<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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
GENERAL RE CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
GENERAL RE 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), or 14a-6(i)(1), or 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
ART WORK
GENERAL RE CORPORATION
695 EAST MAIN STREET
STAMFORD, CONNECTICUT 06904-2351
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
MAY 19, 1995
The annual meeting of the stockholders of General Re Corporation will be
held on May 19, 1995 at 9:00 a.m. at the offices of the Corporation, 695 East
Main Street, Stamford, Connecticut for the following purposes:
(1) To elect directors;
(2) To consider and act upon a proposal to amend the Corporation's
By-laws to raise the retirement age for directors from seventy (70) to
seventy-two (72);
(3) To consider and act upon a proposal to adopt the 1995 Long-Term
Compensation Plan;
(4) To consider and act upon a proposal to ratify the selection of
independent public accountants; and
(5) To transact any and all other business which may properly come
before the meeting.
Only stockholders of record at the close of business on March 24, 1995 are
entitled to notice of and to vote at this meeting or any adjournment thereof.
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE DATE AND SIGN THE
ENCLOSED PROXY AND/OR VOTING DIRECTION CARD(S) AND RETURN THE PROXY AND/OR
CARD(S) PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED
IN THE UNITED STATES.
CHARLES F. BARR, Secretary
Stamford, Connecticut
March 28, 1995
<PAGE> 3
GENERAL RE CORPORATION
695 EAST MAIN STREET
STAMFORD, CONNECTICUT 06904-2351
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors of the
Corporation for use at the annual meeting of stockholders to be held on May 19,
1995. The proxy, when properly executed and received by the Secretary prior to
the meeting, will be voted unless revoked. Any stockholder giving a proxy has
the power to revoke it any time prior to voting by a later dated proxy, notice
in writing or attendance at the meeting and election to vote in person. Except
to the extent that contrary instructions are given by stockholders in the places
provided for this purpose in the proxy, it is the intention of the persons named
in the proxy to vote as follows:
(1) For the election of each nominee named below under the caption
"Election of Directors";
(2) For the amendment of the Corporation's By-laws to raise the
retirement age for directors from seventy (70) to seventy-two (72);
(3) For the adoption of the 1995 Long-Term Compensation Plan;
(4) For the proposal to ratify the selection of independent public
accountants; and
(5) In the discretion of the proxies, on any other matters that may
properly come before the meeting.
This proxy statement and the accompanying proxy or voting direction card(s)
are being mailed on or about March 28, 1995. Only stockholders of record on the
books of the Corporation at the close of business on March 24, 1995 will be
entitled to vote at the annual meeting. On that date, there were 81,948,495
shares of common stock, $.50 par value (the "Common Stock"), issued and
outstanding and 2,000,000 shares of convertible preferred stock, no par value
(the "Preferred Stock"), outstanding. Each holder of shares of Common Stock is
entitled to one vote per share. Each share of Preferred Stock is entitled to the
number of votes equal to the number of shares of Common Stock into which such
shares of Preferred Stock could be converted on the record date for determining
the stockholders entitled to vote, rounded to the nearest one-tenth of a vote.
As of March 24, 1995, each beneficial owner of shares of Preferred Stock is
entitled to one vote per share. The presence of the holders of a majority of the
outstanding shares of Common Stock and Preferred Stock will constitute a quorum
for the transaction of business at the annual meeting, but if a quorum is not
present, in person or by proxy, the meeting may adjourn from time to time until
a quorum is obtained.
The affirmative vote of a majority in interest of the outstanding shares of
Common Stock and Preferred Stock present in person or represented by proxy at
the meeting and entitled to vote, voting together and not as separate classes,
is required for the election of directors, the adoption of the 1995 Long-Term
Compensation Plan and the ratification of the selection of independent public
accountants. The affirmative vote of the holders present in person or
represented by proxy at the meeting of a majority in interest of the outstanding
shares of Common Stock and Preferred Stock entitled to vote, voting together and
not as separate classes, is required for the amendment of the Corporation's
By-laws to raise the retirement age for directors. Shares represented by proxies
that are marked "ABSTAIN" or that are not voted by brokers who are prohibited
from exercising authority for beneficial owners who have not provided voting
instructions with respect to a particular matter ("broker non-votes") are
counted for purposes of determining the presence or absence of a quorum for the
transaction of business. Shares represented by proxies which are marked
"WITHHELD" with regard to the election of directors will be excluded entirely
from the vote and will have no effect. Shares represented by proxies which are
marked "ABSTAIN" with respect to any of the other matters presented for
consideration at the annual meeting will be considered in person or represented
by proxy at the meeting and, accordingly, will have the effect of a negative
vote because those matters require the affirmative vote of a majority of the
votes
<PAGE> 4
of holders of shares present in person or represented by proxy. In addition, any
broker non-votes on specific matters will have no effect on the outcome of such
matters.
The voting direction cards will serve to instruct the trustees of the
Employee Savings and Stock Ownership Plan of General Re Corporation and its
Subsidiaries (the "ESSOP") on how to vote shares of the Corporation's Common
Stock and Preferred Stock held by such plan. Printed on any voting direction
card accompanying this proxy statement is the number of shares of Common Stock
and/or Preferred Stock allocated to each participant in such plan. The
instructions given by the participants will also serve to instruct the trustee
on how to vote the unallocated shares of Preferred Stock held by such plan.
BOARD OF DIRECTORS
The Corporation's By-laws provide that the Board of Directors shall consist
of not less than nine nor more than twenty-one members as established from time
to time by the directors or the stockholders pursuant to the provisions of the
By-laws provided that the number of directors in each of the three classes of
directors is as nearly equal as possible. The Board of Directors currently
consists of twelve (12) members. The members of each class are elected to serve
for a term of three (3) years and until their successors are elected, or until
the earliest of the annual meeting of stockholders next following a member's
seventieth (70th) birthday (or seventy-second (72nd) birthday if the amendment
to the By-laws is approved) or a member's resignation, removal or ineligibility.
Under the present schedule, regular meetings of the Board of Directors are
held eight (8) times each year and additional special meetings are called
whenever necessary. The Board met eight (8) times in 1994.
