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EVEREST REINSURANCE GROUP LTD
424B3, 2000-01-13
ACCIDENT & HEALTH INSURANCE

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Sincerely,

Joseph V. Taranto

Chairman and Chief Executive Officer

1.

A proposal to adopt an agreement and plan of merger among Everest Holdings, Everest Re Group, Ltd., a Bermuda company referred to in this document as Everest Group, and Everest Re Merger Corporation, a Delaware corporation and wholly-owned subsidiary of Everest Group that is referred to in this document as Everest Merger. The proposed merger will cause a restructuring of Everest Holdings. As a result of the restructuring, Everest Holdings will become a wholly-owned subsidiary of Everest Group and each outstanding share of common stock of Everest Holdings will automatically convert into one common share of Everest Group.

2.

Any other business related to the proposed restructuring that may properly come before the special meeting.

By Order of the Board of Directors,

Janet J. Burak

Secretary

		Page
REFERENCES TO ADDITIONAL INFORMATION		i
QUESTIONS AND ANSWERS ABOUT VOTING PROCEDURES FOR THE MEETING		1
SUMMARY		2
RISK FACTORS		7
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		13
THE COMPANIES		14
RECENT DEVELOPMENTS		17
MARKET PRICE AND DIVIDEND INFORMATION		17
FINANCIAL INFORMATION ABOUT EVEREST GROUP		18
THE SPECIAL MEETING		18
THE PROPOSED RESTRUCTURING		20
MANAGEMENT		29
MATERIAL TAX CONSIDERATIONS		31
DESCRIPTION OF EVEREST GROUP SHARE CAPITAL		43
REGULATORY CONSIDERATIONS ASSOCIATED WITH OPERATING IN BERMUDA AND      BARBADOS		49
LEGAL MATTERS		54
EXPERTS		54
STOCKHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING		55
ENFORCEABILITY OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES      LAWS		55
WHERE YOU CAN FIND MORE INFORMATION		55

Q:	What am I being asked to vote on?

A:	You are being asked to vote in favor of a merger as a result of which Everest Holdings will become a wholly-owned subsidiary of a new holding company, Everest Group, and you will receive one common share of Everest Group for each share of common stock of Everest Holdings that you own.

Q:	What do I need to do now?

A:	After you have carefully read this document, complete, sign, date and mail your proxy card in the enclosed envelope so that your shares will be represented at the special meeting.

Q:	If my shares are held in “street name” by my broker, will my broker vote my shares for me?

A:

No. Your broker will not be able to vote your shares without instructions from you. You should instruct your broker to vote your shares, following the directions provided by your broker. Your failure to instruct your broker to vote your shares will be the equivalent of voting against the adoption of the agreement and plan of merger.

Q:	Can I change my vote after I have submitted my proxy with voting instructions?

A:

Yes. There are three ways in which you may revoke your proxy and change your vote. First, you may send a written notice to the party to whom you submitted your proxy stating that you would like to revoke your proxy. Everest Holdings must receive the notice before the special meeting. Second, you may complete and submit a new proxy card by mail. Everest Holdings will record the latest proxy actually received by it prior to the special meeting and any earlier proxies will be revoked. Third, you may attend the special meeting and vote in person. Simply attending the special meeting, however, will not revoke your proxy. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change or revoke your proxy.

Q:	Should I send in my stock certificates?

A:	No. You should not send in your stock certificates at this time. If the restructuring is completed, Everest Group will mail to you a transmittal form with instructions on how to exchange your Everest Holdings stock certificates for Everest Group share certificates.

Q:	When do you expect to complete the restructuring?

A:	We are working to complete the restructuring as soon as possible. We hope to complete the restructuring shortly after the special meeting of Everest Holdings stockholders, assuming that the restructuring is approved by the stockholders at the meeting.

Q:	Whom should I call with questions?

A:	Stockholders with any questions about the restructuring and the related transactions should call Everest Holdings’ Vice President, Investor Relations, Mr. James H. Foster, at (908) 604-3169.

Everest Holdings was formed in 1993 as the holding company for Everest Reinsurance Company, a property and casualty reinsurer referred to in this document as Everest Re, and its subsidiaries. The mailing address of its principal executive offices is 477 Martinsville Road, P.O. Box 830, Liberty Corner, New Jersey 07938-0830 and its telephone number is (908) 604-3000.

Everest Group was recently organized under the laws of Bermuda and is wholly owned by Everest Holdings. As a result of the restructuring, Everest Group will become the new holding company for Everest Holdings and its subsidiaries. Everest Group has no significant assets or capitalization and has not engaged in any business or prior activities other than in connection with the restructuring. The mailing address of its principal executive offices is c/o ABG Financial & Management Services Inc., Parker House, Wildey Business Park, Wildey Road, St. Michael, Barbados and its telephone number is (246) 436-6287.

Everest Merger was recently organized under the laws of Delaware in order to accomplish the proposed restructuring and is wholly owned by Everest Group. Everest Merger has no significant assets or capitalization and has not engaged in any business or prior activities other than in connection with the restructuring.

The special meeting of stockholders will be held on February 23, 2000 at 11:00 a.m. at the Company’s corporate headquarters at Westgate Corporate Center, 477 Martinsville Road, Liberty Corner, New Jersey.

Holders of record of shares of Everest Holdings common stock at the close of business on January 10, 2000 will be entitled to vote in person or by proxy at the special meeting.

Ÿ

To consider and adopt an agreement and plan of merger; and

Ÿ

To transact any other business related to the proposed restructuring that may properly come before the special meeting.

Adoption of the agreement and plan of merger requires the affirmative vote of a majority of the outstanding shares of Everest Holdings common stock. As of January 10, 2000, directors and executive officers of Everest Holdings and their affiliates owned beneficially approximately 1.76% of the shares of Everest Holdings common stock outstanding on that date.

Everest Merger will be merged into Everest Holdings, with Everest Holdings as the surviving corporation. As a result of the merger, Everest Holdings will become a subsidiary of Everest Group and each outstanding share of common stock of Everest Holdings will automatically convert into one common share of Everest Group. Each shareholder ’s percentage ownership in Everest Group immediately following the restructuring will be identical to that shareholder’s percentage interest in Everest Holdings immediately before the restructuring. Following the merger, Everest Group will capitalize a Bermuda-based reinsurance subsidiary called Everest Reinsurance (Bermuda) Ltd., referred to in this document as Everest Bermuda.

