<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CENTRAL RESERVE LIFE CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CENTRAL RESERVE LIFE CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of filing fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
[LOGO]
CENTRAL RESERVE LIFE CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 16, 1996
Notice is hereby given that the Annual Meeting of Shareholders of Central
Reserve Life Corporation will be held at the Cleveland Airport Marriott Hotel,
4277 West 150th Street, Cleveland, Ohio, on Thursday, May 16, 1996, at 10:00
a.m., local time, for the following purposes:
1. To elect three directors, each to serve for a term of three years; and
2. To consider and transact such other business as may properly come
before the meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 3, 1996, will
be entitled to notice of, and to vote at, the Annual Meeting or any adjournment
thereof.
By order of the Board of Directors.
/s/ Linda S. Standish
LINDA S. STANDISH, Secretary
April 18, 1996
================================================================================
YOUR VOTE IS IMPORTANT
PLEASE SIGN, DATE AND RETURN YOUR PROXY CARD
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING.
================================================================================
<PAGE> 3
CENTRAL RESERVE LIFE CORPORATION
CRL PLAZA
17800 ROYALTON ROAD
STRONGSVILLE, OHIO 44136
===============
PROXY STATEMENT
===============
This Proxy Statement is furnished in connection with the solicitation of
proxies for use at the Annual Meeting of Shareholders of Central Reserve Life
Corporation, an Ohio corporation (the "Company"), to be held on Thursday, May
16, 1996, at 10:00 a.m., local time, at the Cleveland Airport Marriott Hotel,
4277 West 150th Street, Cleveland, Ohio, and at any adjournment thereof. This
Proxy Statement and the accompanying form of proxy ("proxy card"), together with
the Company's Annual Report to Shareholders for the fiscal year ended December
31, 1995, will first be sent to shareholders on or about April 18, 1996.
The close of business on April 3, 1996, has been fixed as the record date
for the determination of shareholders entitled to notice of and to vote at the
meeting. At that date, the Company had outstanding 4,037,500 Common Shares,
without par value, each of which will be entitled to one vote.
ELECTION OF DIRECTORS
The number of directors has been fixed pursuant to the Code of Regulations
of the Company at nine (9), and nine (9) directors are currently in office. At
the meeting, shares represented by proxies, unless otherwise specified, will be
voted for the election of the three (3) nominees, hereinafter named, to serve
for a term of three (3) years and, in each case, until their respective
successors are duly elected and qualified. If, by reason of death or other
unexpected occurrence, any nominee should not be available for election, the
proxies will be voted for such substitute nominee as the Board of Directors may
propose.
If notice in writing is given by any shareholder to the President, a Vice
President or the Secretary not less than forty-eight (48) hours before the time
fixed for holding the meeting that he desires that voting for the election of
directors shall be cumulative, and if an announcement of the giving of such
notice is made upon the convening of such meeting by the Chairman or Secretary
or by or on behalf of the shareholder giving such notice, each shareholder shall
have the right to cumulate such voting power as he possesses at such election
and to give one (1) nominee a number of votes equal to the number of directors
to be elected multiplied by the number of shares he holds, or to distribute his
votes on the same basis among two (2) or more nominees, as he sees fit. If
voting for the election of directors is cumulative, the persons named in the
enclosed proxy will vote the shares represented thereby and by other proxies
held by them so as to elect as many of the three (3) nominees named below as
possible. In the election of directors, the three (3) nominees receiving the
greatest number of votes will be elected. Abstentions and broker non-votes will
not count in favor of or against election of any nominee.
