<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
</TABLE>
ESG RE LIMITED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-12.
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
ESG RE LIMITED
16 CHURCH STREET
HAMILTON, HM 11
BERMUDA
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 7, 1999
To the Shareholders:
The Annual General Meeting of Shareholders of ESG Re Limited (the
"Company") will be held at 11:00 a.m., Friday, May 7, 1999, at the Waterloo
House, 100 Pitts Bay Road, Pembroke, HM08 Bermuda, for the following purposes:
1. To elect two directors to serve until the 2002 Annual General
Meeting of Shareholders and, in each case, to hold office
until their successors are duly elected and qualified;
2. To ratify the appointment of Deloitte & Touche, independent
auditors, as the Company's auditors for the ensuing year
ending with the 2000 Annual General Meeting of Shareholders
and to refer the determination of auditors' remuneration to
the Board of Directors; and
3. To transact such other business as may properly come before
the meeting, or any adjournment or adjournments thereof.
Shareholders of record at the close of business on Monday, March 22,
1999, will be entitled to receive notice of, and to vote, at the meeting.
All shareholders are cordially invited to attend the Annual General
Meeting.
By order of the Board of Directors
Margaret L. Webster
Corporate Secretary
Hamilton, Bermuda
April 6, 1999
WE NEED YOUR PROXY VOTE IMMEDIATELY. A SHAREHOLDER MAY THINK HIS VOTE IS NOT
IMPORTANT, BUT IT IS VITAL. BY LAW, THE ANNUAL GENERAL MEETING OF SHAREHOLDERS
WILL HAVE TO BE ADJOURNED WITHOUT CONDUCTING ANY BUSINESS IF LESS THAN A QUORUM
IS REPRESENTED. IN THAT EVENT, THE COMPANY WOULD CONTINUE TO SOLICIT VOTES IN AN
ATTEMPT TO ACHIEVE A QUORUM. CLEARLY, YOUR VOTE COULD BE CRITICAL TO ENABLE THE
COMPANY TO HOLD THE MEETING AS SCHEDULED, SO PLEASE RETURN YOUR PROXY CARD
IMMEDIATELY. YOU AND ALL OTHER SHAREHOLDERS WILL BENEFIT FROM YOUR COOPERATION.
<PAGE> 3
PROXY STATEMENT
ESG RE LIMITED
ANNUAL GENERAL MEETING OF SHAREHOLDERS
MAY 7, 1999
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of ESG Re Limited (the
"Company") from holders of the Company's common shares, par value $1.00 per
share (the "Common Shares"). The proxies will be voted at the Annual General
Meeting of Shareholders to be held at 11:00 a.m., Friday, May 7, 1999, at the
Waterloo House, 100 Pitts Bay Road, Pembroke, HM08 Bermuda, and at any
adjournment or adjournments thereof (the "Annual Meeting"), for the purposes set
forth in the accompanying Notice of Annual General Meeting of Shareholders. The
cost of solicitation of proxies is to be borne by the Company.
The Board has fixed the close of business on Monday, March 22, 1999, as
the record date (the "Record Date") for determining the shareholders of the
Company entitled to receive notice of, and to vote at, the Annual Meeting. At
the close of business on the Record Date, an aggregate of 13,923,799 Common
Shares were issued and outstanding, each share entitling the holder thereof to
one vote on each matter to be voted upon at the Annual Meeting, except that if a
person (other than John C Head III and certain affiliates) constructively or
beneficially, directly or indirectly, owns more than 9.9% of the voting power of
the issued Common Shares, the voting rights with respect to such shares will be
limited, in the aggregate, to voting power of 9.9%, pursuant to a formula
specified in the Company's Bye-Laws. The presence, in person or by proxy, of the
holders of a majority of the Common Shares outstanding (without regard to the
limitation on voting referred to above) is necessary to constitute a quorum for
the transaction of business at the Annual Meeting.
It is estimated that proxy materials will be mailed to shareholders of
record on or about April 6, 1999 The mailing address for the return of proxies
in the enclosed postage paid envelope is c/o Boston EquiServe, P.O. Box 9391,
Boston, MA 02205-9969.
At the Annual Meeting, shareholders of the Company will be asked to (i)
elect two directors to serve on the Board until the completion of three-year
terms, (ii) ratify the appointment of Deloitte & Touche, independent auditors,
as the Company's auditors for the ensuing period ending with the 2000 Annual
General Meeting of Shareholders and to refer the determination of the auditors'
remuneration to the Board of Directors, and (iii) transact such other business
as may properly come before the meeting, or any adjournment or adjournments
thereof.
All matters referenced in this Proxy Statement upon which shareholders
are called to vote will be decided by a plurality of votes cast.
A copy of the Company's Annual Report for the fiscal year ended December
31, 1998, which is not a part of the proxy soliciting material, is being mailed
to shareholders together with this Proxy Statement.
1
<PAGE> 4
SOLICITATION AND REVOCATION
PROXIES IN THE FORM ENCLOSED ARE SOLICITED BY, OR ON BEHALF OF, THE
BOARD OF DIRECTORS OF THE COMPANY. THE PERSONS NAMED IN THE FORM OF PROXY HAVE
BEEN DESIGNATED AS PROXIES BY THE BOARD OF DIRECTORS. Such persons designated as
proxies are (i) the Chairman of the Board and (ii) the Managing Director and
Chief Executive Officer of Company. A shareholder desiring to appoint some other
person to represent him at the Annual Meeting may do so either by inserting such
person's name in the blank space provided in the enclosed proxy card, or by
completing another form of proxy and, in either case, delivering the completed
proxy to the address indicated above before the time of the Annual Meeting. It
is the responsibility of the shareholder appointing some other person to
represent him to inform such person of this appointment.