Everest Group will be a publicly owned holding company, organized under the laws of Bermuda and having its principal executive offices in Barbados, and will own all of the stock of Everest Holdings and all of the share capital of Everest Bermuda.

The board of directors of Everest Holdings believes that the proposed restructuring will provide Everest Group with an enhanced ability to compete and create better returns for stockholders by permitting Everest Group to take maximum advantage of favorable business, regulatory, tax and financing environments in Bermuda and Barbados.

The board of directors of Everest Holdings has declared the agreement and plan of merger to be advisable, has approved it and recommends that stockholders vote “FOR ” its adoption.

The obligation of Everest Holdings and Everest Merger to complete the merger is subject to the satisfaction or waiver of the following conditions:

Ÿ

adoption of the agreement and plan of merger by the Everest Holdings stockholders;

Ÿ

effectiveness of the registration statement for the Everest Group common shares to be issued in the merger;

Ÿ

approval by the NYSE for the listing of the Everest Group common shares to be issued in the merger;

Ÿ

approval of the merger by government regulatory authorities and the expiration of applicable waiting periods; and

Ÿ

absence of any order or injunction preventing completion of the merger.

If approved by the Everest Holdings stockholders, the merger will become effective on February 24, 2000, subject to the above conditions. However, the board of directors of Everest Holdings can abandon or delay the merger at any time before it becomes effective, even after the stockholders have approved the merger.

Everest Group has obtained the approval of its acquisition of control of Everest Holdings’ insurance subsidiaries from the insurance regulatory authorities in Delaware and Arizona and will give written notice of the restructuring to the insurance and financial services regulatory authorities in other U.S. jurisdictions where those subsidiaries are licensed. Outside of the United States, Everest Group has filed or will file applications seeking approval of the restructuring with the insurance and financial services regulatory authorities in the countries where Everest Holdings’ insurance subsidiaries are domiciled or licensed.

Under Section 262 of the Delaware General Corporation Law, Everest Holdings stockholders have no right to a court determination, in a proceeding known as an appraisal, of the value of their shares in connection with the restructuring. See “The Proposed Restructuring —Absence of Appraisal Rights.”

The restructuring will not be taxable for federal income tax purposes to Everest Holdings. However, a U.S. holder of Everest Holdings common stock will recognize gain in an amount equal to the excess, if any, of the fair market value of the Everest Group common shares received at the effective time of the restructuring over that holder ’s adjusted basis in the Everest Holdings common stock surrendered. “See Material Tax Considerations. ”

If the restructuring is completed, Everest Group will mail to stockholders a transmittal form with instructions on how to exchange stock certificates for share certificates of Everest Group.

Under Everest Group’s bye-laws, Everest Group may redeem or purchase common shares from any person, and may decline to register a transfer of common shares, if the board of directors has reason to believe that the ownership of common shares, or the transfer, would result in:

Ÿ

any person that is not an investment company, as defined in the Investment Company Act of 1940, beneficially owning more than 5.0% of any class of the issued and outstanding share capital of Everest Group,

Ÿ

any person owning, directly or indirectly, more than 9.9% of any class of the issued and outstanding share capital of Everest Group or

Ÿ

any adverse tax, regulatory or legal consequences to Everest Group, any of its subsidiaries or any of its shareholders.

In addition, Everest Group’s bye-laws limit the voting rights of any person owning, directly or indirectly, more than 9.9% of the voting power of the issued and outstanding share capital of Everest Group. Because of the attribution and constructive ownership rules of the U.S. Internal Revenue Code of 1986, referred to in this document as the Code, and the rules of the SEC regarding determination of beneficial ownership, some persons may become subject to these limitations whether or not they directly hold of record more than 9.9% of Everest Group’s issued and outstanding share capital. See “Description of Everest Group Share Capital —Common Shares.”

		Nine Months Ended September 30, (unaudited)						Year Ended December 31,
		1999			1998			1998			1997			1996			1995			1994
		(Dollars in millions, except per share amounts)
Operating Data
Gross premiums written		$     836.6			$     792.9			$1,045.9			$1,075.0			$1,044.0			$     949.5			$     953.2
Net premiums written		804.3			756.3			1,016.6			1,031.1			1,030.5			783.2			863.2
Net premiums earned		795.0			771.3			1,068.0			1,049.8			973.6			753.3			853.3
Net investment income		188.9			183.2			244.9			228.5			191.9			166.0			143.6
Net realized capital gains (losses) (1)		(17.1	)		3.5			(0.8	)		15.9			5.7			33.8			(10.5	)
Total revenue		966.3			960.7			1,315.2			1,299.2			1,169.3			948.9			982.8
Losses and LAE incurred (including catastrophes)		568.9			564.0			778.4			765.4			716.0			674.7			720.8
Total catastrophe losses (2)		25.3			17.1			30.6			8.6			7.1			31.4			81.9
Commission, brokerage, taxes and fees		214.4			197.7			274.6			274.8			254.6			227.4			197.9
Other underwriting expenses		36.1			36.2			49.6			51.7			54.9			60.0			68.3
Compensation related to public offering		—			—			—			—			—			13.3			—
Restructuring and early retirement costs		—			—			—			—			—			—			7.8
Total expenses (3)		819.4			798.0			1,102.5			1,091.9			1,025.5			975.4			994.8
Income (loss) before taxes (3)		146.9			162.7			212.7			207.3			143.8			(26.6	)		(12.0	)
Income tax (benefit)		28.4			37.2			47.5			52.3			31.8			(27.3	)		(22.6	)
Net income (3)		$     118.5			$     125.5			$     165.2			$     155.0			$     112.0			$         0.7			$       10.7
Net income per basic share (4)		$       2.42			$       2.49			$       3.28			$       3.07			$       2.22			$       0.01			$       0.21
Net income per diluted share (5)		$       2.41			$       2.47			$       3.26			$       3.05			$       2.21			$       0.01			$       0.21
Dividends paid per share		$       0.18			$       0.15			$       0.20			$       0.16			$       0.12			$       0.14			$       0.15
Certain GAAP Financial Ratios
Loss and LAE ratio (6)		71.6	%		73.1	%		72.9	%		72.9	%		73.5	%		89.6	%		84.5	%
Underwriting expense ratio (7)		31.5			30.4			30.3			31.1			31.8			39.9			31.2
Combined ratio		103.1	%		103.5	%		103.2	%		104.0	%		105.3	%		129.5	%		115.7	%
Certain SAP Data (8)
Ratio of net premiums written to surplus (9)		1.0	x		1.0	x		1.0	x		1.4	x		1.2	x		1.0	x		1.2	x
Statutory surplus		$1,128.1			$     998.7			$1,059.4			$     908.8			$     772.7			$     686.9			$     600.7
Loss and LAE ratio (10)		71.3	%		72.2	%		72.2	%		75.7	%		71.2	%		92.2	%		85.8	%
Underwriting expense ratio (11)		31.5			30.4			31.1			25.6			31.7			38.9			32.6
Combined ratio		102.8	%		102.6	%		103.3	%		101.3	%		102.9	%		131.1	%		118.4	%
Balance Sheet Data (at end of period)
Total investments and cash		$4,160.7			$4,450.2			$4,325.8			$4,163.3			$3,624.6			$3,238.3			$2,573.2
Total assets		5,783.1			5,811.9			5,996.7			5,538.0			5,047.8			4,647.8			4,040.6
Loss and LAE reserves		3,698.0			3,491.7			3,800.0			3,437.8			3,246.9			2,969.3			2,706.4
Total liabilities		4,405.3			4,353.4			4,517.5			4,230.5			3,961.7			3,664.2			3,299.6
Stockholders’ equity (12)		1,377.8			1,458.6			1,479.2			1,307.5			1,086.0			983.6			741.0
Book value per share (13)		28.61			29.00			29.59			25.90			21.51			19.36			14.82

