 23.3 8.9
1998 50.9 19.7 21.7 7.7
1999 50.4 25.4 17.3 6.9
2000 52.4 26.1 18.8 2.7
Additional information concerning the Company's divisions may be found in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations" and Note 10 to Consolidated Financial Statements in the Company's 2000 Annual Report to Share Owners, which are incorporated herein by reference.
In the following paragraphs, the Company reports its divisional sales, new capital invested, members, and annualized premium. These statistics are used by the Company to measure the relative progress of its marketing and acquisition efforts. These statistics were derived from the Company’s various sales tracking and administrative systems and were not derived from the Company’s financial reporting systems or financial statements. These statistics attempt to measure only one of many factors that may affect future divisional profitability, and therefore are not intended to be predictive of future profitability.
A strategic focus of the Company is to expand its life insurance operations through internal growth and acquisitions. The Individual Life, West Coast and Acquisitions Divisions support this strategy.
The Individual Life Division markets level premium term and term-like insurance, universal life and variable universal life products on a national basis primarily through networks of independent insurance agents. The Division is also developing other distribution channels. These include marketing life insurance products through regional stockbrokers and banks, and through direct response and worksite arrangements.
The Division has two primary agent networks. The first is based on experienced independent personal producing general agents who are recruited by regional sales managers. At December 31, 2000, Protective Life Insurance Company had 70 regional sales managers located throughout the United States. Approximately 45.9% of the Division’s 2000 sales came from this distribution system.
The Division also distributes insurance products in the life insurance brokerage market through another wholly-owned subsidiary, Empire General Life Assurance Corporation, representing approximately 36.6% of sales.
For the entire Division, sales through stockbrokers and banks represented 12.4% of sales, and direct response represented 5.1%.
The following table shows the Individual Life Division’s sales measured by new premium.
YEAR ENDED
DECEMBER 31 SALES
- ---------------------------------------- -----------------------------------
(dollars in millions)
1996 $45.4
1997 48.7
1998 71.2
1999 80.4
2000 92.8
In 1999, the Company acquired a non-controlling equity interest in Matrix Direct, Inc. (Matrix), located in San Diego. Matrix is a leading direct marketer of life and other insurance products. Matrix offers a full complement of direct marketing services, including market research, media buying, fulfillment, a nationally-licensed sales group and new business processing. The Company believes that the Matrix fulfillment and processing platform has significant potential for serving Internet marketers, banks, brokerage firms and innovative life agents who desire to participate in direct marketing or lead generation ventures with Matrix. The Company expects to acquire all of the equity of Matrix in 2001.
The Division includes ProEquities, Inc. (ProEquities), a full-service securities broker-dealer. ProEquities primarily recruits financial planners. ProEquities makes available variable insurance products, mutual funds, and other investment products to its licensed representatives to offer to their clients and customers.
In 1997, the Company acquired West Coast Life Insurance Company (West Coast). West Coast sells universal life and level premium term and term-like insurance products in the life insurance brokerage market and in the “bank owned life insurance” (BOLI) market. Headquartered in San Francisco, the Division also has regional offices in Atlanta and Detroit.
The Division primarily utilizes a distribution system comprised of brokerage general agencies (BGAs) who recruit a network of independent life agents. At December 31, 2000, the Division worked with approximately 379 BGAs located throughout the United States. This distribution system represented approximately 87.0% of the Division’s 2000 sales.
The Division also offers corporate owned life insurance products to the BOLI market through an independent marketing organization which specializes in this market. The products are sold to smaller and regional banks, and represent approximately 13.0% of the Division’s sales.
The following table shows the West Coast Division’s sales measured by new premium including sales prior to the Company’s acquisition of West Coast for comparison purposes.
YEAR ENDED BGA BOLI TOTAL
DECEMBER 31 SALES SALES SALES
- --------------------------- ----------------------- ------------------------ ----------------------
(dollars in millions)
1996 $10.3 $4.6 $14.9
1997 19.5 10.3 29.8
1998 22.1 18.5 40.6
1999 39.0 19.8 58.8
2000 60.0 9.0 69.0
The Acquisitions Division focuses on acquiring, converting, and servicing policies acquired from other companies. The Division's primary focus is on life insurance policies sold to individuals. These acquisitions may be accomplished through acquisitions of companies or through the reinsurance of blocks of policies from other insurers. Forty transactions have been closed by the Division since 1970, including 13 since 1989. Policies acquired through the Division are usually administered as "closed" blocks; i.e., no new policies are being marketed. Therefore, the amount of insurance in force for a particular acquisition is expected to decline with time due to lapses and deaths of the insureds.
Most acquisitions closed by the Division do not include the acquisition of an active sales force. In transactions where some marketing capacity was included, the Division generally either ceased future marketing efforts or redirected those efforts to another Division of the Company. However, in the case of the acquisition of West Coast which was closed by the Acquisitions Division, the Company elected to continue the marketing of new policies and operate West Coast as a separate division of the Company.
The Division believes that its focused and disciplined approach to the acquisition process and its experience in the assimilation, conservation, and servicing of acquired policies give it a significant competitive advantage over many other companies that attempt to make similar acquisitions. The Division expects acquisition opportunities to continue to be available as the life insurance industry continues to consolidate; however, management believes that the Company may face increased competition for future acquisitions.
Total revenues and income before income tax from the Acquisitions Division are expected to decline with time unless new acquisitions are made. Therefore, the Division’s revenues and earnings may fluctuate from year to year depending upon the level of acquisition activity.
The following table shows the number of transactions closed by the Acquisitions Division and the approximate amount of (statutory) capital invested for each year in which an acquisition was made.
NUMBER
YEAR ENDED OF CAPITAL
DECEMBER 31 TRANSACTIONS INVESTED
- ------------------------- ------------------------ --------------------------
(dollars in millions)
1996 3 $ 47.1
1997 1 (1) 116.8 (1)
1998 1 77.8
___________
(1) West Coast
Although acquisition opportunities were pursued, no transactions were completed in 1999 or 2000. In January 2001, the Division coinsured a block of individual life policies from Standard Insurance Company representing approximately $115 million of capital invested.
From time to time other of the Company’s Divisions have acquired companies and blocks of policies which are included in their respective results.
A second strategic focus of the Company is to participate in specialized segments of the insurance industry that offer attractive growth opportunities. The Dental Benefits and Financial Institutions Divisions support this strategy.
In 1997, the Division substantially exited from the group major medical business, fulfilling the Division’s strategy to focus primarily on dental insurance and related products.
The Division’s primary strategic emphasis is on indemnity and prepaid dental products. The Division was a pioneer in developing indemnity dental products for the voluntary payroll deduction market. In 1995, the Division entered the prepaid dental market when it acquired DentiCare of Florida, Inc. The Division’s strategy is to promote a “dual choice” option by offering prepaid dental products through the Division’s indemnity dental distribution channels.
The Division has significantly grown its prepaid dental business through acquisitions. The Division acquired two small prepaid dental plans in 1996, and three small plans in 1997. In 1998, the Division acquired United Dental Care, Inc. (United Dental Care). With the United Dental Care acquisition, the Division became a leading provider of prepaid dental coverages.
The following table shows the Division's approximate annualized dental premium in-force.
YEAR INDEMNITY PREPAID TOTAL
ENDED ANNUALIZED ANNUALIZED ANNUALIZED
DECEMBER 31 PREMIUM PREMIUM PREMIUM
- ------------------- -------------------- ------------------ -----------------
(dollars in millions)
1996 $ 67.0 $ 34.2 $101.2
1997 98.3 47.8 146.1
1998 113.4 203.8 317.2
1999 149.3 163.7 313.0
2000 171.8 143.6 315.4
Prepaid annualized premium declined in 1999 and 2000 due to the Division’s exit from unprofitable lines of business within United Dental Care and higher than expected lapses.
The Division offers a variety of discounted fee-for-service, club-based programs to individual consumers and groups through its Protective Consumer Direct where enrolled consumers have access to a network of providers who have agreed to a discounted fee
The Division also has group life and group disability coverages.
The Financial Institutions Division markets credit life and disability insurance products through banks, consumer finance companies and automobile dealers. The Division also markets vehicle and recreational marine extended service contracts.
In 1997, the Division acquired the Western Diversified Group. The Western Diversified Group markets credit insurance and related products through automobile dealers primarily in the midwestern United States. The Western Diversified Group included a property and casualty insurer that offers automobile extended service contracts.
In January 2000, the Company acquired Lyndon Insurance Group (Lyndon). Lyndon markets a variety of specialty insurance products, including credit insurance and vehicle and marine extended service contracts. Lyndon distributes products on a national basis through financial institutions and automobile dealers.
The Division markets through employee field representatives, independent brokers and wholly-owned subsidiaries. The Division is one of the largest independent writers of credit insurance in the United States. The majority of these policies cover consumer loans made by financial institutions located primarily in the southeastern United States and automobile dealers throughout the United States. The Company believes it has been a beneficiary of a "flight to quality," as financial institutions and automobile dealers increasingly prefer to do business with insurers having quality products, strong balance sheets and high-quality training and service capabilities.
The demand for the Division’s credit insurance and extended service contracts is related to the general level of automobile sales and consumer loans. In 2000, approximately 65% of the Division’s sales were from automobile dealers, and approximately 33% of sales were extended service contracts.
The following table shows the Financial Institutions Division’s sales measured by new premium including the sales of Western Diversified and Lyndon since the date of acquisition.