The Board of Directors has established an Executive Committee to exercise
the powers of the Board during the intervals between meetings of the Board. The
members of the Executive Committee are Ronald E. Ferguson, Chairman, John C.
Etling, William C. Ferguson, Donald J. Kirk, Andrew W. Mathieson and David E.
McKinney. The Executive Committee did not meet in 1994.
The Board of Directors has established a Finance Committee to review and
monitor the financial affairs of the Corporation, including its investment
strategy, capital resources and expenditures, subsidiary and stockholder
dividends, foreign currency positions and commercial and investment banking
relationships. The members of the Finance Committee are Ronald E. Ferguson,
Chairman, Walter M. Cabot, Edward H. Malone, Andrew W. Mathieson, David E.
McKinney and Stephen A. Ross. The Finance Committee met six (6) times in 1994.
The Board of Directors has established an Audit Committee consisting of
Donald J. Kirk, Chairman, Lucy Wilson Benson, Kay Koplovitz and Walter F.
Williams, all of whom are non-employee directors. This Committee oversees
management's discharge of its financial reporting responsibilities and
recommends appointment of the Corporation's independent public accountants. The
Audit Committee met three (3) times during 1994.
The Board has established a Compensation Committee consisting of Andrew W.
Mathieson, Chairman, William C. Ferguson, Edward H. Malone, David E. McKinney
and Walter F. Williams, all of whom are non-employee directors, to review,
approve and report to the Board on all aspects of the Corporation's human
resources (including personnel policies, controls, and compensation and benefit
programs), the performance of the senior officers and the compensation of the
Chairman, President and senior officers. The Compensation Committee met five (5)
times in 1994.
The Board has established a Committee on Directors consisting of William C.
Ferguson, Chairman, Lucy Wilson Benson and Andrew W. Mathieson to recommend
board committee structure, recommend a plan of compensation and benefits for
non-employee directors, establish criteria for selection of directors, review
the performance of each director and propose nominees for election to the Board.
It met twice in 1994. The Committee on Directors will consider nominations
submitted by stockholders. Nominations submitted in writing by stockholders must
be received by the Secretary of the Corporation not less than sixty (60) days
nor
2
<PAGE> 5
more than ninety (90) days prior to an annual meeting. This notice must include
the information concerning the nominee that must be disclosed about nominees for
election as directors in proxy solicitations prepared in accordance with
Regulation 14A under the Securities Exchange Act of 1934, as amended. The notice
must be accompanied by the written consent of each proposed nominee to serve as
a director of the Corporation if so elected.
The Board has established a Committee on Shareholder Relations consisting
of non-management directors Lucy Wilson Benson, Chairman, William C. Ferguson,
Donald J. Kirk and Walter F. Williams to consider matters of special interest to
stockholders, such as stockholder proposals. Although no such proposals were
received during 1994, the Committee on Shareholder Relations met once in 1994.
The Board has established a Pension & Savings Plan Committee consisting of
Walter M. Cabot, Chairman, Donald J. Kirk, Kay Koplovitz and Edward H. Malone.
The Committee's responsibilities include the approval of the actuarial
assumptions and annual contributions for the Corporation's pension plans and the
selection of trustees, investment managers and independent actuaries for the
Corporation's pension plans and the ESSOP. The Pension & Savings Plan Committee
met twice in 1994.
Each of the directors attended at least seventy-five percent (75%) of the
total of the Board and their committee meetings held during 1994.
ELECTION OF DIRECTORS
Six (6) directors have been nominated for re-election at the annual
meeting. They are Lucy Wilson Benson, a director since 1990, Walter M. Cabot, a
director since 1979, John C. Etling, a director since 1983, William C. Ferguson,
a director since 1987, Kay Koplovitz, a director since 1990 and Walter F.
Williams, a director since 1989.
It is intended that the proxies received will be voted for the six (6)
nominees unless otherwise provided therein. Management knows of no reason why
any of these nominees will be unable to serve, but, in such event, the proxies
received will be voted for such substitute nominees as the Committee on
Directors may recommend, but in no event will proxies received be voted for a
greater number of persons than the number of nominees.
3
<PAGE> 6
The names, ages, terms of office, and certain other information as of March
1, 1995 with respect to the persons nominated for election as directors and
other persons serving as directors are as follows:
INFORMATION CONCERNING NOMINEES FOR TERMS EXPIRING IN 1998:
<TABLE>
<S> <C>
---------------- LUCY WILSON BENSON, 67, a director of the Corporation since 1990, has
been President of Benson and Associates, consultants to business and
government, since 1981. She served as Under Secretary of State for
Security Assistance, Science and Technology from 1977 to 1980. She
---------------- serves on the boards of directors of COMSAT Corporation, various Dreyfus
(a)(d)(s) Mutual Funds, International Executive Service Corps and Logistics
Management Institute. She is a trustee of the Alfred P. Sloan Founda-
tion, Vice Chairman of the board of trustees of Lafayette College and
Vice Chairman of the Atlantic Council of the U.S.
---------------- JOHN C. ETLING, 59, a director of the Corporation since 1983, has been
Vice Chairman of the Corporation since 1987 and Vice Chairman of the
Corporation's subsidiary, General Reinsurance Corporation, since
February, 1995. He previously served as Senior Vice President and Group
---------------- Executive (1984-1987) and Vice President and Group Executive (1981-1984)
(e) of the Corporation and President and Chief Executive Officer of General
Reinsurance Corporation (1983-1995). He has been with the General Re
Group since 1961. He serves on the boards of directors of Tempest
Reinsurance Company Limited and Federal Home Loan Mortgage Corporation.
---------------- WILLIAM C. FERGUSON, 64, a director of the Corporation since 1987, is
currently Chairman of NYNEX Corporation, a telecommunications company.
He previously served as Chairman and Chief Executive Officer of NYNEX
Corporation (1989-1994). He serves on the boards of directors of CPC
---------------- International, Inc., NYNEX Corporation and Viacom Inc.
(c)(d)(e)(s)
---------------- KAY KOPLOVITZ, 49, a director of the Corporation since 1990, is the
founder and has been Chairman and Chief Executive Officer of USA
Networks, an international television programming company, since 1980.