Common Shares represented at the Annual Meeting by a properly executed
and unrevoked proxy will be voted in accordance with instructions made thereon,
or if no instructions are noted, the proxy will be voted in favor of the
proposals set forth in the Notice of Annual Meeting. If a shareholder appoints a
person other than the persons named in the proxy to represent him, such person
must vote the shares in respect of which he is appointed proxy holder in
accordance with the directions of the shareholder appointing him. A submitted
proxy is revocable by a shareholder at any time prior to it being voted provided
that such shareholder gives written notice to the Company at or prior to the
Annual Meeting that such shareholder intends to vote in person or by submitting
a subsequently dated proxy. Attendance at the Annual Meeting by a shareholder
who has given a proxy shall not in and of itself constitute a revocation of such
proxy.
Abstentions and "non-votes" will be counted as present in determining
the existence of a quorum. (A "non-vote" occurs when a nominee (typically, a
broker-dealer) holding shares for a beneficial owner attends a meeting with
respect to such shares (in person or by proxy) but does not vote on one or more
proposals because the nominee does not have discretionary voting power with
respect thereto and has not received instructions from the beneficial owner.)
The affirmative vote of a plurality of the shares present or represented by
proxy and voting on the matters in question at the Annual Meeting will be
required to elect the nominees for election as directors and for the
ratification of Deloitte & Touche as independent auditors of the Company.
Therefore, abstentions and "non-votes" will not have the effect of votes in
opposition to the election of a director or "no" votes on the proposed
ratification of the selection of the independent auditors of the Company.
Banks, brokerage houses and other institutions, nominees or fiduciaries
will be requested to forward the proxy materials to the beneficial owners of the
Common Shares held of record by such persons and entities.
2
<PAGE> 5
PROPOSAL 1
ELECTION OF DIRECTORS
The Board of Directors of the Company currently consists of seven
members. At the Annual Meeting, two directors will be elected to serve until the
2002 Annual General Meeting of Shareholders and, in each case, to hold office
until their successors are duly elected and qualified.
The Company's Board of Directors is divided into three classes as
follows: the first class, whose initial term expired at the 1998 Annual General
Meeting of Shareholders, is comprised of John C Head III and Wolfgang M. Wand;
the second class, whose term expires at the 1999 Annual General Meeting of
Shareholders, is comprised of Kenneth P. Morse and William J. Poutsiaka; and the
third class, whose term expires at the 2000 Annual General Meeting of
Shareholders, is comprised of Steven H. Debrovner, David L. Newkirk and Edward
A. Tilly. Since Messrs. Debrovner and Morse were initially appointed by the
Board of Directors in February 1998 to fill vacancies on the Board of Directors,
the initial terms of Messrs. Debrovner and Morse expired at the 1998 Annual
General Meeting in accordance with the Company's Bye-laws. At the 1998 Annual
General Meeting of Shareholders, each of Messrs. Head and Wand was re-elected to
a three-year term, Mr. Debrovner was elected to a two-year term and Mr. Morse
was elected to a one-year term. Otherwise, following their initial terms, all
classes of directors shall be elected to three-year terms.
Each Proxy will be voted in accordance with the directions thereon or,
if no directions are indicated, in favor of election of the director named below
whose election has been proposed and recommended by the Board of Directors. The
presence, in person or by proxy, of a majority of the outstanding Common Shares
is required for a quorum for the election of directors at the Annual Meeting,
but if a quorum should not be present, the meeting may be adjourned from time to
time until a quorum is obtained. Election of directors at the Annual Meeting
will be decided by a plurality of votes cast. The individual nominees (each, a
"Nominee" and collectively, the "Nominees") is listed below. Each Nominee has
consented to be named in this Proxy Statement and has agreed to serve as a Board
member if elected. If any Nominee shall, prior to the Annual Meeting, become
unavailable for election as a director, the persons named in the accompanying
Proxy will vote for such other nominee, if any, in their discretion as may be
recommended by the Board of Directors, or the Board of Directors may reduce the
number of directors to eliminate the vacancy.
The respective ages, positions with the Company, business experience,
directorships in other companies and Board committee memberships of the two
Nominees for election and for the continuing directors are set forth below. Each
of the Nominees is currently a director of the Company whose term expires on May
7, 1999. Upon election, Messrs. Poutsiaka and Morse will serve three-year terms
expiring at the 2002 Annual General Meeting of Shareholders.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------------------------- ----- ------------------
<S> <C> <C>
NOMINEE:
- --------
William J. Poutsiaka (1) 46 Director
William J. Poutsiaka has been President, Chief
Executive Officer and a director of Arkwright Mutual
Insurance Company in Waltham, Massachusetts since
1994, and has served in other executive capacities
for such company since 1989.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------------------------- ----- ------------------
<S> <C> <C>
Kenneth P. Morse 52 Director
Kenneth P. Morse, has served as a director of the
Company since February 1998. Mr. Morse has served as
the Managing Director of the MIT Entrepreneurship
Center and as Senior Lecturer at the MIT Sloan School
of Management since 1996. Prior thereto, Mr. Morse
was the Managing Director and member of the Board of
Directors of AspenTech Europe S.A./N.V. from 1992 to
1996. From 1980 to 1996, Mr. Morse was one of the
founders of, and responsible for sales and marketing
at, several high tech companies, including 3Com
Corporation and Aspen Technology, Inc.
CONTINUING DIRECTORS:
- ---------------------
John C Head III (2) 50 Chairman of the Board
John C Head III has served as Chairman of the Board
since the inception of the Company and is a member of
the Compensation Committee. Mr. Head has been a
Managing Member of Head & Company L.L.C., an
investment banking firm specializing in the insurance
industry, since 1987. Mr. Head is also a director of
PartnerRe Ltd., Kiln Capital plc, FFTW, Inc. and
other private companies.