(1)

After-tax operating income (loss), before after-tax net realized capital gains or losses, was $129.7 million (or $2.64 per basic share and $2.63 per diluted share), $123.2 million (or $2.44 per basic share and $2.43 per diluted share), $165.7 million (or $3.29 per basic share and $3.27 per diluted share), $144.6 million (or $2.86 per basic and $2.85 per diluted share), $108.3 million (or $2.14 per basic and diluted share), ($21.2) million (or ($0.42) per basic and diluted share) and $17.5 million (or $0.35 per basic and diluted share) for the periods ended September 30, 1999 and 1998 and the years ended December 31, 1998, 1997, 1996, 1995 and 1994, respectively. Supplemental after-tax operating income, before net realized gains and excluding IPO-related charges was, $78.4 million (or $1.56 per basic and diluted share) for the year ended December 31, 1995.

(2)	Catastrophe losses are net of reinsurance. A catastrophe is defined, for purposes of the Selected Consolidated Financial Data, as an event that causes a pre-tax loss before reinsurance of at least $5.0 million and has an event date of January 1, 1988 or later.

(3)	Some amounts may not reconcile due to rounding.

(4)	Based on weighted average basic shares outstanding of 49.0 million, 50.5 million, 50.4 million, 50.5 million, 50.6 million, 50.2 million and 50.0 million for the periods ended September 30, 1999 and 1998 and the years ended December 31, 1998, 1997, 1996, 1995 and 1994, respectively.

(5)	Based on weighted average diluted shares outstanding of 49.2 million, 50.8 million, 50.7 million, 50.8 million, 50.7 million, 50.2 million and 50.0 million for the periods ended September 30, 1999 and 1998 and the years ended December 31, 1998, 1997, 1996, 1995 and 1994, respectively.

(6)	GAAP losses and LAE incurred as a percentage of GAAP net premiums earned.

(7)	GAAP underwriting expenses as a percentage of GAAP net premiums earned. Including restructuring and early retirement costs incurred in the fourth quarter of 1994, Everest Holdings’ GAAP underwriting expense ratio in 1994 was 32.1%.

(8)

Statutory results are on a Everest Re legal entity basis; consequently, investments in subsidiary operations are accounted for on an equity basis. Effective January 1, 1997, the reinsurance operations of Everest Re Holdings, Ltd. were transferred to Everest Re on a portfolio basis. Excluding the impact of the portfolio transaction, the 1997 ratio of net written premiums to surplus, the 1997 loss and LAE ratio, the 1997 underwriting expense ratio and the 1997 combined ratio were 1.1 x, 70.5%, 32.2% and 102.7%, respectively.

(9)	Statutory net premiums written as a percentage of period-end surplus.

(10)	Statutory losses and LAE incurred as a percentage of SAP net premiums earned.

(11)	Statutory underwriting expenses as a percentage of SAP net premiums written.

(12)

Excluding net unrealized appreciation (depreciation) of investments, stockholders’ equity was $1,339.9 million, $1,254.1 million, $1,281.6 million, $1,147.1 million, $1,008.3 million, $899.9 million and $799.1 million as of September 30, 1999 and 1998 and December 31, 1998, 1997, 1996, 1995 and 1994, respectively.

(13)

Based on 48.2 million shares outstanding for September 30, 1999, 50.3 million shares outstanding for September 30, 1998, 50.0 million shares outstanding for December 31, 1998, 50.5 million shares outstanding for December 31, 1997 and 1996, 50.8 million shares outstanding for December 31, 1995, and 50.0 million shares outstanding for December 31, 1994.

Ÿ

any U.S. taxpayer who directly or indirectly through foreign entities owns shares of a foreign insurance company; or

Ÿ

any person related to a U.S. taxpayer meeting the above definition.

Ÿ

25% or more of the value or voting power of the share capital of Everest Bermuda is owned directly, indirectly or by attribution by U.S. taxpayers;

Ÿ

20% or more of the value or voting power of the share capital of Everest Bermuda is owned directly, indirectly or by attribution by U.S. taxpayers, or persons related to U.S. taxpayers, who are insured or reinsured by Everest Bermuda; and

Ÿ

Everest Bermuda has gross RPII equal to 20% or more of its gross insurance income.