She previously served as Vice President and Executive Director of
---------------- USA-Columbia Satellite Services, Inc. (1977-1980). She serves on the
(a)(p) board of directors of Liz Claiborne, Inc.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C>
---------------- WALTER F. WILLIAMS, 66, a director of the Corporation since 1989, is
retired. He previously served as Chairman, President and Chief Executive
Officer of Bethlehem Steel Corporation from 1986 to 1992. He serves on
the board of trustees of Moravian College, is a director of Wilmington
---------------- Trust Company of Florida and is a member of The Business Council.
(a)(c)(s)
</TABLE>
INFORMATION CONCERNING NOMINEE FOR TERM EXPIRING IN 1997:
<TABLE>
<S> <C>
---------------- WALTER M. CABOT, 62, a director of the Corporation since 1979, has been
Senior Advisor to and Director of Standish, Ayer & Wood, investment
managers, since 1991. He previously served as President (1974-1990) and
Senior Advisor (1990-1991) of Harvard Management Company, Inc., an
---------------- endowment management company. He is a trustee of Property Capital Trust
(f)(p) and serves on the boards of directors of Gasbeau, Inc., and Rockefeller
Financial Service, Inc. He serves as a trustee and treasurer of
Wellesley College and is Chairman of the New England Medical Center.
</TABLE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
NOMINEES FOR ELECTION AS DIRECTORS.
INFORMATION CONCERNING DIRECTORS WHOSE TERMS EXPIRE IN 1996:
<TABLE>
<S> <C>
---------------- ANDREW W. MATHIESON, 66, a director of the Corporation since 1966, has
been Executive Vice President of Richard K. Mellon and Sons, investment
management and philanthropy, since 1978. He serves on the boards of
---------------- directors of Mellon Bank Corporation and Mellon Bank, N.A.
(c)(d)(e)(f)
---------------- DAVID E. MCKINNEY, 60, a director of the Corporation since 1988, is
self-employed. He previously served as Senior Vice President (1991-1992
and 1987-1988) and Vice President (1979-1987) of IBM Corporation and as
Director General, IBM Europe (1988-1991). He serves on the boards of
---------------- trustees of Brown University and the New York Philharmonic, on the
(c)(e)(f) boards of directors of Organization Research Counselors, Fraunhofer
Center for Research and PAXAR Corporation, and is an overseer of the
Thomas J. Watson, Jr. Institute of International Studies.
</TABLE>
5
<PAGE> 8
<TABLE>
<S> <C>
---------------- STEPHEN A. ROSS, 51, a director of the Corporation since 1993, has been
Sterling Professor of Economics and Finance at Yale University since
1985. He is also Co-Chairman of Roll & Ross Asset Corporation and
Managing Director, WP Capital Management, L.P. He serves on the board of
---------------- trustees of the College Retirement Equities Fund.
(f)
</TABLE>
INFORMATION CONCERNING DIRECTORS FOR TERMS EXPIRING IN 1997:
<TABLE>
<S> <C>
---------------- RONALD E. FERGUSON, 53, a director of the Corporation since 1983, has
been Chairman, President and Chief Executive Officer of the Corporation
since 1987 and Vice Chairman of the Corporation's subsidiary, General
Reinsurance Corporation, since February, 1995. He previously served as
---------------- President and Chief Operating Officer (1983-1987) and Vice President and
(e)(f) Group Executive (1981-1983) of the Corporation and Chairman of General
Reinsurance Corporation (1985 to 1995). He has been with the General Re
Group since 1969. He serves on the boards of directors of Colgate-
Palmolive Company and General Signal Corporation.
---------------- DONALD J. KIRK, 62, a director of the Corporation since 1987, is an
Executive-in-Residence, Columbia University Graduate School of Business,
where he was a professor from 1987 to 1994. He was Chairman of the
Financial Accounting Standards Board from 1978 to 1986. In 1995 he
---------------- became a Member of the Public Oversight Board of the American Institute
(a)(e)(p)(s) of Certified Public Accountants' SEC Practice Section. He is a trustee
of the Fidelity Group of Mutual Funds and a director of Valuation
Research Corporation and serves as Vice Chairman of the boards of
directors of Greenwich Hospital and the National Arts Stabilization
Fund.
---------------- EDWARD H. MALONE, 70, a director of the Corporation since 1985, is
retired. He previously served as Vice President of General Electric
Company from 1970 to 1985. He is a trustee of Corporate Property
Investors and the Fidelity Group of Mutual Funds and serves on the
---------------- boards of directors of Allegheny Power Systems, Inc., Butler Capital
(c)(f)(p) Corporation and Mattel, Inc. He also serves as a trustee of the EPS
Foundation at Trinity College (Washington, D.C.), the Naples (Florida)
Philharmonic Center for the Arts and Rensselaer Polytechnic Institute.
</TABLE>
---------------
(a) Member Audit Committee
(c) Member Compensation Committee
(d) Member Committee on Directors
(e) Member Executive Committee
(f) Member Finance Committee
(p) Member Pension and Savings Plan Committee
(s) Member Committee on Shareholder Relations
6
<PAGE> 9
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
At December 31, 1994, no person was known by management to be a beneficial
holder, directly or indirectly, of more than five percent (5%) of the shares of
Common Stock of the Corporation. All of the outstanding shares of Preferred
Stock are held by the ESSOP.
The following table shows the number of shares of the Corporation's Common
Stock beneficially owned as of March 1, 1995 by each director and nominee for
director and by the executive officers named in the Compensation Table included
in this Proxy Statement (including the beneficial ownership of Preferred Stock
held by the ESSOP, which is reported as shares of Common Stock because the
Preferred Stock is convertible into and votes with the Common Stock as a class).
All directors and executive officers as of March 1, 1995 as a group owned
204,184 shares of Common Stock representing approximately 0.25% of the
outstanding Common Stock. Except as otherwise indicated, each person has sole
voting and investment power with respect to the shares shown.