The following information is set forth with respect to each person
nominated for election as a director (each of whom is currently a director of
the Company) and with respect to the directors of the Company whose terms of
office will continue after the meeting:
1
<PAGE> 4
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
<TABLE>
<CAPTION>
NOMINATED
DIRECTOR FOR TERM
NAME AGE PRINCIPAL OCCUPATION (1) SINCE EXPIRING
---- --- ------------------------ ----- --------
<S> <C> <C> <C> <C>
Fred Lick, Jr. 64 Chairman of the Board, President and 1976 1999
Chief Executive Officer of the Company
and of Central Reserve Life
Insurance Company
John F. Novatney, Jr. (2) 65 Partner, Baker & Hostetler, 1976 1999
(Attorneys); Vice Chairman of the Board
of the Company
John L. McKean (3) 71 President, Jack McKean Agency, Inc. 1989 1999
(Life Insurance Agency)
<CAPTION>
DIRECTORS WHOSE TERMS WILL CONTINUE AFTER THE ANNUAL MEETING
CURRENT
DIRECTOR TERM
NAME AGE PRINCIPAL OCCUPATION (1) SINCE EXPIRES
---- --- ------------------------ ----- --------
<S> <C> <C> <C> <C>
Robert K. Smith 52 President, R.K. Smith & Associates, Inc. 1986 1997
(Certified Public Accountants)
David L. Rossio 59 President, Rossio Jewelry, Inc. 1992 1997
Thomas D. Schulte 61 Retired (Formerly Director, Academic,
Education and Industrial Studies, Great
Oaks Joint Vocational School) 1994 1997
Lawrence Hendershot, M.D. 70 Retired, President, E.N.T. Group 1986 1998
of Cleveland, Inc. (Otologists)
Robert E. Bruce (4) 74 President, Bruce and Bruce Company 1987 1998
(Consulting Actuaries)
William E. Gerstenslager 50 Partner, Gerstenslager & Obert Co. 1990 1998
(Attorneys)
<FN>
(1) Each director or nominee for election as a director, except Mr.
Gerstenslager, has held the position shown for more than five (5) years.
Prior to forming his own firm, Gerstenslager & Obert Co., Mr. Gerstenslager
was with the law firm of Robert L. Sweeney, L.P.A. from 1986 through 1995.
(2) Baker & Hostetler served as general counsel to the Company and its
subsidiaries in 1995 and will continue to serve as general counsel in 1996.
(3) Jack McKean Agency, Inc. served as a licensed General Agent with the
Company's principal operating subsidiary, Central Reserve Life Insurance
Company, in 1995 and was paid commissions of $315,988 in 1995. The agency
will continue to serve as an agent in 1996.
(4) Bruce and Bruce Company provided actuarial services to the Company in 1995
and will continue to provide such services in 1996.
</TABLE>
2
<PAGE> 5
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors of the Company has standing executive, audit,
investment and employee relations committees, as described below:
Executive Committee. The Executive Committee has all powers of the Board in
the management of the business and affairs of the Company between Board meetings
except the power to fill vacancies on the Board or its committees. The Executive
Committee also functions as a nominating committee. In functioning as a
nominating committee, the Executive Committee seeks qualified persons to serve
as directors of the Company and makes recommendations to the Board of Directors.
The Executive Committee will consider nominees for the Board of Directors
recommended by shareholders, provided that the names of such persons are
submitted by January 30 for the next succeeding annual shareholders' meeting.
Such recommendations should be submitted only on behalf of persons willing to
serve as directors and should include a resume of their business experience and
qualifications. The Executive Committee also serves as a compensation committee
responsible for determining the compensation of the Company's executive
officers. Members of the Executive Committee are Mr. Lick, Mr. Novatney and Dr.
Hendershot. The Executive Committee met once during 1995.
Audit Committee. The Audit Committee recommends to the Board of Directors
the firm of independent accountants to serve the Company and reviews the scope,
performance and results of the annual audit of the Company. Its members are
Messrs. Smith, Gerstenslager and Rossio. The Audit Committee met eight (8) times
during 1995.
Investment Committee. The Investment Committee establishes policy for and
monitors management of the Company's investments. Its members are Mr. Bruce, Mr.
Novatney and Dr. Hendershot. Mr. Frank Grimone, Executive Vice President of the
Company, participates in all meetings of the Investment Committee. The
Investment Committee met seven (7) times during 1995.
Employee Relations Committee. The Employee Relations Committee, working
with employee-relations personnel of Central Reserve Life Insurance Company
("CRL"), the company's principal operating subsidiary, serves to structure,
review and update CRL's employee-relations policies and practices, including
CRL's firm commitment to equal employment opportunity. Its members are Messrs.
Novatney, McKean, and Schulte. The Committee met four (4) times during 1995.