Ÿ

any person that is not an investment company beneficially owns more than 5.0% of any class of Everest Group ’s issued and outstanding share capital,

Ÿ

any person controls, based on the definition of control discussed in the next paragraph, more than 9.9% of any class of Everest Group’s issued and outstanding share capital or

Ÿ

share ownership by any person may cause adverse tax, regulatory or legal consequences to Everest Group, any of its subsidiaries or any of its shareholders,

Ÿ

owns the shares directly,

Ÿ

is a U.S. person and is treated as owning the shares by application of the attribution and constructive ownership rules of Sections 958 (a) and 958(b) or 544 and 554 of the Code, or

Ÿ

beneficially owns the shares within the meaning of Section 13(d)(3) of the Exchange Act.

Ÿ

changes in the level of competition in the domestic and international reinsurance or primary insurance markets that adversely affect the volume or profitability of Everest Group’s reinsurance or insurance business, including the intensification of price and contract terms competition, the entry of new competitors, consolidation in the reinsurance and insurance industry and the development of new products by new and existing competitors;

Ÿ

changes in the demand for reinsurance and insurance products of the type that Everest Group and its ceding insurance customers offer;

Ÿ

Everest Group’s ability to execute its strategies;

Ÿ

catastrophe losses in Everest Group’s domestic or international reinsurance or insurance business;

Ÿ

adverse development on claim and claim expense liabilities related to business written in prior years, including evolving case law and its effect on environmental and other latent injury claims, changing government regulations, newly identified toxins, newly reported claims, new theories of liability, or new insurance and reinsurance contract interpretations, to the extent that the adverse development exceeds the limits available under or is not covered by Everest Re’s stop loss agreement with Gibraltar Casualty Company;

Ÿ

greater than expected loss ratios on reinsurance or insurance written by Everest Group;

Ÿ

changes in inflation that affect the profitability of Everest Group’s current reinsurance and insurance businesses or the adequacy of its claim and claim expense liabilities;

Ÿ

changes in Everest Group’s retrocessional arrangements;

Ÿ

lower than estimated retrocessional or reinsurance recoveries on losses, including losses due to a decline in the creditworthiness of Everest Group’s retrocessionaires or reinsurers;

Ÿ

changes in the reinsurance/retrocessional market impacting Everest Group’s ability to cede risks above its desired level of retention;

Ÿ

changes in interest rates, increases in which cause a reduction in the market value of Everest Group’s fixed income investment portfolio and common stockholders ’ equity, and decreases in which cause a reduction of income earned on new cash flow from operations as well as on the reinvestment of the proceeds from sales, calls or maturities of existing investments;

Ÿ

decline in the value of Everest Group’s common equity investments;

Ÿ

changes in the composition of Everest Group ’s investment portfolio;

Ÿ

gains or losses related to changes in foreign currency exchange rates;

Ÿ

changes in the role of reinsurance brokers and Everest Group’s relationship with those brokers;

Ÿ

impact of Year 2000 computer hardware, software and microprocessors embedded in certain equipment on Everest Group’s operations and potential for Year 2000 claims under reinsurance and insurance contracts written by Everest Group;

Ÿ

impact of the Euro on Everest Group’s operations or financial condition;

Ÿ

adverse results in litigation matters, including litigation related to environmental, asbestos and other potential mass tort claims;

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changes in Everest Group’s capital needs;

Ÿ

changes in Everest Group’s ratings;

Ÿ

the impact of current and future regulatory environments, generally, and on the ability of Everest Group ’s subsidiaries to enter and exit reinsurance or insurance markets; and

Ÿ

changes in the commission or brokerage levels that competitors are willing to offer to ceding companies, brokers or agents.

Ÿ

Everest National Insurance Company, an Arizona insurance company, is licensed in 42 states and the District of Columbia and is authorized to write primary insurance in the states in which it is licensed, often called writing insurance on an admitted basis.

Ÿ

Everest Insurance Company of Canada, a Canadian insurance company, is licensed in all Canadian provinces and territories and is federally licensed to write primary insurance under the Insurance Companies Act of Canada.

Everest Indemnity Insurance Company, a Delaware insurance company, engages in the excess and surplus lines insurance business in the United States. Excess and surplus lines insurance is specialty property and liability coverage that an insurer not licensed to write insurance in a particular state is permitted to provide when the specific specialty coverage is unavailable from admitted insurers. This is often called writing insurance on a non-admitted basis. Everest Indemnity is licensed in Delaware and is eligible to write business in 39 states, the District of Columbia and the Commonwealth of Puerto Rico on a non-admitted basis.

Ÿ

Mt. McKinley Managers, L.L.C., a New Jersey limited liability company, is licensed in New Jersey as an insurance producer, which is any intermediary, such as an agent or broker, which acts as the conduit between an insurance company and an insured. Mt. McKinley holds licenses to allow it to act in New Jersey as an insurance producer in connection with policies written on both an admitted and a surplus lines basis. After a 1998 acquisition of the assets of insurance agency operations in Alabama and Georgia, the continuing insurance agency operations are now carried on by subsidiaries of Mt. McKinley. These subsidiaries are WorkCare Southeast, Inc., an Alabama insurance agency, and WorkCare Southeast of Georgia, Inc., a Georgia insurance agency.

Ÿ

Everest Re Holdings, Ltd., a Bermuda company formed in 1998 and referred to in this document as Everest Ltd., owns Everest Re Ltd., a United Kingdom company that is in the process of being dissolved because its reinsurance operations have been converted into branch operations of Everest Re. Everest Ltd. also holds approximately $100 million of investments.

		High		Low
1997
First Quarter		32.7500		26.0000
Second Quarter		40.2500		26.7500
Third Quarter		41.1250		34.5000
Fourth Quarter		43.0000		33.0000
1998
First Quarter		41.6250		35.2500
Second Quarter		45.2500		36.1250
Third Quarter		43.5000		34.1875
Fourth Quarter		38.9375		28.7500
1999
First Quarter		38.9375		30.1250
Second Quarter		34.8125		28.8750
Third Quarter		35.6875		21.9375
Fourth Quarter		27.2500		20.5000

Ÿ

by giving written notice of revocation to Everest Holdings, addressed to Janet J. Burak, 477 Martinsville Road, P.O. Box 830, Liberty Corner, New Jersey 07938-0830, if the notice of revocation is received by Everest Holdings prior to the special meeting;

Ÿ

by submitting a later dated proxy with voting instructions by mail, if the proxy is received by Everest Holdings prior to the special meeting; or

Ÿ

by voting in person at the special meeting, although a proxy is not revoked by simply attending the special meeting.

