Document:

EX-10(x)

 

EXHIBIT 10(x)

03/05

COMPENSATION OF NON-EMPLOYEE DIRECTORS

		
	Ø	
    Non-Employee Directors receive the following annual retainers
    (paid in advance semi-annually in May and November, prorated
    quarterly as applicable) and meeting fees:

	 	 	 	 	 	 
	
    
    Annual Board Retainer:

    	 	$	40,000	 
	
    
    Lead Director Annual Retainer

    	 	 	10,000	 
	
    
    Committee Chair Annual Retainer:

    	 	 	10,000	 
	
    
    Audit Committee Annual Retainer (includes eight regularly
    scheduled meetings per year including conference call meetings)
    (If there are nine or more meetings, the Audit Chair can call
    for payment of a $1,000 meeting fee for all participating
    Committee members in the event any extra meeting exceeds 30
    minutes)

    	 	 	5,000	 
	
    
    Board Meeting Fee (typically five meetings per year):

    	 	 	2,000	 
	
    
    Committee Meeting Fee:

    	 	 	 	 
	 	
    
    In connection with Board meeting

    	 	 	500	 
	 	
    
    Other meeting

    	 	 	1,000	 

		
	Ø	
    They also receive stock options as follows through March 2008:

	 	 	 	 	 
	
    
    Initial grant upon joining Board (vesting in three annual
    increments):

    	 	$	175,000 face value,	 
	
    
    Annual grant each February (one-year vesting):

    	 	 	7,500 shares*	 
	
    
    (prorated by quarter if director elected after prior February)

    	 	 	 	 
	
    
    *but growth in face value capped at cumulative compound annual
    rate of 8% from February 2004 option exercise price

    	 	 	 	 

		
	Ø	
    Under an unfunded fee deferral program, retainer and/or meeting
    fees may be deferred into one or both investment vehicles.
    Transfers of account balances between vehicles are not permitted.

			
	 	• 	
    Interest rate option tied to 24-month average rate on 7-year
    Treasuries, fixed at each year end for the next year.
	 
	 	• 	
    JP phantom stock, with dividend equivalents credited in shares.
    JP currently hedges the cost of this phantom stock through a
    Rabbi Trust that holds JP shares.

		
	Ø	
    Directors also are eligible for matching of charitable gifts up
    to $5,000 per year.
	 
	Ø	
    Directors also are covered by Travel Accident Insurance.
	 
	Ø	
    JP covers travel expenses for Directors to attend meetings.

E-12EX-10(xi)

 

EXHIBIT 10(xi)

February 14, 2005

DIRECTOR STOCK OPTION AWARD

TERMS AND PROSPECTUS-SUPPLEMENT

An automatic stock option award of 7,500 shares was granted on
February 14, 2005 by Jefferson-Pilot Corporation
(“Jefferson-Pilot or JP”) under our new Non-Employee
Directors’ Stock Option Plan (“Plan”) to each
non-employee member of JP’s Board of Directors
(“Board”).

The terms of your stock option award are set forth below in
question and answer form. A copy of the current Plan is
enclosed, and you can request another copy at any time. The
provisions of the Plan govern if there is any inconsistency. All
interpretations by the Committee established under the Plan
(“Committee”) are binding on you and
Jefferson-Pilot.

What is my stock option exercise price? This option gives
you the right to buy JP common stock from Jefferson-Pilot in the
future at $49.87 per share, the closing market price on
February 14, 2005.

How many shares can I buy? 7,500 shares.

The number of shares and exercise price will be adjusted to
reflect stock splits and certain other changes in JP stock as
described in the Plan or as determined by the Compensation
Committee. For example, with our April 2001 3 for 2 stock split,
an option for 5,000 shares was automatically increased to 7,500
shares, and the exercise price was reduced from $69.82 to
$46.5467 (2/3 of $69.82). If it splits again, similar
adjustments will be made.

Does this option last indefinitely? No, it will expire in
ten years — and may expire earlier if you leave the
Board before then. The last day it can be exercised in any event
is February 13, 2015.

Can I exercise before then? Yes, you can exercise at any
time for some or all of your Option Shares after they vest and
before your option expires.

When do my Option Shares vest? On February 14, 2006,
the first anniversary of the award, if you are still serving on
the Jefferson-Pilot Board on that date.

What if I leave the Board before then? (1) Your
Option Shares vest early and become exercisable if your service
as a director terminates because you retire or otherwise depart
from the Board pursuant to Board policy, become permanently
disabled or die. Currently, under that policy, retirement occurs
at the annual meeting immediately prior to your 72nd birthday.

(2) If your service on the Board terminates for any other
reason, before any change in control, your Option Shares that
have not yet vested at your date of termination will never vest
and will expire/be forfeited.

Will my Option Shares vest upon a “change in
control”? Yes, for any change in control as defined in
Exhibit 1. Vesting would occur whether or not this results
in termination of your Board service. Generally this applies if
JP is taken over.

Once Option Shares are vested, do I have until
February 13, 2015 to exercise? Yes, if you remain on
the Board until that date. If you leave the Board before then
for any reason including death, you or your heirs must exercise
before the fifth anniversary of the date you leave the Board.
Only Option Shares vested at your termination can be exercised.
In any event your option must be exercised by February 13,
2015.