Wolfgang M. Wand 46 Managing Director and Chief
Wolfgang M. Wand, has served as a director and Executive Officer
Managing Director and Chief Executive Officer
since the inception of the Company. In 1993,
Mr. Wand co-founded and became Managing Director of
European Specialty Group Holding AG ("ESG Germany"),
through which the Company operated its reinsurance
management businesses prior to its initial public
offering in December 1997. Following the
reunification of Germany, Mr. Wand served, on behalf
of the German government's privatization agency, the
Treuhandanstalt, in connection with the privatization
and restructuring of the East German economy, as
Chairman of the Board of Directors for certain
segments of the German shoe manufacturing industry
from 1991 to 1992. Mr. Wand serves as a member of the
German delegation of the International Chamber of
Commerce and is a representative on the Chamber's
Committee for insurance affairs in Eastern Europe.
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------------------------- ----- ------------------
<S> <C> <C>
Steven H. Debrovner 61 Chief Underwriting and
Steven H. Debrovner has served as a director Marketing Officer
of the Company since February 1998. He served
as the Chief Operating Officer from the
inception of the Company until November 1998 and is
currently serving as the Chief Underwriting and
Marketing Officer. Mr. Debrovner co-founded ESG
Germany with Mr. Wand in 1993. Prior thereto, Mr.
Debrovner served as the head of marketing for all
non-life business at CIGNA Worldwide headquarters in
Philadelphia from 1987 to 1993. In 1974, Mr.
Debrovner created the European accident and health
activities for AFIA and, subsequently, CIGNA. Mr.
Debrovner began his insurance underwriting experience
with American International Group, Inc. in 1967.
David L. Newkirk (1)(2) 46 Director
David L. Newkirk has been Vice President of
Booz-Allen & Hamilton International, Inc. and various
of its wholly-owned subsidiaries since 1991.
Edward A. Tilly (1)(2) 55 Director
Edward A. Tilly is the former Chairman and Chief
Executive of the Consolidated Financial Insurance
group of companies, which are subsidiaries of General
Electric Company where he served since 1994. Between
1989 and 1994, Mr. Tilly was Chairman and Chief
Executive of Financial Insurance Group.
</TABLE>
- -------------------
(1) Member of the Company's Audit Committee.
(2) Member of the Company's Compensation Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION
OF THE TWO DIRECTORS NAMED ABOVE.
THE BOARD AND ITS COMMITTEES
The Board of Directors has established an Audit Committee and a
Compensation Committee, each of which reports to the Board of Directors. The
Audit Committee consists of Messrs. Newkirk, Poutsiaka and Tilly. The
Compensation Committee consists of Messrs. Head, Tilly and Newkirk. The Board of
Directors is responsible for, among other things, the nomination of additional
directors.
The Audit Committee oversees the financial reporting process and the
internal control structure of the Company and establishes standards for review
of the Company's compliance with applicable accounting and regulatory
requirements. The Audit Committee meets with management and with the Company's
independent
5
<PAGE> 8
auditors to review matters relating to the quality of financial reporting and
internal accounting control, including the nature, extent and results of their
audits, and otherwise maintains communications between the Company's independent
auditors and the Board of Directors.
The Securities and Exchange Commission requested, and the New York Stock
Exchange and the National Association of Securities Dealers agreed to sponsor,
the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit
Committees. The Blue Ribbon Committee's objective was to recommend ways to
strengthen the role of audit committees in overseeing the corporate financial
reporting process. The committee held a public hearing in December 1998 and
issued its report in February 1999. The Audit Committee has reviewed the
recommendations of the Blue Ribbon Committee and intends to comply with the
report of the Blue Ribbon Committee.
The Compensation Committee oversees all compensation matters for
executive officers and the Board of Directors and reviews the performance of
executive officers of the Company. The Compensation Committee is also
responsible for all forms of noncurrent monetary compensation, including the
administration of the Non- Management Directors' Compensation and Option Plan
and the Company's 1997 Stock Option Plan.
To date in 1999, the Board of Directors has met once, on February 25,
1999. In 1998, the Board of Directors met on February 5, 1998, February 27,
1998, March 9, 1998, May 4, 1998, August 6, 1998, November 10, 1998 and December
21, 1998.
INFORMATION REGARDING THE SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS, MANAGEMENT AND DIRECTORS
The table below sets forth the beneficial ownership of Common Shares,
Class A Warrants, vested Class B Warrants and vested options by all persons who
beneficially own 5% or more of the Common Shares and by all directors and
executive officers of the Company as of March 22, 1999.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
- ------------------------------------------------------ ------------------------- ----------
<S> <C> <C>
John C Head III..................................... 3,497,506(2)(4)(5) 21.9%
Madie Ivy
1330 Avenue of the Americas
New York, New York 10019................... 3,497,457(3)(4)(5) 21.9%
HMI Partners L.P.
1330 Avenue of the Americas
New York, New York 10019.................... 1,815,672(4) 11.4%
Heracles-B L.P.
1330 Avenue of the Americas
New York, New York 10019.................... 1,815,672(4) 11.4%
ESG Partners (Bermuda) L.P.
1330 Avenue of the Americas
New York, New York 10019.................... 896,143(5) 5.6%
Heracles ESG L.L.C.
1330 Avenue of the Americas
New York, New York 10019.................... 886,793(5) 5.6%
</TABLE>
6
<PAGE> 9
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OF CLASS
- ------------------------------------------------------ ------------------------- ----------
<S> <C> <C>
Vontobel USA Inc.
450 Park Avenue
New York, New York 10022.................... 822,000(6) 5.2%
The Goldman Sachs Group, L.P., et al.
85 Broad Street
New York, New York 10004.................... 699,200(7) 4.4%
Wolfgang M. Wand.................................... 414,690(8) 2.6%
Steven H. Debrovner................................. 257,725(9) 1.6%
Joan H. Dillard..................................... 37,625(10) *
David L. Newkirk.................................... 37,000(11) *
William J. Poutsiaka................................ 35,000(12) *
Edward A. Tilly..................................... 35,000(12) *
Kenneth P. Morse.................................... 35,000(12) *
Renate M. Nellich................................... 9,750(13) *
Gerhard Jurk........................................ 7,250(14) *
All directors and executive officers (10 persons)... 4,366,546(1) 27.4%
</TABLE>
- ------------------------
* Denotes beneficial ownership of less than 1%.