Ÿ

Everest Group, a company organized in Bermuda and with its principal executive offices in Barbados, will become the new publicly-owned parent corporation of Everest Holdings.

Ÿ

Everest Holdings, as a subsidiary of Everest Group, will continue to act as the holding company for the subsidiaries of Everest Holdings in the United States and Canada.

Ÿ

Everest Group will also be the holding corporation for a new Bermuda-based reinsurance subsidiary, Everest Bermuda.

Ÿ

Everest Holdings has organized a subsidiary, Everest Group, under the laws of Bermuda and established its principal office in Barbados.

Ÿ

Everest Group has organized a Delaware subsidiary, Everest Merger.

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Everest Merger will be merged into Everest Holdings, with Everest Holdings as the surviving corporation. When the merger is completed, Everest Holdings will become a subsidiary of Everest Group and each outstanding share of common stock of Everest Holdings will be converted into one common share of Everest Group.

Ÿ

After the merger is completed, Everest Group will capitalize Everest Bermuda, its Bermuda-based reinsurance subsidiary.

Ÿ

The board of directors believes that Bermuda is an important insurance market that attracts a significant deal flow because of its favorable business, regulatory and tax environments, and having a presence in Bermuda is important as a competitive matter.

Ÿ

The board of directors believes that, compared to U.S. state regulatory environments, the Bermuda regulatory environment offers insurance companies more flexibility to price their products, develop new products and write additional lines of reinsurance and imposes fewer restrictions on an insurance company’s ability to make investments and distribute capital to shareholders.

Ÿ

The board of directors believes that a holding company structure in the form proposed by the restructuring will provide a more suitable corporate structure for expansion of Everest Group’s business and future acquisitions and diversification opportunities. Everest Group currently has no specific plans for material acquisitions or to significantly diversify its business from the business that Everest Holdings is currently conducting and that Everest Bermuda is expected to conduct subsequent to the restructuring.

Ÿ

The board of directors believes that the establishment of Bermuda and Barbados operations will, over a period of time, reduce corporate income taxes because, unlike the U.S. tax system which imposes corporate income tax on the worldwide income of U.S. corporations, Bermuda generally imposes no corporate income taxes on foreign income and Barbados generally imposes corporate income tax only on some foreign income of a non-Barbados company managed and controlled in Barbados. Income taxes should therefore be reduced to the extent operations after the restructuring are conducted outside of the United States and outside of other countries with significant corporate taxes. To the extent that Everest Group’s taxes are reduced, it expects to be able to price its products more competitively.

Ÿ

Everest Merger will be merged with and into Everest Holdings, with Everest Holdings as the surviving corporation;

Ÿ

each share of Everest Holdings common stock issued and outstanding immediately prior to the merger will automatically convert into one Everest Group common share;

Ÿ

each share of Everest Merger common stock issued and outstanding immediately prior to the merger will remain outstanding and automatically convert into one share of the surviving corporation;

Ÿ

each share of Everest Holdings common stock owned by Everest Holdings or by any direct or indirect wholly-owned subsidiary of Everest Holdings immediately prior to the effective time of the merger will automatically be cancelled and no Everest Group common shares will be issued in exchange for those shares of Everest Holdings common stock;

Ÿ

the certificate of incorporation of Everest Holdings as in force and effect immediately prior to the effective time of the merger will be the certificate of incorporation of the surviving corporation;

Ÿ

the by-laws of Everest Holdings as in force and effect immediately prior to the effective time of the merger will be the by-laws of the surviving corporation; and

Ÿ

the directors and officers of Everest Holdings who are in office immediately prior to the effective time of the merger will be the directors and officers of the surviving corporation and will remain in office until the election and qualification of their successors or until their tenure is otherwise terminated in accordance with the by-laws of the surviving corporation.

Ÿ

the Everest Holdings stockholders will have adopted the agreement and plan of merger;

Ÿ

the registration statement on Form S-4 filed with the SEC to register the Everest Group common shares to be issued in the merger will have become effective under the Securities Act, and no stop order or proceeding seeking a stop order with respect to that registration statement will be in effect;

Ÿ

the Everest Group common shares issuable to stockholders pursuant to the agreement and plan of merger will have been approved by the NYSE for listing, subject to official notice of issuance;

Ÿ

the merger will have received all required consents and approvals from applicable governmental and regulatory authorities and other persons, and all applicable waiting periods will have expired; and

Ÿ

no temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the merger will be in effect.

Benefit Plans and Stock Options

Ÿ

the annual incentive plan,

Ÿ

the executive performance annual incentive plan,

Ÿ

the 1995 stock incentive plan,

Ÿ

the 1995 stock option plan for non-employee directors,

Ÿ

the senior executive change of control plan and

Ÿ

all other plans, arrangements or agreements under which Everest Holdings stock options have been granted.

Change of Control Provisions

Employment Agreements

Ÿ

the completion of a tender offer or exchange offer for the ownership of securities of Everest Re or Everest Group representing 25% or more of the combined voting power of that company’s then outstanding voting securities;

Ÿ

the completion of a merger or consolidation of Everest Re or Everest Group with another corporation that results in less than 75% of the outstanding voting securities of the surviving or resulting corporation being owned by the former stockholders of Everest Re, Everest Group or their affiliates;

Ÿ

the transfer by Everest Re or Everest Group of substantially all of its assets to another corporation or entity that is not a wholly owned subsidiary of Everest Re or Everest Group;

Ÿ

the acquisition by any person of direct or indirect beneficial ownership of securities of Everest Re or Everest Group representing 25% or more of the combined voting power of the then outstanding securities of Everest Re or Everest Group; and

Ÿ

a tender offer, merger, consolidation, sale of assets or contested election, or any combination of those transactions, which causes the persons who were members of the board of directors of Everest Re or Everest Group immediately before the transaction to cease to constitute at least a majority of that board of directors.