YEAR ENDED
DECEMBER 31 SALES
- -------------------------------------- ----------------------------------
(dollars in millions)
1996 $147.2
1997 189.3
1998 273.5
1999 283.4
2000 523.6
A portion of the Division's sales are reinsured with producer-owned reinsurers.
The Division has also coinsured closed blocks of credit policies in 1996 and 1997, and in 1999 the Division recaptured a closed block of credit policies that it had previously ceded to another insurer.
A third strategic focus of the Company is to offer products that respond to the shift in consumer preference to savings products brought about by demographic trends as “baby-boomers” move into the saving stage of their life cycle. The two Divisions that support this strategy are the Stable Value Products and Investment Products Divisions.
The Stable Value Products Division markets guaranteed investment contracts (GICs) to 401(k) and other qualified retirement savings plans. GICs are generally contracts which specify a return on deposits for a specified period and often provide flexibility for withdrawals at book value in keeping with the benefits provided by the plan. The demand for GICs is related to the relative attractiveness of the “fixed rate” investment option in a 401(k) plan compared to the equity-based investment options available to plan participants. The Division also markets fixed and floating rate funding agreements to the trustees of municipal bond proceeds, institutional investors, bank trust departments and money market funds, and long-term annuity contracts.
The Division’s emphasis is on a consistent and disciplined approach to product pricing and asset/liability management, careful underwriting of early withdrawal risks and maintaining low distribution and administration costs. Most GIC contracts and funding agreements written by the Division have maturities of three to five years. At December 31, 2000, the Division had approximately $1.2 billion of contracts that pay a floating rate of interest, and had $30 million, $50 million, and $76 million of contracts which may be terminated upon seven, thirty, and ninety days notice, respectively.
The following table shows the Stable Value Products Division’s sales.
YEAR ENDED FUNDING LONG-TERM
DECEMBER 31 GICS AGREEMENTS ANNUITIES TOTAL
- ------------------------- ---------------- ---------------- ---------------- -------------
(dollars in millions)
1996 $318 $290 $78 $ 686
1997 203 461 32 696
1998 488 336 3 827
1999 584 386 970
2000 418 801 1,219
The following table shows the Division’s account balances (consisting of Stable Value Contract and certain annuity account balances).
YEAR ENDED FUNDING LONG-TERM
DECEMBER 31 GICS AGREEMENTS ANNUITIES TOTAL
- ------------------------- ---------------- ---------------- --------------- ----------
(dollars in millions)
1996 $2,013 $ 462 $152 $2,627
1997 1,806 883 180 2,869
1998 1,699 1,007 173 2,879
1999 1,780 903 167 2,850
2000 1,813 1,365 162 3,340
The rate of growth in the Division's account balances is affected by the amount of maturing contracts relative to the amount of sales.
The Investment Products Division manufactures, sells, and supports fixed and variable annuity products. These products are primarily sold through stockbrokers and ProEquities, but are also sold through financial institutions and the Individual Life Division’s sales force.
The Division offers modified guaranteed annuities which guarantee an interest rate for a fixed period. Because contract values are “market-value adjusted” upon surrender prior to maturity, these products afford the Company a measure of protection from the effects of changes in interest rates. The Division also offers variable annuities which offer the policyholder the opportunity to invest in various investment accounts.
The following table shows the Investment Products Division’s sales. The demand for annuity products is related to the general level of interest rates and performance of the equity markets.
YEAR ENDED FIXED VARIABLE TOTAL
DECEMBER 31 ANNUITIES ANNUITIES ANNUITIES
- -------------------------- --------------------- --------------------------- -------------------------
(dollars in millions)
1996 $199 $169 $368
1997 180 324 504
1998 97 472 569
1999 350 361 711
2000 635 257 892
The following table shows the Investment Products account balances.
YEAR ENDED FIXED VARIABLE TOTAL
DECEMBER 31 ANNUITIES ANNUITIES ANNUITIES
- -------------------------- --------------------- ---------------------------- ------------------------
(dollars in millions)
1996 $1,192 $625 $1,817
1997 1,229 1,057 2,286
1998 1,105 1,555 2,660
1999 1,269 2,085 3,354
2000 1,735 2,044 3,779
The Company has an additional business segment referred to as Corporate and Other. The Corporate and Other segment primarily consists of net investment income and expenses not attributable to the Divisions described above (including net investment income on unallocated capital and interest on substantially all debt). This segment also includes earnings from several lines of business which the Company is not actively marketing (mostly health insurance), various investment-related transactions, and the operations of several small subsidiaries. The earnings of this segment may fluctuate from year to year.
In March 2000, the Company sold its participation in a joint venture which owned a small life insurance company in Hong Kong.
The types of assets in which the Company may invest are influenced by various state laws which prescribe qualified investment assets. Within the parameters of these laws, the Company invests its assets giving consideration to such factors as liquidity needs, investment quality, investment return, matching of assets and liabilities, and the overall composition of the investment portfolio by asset type and credit exposure.
A significant portion of the Company’s bond portfolio is invested in mortgage-backed securities. Mortgage-backed securities are constructed from pools of residential mortgages, and may have cash flow volatility as a result of changes in the rate at which prepayments of principal occur with respect to the underlying loans. Prepayments of principal on the underlying residential loans can be expected to accelerate with decreases in interest rates and diminish with increases in interest rates. Due to the potential cash flow volatility of mortgage-backed securities, the Company has focused on sequential, planned amortization class (PAC), targeted amortization class (TAC) securities, and Non-Accelerated Securities (NAS). These types have less cash flow volatility than other types of mortgage-backed securities. The Company has not invested in the higher risk tranches of mortgage-backed securities (except mortgage-backed securities issued in securitization transactions sponsored by the Company). In addition, the Company has entered into hedging transactions to reduce the volatility in market value of its mortgage-backed securities.
The table below shows a breakdown of the Company’s mortgage-backed securities portfolio by type at December 31, 2000. PACs pay down according to a schedule. TACs pay down in amounts approximating a targeted schedule. NAS receive no principal payments in the first five years, after which NAS receive an increasing percentage of pro rata principal payments until the tenth year, after which NAS receive principal as principal of the underlying mortgages is received. All of these types of structured mortgage-backed securities give the Company some measure of protection against both prepayment and extension risk.
Accretion directed securities have a stated maturity but may repay more quickly. Sequentials receive scheduled payments with any “excess” cash flow going to repay the earliest maturing tranches first. Pass through securities receive principal as principal of the underlying mortgages is received. Support tranches are designed to receive cash after the more stable tranches (i.e., PACs and TACs) are satisfied. The CMBS are commercial mortgage-backed securities issued in securitization transactions sponsored by the Company, in which the Company securitized portions of its mortgage loan portfolio.
PERCENTAGE OF
MORTGAGE-BACKED
TYPE SECURITIES
- --------------------------------- -----------------------------------------
PAC 11.6%
TAC 7.3
NAS 13.6
Accretion Directed 6.4
Sequential 41.4
Pass Through 7.0
Support 1.3
CMBS 11.4
-----
100.0%
=====
The Company obtains ratings of its fixed maturities from Moody’s Investors Service, Inc. (Moody’s) and Standard & Poor’s Corporation (S&P). If a bond is not rated by Moody’s or S&P, the Company uses ratings from the Securities Valuation Office of the National Association of Insurance Commissioners (NAIC), or the Company rates the bond based upon a comparison of the unrated issue to rated issues of the same issuer or rated issues of other issuers with similar risk characteristics. At December 31, 2000, approximately 99.6% of bonds were rated by Moody’s, S&P, or the NAIC.
The approximate percentage distribution of the Company’s fixed maturity investments by quality rating at December 31, 2000, is as follows:
RATING 2000
- ---------------------------------------------- ------------
AAA 37.1%
AA 7.0
A 25.1
BBB 27.3
BB or less 3.4
Redeemable preferred stocks 0.1
-----
100.0%
=====
At December 31, 2000, approximately $7,161.5 million of the Company’s $7,414.0 million bond portfolio was invested in U.S. Government or agency-backed securities or investment grade bonds and approximately $252.5 million of its bond portfolio was rated less than investment grade, of which $70.1 million were securities issued in Company-sponsored commercial mortgage loan securitizations.
Risks associated with investments in less than investment grade debt obligations may be significantly higher than risks associated with investments in debt securities rated investment grade. Risk of loss upon default by the borrower is significantly greater with respect to such debt obligations than with other debt securities because these obligations may be unsecured or subordinated to other creditors. Additionally, there is often a thinly traded market for such securities and current market quotations are frequently not available for some of these securities. Issuers of less than investment grade debt obligations usually have higher levels of indebtedness and are more sensitive to adverse economic conditions, such as recession or increasing interest rates, than investment-grade issuers.
The Company also invests a significant portion of its portfolio in mortgage loans. Results for these investments have been excellent due to careful management and a focus on a specialized segment of the market. The Company generally does not lend on speculative properties and has specialized in making loans on either credit-oriented commercial properties or credit-anchored strip shopping centers. The average size of loans made during 2000 was $4.0 million. The average size mortgage loan in the Company’s portfolio is approximately $2.3 million. The largest single loan amount is $19.0 million.