(1) Assumes the exercise of Class A Warrants and vested Class B Warrants, but
not unvested Class B Warrants (which are subject to certain performance
criteria).
(2) Includes (a) 8,685 Common Shares and Class A Warrants to purchase 885
Common Shares held by Mr. Head, (b) 21,196 Common Shares, Class A Warrants
to purchase 1,416 Common Shares, and Options to purchase 66,428 Common
Shares, held by certain trusts for the benefit of the minor children of
Mr. Head and Ms. Ivy, (c)143,995 Common Shares and Class A Warrants to
purchase 16,277 Common Shares held by certain pension plan trusts of Head
Company and other entities which are affiliates of HMI Partners L.P. and
(d) 465,241 Common Shares and Class A Warrants to purchase 61,568 Common
Shares held by an affiliate of ESG Partners L.P. Mr. Head is married to
Ms. Ivy.
(3) Includes (a) 8,636 Common Shares and Class A Warrants to purchase 885
Common Shares held by Ms. Ivy, (b) 3,000 Common Shares held by certain
trusts for the benefit of the minor children of Mr. Head and Ms. Ivy, (c)
143,995 Common Shares and Class A Warrants to purchase 16,277 Common
Shares held by certain pension plan trusts of Head Company and other
entities which are affiliates of HMI Partners L.P. and (d) 465,241 Common
Shares and Class A Warrants to purchase 61,568 Common Shares held by an
affiliate of ESG Partners L.P.
(4) Includes 455,457 Common Shares, Class A Warrants to purchase 1,083,975
Common Shares and Class B Warrants to purchase 276,240 Common Shares held
by HMI Partners L.P., the General Partner of which is Heracles-B L.P., of
which Mr. Head and Ms. Ivy are the General Partners.
(5) Includes 792,505 Common Shares and Class A Warrants to purchase 103,638
Common Shares held by ESG Partners (Bermuda) L.P., the General Partner of
which is Heracles ESG L.L.C., of which Mr. Head and Ms. Ivy are the
Managing Members.
(6) The source of the information is the Schedule 13D dated February 19, 1999
filed by Vontobel USA Inc. with the Securities and Exchange Commission
(the "Commission").
(7) The Common Shares are owned by the following entities: Goldman, Sachs &
Co. (with shared voting and shared dispositive power over 699,200 Common
Shares) and The Goldman Sachs Group, L.P. (with shared voting and shared
dispositive power over 699,200 Common Shares). The source of the
information in this footnote is the Schedule 13D dated February 14, 1999
filed by Goldman, Sachs & Co. and The Goldman Sachs Group, L.P. with the
Commission.
(8) Includes 370,315 Common Shares, 144,405 of which are owned by Mr. Wand's
wife. Mr. Wand disclaims beneficial ownership of all such shares held by
his wife. Mr. Wand holds options to purchase 177,500 Common Shares, 44,375
of which are currently exercisable. See "Summary Compensation Table."
(9) Includes 229,600 Common Shares. Mr. Debrovner holds options to purchase
112,500 Common Shares, 28,125
7
<PAGE> 10
of which are currently exercisable. See "Summary Compensation Table."
(10) Includes 22,000 Common Shares. Ms. Dillard holds options to purchase
62,500 Common Shares, 15,625 of which are currently exercisable. See
"Summary Compensation Table."
(11) Includes 2,000 Common Shares owned by Mr. Newkirk's wife. Mr. Newkirk
disclaims beneficial ownership of all such shares held by his wife. Mr.
Newkirk holds options to purchase 35,000 Common Shares. See "Executive
Compensation."
(12) Represents options to purchase Common Shares. See "Executive
Compensation."
(13) Includes 1,000 Common Shares owned by Ms. Nellich's husband. Ms. Nellich
disclaims beneficial ownership of all such shares held by her husband. Ms.
Nellich holds options to purchase 35,000 Common Shares, 8,750 of which are
currently exercisable. See "Summary Compensation Table."
(14) Includes 1,000 Common Shares. Mr. Jurk holds options to purchase 25,000
Common Shares, 6,250 of which are currently exercisable. See "Summary
Compensation Table."
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Investment Advisory Agreement
The Company is party to an investment advisory agreement (the "Investment
Advisory Agreement") with Head Asset Management L.L.C. ("Head Asset
Management"), an affiliate of Head Company, to supervise and direct the
investment of the Company's asset portfolio in accordance with, and subject to,
the investment objectives and guidelines established by the Company. Pursuant to
the terms of the Investment Advisory Agreement, the Company pays Head Asset
Management a fee, payable quarterly in arrears, equal to 0.25% per annum of the
first $200 million of assets under its management declining to 0.15% per annum
of the assets under its management, in excess of $200 million. The Investment
Advisory Agreement may be terminated upon 90 days written notice by Head Asset
Management or by the Company upon five days written notice or upon shorter
notice upon mutual written agreement by the parties. The Company expensed
$549,000 and $45,549 under this agreement for the years ended December 31, 1998
and 1997, respectively.
Financial Services Agreement
The Company was party to a financial services agreement (the "Agreement")
with Head Company in connection with the analysis and implementation of
operating plans, capital plans, and strategic alternatives. Pursuant to the
terms of the Agreement, Head Company is paid a monthly fee of $50,000 and is
reimbursed for reasonable out-of-pocket expenses. Under this Agreement the
Company incurred fees and direct expenses of $377,629 in 1998. The Agreement was
terminated effective as of June 1, 1998.