Ÿ

all of Mr. Taranto’s outstanding stock options will immediately vest and become exercisable;

Ÿ

Mr. Taranto will receive a cash payment equal to the lesser of

Ÿ

2.99 multiplied by Mr. Taranto’s annual compensation for the most recent taxable year ending prior to the date of the material change, less the value of Mr. Taranto ’s gross income in the most recent taxable year ending prior to the date of a material change attributable to Mr. Taranto’s exercise of stock options, stock appreciation rights and other stock-based awards granted to Mr. Taranto, and

Ÿ

2.99 multiplied by Mr. Taranto’s “annualized includible compensation for the base period ” as that phrase is defined in Section 280G(d) of the Code;

Ÿ

Mr. Taranto will continue to be covered under the medical and dental insurance plans of Everest Re or Everest Global Services, as applicable, for a period of three years from the date of termination; and

Ÿ

Mr. Taranto will receive special retirement benefits in an amount that will equal the retirement benefits he would have received had he continued in the employ of Everest Re or Everest Global Services, as applicable, for three years following his termination under the Everest Reinsurance Retirement Plan and any supplemental, substitute, or successor retirement plans.

Ÿ

one year following a material change;

Ÿ

termination by Mr. Taranto of his employment with Everest Re or Everest Global Services, as applicable, under circumstances not following a material change;

Ÿ

the termination by Everest Re or Everest Global Services, as applicable, of Mr. Taranto’s employment for due cause; and

Ÿ

December 31, 2001, or any date thereafter, with 60 days written notice.

Rights Agreement

Ÿ

a citizen or resident of the United States;

Ÿ

a corporation, partnership or other entity created or organized in the United States or under the laws of the United States or of any of its political subdivisions;

Ÿ

an estate whose income is includible in gross income for U.S. federal income tax purposes regardless of its source; or

Ÿ

any trust if, and only if, a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust.

Bermuda

Barbados

United States

Ÿ

a U.S. holder of Everest Holdings common stock will recognize gain in an amount equal to the excess, if any, of the fair market value of the Everest Group common shares at the time of the merger over the holder’s adjusted basis in the Everest Holdings common stock surrendered; and

Ÿ

a U.S. holder of Everest Holdings common stock will not recognize loss in the merger if the fair market value of the Everest Group common shares at the time of the merger is less than the holder’s adjusted basis in the Everest Holdings common stock surrendered.

Information Reporting

Backup Withholding.

Ÿ

is a corporation or other exempt recipient and, if required, demonstrates that is has that status; or

Ÿ

provides a United States taxpayer identification number, certifies that the taxpayer identification number provided is correct and that the holder has not been notified by the IRS that it is subject to backup withholding due to the under-reporting of interest or dividends, and otherwise complies with the applicable requirements of the backup withholding rules.

Bermuda

Barbados

United States

Ÿ

U.S. federal income tax at graduated rates on its taxable income that is treated as effectively connected to its conduct of a trade or business within the United States;

Ÿ

U.S. branch profits tax on its effectively connected earnings and profits deemed repatriated out of the United States; and

Ÿ

U.S. withholding tax on interest, dividends and other similar types of U.S. source income not effectively connected with a U.S. trade or business.

Corporate Income Tax and Branch Profits Tax

Withholding Tax

Insurance Excise Tax

Bermuda Taxation

Barbados Taxation

United States Taxation of Shareholders

Ÿ

“foreign personal holding company income, ” such as interest, dividends and other types of passive investment income; and

Ÿ

“insurance income,” which is defined to include any income that is attributable to the issuing or reinsuring of any insurance or annuity contract that would be taxed under the insurance company provisions of the Code if that income were the income of a domestic insurance company.

Ÿ

any income from sources within the United States that is effectively connected with the conduct of a trade or business within the United States and not exempted or subject to a reduced rate of tax by applicable treaty;

Ÿ

some income subject to high foreign taxes; and

Ÿ

“exempt insurance income” derived prior to January 1, 2000 by a “qualifying insurance company” as defined in Section 953(e) of the Code.

Ÿ

the tax-exempt shareholder,

Ÿ

an affiliate of the tax-exempt shareholder which itself is exempt from tax under Section 501(a) of the Code or

Ÿ

a director or officer of, or an individual who directly or indirectly performs services for, the tax-exempt shareholder or an exempt affiliate but only if the insurance covers primarily risks associated with the performance of services in connection with the tax-exempt shareholder or exempt affiliate.

Ÿ

must include in each year as ordinary income any excess of the fair market value of the common shares at the end of the taxable year over their adjusted basis; and

Ÿ

will be permitted an ordinary loss in respect of any excess of the adjusted basis of the common shares over their fair market value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark to market election.

Backup Withholding.

Ÿ

“T” is the aggregate number of votes conferred by all the issued and outstanding share capital immediately prior to that application of the formula with respect to any particular person, adjusted to take into account any prior reduction taken with respect to any other person as a result of a previous application of the formula;

Ÿ

“C” is the number of controlled shares attributable to the person; and

Ÿ

Controlled shares of any person refers to all shares of the issued and outstanding share capital owned by that person, whether

Ÿ

directly,

Ÿ

with respect to persons who are U.S. persons, by application of the attribution and constructive ownership rules of sections 958(a) and 958(b) or 544 and 554 of the Code, or

Ÿ

beneficially within the meaning of Section 13(d)(3) of the Exchange Act.

Ÿ

any person that is not an investment company beneficially owning more than 5.0% of any class of the issued and outstanding share capital of Everest Group,

Ÿ

any person holding controlled shares in excess of 9.9% of any class of the issued and outstanding share capital of Everest Group or

Ÿ

any adverse tax, regulatory or legal consequences to Everest Group, any of its subsidiaries or any of its shareholders.

Ÿ

any person that is not an investment company beneficially owns more than 5.0% of any class of the issued and outstanding share capital of Everest Group,

Ÿ

any person holds controlled shares in excess of 9.9% of any class of the issued and outstanding share capital of Everest Group or

Ÿ

share ownership by any person may result in adverse tax, regulatory or legal consequences to Everest Group, any of its subsidiaries or any other shareholder,

(1)

Duty of good faith. A director or officer must act honestly and in good faith with a view to the best interests of the company. This means that in conflict of interest situations, a director or officer must place the best interests of the company above his own personal interests. It also means that a director or officer may not use his position as a director to make a personal profit from opportunities that rightfully belong to the company.

(2)

Duty of care. A director or officer must exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. This means that a director or officer must act reasonably in accordance with the level of skill expected from a person of his knowledge and experience. A director must attend diligently to the company’s affairs, but is permitted to do so on an intermittent rather than a continuous basis. A director or officer may delegate management functions to suitably qualified persons, although he will not avoid his duty by delegation to others.