The following table shows a breakdown of the Company’s mortgage loan portfolio by property type at December 31, 2000:
PERCENTAGE OF
MORTGAGE LOANS
PROPERTY TYPE ON REAL ESTATE
- --------------------------------- --------------------------------------
Retail 76.1%
Apartments 11.4
Office Buildings 6.4
Warehouses 5.3
Other 0.8
-----
Total 100.0%
=====
Retail loans are generally on strip shopping centers located in smaller towns and anchored by one or more regional or national retail stores. The anchor tenants enter into long-term leases with the Company’s borrowers. These centers provide the basic necessities of life, such as food, pharmaceuticals, and clothing, and have been relatively insensitive to changes in economic conditions. The following are the largest anchor tenants (measured by the Company’s exposure) at December 31, 2000:
PERCENTAGE OF
MORTGAGE LOANS
ANCHOR TENANTS ON REAL ESTATE
- ----------------------------------- -----------------------------------------
Food Lion, Inc. 4%
Winn Dixie Stores, Inc. 4
Wal-Mart Stores, Inc. 3
Rite-Aid Corporation 2
Walgreen Corporation 2
The Company’s mortgage lending criteria generally require that the loan-to-value ratio on each mortgage be at or under 75% at the time of origination. Projected rental payments from credit anchors (i.e., excluding rental payments from smaller local tenants) generally exceed 70% of the property's projected operating expenses and debt service.
For several years the Company has offered a commercial loan product under which the Company will permit a loan-to-value ratio of up to 85% in exchange for a participating interest in the cash flows from the underlying real estate. Approximately $572.2 million of the Company’s mortgage loans have this participation feature.
Many of the Company’s mortgage loans have call or interest rate reset provisions between 3 and 10 years. However, if interest rates were to significantly increase, the Company may be unable to call the loans or increase the interest rates on its existing mortgage loans commensurate with the significantly increased market rates.
At December 31, 2000, $20.6 million or 0.9% of the mortgage loan portfolio was nonperforming. It is the Company’s policy to cease to carry accrued interest on loans that are over 90 days delinquent. For loans less than 90 days delinquent, interest is accrued unless it is determined that the accrued interest is not collectible. If a loan becomes over 90 days delinquent, it is the Company’s general policy to initiate foreclosure proceedings unless a workout arrangement to bring the loan current is in place.
In 1996, the Company sold approximately $554 million of its mortgage loans in a securitization transaction. In 1997, the Company sold approximately $445 million of its loans in a second securitization transaction. In 1998 the Company securitized $146 million of its mortgage loans and in 1999 the Company securitized $263 million. The securitizations’ senior tranches were sold, and the Company retained the junior tranches. The Company continues to service the securitized mortgage loans.
As a general rule, the Company does not invest directly in real estate. The investment real estate held by the Company consists largely of properties obtained through foreclosures or the acquisition of other insurance companies. In the Company’s experience, the appraised value of a foreclosed property often approximates the mortgage loan balance on the property plus costs of foreclosure. Also, foreclosed properties often generate a positive cash flow enabling the Company to hold and manage the property until the property can be profitably sold.
The Company has an allowance for uncollectible amounts on investments. This allowance was $21.8 million at December 31, 2000.
The following table shows the investment results of the Company for the years 1996 through 2000:
CASH, ACCRUED
INVESTMENT INCOME, PERCENTAGE EARNED ON REALIZED
YEAR ENDED AND INVESTMENT AT AVERAGE OF CASH AND INVESTMENT
DECEMBER 31 DECEMBER 31 NET INVESTMENT INCOME INVESTMENTS GAINS (LOSSES)
- -----------------------------------------------------------------------------------------------------------------
(dollars in thousands)
1996 $ 6,743,770 $517,483 8.1% $ 5,510
1997 8,192,538 591,376 8.0 830
1998 8,718,455 636,396 7.7 3,121
1999 8,877,038 676,401 7.6 (1,057)
2000 10,419,217 737,284 7.6 (7,043)
For further information regarding the Company’s investments, the maturity of and the concentration of risk among the Company’s invested assets, derivative financial instruments, and liquidity, see Notes 1 and 2 to the Consolidated Financial Statements, and "Management’s Discussion and Analysis of Financial Condition and Results of Operations" in the Company's 2000 Annual Report to Share Owners.
The Company’s total consolidated life insurance in force at December 31, 2000 was $170.4 billion. The following table shows sales by face amount and insurance in force for the Company’s divisions.
Year Ended December 31
--------------- --------------- --------------- -------------- ---------------
2000 1999 1998 1997 1996
--------------- --------------- --------------- -------------- ---------------
(dollars in thousands)
New Business Written
Individual Life................... $ 22,429,530 $ 16,305,923 $ 16,188,344 $10,588,594 $ 9,245,002
West Coast........................ 23,488,843 10,612,852 5,050,309 1,984,928
Dental Benefits................... 143,192 123,648 113,056 124,230 115,748
Financial Institutions............ 7,052,106 6,665,219 5,257,957 4,183,216 3,956,581
---------- ---------- ---------- ---------- ----------
Total.......................... $ 53,113,671 $ 33,707,642 $ 26,609,666 $16,880,968 $13,317,331
========== ========== ========== ========== ==========
Business Acquired
West Coast........................ $10,237,731
Acquisitions...................... $ 7,787,284 $ 1,286,673
Financial Institutions............ $ 2,457,296 $ 620,000 3,364,617 1,607,463
--------- ------- --------- ---------- ---------
Total......................... $ 2,457,296 $ 620,000 $ 7,787,284 $13,602,348 $ 2,894,136
========= ======= ========= ========== =========
Insurance in Force at End of Year(1)
Individual Life................... $ 83,523,420 $ 67,026,950 $ 50,587,419 $39,715,608 $35,765,841
West Coast........................ 45,978,885 24,600,268 15,498,799 12,004,967
Acquisitions...................... 20,133,370 22,054,734 27,606,592 20,955,836 20,037,857
Dental Benefits................... 7,348,195 6,065,604 6,665,815 6,393,076 6,054,947
Financial Institutions............ 13,438,226 10,069,030 9,632,466 10,183,997 7,468,761
----------- ----------- ----------- ---------- ----------
Total......................... $170,422,096 $129,816,586 $109,991,091 $89,253,484 $69,327,406
=========== =========== =========== ========== ==========
(1) Reinsurance assumed has been included; reinsurance ceded (2000-$128,374,583;1999-$92,566,755; 1998-$64,846,246;
1997-$34,139,554; 1996-$18,840,221) has not been deducted.
The ratio of voluntary terminations of individual life insurance to mean individual life insurance in force, which is determined by dividing the amount of insurance terminated due to lapses during the year by the mean of the insurance in force at the beginning and end of the year, adjusted for the timing of major acquisitions and assumptions was:
RATIO OF
YEAR ENDED VOLUNTARY
DECEMBER 31 TERMINATION
- --------------------------------------- ---------------------
1996......................... 6.4%
1997......................... 6.9
1998......................... 6.4
1999......................... 6.0
2000......................... 5.8
Net terminations reflect voluntary lapses, some of which may be due to the replacement of the Company's products with competitors' products. Also, a higher percentage of voluntary lapses typically occurs in the first 15 months of a policy, and accordingly, lapses will tend to increase or decrease in proportion to the change in the amount of new insurance written during the immediately preceding periods.
The amount of investment products in force is measured by account balances. The following table shows guaranteed investment contract and annuity account balances. Most of the variable annuity account balances are reported in the Company’s financial statements as liabilities related to separate accounts.
GUARANTEED MODIFIED
YEAR ENDED INVESTMENT GUARANTEED FIXED VARIABLE
DECEMBER 31 CONTRACTS ANNUITIES ANNUITIES ANNUITIES
- ------------------------- ---------------------- ----------------------- ---------------------- ----------------------
(dollars in thousands)
1996 $2,474,728 $ 862,747 $390,461 $ 624,714
1997 2,684,676 926,071 453,418 1,057,186
1998 2,691,697 818,566 432,237 1,554,969
1999 2,680,009 941,692 391,085 2,085,072
2000 3,177,863 1,384,027 331,937 2,043,878
The underwriting policies of the Company’s insurance subsidiaries are established by management. With respect to individual insurance, the subsidiaries use information from the application and, in some cases, inspection reports, attending physician statements, or medical examinations to determine whether a policy should be issued as applied for, rated, or rejected. Medical examinations of applicants are required for individual life insurance in excess of certain prescribed amounts (which vary based on the type of insurance) and for most individual insurance applied for by applicants over age 50. In the case of “simplified issue” policies, which are issued primarily through the Financial Institutions Division and the Individual Life Division in the payroll deduction market, coverage is rejected if the responses to certain health questions contained in the application indicate adverse health of the applicant. For other than “simplified issue” policies, medical examinations are requested of any applicant, regardless of age and amount of requested coverage, if an examination is deemed necessary to underwrite the risk. Substandard risks may be referred to reinsurers for full or partial reinsurance of the substandard risk.
The Company’s insurance subsidiaries require blood samples to be drawn with individual insurance applications for coverage at age 16 and above except in the payroll deduction market where the face amount must be $100,000 or more before blood testing is required. Blood samples are tested for a wide range of chemical values and are screened for antibodies to the HIV virus. Applications also contain questions permitted by law regarding the HIV virus which must be answered by the proposed insureds.
Group insurance underwriting policies are administered by experienced group underwriters. The underwriting policies are designed for single employer groups. Initial premium rates are based on prior claim experience and manual premium rates with relative weights depending on the size of the group and the nature of the benefits.