This document constitutes part of a Prospectus covering
securities that have been registered

under the Securities Act of 1933.

E-13

 

How do I exercise? By paying the exercise price for the
shares you are buying, at least 1,000 shares for each exercise.
You must deliver to our Corporate Secretary’s Office an
exercise form — copies can be obtained from that
Office -and arrange for proper payment. When the form and
payment are received, your exercise becomes effective. If these
exercise procedures change, we will notify you.

Are there different ways I can pay the exercise price?
Yes.

1. Pay with your own funds. You can write us a
check, or send a wire from one of your accounts, for the full
exercise price for the portion you are exercising. This will
result in your owning all of the exercised shares, unless you
ask us to withhold shares for any applicable withholding taxes
as discussed below.

2. Pay with JP shares. You can use JP shares you
own, valued at market value, to pay some or all of the purchase
price. You simply must certify to us that you own the shares and
they are freely transferable. The exchanged shares may be held
in your name or jointly with your spouse, either of record or in
our dividend reinvestment plan. If you want to use shares in
street name with your bank or broker, they must be freely
transferable and we may need to verify with your broker. They
cannot be in an IRA or similar tax favored account. Any gain on
the shares you use is tax deferred under current Federal tax
law. This procedure will result in your owning the shares you
started with plus additional shares representing your option
gain. If you immediately sell some of these shares to cover
estimated taxes we can deliver them electronically to your
broker.

3. Cashless exercise. You can arrange with a
stockbroker to borrow the exercise price and at the same time
sell some or all of the shares you are exercising. This is
called a cashless exercise. Most brokers will help with this.
They generally will charge a commission on the stock sale, and
interest on the loan for the few days before they receive the
proceeds from your sale. Then you can leave the net proceeds in
your brokerage account or can have your broker send them to you.

How are exercised shares delivered? If you request a
stock certificate, it will be mailed to you within a week or so
after you exercise. If you want to avoid the inconvenience and
risk of loss of stock certificates, you can ask us to deposit
your shares under our dividend reinvestment plan. You then can
elect either to have dividends reinvested, or to receive
dividend checks. In a cashless exercise or at your request, the
shares are delivered electronically to your broker.

Will I get dividends on my option? No. Dividends are
paid only on outstanding stock. The option is only a right to
buy the stock. Once you exercise, dividends will be paid on JP
shares you keep.

Can I voluntarily transfer my option to someone else?
Generally, no. Your option is not transferable except upon
your death or under a qualified domestic relations order. The
Committee has approved procedures for limited transfers under
special circumstances.

Should you die, your option becomes part of your estate. Your
estate, or whoever receives the option in distribution from your
estate, can exercise in the same fashion and for the same time
period as you could have after termination of employment.

Will I have to pay taxes if I exercise? Yes, at the time
you exercise. The closing market value of the shares on the day
you exercise, minus your exercise price (the
“spread”), is fully taxable as ordinary income, under
today’s tax laws. JP receives a corresponding tax deduction.

Am I responsible for withholding taxes? No, unless tax
laws change. Under current law, the taxable spread will be
reported on Form 1099 and be subject to income taxes and
also self-employment Social Security and Medicare taxes. You may
need to make estimated tax filings to avoid penalties.

Will I pay more taxes on a later sale of shares I keep?
Yes, if the share price goes up. The closing market price of
the shares on the day you exercise becomes your tax basis
in the shares you receive. Should you later sell the shares,
you would have a capital gain or loss, equal to the difference
between this tax basis and what you receive from the
sale. Long term capital gains have favorable tax rates, and
there are annual limits on utilization of capital losses, under
today’s tax laws. You should consult your tax or financial
advisor for specific tax advice.

E-14

 

Will exercise after I stop working affect my Social Security?
Generally speaking, no. Even before age 65 exercise will not
reduce or eliminate your receipt of Social Security benefits,
because the taxable spread at exercise does not count as income
for the current earnings test. But as noted above, this spread
is subject to self-employment Social Security taxes. This
possibly could result in a recalculation upward of your Social
Security benefits, if the exercise year becomes one of your best
income years under applicable Social Security wage base limits.

Does this option guarantee me continued Board service for the
vesting period or perhaps for ten years? No. It does
not create any rights to continued Board service.

How can I get answers to questions about my option?
Contact our Corporate Secretary’s office in Greensboro:
336-691-3691, Fax 336-691-3258. They also can provide exercise
forms and helpful instructions.

Are there any restrictions on my sale of shares when I
exercise? We have policies as to timing and preclearances of
sales for directors.

Under our current timing policy, directors are subject to a
“blackout period” each quarter. You may not have any
market transactions in JP stock during this period. It starts on
the first day of each calendar quarter and ends on the second
business day after the Board meeting. Generally, the Board meets
on the first Monday in May, August and November and the second
Monday in February, so you can trade starting on the Wednesday
after that.