Ÿ

the material facts as to the interested director’s relationship or interests are disclosed or are known to the board of directors and the board in good faith authorizes the transaction by the affirmative vote of a majority of the disinterested directors,

Ÿ

the material facts are disclosed or are known to the stockholders entitled to vote on the transaction and the transaction is specifically approved in good faith by the holders of a majority of the voting shares or

Ÿ

the transaction is fair to the corporation as of the time it is authorized, approved or ratified.

Ÿ

$100,000,000;

Ÿ

50% of net premiums written, provided that net premiums written cannot be less than 75% of gross premiums written, even if more than 25% of gross premiums written have been ceded by Everest Bermuda; and

Ÿ

15% of loss and other insurance reserves.

Ÿ

Everest Bermuda will be unable to declare or pay any dividends during a financial year if it cannot meet its minimum solvency margin or minimum liquidity ratio, or if declaring or paying those dividends would cause it to fail to meet its minimum solvency margin or minimum liquidity ratio.

Ÿ

Everest Bermuda will be unable to declare or pay in any financial year dividends of more than 25% of its total statutory capital and surplus, as shown on its previous year’s statutory financial statements, unless at least seven days before payment of those dividends it files with the Registrar of Companies an affidavit stating that it will continue to meet the required margins.

Ÿ

If Everest Bermuda fails to meet its minimum solvency margin or minimum liquidity ratio on the last day of any financial year, it will be unable to declare or pay any dividends during the next financial year without the approval of the Minister of Finance.

Ÿ

Everest Bermuda will be unable to reduce the total statutory capital stated in its previous year’s statutory financial statements by 15% or more without the approval of the Minister of Finance.

Ÿ

If Everest Bermuda writes long-term business, it will be unable to declare or pay a dividend to anyone who is not a policyholder unless, after payment of the dividend, the value of the assets in its long-term business fund, as certified by its approved actuary, will exceed its liabilities for long-term business by at least the $250,000 minimum solvency margin prescribed by the Insurance Act. The amount of this dividend may not exceed the sum of (1) the amount by which Everest Bermuda’s long-term business solvency margin exceeds the $250,000 minimum and (2) any other funds properly available for payment of dividends, such as funds derived from business other than long-term business.

Ÿ

The Minister of Finance may impose additional restrictions on Everest Bermuda’s ability to pay dividends, if the Minister believes that the insurer is in danger of becoming insolvent or has violated the Insurance Act or any of the conditions of its registration.

Ÿ

not to take on any new insurance business,

Ÿ

not to change the terms of any insurance contract in a way that would increase the insurer’s liabilities,

Ÿ

not to make investments,

Ÿ

to realize investments,

Ÿ

to maintain assets,

Ÿ

to transfer assets to the custody of a specified bank,

Ÿ

not to declare or pay any dividends or other distributions,

Ÿ

to limit the payment of dividends or other distributions and/or

Ÿ

to limit its premium income.

Ÿ

acquiring or holding land in Bermuda without the express authorization of the Bermuda legislature, other than rental property required for their business and leased for no more 50 years;

Ÿ

taking mortgages on land in Bermuda to secure an obligation exceeding $50,000 without the consent of the Minister of Finance;

Ÿ

acquiring any bonds or debentures secured by any land in Bermuda, other than some types of Bermuda government securities; or

Ÿ

conducting business of any kind in Bermuda, except in furtherance of their business conducted outside Bermuda.

Ÿ

the name of the company has been changed,

Ÿ

the corporate instruments of the company have been altered,

Ÿ

the objects of the company have been altered or its business has been restricted or

Ÿ

any change is made among its directors,

Public Reference Room 450 Fifth Street, N.W. Room 1024 Washington, D.C. 20549

New York Regional Office 7 World Trade Center Suite 1300 New York, New York 10048

Chicago Regional Office Citicorp Center 500 West Madison Street Suite 1400 Chicago, Illinois 60661

Ÿ

the majority of the executive officers or directors of the issuer are United States citizens or residents,

Ÿ

more than 50% of the assets of the issuer are located in the United States or

Ÿ

the business of the issuer is administered principally in the United States.

Ÿ

Annual Report on Form 10-K for the year ended December 31, 1998;

Ÿ

Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999, June 30, 1999 and September 30, 1999;

Ÿ

Current Report on Form 8-K filed on December 28, 1999; and

Ÿ

All documents filed with the SEC by Everest Holdings under Sections 13(a), 13(c) 14, and 15(d) of the Exchange Act after the date of this document and before the special meeting of stockholders, are considered to be part of this document, effective as of the date these documents are filed.

REPORT OF INDEPENDENT ACCOUNTANTS		F-2
EVEREST RE GROUP, LTD. (FORMERLY EVEREST REINSURANCE GROUP, LTD.) BALANCE      SHEET AS OF SEPTEMBER 14, 1999 (date of inception)		F-3
EVEREST RE GROUP, LTD. (FORMERLY EVEREST REINSURANCE GROUP, LTD.) NOTES TO      FINANCIAL STATEMENT		F-4

ASSETS
Cash		$50,000
Total Assets		$50,000
SHAREHOLDER’S EQUITY
Common shares, $0.01 par value (1,200,000 shares authorized, issued and outstanding)		$12,000
Paid in capital		38,000
Total Shareholder’s Equity		$50,000

A.

All cash balances are held in a non-interest bearing account at the Bank of N.T. Butterfield & Son Limited in Hamilton, Bermuda.

B.

All amounts are reported in U.S. dollars.

(a)     Conversion of Everest Holdings Common Stock. Each issued and outstanding share of Everest Holdings Common Stock (other than shares to be canceled in accordance with Section 3.01(c)) shall be automatically converted into and shall become one validly issued, fully paid and non-assessable Everest Group Common Share.

(b)     Everest Merger Common Stock. Each issued and outstanding share of Everest Merger Common Stock shall be converted into and become one fully paid and nonassessable share of Everest Holdings Common Stock.