The Company’s insurance subsidiaries cede insurance to other insurance companies. The ceding insurance company remains liable with respect to ceded insurance should any reinsurer fail to meet the obligations assumed by it. The Company sets a limit on the amount of insurance retained on the life of any one person. In the individual lines it will not retain more than $500,000, including accidental death benefits, on any one life; for group insurance, the maximum amount retained on any one life is $100,000. In many cases the retention is less. At December 31, 2000, the Company had insurance in force of $170.4 billion of which approximately $128.4 billion was ceded to reinsurers.
Over the past several years, the Company’s reinsurers have reduced the net cost of reinsurance to the Company. Consequently, the Company has increased the amount of reinsurance which it cedes on newly-written individual life insurance policies, and has also ceded a portion of the mortality risk of existing business of the Individual Life, West Coast, and Acquisitions Divisions.
The applicable insurance laws under which the Company’s insurance subsidiaries operate require that each insurance company report policy liabilities to meet future obligations on the outstanding policies. These liabilities are the amounts which, with the additional premiums to be received and interest thereon compounded annually at certain assumed rates, are calculated in accordance with applicable law to be sufficient to meet the various policy and contract obligations as they mature. These laws specify that the liabilities shall not be less than liabilities calculated using certain named mortality tables and interest rates.
The policy liabilities and accruals carried in the Company’s financial reports (presented on the basis of accounting principles generally accepted in the United States of America – “GAAP”) differ from those specified by the laws of the various states and carried in the insurance subsidiaries’ statutory financial statements (presented on the basis of statutory accounting principles mandated by state insurance regulations). For policy liabilities other than those for universal life policies, annuity contracts, GICs, and funding agreements, these differences arise from the use of mortality and morbidity tables and interest rate assumptions which are deemed under GAAP to be more appropriate for financial reporting purposes than those required for statutory accounting purposes; from the introduction of lapse assumptions into the calculation; and from the use of the net level premium method on all business. Policy liabilities for universal life policies, annuity contracts, GICs, and funding agreements are carried in the Company’s financial reports at the account value of the policy or contract.
Existing federal laws and regulations affect the taxation of the Company’s products. Income tax payable by policyholders on investment earnings is deferred during the accumulation period of certain life insurance and annuity products. Congress has from time to time considered proposals that, if enacted, would have had an adverse impact on the federal income tax treatment of such products, or would increase the tax-deferred status of competing products. In addition, life insurance products are often used to fund estate tax obligations. If the estate tax were eliminated, the demand for certain insurance products would be adversely affected.
The Company’s insurance subsidiaries are taxed by the federal government in a manner similar to companies in other industries. However, certain restrictions on consolidating recently acquired life insurance companies and on consolidating life insurance company income with non-insurance income are applicable to the Company; thus, the Company is not able to consolidate all of the operating results of its subsidiaries for federal income tax purposes.
Under pre-1984 tax law, certain income of the Company was not taxed currently, but was accumulated in a memorandum account designated as “Policyholders’ Surplus” to be taxed only when such income was distributed to share owners or when certain limits on accumulated amounts were exceeded. Consistent with current tax law, amounts accumulated in Policyholders’ Surplus have been carried forward, although no accumulated income may be added to these accounts. As of December 31, 2000, the aggregate accumulation in the Policyholders’ Surplus account was $70.5 million. Under current income tax laws, the Company does not anticipate paying income tax on amounts in the Policyholders’ Surplus accounts.
Life and health insurance is a mature industry. In recent years, the industry has experienced little growth in life insurance sales, though the aging population has increased the demand for retirement savings products. Life and health insurance is a highly competitive industry. The Company encounters significant competition in all lines of business from other insurance companies, many of which have greater financial resources than the Company, as well as competition from other providers of financial services. Competition could result in, among other things, lower sales or higher lapses of existing products.
The insurance industry is consolidating, with larger, potentially more efficient organizations emerging from consolidation. Also, some mutual insurance companies are converting to stock ownership which will give them greater access to capital markets. Additionally, commercial banks, insurance companies, and investment banks may now combine, provided certain requirements are satisfied.
The Company’s ability to compete is dependent upon, among other things, its ability to attract and retain distribution channels to market its insurance and investment products, its ability to develop competitive and profitable products, its ability to maintain low unit costs, and its maintenance of strong ratings from rating agencies. However, irrational competition from other insurers could adversely affect the Company’s competitive position.
The Company’s insurance subsidiaries are subject to government regulation in each of the states in which they conduct business. Such regulation is vested in state agencies having broad administrative power dealing with many aspects of the insurance business, which may include premium rates, marketing practices, advertising, policy forms, and capital adequacy, and is concerned primarily with the protection of policyholders rather than share owners.
A life insurance company’s statutory capital is computed according to rules prescribed by the National Association of Insurance Commissioners (NAIC) as modified by the insurance company’s state of domicile. Statutory accounting rules are different from GAAP and are intended to reflect a more conservative view, for example, requiring immediate expensing of policy acquisition costs and more conservative computations of policy liabilities. The NAIC’s risk-based capital requirements require insurance companies to calculate and report information under a risk-based capital formula. These requirements are intended to allow insurance regulators to identify inadequately capitalized insurance companies based upon the types and mixtures of risks inherent in the insurer’s operations. The formula includes components for asset risk, liability risk, interest rate exposure, and other factors. Based upon the December 31, 2000 statutory financial reports, the Company’s insurance subsidiaries are adequately capitalized under the formula.
The Company’s insurance subsidiaries are required to file detailed annual reports with the supervisory agencies in each of the jurisdictions in which they do business and their business and accounts are subject to examination by such agencies at any time. Under the rules of the NAIC, insurance companies are examined periodically (generally every five years) by one or more of the supervisory agencies on behalf of the states in which they do business. To date, no such insurance department examinations have produced any significant adverse findings regarding any insurance company subsidiary of the Company.
Under insurance guaranty fund laws in most states, insurance companies doing business in such a state can be assessed up to prescribed limits for policyholder losses incurred by insolvent or failed insurance companies. Although the Company cannot predict the amount of any future assessments, most insurance guaranty fund laws currently provide that an assessment may be excused or deferred if it would threaten an insurer’s financial strength. The Company’s insurance subsidiaries were assessed immaterial amounts in 2000, which will be partially offset by credits against future state premium taxes.
In addition, many states, including the states in which the Company’s insurance subsidiaries are domiciled, have enacted legislation or adopted regulations regarding insurance holding company systems. These laws require registration of and periodic reporting by insurance companies domiciled within the jurisdiction which control or are controlled by other corporations or persons so as to constitute an insurance holding company system. These laws also affect the acquisition of control of insurance companies as well as transactions between insurance companies and companies controlling them. Most states, including Tennessee, where Protective Life Insurance Company (Protective Life) is domiciled, require administrative approval of the acquisition of control of an insurance company domiciled in the state or the acquisition of control of an insurance holding company whose insurance subsidiary is incorporated in the state. In Tennessee, the acquisition of 10% of the voting securities of an entity is generally deemed to be the acquisition of control for the purpose of the insurance holding company statute and requires not only the filing of detailed information concerning the acquiring parties and the plan of acquisition, but also administrative approval prior to the acquisition.
The Company’s insurance subsidiaries are subject to various state statutory and regulatory restrictions on the insurance subsidiaries’ ability to pay dividends to Protective Life Corporation. In general, dividends up to specified levels are considered ordinary and may be paid without prior approval. Dividends in larger amounts are subject to approval by the insurance commissioner of the state of domicile. The maximum amount that would qualify as ordinary dividends to the Company by Protective Life in 2001 is estimated to be $83.6 million. No assurance can be given that more stringent restrictions will not be adopted from time to time by states in which the Company’s insurance subsidiaries are domiciled, which restrictions could have the effect, under certain circumstances, of significantly reducing dividends or other amounts payable to the Company by such subsidiaries without affirmative prior approval by state regulatory authorities.
The Company’s insurance subsidiaries may be subject to regulation by the United States Department of Labor when providing a variety of products and services to employee benefit plans governed by the Employee Retirement Income Security Act (ERISA). Severe penalties are imposed for breach of duties under ERISA.
Certain policies, contracts and annuities offered by the Company’s insurance subsidiaries are subject to regulation under the federal securities laws administered by the Securities and Exchange Commission. The federal securities laws contain regulatory restrictions and criminal, administrative and private remedial provisions.
Additional issues related to regulation of the Company and its insurance subsidiaries are discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2000 Annual Report to Share Owners.
The NAIC has adopted the Codification of Statutory Accounting Principles (Codification). Codification changes current statutory accounting rules in several areas and is effective January 1, 2001. Although the Company has not estimated the potential effect, it does not believe Codification will have a material effect on the financial position, results of operation, or liquidity of the Company.
The NAIC has adopted a model regulation, commonly referred to as “Triple X” (i.e., Roman numeral XXX), for universal life and level premium term and term-like insurance products. Triple X potentially increases the amount of required regulatory policy liabilities and thus the capital employed in the sale of these products. Thirty-five jurisdictions have adopted Triple X. Insurers have reacted to Triple X by changing product features and/or premium rates. The Company assessed the probable impact of Triple X on its products and has introduced new products in response to Triple X. The Company cannot predict what effect Triple X may have on its life insurance sales or how its response to Triple X will affect its competitive position. In the first six months of 2000, the Company issued a significant number of policies which had been applied for prior to January 1, 2000.