The Board of Directors met five (5) times during 1995. Each director
attended more than 75% (seventy-five percent) of the meetings held by the Board
of Directors and the committees of the Board of Directors on which he served.
During 1995, the directors of the Company were paid $2,000 per quarter plus
$1,000 per Board meeting attended and $1,000 per committee meeting attended plus
expenses of attendance. Mr. Lick received no compensation as a director.
3
<PAGE> 6
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS
The following information is set forth with respect to the only persons
known to management to be beneficial owners of more than five percent (5%) of
the Company's Common Shares:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
<S> <C> <C>
Fred Lick, Jr. 545,000 (1) 12.7
17800 Royalton Road
Strongsville, Ohio 44136
Dimensional Fund Advisors Inc. 233,700 (2) 5.8
1299 Ocean Avenue
11th Floor
Santa Monica, California 90401
Ryback Management Corporation 203,000 (3) 5.0
7711 Carondelet Avenue
Box 16900
St. Louis, Missouri 63105
<FN>
(1) Amount held as of April 3, 1996. Also, see footnote 3 to the table on page
5 herein.
(2) Dimensional Fund Advisors Inc. ("Dimensional"), a registered investment
advisor, is deemed to have beneficial ownership of 233,700 shares of
Central Reserve Life Corporation stock as of December 31, 1995, all of
which shares are held in portfolios of DFA Investment Dimensions Group
Inc., a registered open-end investment company, or in series of the DFA
Investment Trust Company, a Delaware business trust, or the DFA Group Trust
and DFA Participation Group Trust, investment vehicles for qualified
employee benefit plans, all of which Dimensional Fund Advisors Inc. serves
as investment manager. Dimensional disclaims beneficial ownership of all
such shares.
(3) Amount held as of December 31, 1995.
</TABLE>
4
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT
The following information is set forth with respect to the Company's Common
Shares beneficially owned as of April 3, 1996, by all directors and nominees for
election as directors of the Company, by all executive officers of the Company
and by all executive officers and directors of the Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER (1) BENEFICIAL OWNERSHIP PERCENT OF CLASS
<S> <C> <C>
Robert E. Bruce ............................ 6,000 *
William E. Gerstenslager ................... 1,600 *
Frank W. Grimone ........................... 125,000 3.1
E. Lawrence Hendershot ..................... 16,600 *
Glen A. Laffoon ............................ 86,650 (2) 2.2
Fred Lick, Jr .............................. 545,000 (3) 12.7
John L. McKean ............................. 1,000 (4) *
John F. Novatney, Jr ....................... 7,950 *
David L. Rossio ............................ 1,000 *
Thomas D. Schulte .......................... 1,035 *
Robert K. Smith ............................ 3,225 (5) *
All executive officers
and directors as a group (11 persons) .... 795,060 18.5
<FN>
* Less than one percent of the outstanding Common Shares of the Company
(1) Unless otherwise indicated, the persons named have sole voting and
investment power with respect to all Common Shares shown as being
beneficially owned by them.
(2) Includes 41,150 common shares held by Mr. Laffoon's spouse.
(3) Includes options to purchase 255,000 Common Shares, exercisable at any time
prior to August 6, 1997, and 37,500 Common Shares owned by Mid American
Asset Management Corporation, of which Mr. Lick is the sole shareholder.
(4) These Common Shares are held by Jack McKean Agency, Inc. of which Mr.
McKean is the sole shareholder.
(5) Includes 1,500 Common Shares held by the R.K. Smith & Associates, Inc.,
Profit Sharing Plan, of which Mr. Smith is the sole beneficiary.
</TABLE>
5
<PAGE> 8
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In order to comply with certain state insurance regulatory requirements
which prohibit providing group life insurance unless at least ten (10) lives are
insured, the Company formed CRL Preferred Group, Inc., International
Professional Group, Inc., North America Preferred Employers, Inc., and Keystone
Employers Group, Inc. to serve as trustees of trusts established to provide
group life insurance to employers with less than ten (10) employees (such
corporations the "Trustee Corporations"). In compliance with state regulations
which require that the Trustee Corporation's shareholders be natural persons,
Mr. Lick and Mr. Grimone hold, for the benefit of the Company, all of the
outstanding shares of the Trustee Corporations. Mr. Grimone is a director of the
Trustee Corporations. None of the officers or directors of the Trustee
Corporations receives any compensation for serving in such capacity.