Transactions between Mr. Wand and Shareholder
During 1996, Mr. Wand received payments from ESG GmbH in consideration of
a loan made by Mr. Wand to a shareholder of European Specialty Group Holding AG
("ESG Germany") to enable such shareholder to purchase shares of ESG Germany. In
order to repay Mr. Wand, amounts payable to the debtor by ESG GmbH in respect of
reinsurance brokerage services provided by the debtor were paid directly to Mr.
Wand. For 1996, ESG GmbH paid Mr. Wand $32,870 in respect of this loan. Such
loan was repaid in full by the debtor prior to December 12, 1997.
8
<PAGE> 11
Indemnification for Contingent Liabilities
Certain of the former shareholders of ESG Germany who participated in the
formation have agreed to indemnify ESG Germany for certain contingent
liabilities applicable to activity prior to 1997. Management believes that the
likelihood of incurring a loss related to any of those contingent liabilities is
remote.
Consulting Fee
For advisory services rendered by Mr. Morse from March 1, 1998 through
August 31, 1998, Mr. Morse was paid a fee of $60,000.
Purchases of Securities in the Company
William J. Poutsiaka, a director of the Company, is President and Chief
Executive Officer of Arkwright Mutual Insurance Company, which purchased
securities in the Company in a private placement of such securities in December
1997. In addition, affiliates of Head Company made capital investments in such
private placement.
EXECUTIVE COMPENSATION
The Company's executive compensation policies are formulated by the
Compensation Committee of the Board of Directors. The Company maintains a
philosophy that compensation of its executive officers should be competitive
with similarly situated executives of its competitors and peer companies. In
addition, compensation is linked to each executive officer's performance as well
as the overall operating performance of the Company.
Each of Messrs. Wand, Debrovner, Jurk, Ms. Dillard and Ms. Nellich has an
employment agreement with the Company, as described below. The base salary
component of each executive's compensation is, pursuant to the terms of the
employment agreement, subject to annual review by the Compensation Committee.
The Compensation Committee may also make discretionary increases in the base
salary based on the executive's contribution to the Company. In addition, under
the terms of each employment agreement the Compensation Committee may award
bonuses to the executive for the prior year.
Executive officers may also receive grants of stock options annually under
the Company's 1997 Stock Option Plan (the "Stock Option Plan"). Options are
granted at a price equal to the fair market value of the Company's Common Shares
on the date of the grant. The Board of Directors believes that grants of stock
options are an effective means of aligning an executive's compensation with the
interests of shareholders, since the value of such options are tied directly to
increases in the market value of the Company's Common Shares. The Compensation
Committee has sole discretionary authority to interpret the Stock Option Plan
and to determine the type of awards to grant, when, if and to whom awards are
granted, the number of Common Shares covered by each award and the terms and
conditions of the award.
The Compensation Committee is comprised of the following Board members:
John C Head III
Edward A. Tilly
David L. Newkirk
The tables which follow summarize compensation paid by the Company and its
subsidiaries and certain information regarding options granted to the Company's
principal executive officers for the years ended December 31, 1998 and 1997.
9
<PAGE> 12
SUMMARY COMPENSATION TABLE (1)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION AWARDS
-------------------------------------------- -------
NUMBER
OTHER ANNUAL OF
NAME AND PRINCIPAL POSITION YEAR SALARY(2) BONUS COMPENSATION(3) OPTIONS
- ---------------------------------- ------ ---------- ---------- --------------- -------
<S> <C> <C> <C> <C> <C>
Wolfgang M. Wand, 1998 $300,000 $235,000(4) $ -- 37,500
Managing Director and Chief 1997 $254,964 $34,495 (6) 140,000
Executive Officer $ 28,746(5)
Steven H. Debrovner, 1998 $300,000 $175,000(4) $14,004 22,500
Chief Underwriting and Marketing 1997 $270,417 $19,446 90,000
Officer $ 28,746(5)
Joan H. Dillard 1998 $203,789 $125,000(4) $15,733 62,500
Chief Financial Officer
Renate M. Nellich, 1998 $250,000 $100,000(4) $11,749 10,000
Chief Executive Officer of ES 1997 $ 83,333 $ 3,859 25,000
North America $ 8,997(5)
Gerhard Jurk, 1998 $200,000 $ 25,000(4) $ 9,968 --
Audit and Compliance Officer 1997 $134,523 $12,376 25,000
$ 14,373(5)
</TABLE>
- ----------------------------------
(1) Amounts paid in currencies other than U.S. dollars have been translated
into U.S. dollars at the average translation rate for the year.
(2) Throughout 1997, each of Messrs. Wand, Debrovner and Jurk were employed by
the Company in its function as a reinsurance management company.
Throughout 1998, each of Messrs. Wand, Debrovner and Jurk were employed by
the Company in its function as a reinsurer. Ms. Nellich has been employed
since September 1997. Ms. Dillard has been employed since March 1998.
(3) During 1998, Mr. Debrovner received $14,004 for life and health insurance;
Mr. Jurk received $3,024 for life and health insurance, and a vehicle
allowance of $6,944; Ms. Nellich received $3,162 for life and health
insurance, and a vehicle allowance of $8,587; Ms. Dillard received $15,733
for health insurance.
(4) The bonuses for 1998 were not paid to the principal executive officers
until the first quarter of 1999.
(5) The bonuses for 1997 were not paid to the principal executive officers
until the first quarter of 1998.