On January 19, 2001, the Company completed the acquisition, through a coinsurance transaction, of a block of approximately 70,000 individual life insurance policies from Standard Insurance Company. The transaction represents approximately $80 million of annual premiums and $725 million of policy liabilities.
On February 16, 2001, the Company issued approximately 3.9 million shares of common stock in settlement of stock purchase contracts under its 6.5% FELINE PRIDES. In the transaction, substantially all of the 6.5% Trust Originated Preferred Securities, comprising part of the FELINE PRIDES, and the underlying subordinated debt, were redeemed.
On February 28, 2001, the Company issued $100 million of Floating Rate Senior Notes.
At December 31, 2000 the Company had approximately 2,834 authorized positions, including approximately 1,634 in Birmingham, Alabama. Most employees are covered by contributory major medical, dental, group life, and long-term disability insurance plans. The cost of these benefits to the Company in 2000 was approximately $7.2 million. In addition, substantially all of the employees are covered by a pension plan. The Company also matches employee contributions to its 401(k) Plan and makes discretionary profit sharing contributions for employees not otherwise covered by a bonus or sales incentive plan. See Note 11 to Consolidated Financial Statements.
The Company’s Home Office is located at 2801 Highway 280 South, Birmingham, Alabama. This campus includes the original 142,000 square-foot building which was completed in 1976 and a second contiguous 220,000 square-foot building which was completed in 1985. In addition, parking is provided for approximately 1,200 vehicles. During 2000, the Company began construction of a third contiguous building which will have approximately 315,000 square feet and parking for approximately 1,560 vehicles.
The Company leases administrative and marketing office space in approximately 53 cities including approximately 143,034 square feet in Birmingham, with most leases being for periods of three to five years. The aggregate annualized rent is approximately $8.7 million.
There are no material pending legal proceedings, other than ordinary routine litigation incidental to the business of the Company, to which the Company or any of its subsidiaries is a party or of which any of the Company’s properties is the subject. For additional information regarding legal proceedings see "Known Trends and Uncertainties" in the Company's 2000 Annual Report to Share Owners.
No matter was submitted during the fourth quarter of 2000 to a vote of security holders of the Company.
The Company’s Common Stock is listed and principally traded on the New York Stock Exchange (NYSE symbol: PL). The following table sets forth the highest and lowest closing prices of the Company’s Common Stock, $0.50 par value, as reported by the New York Stock Exchange during the periods indicated, along with the dividends paid per share of Common Stock during the same periods.
Range Dividends
----------------- ---------
High Low
1999 ---- -----
First Quarter............................ $39.81 $32.75 $.11
Second Quarter........................... 40.00 34.00 .12
Third Quarter............................ 39.44 28.50 .12
Fourth Quarter........................... 36.50 28.63 .12
2000
First Quarter............................ $31.75 $20.81 $.12
Second Quarter........................... 30.75 21.25 .13
Third Quarter............................ 32.06 25.75 .13
Fourth Quarter........................... 32.25 22.00 .13
On March 9, 2001, there were approximately 2,700 owners of record of Company Common Stock.
The Company (or its predecessor) has paid cash dividends each year since 1926 and each quarter since 1934. The Company expects to continue to pay cash dividends, subject to the earnings and financial condition of the Company and other relevant factors. The ability of the Company to pay cash dividends is dependent in part on cash dividends received by the Company from its life insurance subsidiaries. See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations –Liquidity and Capital Resources” in the Company’s 2000 Annual Report to Share Owners. Such subsidiary dividends are restricted by the various insurance laws of the states in which the subsidiaries are incorporated. See Item 1 – “Business – Regulation”.
YEAR ENDED DECEMBER 31
----------------------------------------------------------------------------
2000 1999 1998 1997 1996
-------------- --------------- -------------- -------------- ---------------
(dollars in thousands, except per share amounts)
INCOME STATEMENT DATA
Premium and policy fees $ 1,656,108 $ 1,299,317 $ 1,122,010 $ 856,549 $ 802,327
Reinsurance ceded (822,450) (538,033) (459,215) (334,214) (308,174)
--------- --------- --------- --------- ---------
Net of reinsurance ceded 833,658 761,284 662,795 522,335 494,153
Net investment income.................. 737,284 676,401 636,396 591,376 517,483
Realized investment gains (losses)..... (7,043) (1,057) 3,121 830 5,510
Other income........................... 170,068 97,254 64,103 32,784 20,857
--------- --------- --------- --------- ---------
Total revenues..................... 1,733,967 1,533,882 1,366,415 1,147,325 1,038,003
Benefits and expenses.................. 1,480,172 1,278,107 1,145,691 967,952 898,262
--------- --------- --------- --------- ---------
Income tax expense..................... 90,858 92,079 77,845 60,987 47,512
Minority interest...................... 9,461 10,606 12,098 6,393 3,217
Extraordinary loss(1) 1,763
--------- --------- --------- --------- ---------
Net income............................. $ 153,476 $ 151,327 $ 130,781 $ 111,993 $ 89,012
========= ========= ========= ========= =========
PER SHARE DATA(2)
Income before extraordinary
loss – basic....................... $ 2.33 $ 2.34 $ 2.06 $ 1.79 $ 1.47
Net income per share – basic........... $ 2.33 $ 2.31 $ 2.06 $ 1.79 $ 1.47
Average shares outstanding – basic..... 65,832,349 65,604,311 63,521,587 62,429,250 60,570,782
Operating income per share – diluted(3)
Income before extraordinary $ 2.39 $ 2.34 $ 2.02 $ 1.78 $ 1.44
loss – diluted.....................
Net income per share – diluted......... $ 2.32 $ 2.32 $ 2.04 $ 1.78 $ 1.46
Average shares $ 2.32 $ 2.29 $ 2.04 $ 1.78 $ 1.46
outstanding – diluted..............
Cash dividends......................... 66,281,128 66,161,367 64,087,744 62,849,618 60,969,664
Share-owners’ equity................... $ .51 $ .47 $ .43 $ .39 $ .35
Share-owners’ equity excluding net $ 17.26 $ 13.41 $ 14.65 $ 12.30 $ 9.99
unrealized gains and losses
on investments.....................
$ 18.05 $ 15.68 $ 13.80 $ 11.30 $ 9.88
DECEMBER 31
----------------------------------------------------------------------------
2000 1999 1998 1997 1996
-------------- --------------- -------------- -------------- ---------------
(dollars in thousands)
BALANCE SHEET DATA
Total assets........................... $ 15,145,633 $ 12,994,164 $ 11,989,495 $ 10,511,635 $ 8,263,205
Long-term debt......................... $ 306,125 $ 181,023 $ 152,286 $ 120,000 $ 168,200
Total debt............................. $ 306,125 $ 236,023 $ 172,035 $ 120,000 $ 181,000
9% Cumulative Monthly Income
Preferred Securities, Series A $ 55,000 $ 55,000 $ 55,000
8.25% Trust Originated Preferred
Securities $ 75,000 $ 75,000 $ 75,000 $ 75,000
6.5% FELINE PRIDES $ 115,000 $ 115,000 $ 115,000 $ 115,000
Share-owners’ equity $ 1,114,058 $ 865,223 $ 944,194 $ 758,197 $ 615,316
Share-owners’ equity excluding net
unrealized gains and losses
on investments $ 1,165,431 $ 1,011,304 $ 889,137 $ 696,470 $ 608,628
(1) Due to early extinguishments of debt, net of income tax.
(2) Prior periods have been restated to reflect a two-for-one stock split on April 1, 1998.
(3) Net income excluding realized gains and losses and related amortization and extraordinary loss.
Information regarding the Company’s financial condition and results of operations is included under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s 2000 Annual Report to Share Owners and is incorporated herein by reference.
The information required by this item is included in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Consolidated Financial Statements” in the Company’s 2000 Annual Report to Share Owners and is incorporated herein by reference.
The financial statements and supplementary data for the Company and its subsidiaries, which are included under the caption “Consolidated Financial Statements” in the Company’s 2000 Annual Report to Share Owners, are incorporated herein by reference.
To the Board of Directors and Share Owners of
Protective Life Corporation
Our audits of the consolidated financial statements referred to in our report dated March 1, 2001 appearing in the Annual Report to Share Owners of Protective Life Corporation and subsidiaries (which report and consolidated financial statements are incorporated by reference on this Annual Report on Form 10-K) also included an audit of the financial statement schedules listed in Item 14 (a) (2) of this Form 10-K. In our opinion, these financial statement schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
2000 1999 1998
---- ---- ----
REVENUES
Dividends from subsidiaries* $ 27,362 $ 18,980 $ 77,639
Service fees from subsidiaries* 78,999 82,559 56,683
Net investment income 7,173 10,506 9,295
Realized investment gains (losses) 6,856 (5,817) 985
Other income (loss) (2000 sale of affiliate) 24,856 1,327 (406)
------- ------- -------
145,246 107,555 144,196
------- ------- -------
EXPENSES
Operating and administrative 50,600 44,074 36,737
Interest - subsidiaries* 14,085 17,217 20,351
Interest - others 18,082 12,215 3,541
------ ------ ------
82,767 73,506 60,629
------ ------ ------
INCOME BEFORE FEDERAL INCOME
TAX AND OTHER ITEMS BELOW 62,479 34,049 83,567
INCOME TAX EXPENSE 16,468 11,136 9,843
------ ------ ------
INCOME BEFORE EQUITY IN UNDISTRIBUTED
INCOME OF SUBSIDIARIES 46,011 22,913 73,724
EQUITY IN UNDISTRIBUTED INCOME OF
SUBSIDIARIES* 107,465 130,177 57,057
------- ------- -------
INCOME BEFORE EXTRAORDINARY LOSS 153,476 153,090 130,781
EXTRAORDINARY LOSS ON EARLY
EXTINGUISHMENT OF DEBT 1,763
------- ------- -------
NET INCOME $153,476 $151,327 $130,781
======= ======= =======
- -----------------------------
*Eliminated in consolidation.