For a discussion of the employment contracts the Company has with Mr. Lick
and Mr. Grimone, see "Executive Committee Report on Executive Compensation"
beginning on page 8.
See footnotes 2 through 4 to the table under "Election of Directors" on
page 2 with respect to certain other transactions involving directors of the
Company.
6
<PAGE> 9
PERFORMANCE GRAPH
The following graph compares the Company's cumulative total shareholder return
to the cumulative total return of the University of Chicago Center for Research
in Security Prices ("CRSP") Nasdaq Stock Market Index and the CRSP Nasdaq
Insurance Stocks Index. (Assumes $100 invested on December 29, 1990, in each of
three indices and dividends reinvested.)
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
LEGEND
Symbol Index Description 12/31/90 12/31/91 12/31/92 12/31/93 12/30/94 12/29/95
- ------ ----------------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------- Central Reserve Life Corporation 100.0 123.8 228.4 178.5 225.4 273.6
- - --- - --- CRSP Index for Nasdaq Insurance Stocks 100.0 141.0 190.8 204.1 192.1 272.9
- - - - - - - CRSP Index for Nasdaq Stock Market (US Companies) 100.0 160.5 186.9 214.5 209.7 296.5
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SUMMARY COMPENSATION TABLE
The following table sets forth the annual compensation paid by Central
Reserve Life Insurance Company ("CRL"), the principal operating subsidiary of
the Company, with respect to the calendar years ended December 31, 1995, 1994,
and 1993, to the Chief Executive Officer and all other executive officers of the
Company.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION ALL OTHER
-------------------
NAME AND PRINCIPAL POSITION YEAR SALARY ($) COMPENSATION ($) (1)
- --------------------------- ---- ---------- --------------------
<S> <C> <C> <C>
Fred Lick, Jr 1995 871,166 19,305
Chairman of the Board, President 1994 784,834 19,305
and Chief Executive Officer 1993 707,058 30,000
Frank W. Grimone 1995 258,000 19,305
Executive Vice President, Chief 1994 215,000 19,305
Financial Officer and Treasurer 1993 215,000 28,177
Glen A. Laffoon 1995 234,000 19,305
Executive Vice President and 1994 170,000 19,305
Chief Administrative Officer 1993 170,000 21,965
<FN>
(1) Represents CRL's contribution under a defined-contribution, money-purchase,
pension plan.
</TABLE>
7
<PAGE> 10
EXECUTIVE COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Executive Committee is responsible for determining the compensation of
the Company's executive officers. The executive officers are Mr. Lick, Chairman
of the Board, President and Chief Executive Officer; Mr. Grimone, Executive Vice
President, Chief Financial Officer and Treasurer; and Mr. Laffoon, Executive
Vice President and Chief Administrative Officer.
The Company is somewhat different from most other public companies in that
it does not have a large pool of executive officers and does not have
complicated long-term-compensation arrangements for its executive officers.
Instead, the Company has particularized its compensation policies for each
executive officer based on the officer's role in the Company and the Company's
expectations for each officer.
Central Reserve Life Insurance Company ("CRL"), the Company's principal
operating subsidiary, entered into an employment agreement with Mr. Lick
effective January 1, 1982, pursuant to which he serves as Chairman of the Board,
President and Chief Executive Officer of CRL. The current term of the agreement
expires on December 31, 2001. The agreement provides for automatic renewals for
successive terms of five (5) years each unless notice of non-renewal is given by
either party twenty-four (24) months in advance. The agreement provides for
increases in Mr. Lick's salary of eleven percent (11%) per year for the years
1991 through 1996, with no increase in salary after 1996.
Under his employment agreement, Mr. Lick is entitled to six (6) weeks
vacation annually, cumulative from year to year; an automobile and its
operational expenses; reimbursement of his business expenses; continuation of
his salary during any total or partial disability; and certain other fringe
benefits.