Under our current preclearance policy, directors must preclear
any market transaction in JP stock with designated counsel
(presently, Bob Reed). He can advise whether there is any
undisclosed material information that would make it inadvisable
to trade until public disclosure is made. We will notify you of
any changes in these policies.

We intend to register the Plan shares with the SEC. If this is
not practicable, we will notify you about securities law
restrictions if any on your sales of JP shares.

Directors also may be subject to additional provisions of the
securities laws, under ’34 Act Section 16 or
Rule 144. You periodically receive information concerning
these additional restrictions that may apply to any of your
transactions in JP stock or options.

E-15

 

February 14, 2005

EXHIBIT I

to

Stock Option Award

Terms and Prospectus-Supplement

Director’s Plan

For purposes of the attached Terms and Prospectus-Supplement:

Change in control means a change in control of JP of a
nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A,
promulgated under the Securities Exchange Act of 1934 as amended
or any successor thereto (“Act”), provided that
without limiting the foregoing, a change in control of JP also
shall be deemed to have occurred if:

		
	(1) 	
    Any “person” (as defined under Section 3(a)(9) of
    the Act)(“Person”) or “group” of persons (as
    provided in Rule 13d-3 under the Act) (“Group”)
    is or becomes the “beneficial owner” (as defined in
    Rule 13d-3 or otherwise under the Act), directly or
    indirectly (including as provided in Rule 13d-3(d)(1) under the
    Act), of 20% or more of either

			
	 	(A) 	
    the then outstanding shares of JP common stock (the
    “Outstanding Common Stock”), or

			
	 	(B) 	
    the combined voting power of the then outstanding JP voting
    securities entitled to vote generally in the election of
    directors (the “Outstanding Voting Securities”);

		
	 	
    provided, however that for purposes of this paragraph 1),
    the following acquisitions shall not constitute a change in
    control:

			
	 	(I)	
    any acquisition directly from JP,
	 
	 	(II)	
    any acquisition by JP,
	 
	 	(III)	
    any acquisition by any employee benefit plan (or related trust)
    sponsored or maintained by JP or any corporation controlled by
    JP, or
	 
	 	(IV)	
    any acquisition by any corporation pursuant to a transaction
    which complies with clauses (A), (B) and (C) of
    paragraph (3) below; or

		
	(2) 	
    individuals who constitute the JP Board of Directors
    (“Board”) on February 14, 2005 (the
    “Incumbent Board”) cease for any reason to constitute
    at least a majority of the Board, provided that any person
    becoming a director subsequent to such date whose election, or
    nomination for election, is at any time approved by a vote of at
    least a majority of the directors then comprising the Incumbent
    Board shall be considered as though he or she were a member of
    the Incumbent Board but excluding, for this purpose, any such
    individual whose initial assumption of office as a director
    occurs as a result of (A) an actual or threatened election
    contest with respect to the election or removal of directors,
    (B) any other actual or threatened solicitation of proxies
    or consents by or on behalf of any Person or Group that
    beneficially owns 20% or more of the Outstanding Common Stock or
    the Outstanding Voting Securities, or (C) any other
    pressure from such a Person or Group; or
	 
	(3) 	
    consummation of a reorganization, merger or consolidation or
    sale or other disposition of all or substantially all of the
    assets of JP or the acquisition of assets of another corporation
    (a “Business Combination”), in each case, unless,
    following such Business Combination,

			
	 	(A) 	
    all or substantially all of the individuals and entities who
    were the beneficial owners, respectively, of the Outstanding
    Common Stock and Outstanding Voting Securities immediately prior
    to such Business Combination beneficially own, directly or
    indirectly, more than 50% (40% for any Business Combination
    characterized by resolution of the Incumbent Board prior to its
    consummation as a merger of equals) of, respectively, the then
    outstanding shares of common stock and the combined voting power
    of the then outstanding voting securities entitled to vote
    generally in the election of directors, as the

E-16

 

			
	 		
    case may be, of the corporation resulting from such Business
    Combination (including without limitation, a corporation which
    as a result of such transaction owns JP or all or substantially
    all of JP assets either directly or through one or more
    subsidiaries) in substantially the same proportions as their
    ownership, immediately prior to such Business Combination, of
    the Outstanding Common Stock and Outstanding Voting Securities,
    as the case may be,

			
	 	(B) 	
    no person (excluding any employee benefit plan (or related
    trust) of JP, such corporation resulting from such Business
    Combination, or any corporation controlled by, controlling or
    under common control with either of them) beneficially owns,
    directly or indirectly, 20% or more of, respectively, the then
    outstanding shares of common stock of the corporation resulting
    from such Business Combination or the combined voting power of
    the then outstanding voting securities of such corporation
    except to the extent that such ownership existed prior to the
    Business Combination, and
	 
	 	(C) 	
    at least a majority of the members of the board of directors of
    the corporation resulting from such Business Combination were
    members of the Incumbent Board at the time of the execution of
    the initial agreement, or of the action of the Board, providing
    for such Business Combination; or

		
	(4) 	
    approval by JP shareholders of a complete liquidation or
    dissolution of JP; or
	 
	(5) 	
    any other event or condition specified by the Board as
    effectively changing control such that early vesting of some or
    all options is appropriate.

E-17

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