See notes to condensed financial statements.
DECEMBER 31
-----------------------------------
2000 1999
ASSETS ---- ----
Investments:
Fixed maturities $ 24,511 $ 20,791
Other long-term investments 18,027 17,616
Short-term investments 4,000 2,000
Investments in subsidiaries (equity method)* 1,594,462 1,323,233
--------- ---------
1,641,000 1,363,640
Cash 2,958 1,623
Accrued investment income 247 2,160
Receivables from subsidiaries* 14,348 27,324
Property and equipment, net 513 741
Other 19,880 8,571
--------- ---------
$1,678,946 $1,404,059
========= =========
LIABILITIES
Accrued expenses and other liabilities $ 42,750 $ 69,690
Accrued income taxes (32,264) 10,816
Deferred income taxes 54,716 28,769
Debt:
Notes payable to banks 114,000
Senior and Medium-Term Notes 303,810 119,685
Subsidiaries* 195,876 195,876
------- -------
564,888 538,836
SHARE-OWNERS' EQUITY ------- -------
Preferred Stock
Junior Participating Cumulative
Preferred Stock
Common Stock 34,667 34,667
Additional paid-in capital 289,819 256,057
Treasury stock (12,812) (12,960)
Stock Held in Trust (1,318) (621)
Unallocated stock in Employee Stock Ownership Plan (3,686) (4,043)
Retained earnings (including undistributed
income of subsidiaries: 2000 - $922,405; 1999 - $814,940) 858,761 738,204
Accumulated other comprehensive income
Net unrealized gains (losses) on
investments (all from subsidiaries, net
of income tax: 2000 - $(27,662); 1999 - $(78,659)) (51,373) (146,081)
--------- -------
1,114,058 865,223
--------- ---------
$1,678,946 $1,404,059
========= =========
- ----------------------------
*Eliminated in consolidation.
See notes to condensed financial statements.
2000 1999 1998
---- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 153,476 $ 151,327 $ 130,781
Adjustments to reconcile net income
to net cash provided by operating
activities:
Realized investment (gains) losses (6,856) 5,817 (985)
Equity in undistributed net income
of subsidiaries* (107,465) (130,177) (57,057)
Deferred income taxes 25,947 7,935 15,446
Accrued income taxes (43,080) 19,666 (8,850)
Accrued expenses 6,822 4,380 14,507
Accrued investment income 1,913 (2,160)
Receivables from subsidiaries 8,976 (8,746) (7,342)
Other (net) (11,255) 5,884 361
------- ------- ------
Net cash provided by operating activities 28,478 53,926 86,861
------- ------- ------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of and/or additional investments
in subsidiaries* (102,987) (28,638) (115,960)
Return of capital from subsidiaries 34,288 14,621
Principal payments received on loan
to subsidiary* 4,000 4,000 2,000
Change in fixed maturities and long-term
investments 3,047 (5,516) (1,257)
Change in short-term investments (2,000) (2,000) 7,000
------- ------ -------
Net cash used in investing activities (63,652) (17,533) (108,217)
------- ------ -------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under line of
credit arrangements and long-term debt 237,104 106,800 52,000
Principal payments on line of credit
arrangements and debt (166,979) (41,538) (3,577)
Repayment of subsidiary debt (69,621)
Purchase of Common Stock (697) (621)
Dividends to Share Owners (32,919) (30,305) (26,857)
------- ------- ------
Net cash provided by (used in) financing
activities 36,509 (35,285) 21,566
------- ------- ------
INCREASE (DECREASE) IN CASH 1,335 1,108 210
CASH AT BEGINNING OF YEAR 1,623 515 305
----- ----- ---
CASH AT END OF YEAR $ 2,958 $ 1,623 $ 515
===== ===== ===
- -----------------------------
*Eliminated in consolidation.
See notes to condensed financial statements.
The Company publishes consolidated financial statements that are its primary financial statements. Therefore, these parent company condensed financial statements are not intended to be the primary financial statements of the Company, and should be read in conjunction with the consolidated financial statements and notes thereto of Protective Life Corporation and subsidiaries.
At December 31, 2000, the Company had no borrowings under its $125.0 million line of credit arrangements. $118.6 million of subordinated debentures due 2003, $75.0 million of Senior Notes due 2004, $49.9 million of Senior Notes due 2010, $44.2 million of Medium-Term Notes due 2011, $39.9 million of Senior Notes due 2015, $60.0 million of Senior Notes due 2016, $77.3 million of subordinated debentures due 2027, and $34.8 million of Senior Notes due 2030 were outstanding at December 31, 2000. The subordinated debentures were issued to affiliates in connection with the issuance by such affiliates of Trust Originated Preferred Securities (TOPrS) and FELINE PRIDES.
On February 16, 2001, the Company issued approximately 3.9 million shares of common stock in settlement of stock purchase contracts under the FELINE PRIDES. In the transaction, substantially all of the TOPrS comprising part of the FELINE PRIDES, and the underlying subordinated debt, were redeemed. On February 28, 2001, the Company issued $100.0 million of Floating Rate Senior Notes due 2003.
2000 1999 1998
-------------------------------------------
CASH PAID (RECEIVED) DURING THE YEAR FOR:
Interest Paid to Non-Affiliates $14,696 $ 12,215 $ 9,285
Interest Paid to Subsidiary* 14,085 17,218 20,351
------ ------ ------
$28,781 $ 29,433 $29,636
====== ====== ======
Income Taxes (reduced by amounts received
from affiliates under a tax sharing agreement) $32,039 $(18,584) $ (464)
====== ====== ===
NONCASH INVESTING AND FINANCING ACTIVITIES
Reissuance of Treasury Stock to ESOP $ 255 $ 440 $ 205
=== === ===
Change in unallocated Stock in ESOP $ 357 $ 234 $ 315
=== === ===
Stock-based Compensation $33,655 $ 1,092 $ 3,097
====== ===== =====
Issuance of Common Stock $85,126
======
- ----------------------
*Eliminated in consolidation.
Protective Life Insurance Company (Protective Life) has issued surplus debentures to the Company in order to finance acquisitions and growth. At December 31, 2000, the balance of the surplus debentures was $10.0 million. The surplus debentures are included in receivables from subsidiaries. Protective Life must obtain the approval of the Tennessee Commissioner of Insurance before it may pay interest or repay principal on the surplus debentures.
On March 23, 2000, the Company completed the sale of its Hong Kong affiliate. Included as a component of other income is $24.8 million relating to the transaction.
SCHEDULE III - SUPPLEMENTARY INSURANCE INFORMATION
PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES
(in thousands)
COL. A COL. B COL. C COL. D COL. E COL. F COL. G COL. H COL. I COL. J
------ ------ ------ ------ ------ ------ ------ ------ ------ ------
GIC, ANNUITY AMORTIZATION
DEFERRED DEPOSITS AND OF DEFERRED
POLICY FUTURE POLICY OTHER NET PREMIUMS NET BENEFITS AND POLICY OTHER
ACQUISITION BENEFITS AND UNEARNED POLICYHOLDERS’ AND POLICY INVESTMENT SETTLEMENT ACQUISITIONS OPERATING
SEGMENT COSTS CLAIMS PREMIUMS FUNDS FEES INCOME(1) EXPENSES COSTS EXPENSES(1)
- -------------------------------- ---------------- --------------- --------------- ---------------- --------------- --------------- ---------------- ---------------- --------------
Year Ended
December 31, 2000:
Individual Life $ 354,320 $1,222,673 $ 315 $ 14,878 $ 73,826 $ 60,823 $ 70,365 $ 33,767 $ 59,882
West Coast 276,518 1,499,174 0 86,227 25,987 91,688 79,065 15,003 (12,760)
Acquisitions 223,430 1,364,830 484 238,466 102,997 116,940 125,151 17,081 24,939
Dental Benefits 11,788 96,049 2,721 63,530 325,797 11,193 216,557 6,386 99,261
Financial Institutions 112,135 292,634 931,735 3,963 220,421 47,029 135,494 50,132 90,958
Stable Value Products 2,144 162,236 0 3,177,863 0 243,132 207,143 900 3,881
Investment Products 127,334 306,021 0 1,633,203 30,127 132,314 109,607 24,156 25,403
Corporate and Other 81,711 88,340 2,261 2,160 54,503 34,165 46,183 2,149 49,469
--------- --------- ------- --------- ------- ------- ------- ------- -------
TOTAL $1,189,380 $5,031,957 $937,516 $5,220,290 $833,658 $737,284 $989,565 $149,574 $341,033
========= ========= ======= ========= ======= ======= ======= ======= =======
Year Ended
December 31, 1999:
Individual Life $ 372,359 $1,210,187 $ 338 $ 17,159 $ 92,506 $ 60,070 $ 74,455 $ 23,434 $ 68,923
West Coast 200,605 1,279,554 0 74,831 23,207 78,128 73,176 6,047 (2,649)
Acquisitions 235,903 1,374,445 558 260,267 114,866 129,806 129,581 19,444 31,967
Dental Benefits 25,819 130,463 3,076 79,032 327,464 14,172 213,005 8,218 91,468
Financial Institutions 51,339 149,746 504,965 9,045 107,969 24,506 55,899 24,718 57,382
Stable Value Products 1,156 167,415 0 2,680,009 0 210,208 175,290 744 4,709
Investment Products 124,335 254,492 0 1,320,453 24,248 106,645 88,642 19,820 21,014
Corporate and Other 8 2,852 34 88 71,024 52,866 54,534 2,487 35,799
--------- --------- ------- --------- ------- ------- ------- ------- -------
TOTAL $1,011,524 $4,569,154 $508,971 $4,440,884 $761,284 $ 676,401 $864,582 $104,912 $308,613
========= ========= ======= ========= ======= ======= ======= ======= =======
Year Ended
December 31, 1998:
Individual Life $ 301,941 $1,054,253 $ 355 $ 10,802 $126,166 $ 55,903 $106,306 $ 30,543 $ 48,231
West Coast 144,455 1,006,280 0 77,254 22,380 63,492 54,617 4,924 5,354
Acquisitions 255,347 1,383,759 553 233,846 96,735 112,154 112,051 18,894 28,194
Dental Benefits 23,836 114,693 5,728 81,572 227,692 11,916 156,857 6,859 60,038
Financial Institutions 39,212 215,451 385,006 105,434 112,272 25,313 52,629 28,526 55,197
Stable Value Products 1,448 172,674 0 2,691,697 0 213,136 178,745 735 2,876
Investment Products 75,177 194,726 0 1,233,528 18,809 105,890 85,045 17,213 19,637
Corporate and Other 9 944 39 88 58,741 48,592 39,515 3,494 29,211
------- --------- ------- --------- ------- -------- ------- ------- -------
TOTAL $ 841,425 $4,142,780 $391,681 $4,434,221 $662,795 $ 636,396 $785,765 $111,188 $248,738
======= ========= ======= ========= ======= ======= ======= ======= =======
(1) Allocations of Net Investment Income and Other Operating Expenses are based on a number of assumptions and estimates and
results would change if different methods were applied.