Mr. Lick's employment agreement provides that in the event of a change of
control of CRL or the Company which is not approved by Mr. Lick, he may elect to
resign, in which event he will be entitled, thirty (30) days after such
resignation, to a lump sum payment equal to his full annual salary for the
unexpired term of his employment agreement and the continuation of his fringe
benefits throughout the unexpired term. Mr. Lick's employment agreement may not
be terminated by CRL. If CRL does terminate the agreement, or if Mr. Lick
terminates the agreement because of a material breach by CRL, he is entitled to
the same payment and benefits provided for in the event of a change of control.
Mr. Lick has an employment agreement with the Company which provides that
if CRL terminates or is unable to fulfill any of its obligations under its
employment agreement with Mr. Lick, then the obligations of CRL under his
employment agreement become the responsibility of the Company. Mr. Lick's
employment agreement with the Company was entered into on January 1, 1982, and
the current term of the agreement expires on December 31, 2001. Renewal of the
CRL agreement results in automatic renewal of the Company agreement. This
employment agreement may not be terminated by the Company.
The Executive Committee believes that an employment contract for a chief
executive officer is important to secure continuity of leadership and to avoid
the time-consuming interruption of yearly contract and salary negotiation
between a company and its chief executive officer. The Executive Committee
continues to believe, more specifically, that the health industry's complexity,
its competitiveness, and the significance of government intervention mandate
arrangements designed to secure continuity of leadership and continued focus on
the Company's business. The Executive Committee also continues to believe that
the Company's success can be largely attributed to Mr. Lick's ability to
anticipate trends in the industry and to identify opportunities before they are
recognized by competitors. The Executive Committee believes that the retention
of Mr. Lick as Chief Executive Officer is of vital importance to the Company.
8
<PAGE> 11
Effective January 1, 1984, the Company and CRL entered into employment
agreements with Mr. Grimone. The agreements are automatically renewed on an
annual basis unless Mr. Grimone is given written notice of intention not to
renew thirty (30) days prior to the end of a contract year. Under the agreement,
Mr. Grimone is also entitled to an automobile and its operational expenses, the
reimbursement of business expenses and certain other fringe benefits. Mr.
Grimone's agreement with the Company provides that if CRL is unable or unwilling
to meet its obligations under its employment agreement with Mr. Grimone, such
obligations become the obligations of the Company.
As Chief Financial Officer, Mr. Grimone has overall responsibility for the
Company's financial policies and its investment income. The general
profitability of the Company's investments and, on an essentially equal basis,
his overall individual performance in all of his duties are the factors
considered in the yearly renewal of his agreements. Based upon Mr. Grimone's
exceptional performance of his duties, which contributed to the Company's
excellent financial performance in 1994, Mr. Grimone received an increase in
salary in 1995. He was paid $258,000. The Executive Committee has renewed Mr.
Grimone's employment agreement.
Mr. Laffoon receives compensation in the form of an annual salary. As Chief
Administrative Officer, Mr. Laffoon has as areas of responsibility the CRL claim
and administrative teams and the Actuarial and Quality Assurance Departments,
which comprise a majority of CRL's employees. Mr. Laffoon's compensation is
reviewed annually by the Executive Committee. His annual compensation is based
upon underwriting profitability; improvement of operating procedures; retention
of business; and overall individual performance in all duties. Based upon Mr.
Laffoon's significant contributions to CRL's attainment of an underwriting
profit in 1994, an increased retention of business that year, and achievements
in the managed care area, all of which contributed to the Company's excellent
overall performance in 1994, Mr. Laffoon received an increase in salary in 1995.
He was paid $234,000.
The Executive Committee
----------------------------
Fred Lick, Jr., Chairman
John F. Novatney, Jr.
E. Lawrence Hendershot, M.D.
9
<PAGE> 12
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Lick, Mr. Novatney and Dr. Hendershot serve on the Executive Committee,
which serves as a compensation committee responsible for determining the
compensation of the Company's executive officers.
Mr. Lick is President and Chief Executive Officer of the Company and of its
principal operating subsidiary, Central Reserve Life Insurance Company. While
Mr. Lick serves on the Company's Executive Committee, he abstains in any action
affecting his own compensation as an executive officer. See "Certain
Relationships and Related Transactions" on page 6 with respect to transactions
between Mr. Lick and the Company.