<TABLE>
<CAPTION>
NUMBER
NUMBER OF
OF SHARES
SHARES UNDERLYING
OF SHARE
COMMON UNITS
STOCK IN
BENEFICIALLY DEFERRED TOTAL SHARES
NAME OF BENEFICIAL OWNER OWNED(1) COMPENSATION(2) AND SHARE UNITS
------------------------------- ------ ----- ---------------
<S> <C> <C> <C>
Charles F. Barr................ 130(3) 0 130
Lucy Wilson Benson............. 300 0 300
Joseph P. Brandon.............. 8,130(3)(4) 943 9,073
Walter M. Cabot................ 327 7,736 8,063
John C. Etling................. 35,376(3)(4) 853 36,229
Ronald E. Ferguson............. 69,336(3)(4) 4,541 73,877
William C. Ferguson............ 1,000 299 1,299
Ernest C. Frohboese............ 6,833(3)(4) 1,544 8,377
Donald J. Kirk................. 500 2,691 3,191
Kay Koplovitz.................. 0 1,263 1,263
Edward H. Malone............... 700 4,921 5,621
Andrew W. Mathieson............ 4,203 6,010 10,213
David E. McKinney.............. 2,325 2,396 4,721
Stephen A. Ross................ 1,000 809 1,809
Edmond F. Rondepierre.......... 14,897(3)(4) 892 15,789
Walter F. Williams............. 1,000 312 1,312
</TABLE>
---------------
(1) Includes shares of Common Stock held in the names of spouses and children,
as to which beneficial ownership is disclaimed. Fractional shares are
rounded to the nearest whole share. No director or executive officer owns
beneficially more than 1% of the outstanding stock. Does not include the
following shares underlying stock options exercisable within sixty (60)
days: Charles F. Barr -- 540 shares; Joseph P. Brandon -- 7,390 shares;
John C. Etling -- 41,571 shares; Ronald E. Ferguson -- 32,533 shares;
Ernest C. Frohboese -- 14,937 shares; Edmond F. Rondepierre -- 13,892
shares; and all executive officers as of March 1, 1995 as a
group -- 175,108 shares.
(2) Non-employee directors may elect to defer all or part of their compensation
to be held in deferral accounts either in cash or as units equivalent to
shares of Common Stock ("share units"). Executive officers may also receive
a portion of their bonuses in share units. Share units carry no voting
rights. Fractional shares are rounded to the nearest whole share.
(3) Shares of Preferred Stock are allocated to the accounts of participants in
the ESSOP pursuant to the terms of the ESSOP. Distributions under the ESSOP
are made in cash or shares of Common Stock into which the Preferred Stock is
convertible. The participants in the ESSOP have the right to instruct the
trustee with respect to the vote of the shares allocated to their accounts
and a portion of the Preferred
(Footnotes continued on following page)
7
<PAGE> 10
(Footnotes continued from preceding page)
Stock that has not been allocated to any participant's account or for
which no instructions are timely received by the trustee, whether or not
allocated to the account of any participant. The number of shares of
Common Stock disclosed above includes the shares of Preferred Stock
allocated to each participant's account but excludes any unallocated
shares because of the trustee's fiduciary duty relating to the voting of
unallocated shares under the Employee Retirement Income Security Act of
1974. The number of shares allocated to the accounts of the persons named
above and the minimum number of shares as to which they may give voting
instructions are as follows: Charles F. Barr: 124 allocated shares, 476
unallocated shares; Joseph P. Brandon: 473 allocated shares, 1,817
unallocated shares; John C. Etling: 569 allocated shares, 2,186
unallocated shares; Ronald E. Ferguson: 591 allocated shares, 2,270
unallocated shares; Ernest C. Frohboese: 669 allocated shares, 2,570
unallocated shares; Edmond F. Rondepierre: 954 allocated shares, 3,665
unallocated shares; and all executive officers as of March 1, 1995 as a
group: 4,221 allocated shares and 16,215 unallocated shares.
(4) Includes restricted stock. Joseph P. Brandon holds 7,500 shares (300
restricted until December, 1997; 500 restricted until April, 1999; 500
restricted until May, 2000; 750 restricted until June, 2001; 1700 restricted
until September, 2001; and 3,750 restricted until February, 2019), John C.
Etling holds 12,000 shares (restricted until November, 1995), Ronald E.
Ferguson holds 22,500 shares (3,750 restricted until March, 1996; 3,750
restricted until June, 1997; and 15,000 restricted until January, 2002) and
Ernest C. Frohboese holds 6,000 shares (restricted until September, 2000).
TRANSACTIONS WITH MANAGEMENT AND OTHERS
In May, 1994, the Corporation's subsidiary, General Reinsurance
Corporation, entered into an agreement with WP Capital Management LP ("WP
Capital") under which WP Capital will manage approximately $50 million of the
Corporation's investment portfolios. Stephen A. Ross, a director of the
Corporation, is an executive officer of WP Capital and owns forty-five percent
(45%) of Roll & Ross, which owns twenty percent (20%) of WP Capital. Investment
manager fees, which will be paid by the Corporation to WP Capital on an annual
basis beginning in 1995, will be based upon the performance of the portfolio.