SCHEDULE IV - REINSURANCE
PROTECTIVE LIFE CORPORATION AND SUBSIDIARIES
(dollars in thousands)
COL. A COL. B COL. C COL. D COL. E COL. F
------ ------ ------ ------ ------ ------
PERCENTAGE OF
CEDED TO OTHER ASSUMED FROM AMOUNT ASSUMED
GROSS AMOUNT COMPANIES OTHER COMPANIES NET AMOUNT TO NET
----------------- ----------------- ---------------- ----------------- ----------------
Year Ended
December 31, 2000:
Life insurance
in force $153,371,754 $128,374,583 $ 17,050,342 $ 42,047,513 40.6%
=========== =========== ========== ========== ====
Premiums and
policy fees:
Life insurance $ 691,153 $ 496,715 $ 112,669 $ 307,107 36.7%
Accident/health
insurance 655,370 261,940 24,393 417,823 5.8%
Property and liability
insurance 159,355 63,795 13,168 108,728 12.1%
--------- ------- ------- -------
TOTAL $ 1,505,878 $ 822,450 $ 150,230 $ 833,658
========= ======= ======= =======
Year Ended
December 31, 1999:
Life insurance
in force $112,726,959 $ 92,566,755 $ 17,089,627 $ 37,249,831 45.9%
=========== ========== ========== ========== ====
Premiums and
policy fees:
Life insurance $ 540,430 $ 364,680 $ 131,856 $ 307,606 42.9%
Accident/health
insurance 565,545 172,852 27,266 419,959 6.5%
Property and liability
insurance 34,110 501 110 33,719 0.3%
--------- ------- ------- -------
TOTAL $ 1,140,085 $ 538,033 $ 159,232 $ 761,284
========= ======= ======= =======
Year Ended
December 31, 1998:
Life insurance
in force $ 91,980,657 $ 64,846,246 $ 18,010,434 $ 45,144,845 39.9%
========== ========== ========== ========== ====
Premiums and
policy fees:
Life insurance $ 537,000 $ 294,363 $ 87,964 $ 330,601 26.6%
Accident/health
insurance 456,378 164,852 14,279 305,805 4.7%
Property and liability
insurance 26,389 0 0 26,389 0.0%
--------- ------- ------- -------
TOTAL $ 1,019,767 $ 459,215 $ 102,243 $ 662,795
========= ======= ======= =======
None
Except for the information concerning executive officers of the Company set forth below, the information called for by this Item 10 is incorporated herein by reference to the section entitled “Election of Directors and Information about Nominees” in the Company’s definitive proxy statement for the Annual Meeting of Share Owners, May 7, 2001, to be filed with the Securities and Exchange Commission by the Company pursuant to Regulation 14A within 120 days after the end of its 2000 fiscal year.
The executive officers of the Company are as follows:
Name Age Position
---- --- --------
Drayton Nabers, Jr. 60 Chairman of the Board and
Chief Executive Officer and Director
John D. Johns 49 President, Chief Operating Officer
and Director
R. Stephen Briggs 51 Executive Vice President
Jim E. Massengale 58 Executive Vice President,
Acquisitions
A. S. Williams III 64 Executive Vice President,
Investments and Treasurer
Richard J. Bielen 40 Senior Vice President, Investments
Chris Calos 39 Senior Vice President, Dental Benefits
Thomas Davis Keyes 48 Senior Vice President, Information Services
Carolyn King 50 Senior Vice President,
Investment Products
Deborah J. Long 47 Senior Vice President, Secretary and
General Counsel
Steven A. Schultz 47 Senior Vice President,
Financial Institutions
Wayne E. Stuenkel 47 Senior Vice President
and Chief Actuary
Judy Wilson 43 Senior Vice President,
Stable Value Products
Jerry W. DeFoor 48 Vice President and Controller,
and Chief Accounting Officer
J. William Hamer, Jr. 56 Vice President, Human Resources
All executive officers are elected annually and serve at the pleasure of the Board of Directors. None of the executive officers is related to any director of the Company or to any other executive officer.
Mr. Nabers has been Chairman of the Board and Chief Executive Officer and a Director of the Company since August 1996. From May 1994 to August 1996, Mr. Nabers was Chairman of the Board, President and Chief Executive Officer and a Director of the Company. Mr. Nabers has served in various capacities with the Company and its subsidiaries since 1979 and has served as a member of the Board since August 1982. He is also a director of Energen Corporation, National Bank of Commerce of Birmingham, and Alabama National Bancorporation.
Mr. Johns has been President and Chief Operating Officer of the Company since August 1996 and a Director of the Company since May 1997. He was Executive Vice President and Chief Financial Officer of the Company from October 1993 to August 1996. He is also a director of Alabama National Bancorporation and John H. Harland Company.
Mr. Briggs has been Executive Vice President of the Company since October 1993 and has responsibility for the Individual Life Division. Mr. Briggs has been associated with the Company and its subsidiaries since 1971.
Mr. Massengale has been Executive Vice President, Acquisitions of the Company since August 1996 and also has responsibility for the West Coast Division. He was Senior Vice President of the Company from May 1992 to August 1996. Mr. Massengale has been employed by the Company and its subsidiaries since 1983.
Mr. Williams has been Executive Vice President, Investments and Treasurer of the Company since August 1996. He was Senior Vice President, Investments and Treasurer of the Company from July 1981 to August 1996. Mr. Williams has been employed by the Company and its subsidiaries since 1964.
Mr. Bielen has been Senior Vice President, Investments of the Company since August 1996. From August 1991 to August 1996, he served as Vice President, Investments of Protective Life.
Mr. Calos has been Senior Vice President, Dental Benefits of the Company since January 2001. From November 1989 to January 2001, he was Vice President, Dental and Consumer Benefits of Protective Life Insurance Company. Mr. Calos has been employed by the Company and its subsidiaries since 1987.
Mr. Keyes has been Senior Vice President, Information Services of the Company since April 1999. He was Vice President, Information Services of the Company from May 1993 to April 1999. Mr. Keyes has been employed by the Company and its subsidiaries since 1982.
Ms. King has been Senior Vice President, Investment Products of the Company since April 1995.
Ms. Long has been Senior Vice President, Secretary and General Counsel of the Company since November 1996. She was Senior Vice President and General Counsel of the Company from February 1994 to November 1996. Ms. Long has been employed by the Company and its subsidiaries since 1993.
Mr. Schultz has been Senior Vice President, Financial Institutions of the Company since March 1993. Mr. Schultz has been employed by the Company and its subsidiaries since 1989.
Mr. Stuenkel has been Senior Vice President and Chief Actuary of the Company since March 1987. Mr. Stuenkel is a Fellow of the Society of Actuaries and has been employed by the Company and its subsidiaries since 1978.
Ms. Wilson has been Senior Vice President, Stable Value Products of the Company since January 1995. Ms. Wilson has been employed by the Company and its subsidiaries since 1991.
Mr. DeFoor has been Vice President and Controller, and Chief Accounting Officer of the Company since April 1989. Mr. DeFoor is a certified public accountant and has been employed by the Company and its subsidiaries since 1982.
Mr. Hamer has been Vice President, Human Resources of the Company since 1981.
These executive officers also serve as executive officers and/or directors of various other Company subsidiaries.