(c)     Cancellation of Everest Holdings-Owned Stock. Each outstanding Everest Group Common Share that is owned by Everest Holdings prior to the Effective Time shall immediately after the Effective Time be repurchased by Everest Group for $0.01 per share, or $12,000 in the aggregate, and shall upon such repurchase be canceled and retired and shall cease to be issued. Each outstanding share of Everest Holdings Common Stock that is owned by Everest Holdings or by any direct or indirect wholly-owned subsidiary of Everest Holdings prior to the Effective Time shall automatically be canceled and retired and shall cease to be issued and no Everest Group Common Shares or other consideration shall be delivered or deliverable in exchange for such shares of Everest Holdings Common Stock.

(a)     Exchange Procedures. Following the Effective Time, each holder of an outstanding certificate or certificates theretofore representing shares of Everest Holdings Common Stock may, but shall not be required to, surrender the same to Everest Group for cancellation or transfer, and each such holder or transferee will be entitled to receive certificates representing the same number of Everest Group Common Shares as the shares of Everest Holdings Common Stock previously represented by the stock certificates surrendered. If any certificate representing Everest Group Common Shares is to be issued in a name other than that in which the certificate theretofore representing Everest Holdings Common Stock surrendered is registered, it shall be a condition to such issuance that the certificate surrendered shall be properly endorsed and otherwise in proper form for transfer and that the person requesting such issuance shall either: (i) pay Everest Group or its agents any taxes or other governmental charges required by reason of the issuance of certificates representing Everest Group Common Shares in a name other than that of the registered holder of the certificate so surrendered; or (ii) establish to the satisfaction of Everest Group or its agents that such taxes or governmental charges have been paid. Until so surrendered or presented for transfer, each outstanding certificate which, prior to the Effective Time, represented Everest Holdings Common Stock shall be deemed and treated for all corporate purposes to represent the ownership of the same number of Everest Group Common Shares as though such surrender or transfer and exchange had taken place.

(b)     No Further Ownership Rights in Everest Holdings Common Stock. All Everest Group Common Shares issued upon the surrender for exchange of certificates in accordance with the terms of this Article III shall be deemed to have been issued and paid in full satisfaction of all rights pertaining to the shares of Everest Holdings Common Stock theretofore represented by such certificates, subject, however, to the Surviving Corporation’s obligation (if any) to pay any dividends or make any other distributions with a record date prior to the Effective Time which may have been declared or made by Everest Holdings on such shares of Everest Holdings Common Stock in accordance with the terms of this Agreement or prior to the date of this Agreement and which remain unpaid at the Effective Time. Following the Effective Time, there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the shares of Everest Holdings Common Stock that were outstanding immediately prior to the Effective Time. If, after the Effective Time, certificates are presented to the Surviving Corporation, they shall be canceled and exchanged as provided in this Article III, except as otherwise provided by law.

(a)     Stockholder Approval. The Everest Holdings Stockholder Approval shall have been obtained.

(b)     Form S-4. The registration statement on Form S-4 filed with the Securities and Exchange Commission by Everest Group in connection with the issuance of the Everest Group Common Shares in the Merger shall have become effective under the Securities Act of 1933, as amended, and shall not be the subject of any stop order or proceedings seeking a stop order.

(c)     NYSE Listing. The Everest Group Common Shares issuable pursuant to the terms of this Agreement shall have been approved for listing by the New York Stock Exchange, Inc., subject to official notice of issuance.

(d)     Governmental, Regulatory and Other Consents. All filings required to be made prior to the Effective Time with, and all consents, approvals, permits and authorizations required to be obtained prior to the Effective Time from, any court or governmental or regulatory authority or agency, domestic or foreign, or other person, in connection with the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will have been made or obtained (as the case may be) and all applicable waiting periods shall have expired.

(e)     No Injunctions or Restraints. No temporary restraining order, preliminary or permanent injunction or other order issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Merger or any of the other transactions contemplated hereby shall be in effect.

(a)

if to Everest Holdings:

Everest Reinsurance Holdings, Inc.

477 Martinsville Road

P.O. Box 830

Liberty Corner, New Jersey 07938-0830

(b)

if to Everest Group:

Everest Reinsurance Group, Ltd.

c/o ABG Financial & Management Services Inc.

Parker House

Wildey Business Park, Wildey Road

St. Michael, Barbados

(c)

if to Everest Merger:

Everest Re Merger Corporation

c/o Everest Reinsurance Holdings, Inc.

477 Martinsville Road

P.O. Box 830

Liberty Corner, New Jersey 07938-0830

EVEREST REINSURANCE HOLDINGS , INC .

/S /    STEPHEN L. LIMAURO

By:

Stephen L. Limauro

Name:

Senior Vice President and Comptroller

Title:

EVEREST RE MERGER CORPORATION

/S /    JANET J. BURAK

By:

Janet J. Burak

Name:

Senior Vice President and Secretary

Title:

EVEREST REINSURANCE GROUP , LTD .

/S /    JANET J. BURAK

By:

Janet J. Burak

Name:

Deputy Chairman

Title:

EVEREST REINSURANCE HOLDINGS, INC.

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

 

[X] PLEASE MARK YOUR VOTE AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING ITEMS:

1.	APPROVAL AND ADOPTION OF THE AGREEMENT AND PLAN OF MERGER, dated as of September 17, 1999, among Everest Reinsurance Holdings, Inc., Everest Re Group, Ltd. and Everest Re Merger Corporation, providing for, among other things, the merger of Everest Re Merger Corporation with and into Everest Reinsurance Holdings, Inc., the conversion of Everest Reinsurance Holdings, Inc. Common Stock into Everest Re Group, Ltd. Common Shares and the conversion of Everest Re Merger Corporation Common Stock into Everest Reinsurance Holdings, Inc. Common Stock, as more fully described in the Proxy Statement dated January 14, 2000 relating to the Special Meeting.
	FOR [ ]	AGAINST [ ]	ABSTAIN [ ]

 

In their discretion, upon such other matters as may properly come before the meeting, all in accordance with the accompanying Notice and Proxy Statement, receipt of which is acknowledged.

IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE SHARES REPRESENTED THEREBY WILL BE VOTED. IF A CHOICE IS SPECIFIED BY THE STOCKHOLDER, THE SHARES WILL BE VOTED ACCORDINGLY. IF NOT OTHERWISE SPECIFIED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR ITEM 1.
SIGNATURE (S)	DATE
Sign exactly as name appears hereon. When signing in a representative capacity, please give full title.