(6) In 1997, Mr. Wand received $34,495 from European Specialty Group GmbH, a
subsidiary of the Company, in connection with services provided as
designated legal representative of Les Mutuelles du Mans in Germany. No
such amounts will be paid in the future.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF
PERCENT OF SHARE PRICE APPRECIATION FOR
TOTAL OPTIONS OPTION TERM
NUMBER OF GRANTED TO EXERCISE PRICE -----------------------------
OPTIONS EMPLOYEES IN PER COMMON EXPIRATION
NAME AND PRINCIPAL POSITION GRANTED FISCAL YEAR SHARE DATE 5% 10%
- --------------------------- --------- ------------- -------------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Wolfgang M. Wand 37,500 (1) 10.6% $25.50 May 4, 2008 $601,380 $ 1,524,016
Steven H. Debrovner 22,500 (1) 6.3% $25.50 May 4, 2008 $360,828 $ 914,410
Joan H. Dillard 17,500 (1) 4.9% $25.50 May 4, 2008 $280,644 $ 711,208
45,000 (2) 12.6% $26.00 April 8, 2008 $735,807 $ 1,864,679
</TABLE>
10
<PAGE> 13
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Renate M. Nellich 10,000 (1) 2.8% $25.50 May 4, 2008 $160,368 $ 406,404
Gerhard Jurk -- --% -- -- -- --
</TABLE>
(1) All options granted in 1998 under the Company's 1997 Stock Option Plan were
at $25.50 per share. For each of the individuals listed above, 25% of such
options vested on May 4, 1998, and 25% vests on May 4, 2000, 2001 and 2002,
respectively.
(2) The 45,000 options granted to Ms. Dillard on April 8, 1998 under the
Company's 1997 Stock Option Plan were at $26.00 per share. On April 8 1998,
25% of Ms. Dillard's options vested and 25% vests on April 8, 2000, 2001
and 2002, respectively.
AGGREGATE OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS OPTIONS IN-THE-MONEY
AT FISCAL YEAR END AT FISCAL YEAR END
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE VALUE REALIZED UNEXERCISABLE UNEXERCISABLE(1)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Wolfgang M. Wand -- -- 44,375/133,125 $8,750/$26,250
Steven H. Debrovner -- -- 28,125/84,375 $5,625/$16,875
Joan H. Dillard -- -- 15,625/46,875 $0/$0
Renate M. Nellich -- -- 8,750/26,250 $1,562/$4,687
Gerhard Jurk -- -- 6,250/18,750 $1,562/$4,687
</TABLE>
- -----------------------------
(1) Calculated based upon a price of $20.25 per share of the Company's Common
Shares at December 31, 1998.
COMPENSATION OF DIRECTORS
Directors who are full-time employees of ESG or its subsidiaries will not
be paid any fees or additional compensation for services as members of the Board
of Directors or any committee thereof. Directors who are not full-time employees
of ESG or its subsidiaries ("Non-Management Directors") are eligible to
participate in the ESG Re Limited Non-Management Directors' Compensation and
Option Plan (the "Directors Plan"). A total of 1,000,000 Common Shares may be
issued under the Directors Plan, which limit will be proportionately adjusted in
the event of certain changes in the Company's capitalization, a merger or a
similar transaction. For their services, Non-Management Directors receive fees
annually which are paid in cash, and Common Shares, unless the Non-Management
Director otherwise elects to receive all or a portion of such fees in options or
to defer all or a portion of such fees pursuant to the terms of the Directors
Plan as described below. For services rendered from the closing date of the
Company's initial public offering on December 12, 1997 (the "Closing Date")
until May 4, 1998, Non-Management Directors received fees of $35,000. In
addition to the amounts paid to the Non-Management Directors, the Chairman
received $55,000 for services rendered from the Closing Date until May 4, 1998.
For services rendered from May 5, 1998 to May 7, 1999, each of the
Non-Management Directors received fees of $35,000. In addition to the amounts
paid to the Non-Management Directors, the Chairman received $55,000 for services
rendered from May 5, 1998 to May 7, 1999. For the period from May 5, 1998 to May
7, 1999, each of the Non-Management Directors received (i) options exercisable
for 5,000 shares in payment of their annual award and (ii) options exercisable
for 10,000 Common Shares in lieu of cash payment for their services.
If a Non-Management Director elects to receive options in lieu of such
stock and cash payment, such Director
11
<PAGE> 14
will receive options for Common Shares with a value, as determined by the Board,
equal to two times the amount of fees that would otherwise be payable. The
Non-Management Directors may alternatively elect to receive deferred
compensation ("Deferred Compensation") indexed to the greater of (i) total
return on the Common Shares and (ii) the one-year U.S. treasury bill rate.
Deferred Compensation will be paid in cash, in accordance with the terms of the
Directors Plan. Directors' shares granted under the Directors Plan will be
subject to restrictions on transfer for six months after receipt. All Directors
are reimbursed for travel and other related expenses incurred in attending
meetings of the Board of Directors or committees thereof. Options granted on the
Closing Date were granted at the initial public offering price and all other
options will be granted at the then market price per share. Non-Management
Directors will also receive automatic annual awards of options to purchase 5,000
Common Shares (or such other amount as the Board may determine) at an exercise
price per share equal to the then market price per share (or, in each case, a
lesser amount prorated to the extent the participating director did not serve on
the Board of Directors for the entire year preceding the relevant Annual General
Meeting of Shareholders), on each successive Annual General Meeting of
Shareholders. The Board also has discretionary authority to (i) award additional
options to the Chairman of the Board, and the Committee Chairmen and members of
the Board of Directors or the Supervisory Board of any of the subsidiaries of
ESG and (ii) grant options to permit a Non-Management Director to reacquire any
Common Shares the Non- Management Director delivered as payment of the exercise
price or to satisfy any withholding obligation in connection will the exercise
of an option. All options are vested and exercisable at the time of grant.
Common Shares issued on exercise of options issued pursuant to the Directors
Plan may be either authorized but unissued shares or treasury shares. Options
granted under the Directors Plan are non-transferable, except in limited
circumstances in the Board's discretion as set forth in the Directors Plan.
The Directors Plan may be amended or terminated by the Board of Directors
at any time, in whole or in part. However, any amendment for which shareholder
approval is required by law will not be effective until such approval has been
attained. Unless earlier terminated, the Directors Plan will expire when all
options are issued, and no further options may be granted thereunder.
EMPLOYMENT ARRANGEMENTS
The Company and European Specialty Group (United Kingdom) Limited ("ESG
UK"), a subsidiary of the Company, entered into an Employment Agreement with Mr.