Directors and executive officers of the Company are required to file reports with the Securities and Exchange Commission showing changes in their beneficial ownership of the Company’s Common Stock. The Company has reviewed copies of these reports and written representations from the individuals who are required to file reports. Based on this review, we believe that each of the Company’s directors and executive officers has complied with the reporting requirements in 2000, with one exception. One report for Mr. Keyes for the acquisition of 237 shares of Common Stock issued to him pursuant to the Protective Life Corporation 1992 Performance Share Plan was inadvertently filed late.
The information called for by this Item is incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Share Owners, May 7, 2001.
The information called for by this Item is incorporated herein by reference from the Company’s definitive proxy statement for the Annual Meeting of Share Owners, May 7, 2001.
None.
(a) The following documents are filed as part of this report:
1. Financial Statements:
The following financial statements set forth in the Company's 2000 Annual Report to Share Owners as indicated in the
following table are incorporated by reference (see Exhibit 13).
Page
Consolidated Statements of Income for the years
ended December 31, 2000, 1999, and 1998...............................................
Consolidated Balance Sheets as of December 31,
2000 and 1999 ........................................................................
Consolidated Statements of Share-Owners' Equity
for the years ended December 31, 2000, 1999, and 1998.................................
Consolidated Statements of Cash Flows
for the years ended December 31, 2000, 1999, and 1998.................................
Notes to Consolidated Financial Statements..............................................
Report of Independent Accountants.......................................................
2. Financial Statement Schedules:
The Report of Independent Accountants which covers the financial statement schedules appears on page 23 of this
report. The following schedules are located in this report on the pages indicated.
Page
Schedule II - Condensed Financial Information
of Registrant.........................................................................
Schedule III - Supplementary Insurance Information......................................
Schedule IV - Reinsurance...............................................................
All other schedules to the consolidated financial statements required by Article 7 of Regulation S-X are not
required under the related instructions or are inapplicable and therefore have been omitted.
3. Exhibits:
Included as exhibits are the items listed below. The Company will furnish a copy of any of the exhibits listed upon
the payment of $5.00 per exhibit to cover the cost of the Company in furnishing the exhibit.
ITEM NUMBER DOCUMENT
----------- --------
*3(a) 1998 Restated Certificate of Incorporation of the Company filed with the Secretary of State of
Delaware on November 12, 1998, filed as Exhibit 3(a) to the Company’s Annual Report on Form
10-K/A for the year ended December 31, 1998.
- --------------------------
*incorporated by reference
*3(b) 1998 Restated By-laws of the Company effective November 2, 1998, filed as Exhibit 3(b) to the
Company’s Annual Report on Form 10-K for the year ended December 31, 1998.
4(a) Reference is made to Exhibit 3(a) above.
4(b) Reference is made to Exhibit 3(b) above.
*4(c) Rights Agreement, dated as of August 7, 1995, between the Company and The Bank of New York as
successor to AmSouth Bank (formerly, AmSouth Bank N.A.), as Rights Agent filed as Exhibit 2 to
the Company’s Form 8-K Current Report filed August 7, 1995 and filed as Exhibit 1 to the
Company’s Form 8-A Registration Statement filed August 7, 1995.
*4(d) Rights Certificate filed as Exhibit 1 to the Company’s Form 8-A filed August 7, 1995.
*4(e) Certificate of Trust of PLC Capital Trust I filed as Exhibit 4(a) to the Company’s
Registration Statement on Form S-3 filed April 11, 1997 (No. 333-25027).
*4(f) Declaration of Trust of PLC Capital Trust I filed as Exhibit 4(b) to the Company’s
Registration Statement on Form S-3 filed April 11, 1997 (No. 333-25027).
*4(g) Form of Amended and Restated Declaration of Trust for PLC Capital Trust I filed as Exhibit
4(c) to Amendment No. 1, filed April 21, 1997, to the Company’s Registration Statement on Form
S-3 (No. 33-25027).
*4(h) Form of Preferred Security Certificate for PLC Capital Trust I (included as Exhibit A-1 of
Exhibit 4(f)).
*4(i) Form of Guarantee with respect to Preferred Securities of PLC Capital Trust I filed as Exhibit
4(i) to the Company’s Registration Statement on Form S-3 filed April 11, 1997 (No. 333-25027).
*4(j) Certificate of Trust of PLC Capital Trust II filed as Exhibit 4(aa) to the Company’s
Registration Statement on Form S-3 filed July 8, 1997 (No. 333-30905).
*4(k) Declaration of Trust of PLC Capital Trust II filed as Exhibit 4(dd) to the Company’s
Registration Statement on Form S-3 filed July 8, 1997 (No. 333-30905).
*4(l) Form of Amended and Restated Declaration of Trust of PLC Capital II filed as Exhibit 4(gg) to
the Company’s Registration Statement on Form S-3 filed July 8, 1997 (No. 333-30905).
*4(m) Form of Preferred Security Certificate for PLC Capital Trust II (included in Exhibit 4(l)).
- --------------------------
*incorporated by reference
*4(n) Form of Guarantee Agreement with respect to Preferred Securities to be issued by PLC Capital
Trust II filed as Exhibit 4(v) to the Company’s Registration Statement on Form S-3 filed July
8, 1997 (No. 333-30905).
*10(a)† The Company’s Annual Incentive Plan (effective as of January 1, 1997) filed as Exhibit 10(b)
to the Company’s Form 10-Q Quarterly Report filed May 14, 1997.
*10(b)† The Company’s 1997 Long-Term Incentive Plan (formerly, the “1997 Performance Share Plan”),
filed as Exhibit 10(a) to the Company’s Form 10-Q Quarterly Report filed May 15, 1998.
10(c)† Excess Benefit Plan amended and restated as of January 1, 2000.
*10(d)† Form of Indemnity Agreement for Directors filed as Exhibit 19.1 to the Company's Form 10-Q
Quarterly Report filed August 14, 1986.
*10(d)(1)† Form of Indemnity Agreement for Officers filed as Exhibit 10(d)(1) to the Company’s Annual
Report on Form 10-K for the year ended December 31, 1996.
*10(e)† Form of the Company’s Employment Continuation Agreement filed as Exhibit 10(a) to the
Company’s Form 10-Q Quarterly Report filed September 30, 1997.
*10(f)† The Company’s Deferred Compensation Plan for Directors Who Are Not Employees of the Company as
amended through March 3, 1997, filed as Exhibit 10(e) to the Company’s Form 10-Q Quarterly
Report filed May 14, 1997.
*10(g)† The Company’s Deferred Compensation Plan for Officers as amended through March 3, 1997, filed
as Exhibit 10(d) to the Company’s Form 10-Q Quarterly Report filed May 14, 1997.
*10(h)† The Company’s 1996 Stock Incentive Plan as amended through March 3, 1997, filed as Exhibit
10(c) to the Company’s Form 10-Q Quarterly Report filed May 14, 1997.
*10(h)(1)† The Company’s specimen letter confirming grants under the Company’s 1996 Stock Incentive Plan,
filed as Exhibit 10(2) to the Company’s Form 10-Q Quarterly Report filed November 13, 1996.
13 Selected portions of the 2000 Annual Report To Share Owners which are incorporated herein by
reference.
21 Organization Chart of the Company and Affiliates.
23 Consent of PricewaterhouseCoopers LLP.
24 Powers of Attorney.
99 Safe Harbor for Forward-Looking Statements.
- --------------------------
*incorporated by reference
†Management contract or compensatory plan or arrangement
(b) Current Reports on Form 8-K:
(1) Form 8-K, dated October 26, 2000
- Item 5
- Item 7
(2) Form 8-K, dated December 21, 2000
- Item 5
- Item 7
Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PROTECTIVE LIFE CORPORATION | |
|---|---|
| BY/s/Drayton Nabers, Jr. | |
| Drayton Nabers, Jr. | |
| Chairman of the Board and | |
| Chief Executive Officer |
Dated: March 27, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/Drayton Nabers, Jr. Chairman of the Board and March 27, 2001
- ---------------------- Chief Executive Officer
DRAYTON NABERS, JR. (Principal Executive Officer)
and Director
/s/John D. Johns President and Chief Operating Officer March 27, 2001
- ----------------------- and Director
JOHN D. JOHNS (Principal Financial Officer)
/s/Jerry W. DeFoor Vice President and Controller, March 27, 2001
- ----------------------- and Chief Accounting Officer
JERRY W. DEFOOR (Principal Accounting Officer)
* Director March 27, 2001
- -----------------------
WILLIAM J. CABANISS, JR.
* Director March 27, 2001
- ----------------------
JOHN J. MCMAHON, JR.
* Director March 27, 2001
- ----------------------
A. W. DAHLBERG
* Director March 27, 2001
- ----------------------
RONALD L. KUEHN, JR.
* Director March 27, 2001
- ----------------------
JAMES S. M. FRENCH
* Director March 27, 2001
- ----------------------
ROBERT A. YELLOWLEES
* Director March 27, 2001
- ----------------------
DONALD M. JAMES
* Director March 27, 2001
- ----------------------
J. GARY COOPER
* Director March 27, 2001
- ----------------------
H. CORBIN DAY
- ---------------------
*Drayton Nabers, Jr., by signing his name hereto, does sign this document on behalf of each of the persons indicated above pursuant to powers of attorney duly executed by such persons and filed with the Securities and Exchange Commission.
| BY/s/Drayton Nabers, Jr. | |
| DRAYTON NABERS, JR. | |
| Attorney-in-fact |