8
<PAGE> 11
EXECUTIVE COMPENSATION
Summary Compensation Table
The aggregate of all plan and non-plan compensation awarded to, earned by,
or paid to the Corporation's Chief Executive Officer, the four most highly
compensated executive officers other than the Chief Executive Officer and a
former executive officer who would have been among the four most highly
compensated executive officers if he had been an executive officer as of
year-end (collectively the "named executives") for services during the three
fiscal years ended December 31, 1994 by the Corporation and its subsidiaries to
or for the benefit of the named executives for services during those years in
all capacities to the Corporation and its subsidiaries is shown in the following
table:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
AWARDS
---------------------- PAYOUTS
ANNUAL COMPENSATION RESTRICTED ---------
--------------------------- STOCK OPTIONS LTIP
NAME AND SALARY BONUS AWARD(S) SARS PAYOUTS ALL OTHER
PRINCIPAL POSITION(1) YEAR ($) ($)(2) ($)(3) (#)(4) ($)(5) COMPENSATION(6)
--------------------------------- ----- --------- --------- ----------- --------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Ronald E. Ferguson............... 1994 $ 810,417 $ 647,500 $ 270,928 176,528 $ 306,884 $49,067
Director, Chairman, President 1993 768,750 610,000 1,046,096 28,942 134,335 46,610
and Chief Executive Officer 1992 740,000 337,500 68,778 24,169 119,625 45,042
John C. Etling................... 1994 541,250 475,000 0 13,000 273,277 32,917
Director and Vice Chairman 1993 520,417 365,000 0 10,898 93,380 31,710
1992 503,750 256,000 0 11,304 116,000 30,865
Ernest C. Frohboese.............. 1994 324,167 240,000 313,464 6,497 101,840 19,892
Vice President 1993 304,167 256,000 229,577 5,905 0 18,735
1992 281,249 150,000 274,757 5,645 0 17,557
Edmond F. Rondepierre............ 1994 340,000 93,750 57,448 6,622 100,139 20,842
Former Vice President, 1993 325,625 170,000 12,533 4,624 42,300 20,023
General Counsel and Secretary 1992 310,833 82,500 36,689 6,596 41,325 19,389
(7)
Joseph P. Brandon................ 1994 222,500 187,500 612,993 6,221 0 13,793
Vice President 1993 187,708 112,500 147,410 4,531 0 11,748
1992 151,667 75,000 114,347 3,818 0 10,304
Charles F. Barr.................. 1994 192,258 125,000 0 6,000 0 2,246
Vice President, General Counsel
and Secretary (7)
</TABLE>
---------------
(1) Identified positions are as of March 1, 1995.
(2) Includes cash amounts paid as an annual bonus (the "Annual Incentive Bonus")
under certain provisions of the General Re Corporation 1989 Long-Term
Compensation Plan (the "Compensation Plan") for services rendered during
the specified calendar year.
(3) Includes grants of restricted stock and share units which were awarded in
lieu of cash bonuses awarded under the Annual Incentive Bonus provisions of
the Compensation Plan and under the provisions of the Compensation Plan
providing for bonus payments subject to the performance of the Corporation
over the prior five years (the "Performance Bonus"). Restricted stock and
share units awarded for 1994 were granted under the proposed 1995 Long-Term
Compensation Plan, subject to stockholder approval of that plan.
(Footnotes continued on following page)
9
<PAGE> 12
(Footnotes continued from preceding page)
At December 31, 1994 Ronald E. Ferguson held 22,500 restricted shares and
share units for 2,404 shares worth $3,092,766, John C. Etling held 12,000
restricted shares and share units for 853 shares worth $1,596,182, Ernest
C. Frohboese held 6,000 restricted shares and share units for 945 shares
worth $862,482, Edmond F. Rondepierre held share units for 436 shares worth
$54,146, Joseph P. Brandon held 7,500 restricted shares and share units for
520 shares worth $995,984 and Charles F. Barr held no restricted shares or
share units. Dividends are paid on restricted stock and dividend
equivalents are accrued on share units and convert to common stock at the
same time as the units convert.
(4) Includes regular grants of non-qualified stock options ("NQSOs"), grants of
replacement options (see footnote (2) to the Option Grants Table) and
options granted in lieu of cash bonuses awarded under the Annual Incentive
Bonus and Performance Bonus provisions of the Compensation Plan. NQSOs and
options awarded for 1994 were granted under the proposed 1995 Long-Term
Compensation Plan, subject to stockholder approval. In addition, includes
performance-based NQSOs granted to Ronald E. Ferguson.
(5) Includes amounts paid in cash and shares of Common Stock granted under the
Performance Bonus provisions of the Compensation Plan for the five-year
period ending in the specified calendar year, under the Compensation Plan.
(6) Includes corporate allocations under the ESSOP, the unfunded book account
under the Supplemental Executive Retirement Plan (the "SERP") and the
Benefit Equalization Plan (the "BEP") for 1994, as follows:
<TABLE>
<CAPTION>
NAME ESSOP SERP BEP
-------------------------------------------------- ------ ------ -------
<S> <C> <C> <C>
Ronald E. Ferguson................................ $9,442 $1,000 $38,625
John C. Etling.................................... 9,442 363 23,113
Ernest C. Frohboese............................... 9,442 8,750 1,700
Edmond F. Rondepierre............................. 9,442 3,608 7,792
Joseph P. Brandon................................. 9,330 0 4,463
Charles F. Barr................................... 2,246 0 0
</TABLE>
(7) As of July 1, 1994, Charles F. Barr became Vice President, General Counsel
and Secretary of the Corporation, and Edmond F. Rondepierre became Senior
Vice President of General Reinsurance Corporation.
10
<PAGE> 13
Option Grants Table
The options granted or awarded in 1994 to the named executives are shown in
the following table (no stock appreciation rights were granted in 1994, and none
have been granted since 1987):
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
% OF
TOTAL
NUMBER OPTIONS
OF GRANTED
SECURITIES TO
UNDERLYING EMPLOYEES EXERCISE
OPTIONS IN OR BASE
GRANTED FISCAL PRICE GRANT EXPIRATION
NAME (#) YEAR (S/SH) DATE DATE
--------------------- ------- ------ --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Ronald E. Ferguson... 2,061(2) 00.25% $108.6875 02/23/94 12/13/98
10,167(2) 01.25 123.5000 05/09/94 12/12/99
3,739(2) 00.46 123.5000 05/09/94 12/12/00
135,000(3) 16.59 114.6875 11/09/94 11/09/04
22,000(4) 02.70 120.9375 12/14/94 12/14/04
1,227(5) 00.15 123.5000 01/03/95 01/03/05
2,334(5) 00.29 128.5625 03/01/95 03/01/05
------- ------ ---------
176,528 21.69% $116.3353
John C. Etling....... 13,000(4) 01.60% $120.9375 12/14/94 12/14/04
Ernest C.
Frohboese.......... 5,500(4) 00.68% $120.9375 12/14/94 12/14/04
305(5) 00.04 123.5000 01/03/95 01/03/05
692(5) 00.09 128.5625 03/01/95 03/01/05
------- ------ ---------
6,497 00.80% $121.8699
Edmond F.