Wand to serve as Managing Director and Chief Executive Officer of the Company,
Chairman of ES Ireland and ESG Germany and Chief Executive Officer of ESG UK,
effective as of December 1, 1997. Mr. Wand's compensation under the employment
agreement includes an annual base salary of $300,000, which is subject to review
annually for increase at the discretion of the Compensation Committee and
pension, welfare and fringe benefits. Mr. Wand is entitled to receive
reimbursement of expenses incurred in connection with promotion of the business
of the Company or any of its subsidiaries, including expenses for travel and
other expenses while away from home, on business or in the service of the
Company or any of its subsidiaries. The term of the Employment Agreement is
three years, subject to automatic renewal for successive one-year periods unless
the Company, ESG UK or Mr. Wand provides written notice at least 12 months prior
to the then scheduled expiration date. In the event of termination of Mr. Wand's
employment by the Company or ESG UK without Cause (as defined in the Employment
Agreement) or by Mr. Wand for Good Reason (as defined in the Employment
Agreement), Mr. Wand will receive his then current base salary for the remaining
term of the agreement, but in no event less than 12 months base salary. In the
event that Mr. Wand's employment is terminated by the Company or ESG UK without
Cause or by Mr. Wand for Good Reason within one year of a Change in Control (as
defined in the Employment Agreement), in addition to the compensation otherwise
payable to Mr. Wand upon his termination of employment as set forth above, Mr.
Wand will be entitled to a lump sum payment in an amount which, when added to
the present value of all other benefits or payments which would constitute
"Parachute Payments" (as defined in Section 280G of the Code), equals 2.99 times
Mr. Wand's "Base Amount" (as defined in Section 280G). In the event that any
excise taxes are assessed under Section 4999 of the Code, the Company will
reimburse Mr. Wand for such taxes. Mr. Wand will retain any other rights and
benefits as determined in accordance with the applicable terms of the benefit
12
<PAGE> 15
programs maintained by the Company, ESG UK or any of its affiliates in which Mr.
Wand participates. In the event the Employment Agreement expires by reason of
the Company's election not to renew the term, or death or disability, Mr. Wand
will receive his base salary through the date of termination. In the event of
the termination of Mr. Wand's employment for Cause, or by Mr. Wand without Good
Reason, Mr. Wand will be entitled to his base salary through the date of
termination. The Employment Agreement prohibits Mr. Wand from using or
disclosing confidential information about the Company and its affiliates and
their operations at any time and from engaging in any competitive reinsurance or
insurance business or soliciting any employee of the Company or its affiliates
for a period of 18 months after the termination of employment (other than a
termination within one year of a Change in Control).
The Company has entered into an employment agreement with Mr. Debrovner to
serve as the Chief Operating Officer, effective as of December 1, 1997.
Effective as of November 1, 1998, Mr. Debrovner's title was amended to "Chief
Underwriting and Marketing Officer" in order to reflect his Global Underwriting
and Marketing responsibilities. ESG Germany has entered into an employment
agreement with Mr. Jurk to serve as Chief Financial Officer of the Company,
effective as of December 1, 1997. ES North America has entered into an
Employment Agreement with Ms. Nellich to serve as Chief Executive Officer of ES
North America, effective as of December 1, 1997. Effective as of March 31, 1998,
Mr. Jurk resigned as Chief Financial Officer and was subsequently appointed as
the Audit and Compliance Officer. Mr. Jurk is party to a standard employment
agreement with European Specialty Ruckversicherung AG, a subsidiary of the
Company. The Company has entered into an employment agreement with Ms. Dillard
to serve as the Chief Financial Officer of the Company, effective as of March
23, 1998. The employment agreements (the "Executive Agreements") of Mr.
Debrovner, Ms. Nellich and Mr. Jurk will continue, unless terminated upon one
year's notice, until September 1, 2000 and Ms. Dillard's employment agreement
will continue, unless terminated upon one year's notice, until March 23, 2001.
Under the Executive Agreements, Mr. Debrovner, Ms. Nellich, Ms. Dillard and Mr.
Jurk receive annual base salaries of $300,000, $250,000, $250,000 and $200,000,
respectively. Other benefits granted to Mr. Debrovner, Ms. Nellich, Ms. Dillard
and Mr. Jurk are similar to those granted to Mr. Wand. The Executive Agreements
prohibit the executives from using or disclosing confidential information about
the Company and its affiliates and their operations and, in the case of Mr.
Debrovner, Ms. Nellich and Ms. Dillard, from engaging in any competitive
reinsurance or insurance business for a period of one year after the term of
employment.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Company's Compensation Committee are John C Head III,
David L. Newkirk and Edward A. Tilly, none of whom is an executive officer or
employee of the Company or any of its subsidiaries.
The Company is party to an Investment Advisory Agreement with Head Asset
Management, an affiliate of Head Company. See "Certain Relationships and Related
Transactions."
PERFORMANCE GRAPH
The graph set forth below compares the cumulative shareholder return on the
Company's Common Shares to such return on the Standard & Poor's Insurance Stock
Price Index and the Wilshire 5000 Stock Price Index for the period commencing
January 1, 1998, and ending on December 31, 1998 assuming $100 was invested on
January 1, 1998 (the "Investment Date"). Each measurement point on the graph
below represents the cumulative shareholder return from the Investment Date to
the measurement point date, as measured by the last sale price on such date. As
depicted in the graph below, as of December 31, 1998, the cumulative total
shareholder return on the Company's Common Shares was (12.5)%, and the
cumulative total return on the Standard & Poor's Insurance Stock Price Index and
the Wilshire 5000 Stock Price Index was 3.3% and 21.7%, respectively.