Mr. Novatney is a partner in the law firm of Baker & Hostetler, which
serves as general counsel for the Company and its subsidiaries.
SELECTION OF INDEPENDENT AUDITORS
KPMG Peat Marwick serves as the independent auditors for the Company. The
Audit Committee selected KPMG Peat Marwick to serve as the independent auditors
for the Company and its subsidiaries for the year 1995. A representative of KPMG
Peat Marwick is expected to be present at the Annual Meeting of Shareholders and
will be available to answer questions.
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal at the 1996 Annual
Meeting of Shareholders for inclusion in the proxy statement and form of proxy
relating to that meeting is advised that the proposal must be received by the
Company at its principal executive offices not later than December 16, 1996. The
Company will not be required to include in its proxy statement or form of proxy
a shareholder proposal which is received after that date or which otherwise
fails to meet requirements for shareholder proposals established by regulations
of the Securities and Exchange Commission.
10
<PAGE> 13
OTHER MATTERS
As required by Section 16(a) of The Securities Exchange Act of 1934, Mr.
Schulte filed a Form 5 Annual Statement of Changes in Beneficial Ownership
showing the 32 shares he acquired in 1995 under the Company's Dividend
Reinvestment Plan. The Form 5 was filed late, however, and the rules of the
Commission require disclosure of this fact.
The solicitation of proxies is made by and on behalf of the Board of
Directors. The cost of the solicitation will be borne by the Company, including
the reasonable expenses of brokerage firms or other nominees for forwarding
proxy materials to beneficial owners. In addition to solicitation by mail,
proxies may be solicited by telephone, telegraph or personally. The Company has
engaged Regan & Associates, Inc., New York, New York, to assist it in the
solicitation of proxies at an estimated cost of $3,750. Proxies may also be
solicited by directors, officers and employees of the Company without additional
compensation.
If the enclosed form of proxy is executed and returned, the shares
represented thereby will be voted in accordance with any specification made by
the shareholder. In the absence of any such specification, proxies will be voted
FOR the election of the three (3) nominees as set forth under "Election of
Directors" on page 1.
The presence of any shareholder at the meeting will not operate to revoke
his proxy. A proxy may be revoked at any time, insofar as it has not been
exercised, (1) by a later-dated proxy; (2) by giving written notice to the
Company; or (3) in open meeting.
If any other matters shall properly come before the meeting, the persons
named in the proxy, or their substitutes, will vote thereon in accordance with
their judgment. The Board of Directors does not know of any other matters which
will be presented for action at the meeting.
By order of the Board of Directors.
/s/ Fred Lick, Jr.
Fred Lick, Jr.
Chairman of the Board,
President and Chief Executive Officer
Date: April 18, 1996
11
<PAGE> 14
P CENTRAL RESERVE LIFE CORPORATION
R
O PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
X FOR THE ANNUAL MEETING OF SHAREHOLDERS MAY 16, 1996.
Y
The undersigned hereby constitutes and appoints Fred Lick, Jr., and Frank W.
Grimone and each of them, his true and lawful agents and proxies with full power
of substitution in each, to represent the undersigned at the Annual Meeting of
Shareholders of Central Reserve Life Corporation to be held at the Cleveland
Airport Marriott Hotel, 4277 West 150th Street, Cleveland, Ohio, on Thursday,
May 16, 1996, and at any adjournment thereof, on all matters coming before said
meeting.
<TABLE>
<S> <C>
Election of Directors, Nominees: (change of address)
Fred Lick, Jr. ________________________________________
John F. Novatney, Jr. ________________________________________
John L. McKean ________________________________________
(If you have written in the above
space, please mark the corresponding box
on the reverse side of this card.)
</TABLE>
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. The Proxies cannot
vote your shares unless you sign and return this Card.
SEE REVERSE
SIDE
/X/ Please mark your votes as in SHARES IN YOUR NAME
this example.
Election of FOR WITHHELD
Directors / / / /
(see reverse)
For, except vote withheld from the following nominee(s):
_______________________________________________________
Change
of / /
Address
Attend / /
Meeting
SIGNATURES(S) ______________________________________ DATE _________________
SIGNATURES(S) ______________________________________ DATE _________________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