Rondepierre........ 466(2) 00.06% $122.3125 05/06/94 12/13/98
1,541(2) 00.19 122.3125 05/06/94 12/12/00
1,057(2) 00.13 122.3125 05/06/94 12/11/01
660(2) 00.08 122.3125 05/06/94 12/09/02
2,137(2) 00.26 122.3125 05/06/94 12/12/99
400(5) 00.05 123.5000 01/03/95 01/03/05
361(5) 00.04 128.5625 03/01/95 03/01/05
------- ------ ---------
6,622 00.81% $122.7250
Joseph P. Brandon.... 5,500(4) 00.68% $120.9375 12/14/94 12/14/04
721(5) 00.09 128.5625 03/01/95 03/01/05
------- ------ ---------
6,221 00.76% $121.8212
Charles F. Barr...... 3,000(4) 00.37% $118.7500 06/08/94 06/08/04
3,000(4) 00.37 120.9375 12/14/94 12/14/04
------- ------ ---------
6,000 00.74% $119.8438
All Stockholders..... N/A N/A N/A N/A N/A
All Optionees........ 610,000(4) 100.00% $119.6563 Various 10 Years
Options Gain as % of
all Stockholder
Gain............... N/A N/A N/A N/A N/A
<CAPTION>
POTENTIAL REALIZABLE VALUE AT ASSUMED
ANNUAL RATES OF STOCK PRICE APPRECIATION
FOR OPTION TERM (1)
------------------------------------------
NAME 0% 5% 10%
--------------------- --- --------------- ----------------
<S> <C> <C> <C>
Ronald E. Ferguson... 0 $ 59,150 $ 130,038
0 394,071 884,465
0 175,257 403,973
0 0 to 0 to
9,737,058(3) 24,675,616(3)
0 1,673,253 4,240,351
0 95,299 241,430
0 108,709 478,226
--- --------------- ----------------
0 $ 2,505,739 $ 6,378,483
to to
12,242,797 31,054,099
John C. Etling....... 0 $ 988,740 $ 2,505,662
Ernest C.
Frohboese.......... 0 $ 418,313 $ 1,060,088
0 23,689 60,032
0 55,950 141,788
--- --------------- ----------------
0 $ 497,952 $ 1,261,908
Edmond F.
Rondepierre........ 0 $ 14,361 $ 31,410
0 71,641 165,170
0 58,036 137,482
0 42,053 102,406
0 82,171 184,467
0 31,067 78,730
0 29,188 73,967
--- --------------- ----------------
0 $ 328,517 $ 773,632
Joseph P. Brandon.... 0 $ 418,313 $ 1,060,088
0 58,294 147,730
--- --------------- ----------------
0 $ 476,607 $ 1,207,818
Charles F. Barr...... 0 $ 224,044 $ 567,771
0 228,171 578,230
--- --------------- ----------------
0 $ 452,215 $ 1,146,001
All Stockholders..... 0 $ 6,358,885,347 $ 16,114,663,964
$ 43,397,496 $ 109,949,326
to to
All Optionees........ 0 $ 45,903,235 $ 116,327,809
Options Gain as % of
all Stockholder
Gain............... N/A 0.68% to 0.72% 0.68% to 0.72%
</TABLE>
---------------
(1) The dollar amounts under these columns are the results of calculations at
assumed annual rates of stock price appreciation of zero percent (0%), five
percent (5%) and ten percent (10%). These assumed rates of growth were
selected by the Securities and Exchange Commission for illustration
purposes only. They are not intended to forecast possible future
appreciation, if any, of the Corporation's stock price. No gain to the
optionees is possible without an increase in stock prices, which will
benefit all stockholders. A zero percent (0%) gain in stock price will
result in a zero percent (0%) benefit to optionees.
(2) Replacement options granted following the tender of a like number of shares
to satisfy the option price upon exercise of the underlying stock option.
Replacement options have the same expiration date as the original option
and an exercise price equal to the market price at the date of the new
grant. They are first
(Footnotes continued on following page)
11
<PAGE> 14
(Footnotes continued from preceding page)
exercisable one year from the grant date provided the employee still owns
the shares acquired as a result of the original option exercise, less the
number of shares withheld to pay income tax due as a result of exercising
the original option.
(3) The Corporation awarded Mr. Ferguson a special grant of performance-based
NQSOs for 135,000 shares. These options will become fully exercisable on
January 16, 2002 (or sooner, to the extent of the then current performance,
in the event of death, disability, change in control, merger or
consolidation) if and only if the Corporation's total return to
stockholders compounded annually from the date of grant exceeds by 150
basis points the average return for the Standard & Poor's 500 Index and the
peer group reflected in the Performance Graph included in this proxy
statement (the "comparison group"). If the Corporation's total return to
stockholders exceeds the average return for the comparison group by at
least fifty (50) basis points but less than 150 basis points, these options
will become exercisable for between fifty percent (50%) and a hundred
percent (100%) of the shares in accordance with a predetermined schedule.
The potential realizable values at annual rates of stock price appreciation
of five percent (5%) and ten percent (10%) range from zero (0) if the
minimum performance target is not met, to the values identified in the
table if the performance target is fully met.
(4) The Corporation makes annual grants of NQSOs to its executive officers.
These NQSOs have a ten-year term and become exercisable in twenty percent
(20%) increments each year over a five-year period. These options have the
replacement option feature described in (2) above.
(5) Restricted stock options were granted during the first quarter of 1995 in
lieu of a portion of cash bonuses awarded under the 1994 Annual Incentive
Bonus and 1990-1994 Performance Bonus provisions of the Compensation Plan.
These options are exercisable immediately, but shares acquired are
restricted from being sold for five years from the grant date and are
forfeitable for termination due to cause or the unauthorized use of
proprietary information. These options have the replacement option feature
described in (2) above.