13
<PAGE> 16
[GRAPHIC OMITTED]
PROPOSAL 2
RATIFICATION OF THE SELECTION OF INDEPENDENT AUDITORS
The Board of Directors proposes and recommends that the shareholders ratify
the selection of the firm of Deloitte & Touche to serve as independent auditors
of the Company until the close of the 2000 Annual General Meeting of
Shareholders. Deloitte & Touche has served as the Company's independent auditors
from the Company's inception in August 1997 to the present. Unless otherwise
directed by the shareholders, proxies will be voted in favor of approval of the
selection of Deloitte & Touche to audit the Company's consolidated financial
statements for the fiscal year ended December 31, 1999. A representative of
Deloitte & Touche will attend the Annual Meeting and will have an opportunity to
make a statement, if such representative desires, and to respond to appropriate
questions. Shareholders at the Annual Meeting will also be asked to vote to
refer the determination of the auditors' remuneration to the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
SELECTION OF DELOITTE & TOUCHE AS THE COMPANY'S INDEPENDENT AUDITORS FOR 1999
AND THE REFERRAL TO THE BOARD OF DIRECTORS OF THE DETERMINATION OF
THE AUDITORS' REMUNERATION.
MISCELLANEOUS
The Company will bear all of the costs of the solicitation of proxies for
use at the Annual Meeting. Banks, brokers, nominees and other custodians and
fiduciaries will be reimbursed for their reasonable out-of-pocket expenses in
forwarding soliciting material to their principals, the beneficial owners of
Common Shares of the Company. The costs of soliciting proxies will be borne by
the Company. It is estimated that these costs will be nominal.
14
<PAGE> 17
Shareholders who do not expect to attend in person are urged to sign, date
and return the enclosed proxy card in the envelope provided. In order to avoid
unnecessary expense, we ask your cooperation in mailing your proxy card
promptly, no matter how large or how small your holdings may be.
At the date of this Proxy Statement, management has no knowledge of any
business, other than that described herein, which will be presented for
consideration at the Annual Meeting. In the event any other business is properly
presented at the Annual Meeting, it is intended that the persons named in the
enclosed proxy will have authority to vote such proxy in accordance with their
judgment on such business.
Proposals shareholders wish to include in the Company's proxy statement
for the next Annual General Meeting of Shareholders must be sent to and received
by the Company no later than December 31, 1999 at 16 Church Street, Hamilton,
HM11, Bermuda.
By order of the Board of Directors
Margaret L. Webster
Corporate Secretary
Hamilton, Bermuda
April 6, 1999
15
<PAGE> 18
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
ESG RE LIMITED
Mark box at right if an address change has / /
been noted on the reverse side of this card.
RECORD DATE SHARES:
Please be sure to sign and date this Proxy.
1. Election of Directors For All Nominees Withhold For One Nominee
William J. Poutsiaka
Kenneth P. Morse
/ / / / / /
NOTE: If you do not wish your shares voted "FOR" a particular nominee, mark the
"For One Nominee" and strike a line through the name of the other nominee for
whom you do not wish to vote "FOR". Your shares will be voted for the remaining
nominee.
2. Ratification of the appointment of Deloitte & Touche as independent
auditors for the Company for the fiscal year ended 1999 and referral of the
determination of auditors' remuneration to the Board of Directors.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting, or at any adjournment(s)
thereof.
Date
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint
owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
ESG RE LIMITED
___________________________ __________________________
Shareholder sign here Co-owner to sign here
<PAGE> 19
ESG RE LIMITED
IMPORTANT: PLEASE ACT PROMPTLY. VOTE, DATE, SIGN AND MAIL YOUR PROXY CARD TODAY.
Dear Shareholder,
Please take note of the important information enclosed with this proxy
card. There are a number of issues related to the management and operation of
your Company that require your immediate attention and approval. These are
discussed in detail in the enclosed proxy materials.
No matter how many shares you own, your vote is important. Voting can
also help your Company save money. To hold a meeting, a quorum must be
represented. Voting can save your Company the expense of another solicitation
for proxies required to achieve a quorum.
Please mark the boxes on this proxy card to indicate how your shares
will be voted. Then sign the card, detach it and return your proxy vote in the
enclosed postage paid envelope.
Your vote must be received prior to the Annual General Meeting of
Shareholders, May 7, 1999.
Thank you in advance for your prompt consideration of these matters.
Sincerely,
ESG Re Limited
<PAGE> 20
ESG RE LIMITED
Annual General Meeting of Shareholders - May 7, 1999
Proxy Solicited on Behalf of the Board of Directors
The undersigned shareholder of ESG Re Limited (the "Company") hereby appoints
John C Head III and Wolfgang M. Wand, and each of them, proxies of the
undersigned, with full power of substitution to each, to vote as indicated
herein, all of the shares of the Company standing in the name of the undersigned
at the close of business on Monday, March 22, 1999, at the 1999 Annual Meeting
of Shareholders of ESG Re Limited to be held at Waterloo House, 100 Pitts Bay
Road, Pembroke, HM08 Bermuda, Friday, May 7, 1999, at 11:00 a.m., and at any
adjournment or adjournments thereof, with all of the powers the undersigned
would possess if then and there personally present and especially (but without
limiting the general authorization and power hereby given) to vote as indicated
on the proposals as more fully described in the Proxy Statement for the meeting.
THIS PROXY IS SOLICITED BY, OR ON BEHALF OF, THE COMPANY'S BOARD OF DIRECTORS
AND WILL BE VOTED "FOR" PROPOSALS 1 AND 2 UNLESS OTHERWISE INDICATED.
PLEASE VOTE, DATE AND SIGN ON REVERSE AND RETURN PROMPTLY IN THE ENCLOSED
ENVELOPE.
Please sign exactly as your name(s) appear(s) on the books of the Company. Joint
Owners should each sign personally. Trustees and other fiduciaries should
indicate the capacity in which they sign, and where more than one name appears,
a majority must sign. If a corporation, this signature should be that of an
authorized officer who should state his or her title.
HAS YOUR ADDRESS CHANGED?
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