Aggregated Option Exercises and Fiscal Year-end Option Values Table
The realized value of aggregated option exercises during 1994 and the value
of unexercised in-the-money options at December 31, 1994 held by the named
executives are shown in the following table:
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SHARES UNEXERCISED UNEXERCISED
ACQUIRED OPTIONS AT IN-THE-MONEY
ON VALUE FY-END (#) FY-END ($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
-------------------------- ------ -------- -------------- ---------------------
<S> <C> <C> <C> <C>
Ronald E. Ferguson........ 22,800 $832,475 53,621/209,367 $1,141,189/$2,037,368
John C. Etling............ 0 0 47,188/30,500 1,551,286/355,450
Ernest C. Frohboese....... 0 0 13,940/16,100 439,380/233,338
Edmond F. Rondepierre..... 8,000 276,281 13,131/12,861 370,745/137,733
Joseph P. Brandon......... 0 0 6,669/12,280 161,321/127,019
Charles F. Barr........... 0 0 1,400/8,540 29,450/69,139
</TABLE>
12
<PAGE> 15
Long-Term Incentive Plan ("LTIP") Awards Table
The awards made during 1994 under the Compensation Plan to the named
executives are shown in the following table:
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
NUMBER PERFORMANCE ESTIMATED FUTURE
OF OR OTHER PAYOUTS
SHARES, PERIOD UNDER NON-STOCK
UNITS UNTIL THRESHOLD PRICE-BASED PLANS
OR OTHER MATURITIES ($ ---------------------
RIGHTS OR OR TARGET MAXIMUM
NAME (#) PAYOUT #) ($ OR #) ($ OR #)
---------------------------------- -------- --------- --- -------- --------
<S> <C> <C> <C> <C> <C>
Ronald E. Ferguson................ (1) 1994-1998 $ 0 $382,500 $765,000
John C. Etling.................... (1) 1994-1998 0 254,250 508,500
Ernest C. Frohboese............... (1) 1994-1998 0 119,000 238,000
Edmond F. Rondepierre............. (1) 1994-1998 0 119,000 238,000
Joseph P. Brandon................. (1) 1994-1998 0 87,500 175,000
Charles F. Barr................... (1) 1994-1998 0 77,000 154,000
</TABLE>
---------------
(1) Executive officers have the right to receive awards under the Performance
Bonus provision of the Compensation Plan. Performance Bonus distributions
under the Compensation Plan are made during the first quarter of each year
with respect to the five-year period ending in the preceding calendar year
and are included in the Summary Compensation Table. The amount
distributable, if any, is determined by the Compensation Committee at the
end of the performance period on the basis of results. Awards may be paid in
the discretion of the Compensation Committee in cash, in shares of Common
Stock, in a combination of cash and shares, in share units, in restricted
NQSOs, or in a combination of such units and restricted NQSOs.
Compensation of Directors
The directors, except for those who are also employees of the Corporation,
receive an annual retainer of $27,500 and $1,000 for each Board or committee
meeting attended. In addition, non-employee chairmen of Board committees are
paid an annual retainer of $2,500.
Under the non-employee directors' stock option provisions of the
Compensation Plan (the "Directors' Program"), each non-employee director was
granted a non-qualified stock option ("NQSO") on the first business day of each
calendar year of Board service to purchase five hundred (500) shares of Common
Stock. All of the shares available for grant under the Directors' Program have
been granted. On January 3, 1995 the non-employee directors were granted stock
options for five hundred (500) shares of Common Stock under the proposed 1995
Long-Term Compensation Plan, subject to approval by the Corporation's
stockholders of the new plan. The directors' stock options are exercisable six
(6) months after the date of grant at an exercise price equal to the fair market
value of the Common Stock on the date of grant and have a term of ten (10)
years. The exercise price of any option may be paid in cash or previously owned
shares of Common Stock having a fair market value equal to the exercise price or
in a combination of cash and shares. When previously owned shares of Common
Stock are used to exercise a non-employee director stock option, a replacement
option is issued to the director.
Under the proposed 1995 Long-Term Compensation Plan, if adopted, each
non-employee director will receive an automatic grant of 65 shares of restricted
stock immediately following stockholder approval of the plan and on the first
business day of each calendar year thereafter in which the individual is a
member of the Board of Directors. The restrictions on such shares will lapse
upon the later of five (5) years from the date of grant or retirement from the
Board of Directors.
Non-employee directors are permitted to defer all or part of their
compensation to be held in a deferral account either as cash, to which interest
at a market rate is credited quarterly, or as units equivalent to shares of
Common Stock, to which amounts equivalent to dividends paid on such shares are
credited quarterly.
13
<PAGE> 16
Any director who has completed five (5) or more years of service as a
non-employee director upon his or her retirement from the Corporation's board
will receive an annual amount equal to seventy-five percent (75%) of the final
retainer, to be paid for the greater of five (5) years or the complete number of
years of service following the 1987 annual meeting of stockholders.
Employment Contracts and Termination of Employment and Change in Control of
Management
There are no employment contracts between the Corporation and a named
executive.
The Compensation Plan provides that, in the event of a change in ownership
or control of the Corporation, (i) all outstanding stock options become fully
exercisable; (ii) the restrictions lapse on all restricted stock options; (iii)
all share units attributable to bonuses become fully payable; (iv) all
restricted stock and other share units will become vested if the officer is
terminated within two years of the change in ownership or change in control; (v)
annual bonuses ("Annual Incentive Bonuses") become immediately payable, on a
prorated basis, based on the assumption that all performance objectives have
been met; and (vi) all bonuses based upon the performance of the Corporation
over a period of time ("Performance Bonuses") become payable, on a prorated
basis, at the higher of the amount payable based on the assumption that the
performance objectives have been achieved or the amount based on actual
performance. If such an event were to have occurred on December 31, 1994, the
cash value of outstanding stock options, restricted stock, Annual Incentive
Bonuses and Performance Bonuses affected by such event, without regard to the
actual performance by the Corporation, payable to the named executives would be
as follows: Ronald E. Ferguson, $5,581,118, John C. Etling, $2,345,950, Ernest
C. Frohboese, $1,212,338, Edmond F. Rondepierre, $375,733, Joseph P. Brandon,
$1,228,269 and Charles F. Barr, $84,539.
Under the Corporation's Supplemental Executive Retirement Plan ("SERP") and
the Benefit Equalization Plan ("BEP"), previously accrued benefits become
immediately vested in the event of a change in control. If a participant in
either plan is terminated other than for cause within two (2) years following a
change in control, the participant is entitled to a lump sum payment of the
accrued benefits.
Under the Corporation's Severance Pay Plan, employees, including the
executive officers, are entitled to receive certain severance payments upon
their termination of employment within two (2) years following a change in
control. The benefits payable are salary payments for between six (6) and twelve
(12) months depending upon the number of years the person has been an employee.
The aggregate amount payable will be increased by the amount of any excise tax
imposed on the executive officer and by the amount of the tax thereon.
Maximum Retirement Benefits Payable
The following table shows the maximum annual retirement benefits payable at
the normal retirement age of sixty-five (65) for specified remunerations and
years of credited service under the Employee Retirement
14
<PAGE> 17
Plan of General Re Corporation and its Affiliates, the BEP and the SERP. The
benefits shown in the table are subject to a reduction of up to fifty percent
(50%) of primary Social Security benefits.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
--------------------------------------------------------
REMUNERATION(1) 15 20 25 30 35
---------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 300,000................... $ 90,000 $120,000 $150,000 $165,000 $180,000
400,000.................. 120,000 160,000 200,000 220,000 240,000
500,000.................. 150,000 200,000 250,000 275,000 300,000
600,000.................. 180,000 240,000 300,000 330,000 360,000
700,000.................. 210,000 280,000 350,000 385,000 420,000
800,000.................. 240,000 320,000 400,000 440,000 480,000
900,000.................. 270,000 360,000 450,000 495,000 540,000
1,000,000.................. 300,000 400,000 500,000 550,000 600,000
1,100,000.................. 330,000 440,000 550,000 605,000 660,000
1,200,000.................. 360,000 480,000 600,000 660,000 720,000
1,300,000.................. 390,000 520,000 650,000 715,000 780,000
1,400,000.................. 420,000 560,000 700,000 770,000 840,000
1,500,000.................. 450,000 600,000 750,000 825,000 900,000
</TABLE>
---------------
(1) Benefits for eligible employees are computed under a formula based upon
years of service and average annual earnings (salary plus Annual Incentive
Bonus) during the three (3) consecutive years of highest earnings during the
employee's service with the Company.
As of December 31, 1994, Mr. Ferguson had twenty-five (25) years of
credited service, Mr. Etling thirty-three (33) years, Mr. Rondepierre eighteen
(18) years, Mr. Frohboese four (4) years, Mr. Brandon five (5) years and Mr.
Barr five (5) years.
Compensation Committee Report on Executive Compensation
The Compensation Committee reports as follows:
INTRODUCTION. The Compensation Committee (the "Committee") of the
Corporation's Board of Directors is responsible for approving and reporting to
the Board of Directors the compensation of the Corporation's executive officers,
including compensation awarded in the form of bonuses and equity-based awards.
Since its adoption, the Compensation Committee has administered the
Corporation's 1989 Long-Term Compensation Plan (the "Compensation Plan") under
which equity-based and bonus awards have been made. The Compensation Plan
provides that no awards can be made thereunder after December 31, 1994.
Therefore, the Compensation Committee approved and recommended to the Board of
Directors the adoption, subject to stockholder approval, of the proposed 1995
Long-Term Compensation Plan (the "Proposed Plan"). The Committee's five (5)
members, who have never been employees of the Corporation, meet in executive
session to evaluate the performance of and compensation paid to the
Corporation's executive officers.
COMPENSATION PROGRAM. The Corporation's compensation program is designed
to attract, retain and reward executive officers in a manner that is in the best
interests of stockholders by providing for competitive salaries, bonuses based
upon the achievement of the Corporation's business strategy and operating
objectives and equity-based awards, including stock options and restricted stock
awards, that align the interests of executive officers to those of the
stockholders.
The Corporation's total compensation program enables executive officers to
earn premier pay for premier performance and to be rewarded as value is created
for stockholders. Special emphasis is placed on fostering employee ownership of
common stock through programs which encourage executive officers to acquire
stock and receive compensation, otherwise paid in cash, in the form of share
units and restricted non-qualified stock options ("NQSOs").
15
<PAGE> 18
The components of the total compensation program include base salary,
annual incentives, long-term performance bonus awards, NQSOs, share units and
restricted stock awards. These components of compensation play specific roles in
attracting, rewarding and retaining executive officers and in balancing the
Corporation's short and long-term interests. As an individual's level of
responsibility increases, a greater portion of the total compensation is "at
risk", or variable, and performance driven and the mix of total compensation
shifts for executive officers toward stock and stock option awards to more
closely align the long-term interests of executive officers and stockholders.
The Compensation Committee annually evaluates the Corporation's
performance, executive compensation and executive share ownership compared with
other property/casualty insurance and reinsurance companies and leading
financial services companies reflected in compensation surveys obtained from
compensation consultants and compares stockholder returns to the Standard &
Poor's 500 and the stockholder returns of the property/casualty and multiline
insurance companies that are subsets of the Standard & Poor's 500 and other
leading insurance and reinsurance companies. Generally, the Compensation
Committee's objective has been to award amounts of total compensation equivalent
to the amounts reflected in the top of the third quartile (that is, the 75th
percentile) of the range of compensation paid by the companies surveyed. (The
salary compensation paid to Mr. Ferguson and most of the other executive
officers in 1994 was in the third quartile of the range of compensation paid by
the companies surveyed.)
Based upon its analysis of the compensation surveys and stockholder
returns, the Compensation Committee determines target percentages of total
compensation to be paid in the form of salaries, annual bonuses, long-term
performance bonuses and stock-based awards.
SALARY. Salary level targets are established so that the Corporation can
attract and retain the most qualified employees. The Compensation Committee
approves the individual salaries of executive officers. In determining an
executive officer's salary, the Compensation Committee considers, but does not
assign, specific weights to, the following factors: individual performance,
corporate performance, industry salary trends and competitive salary levels.
Based on its discretion in evaluating these factors, the Committee determines
appropriate salary levels. The Compensation Committee has lengthened the time
between salary increases beyond twelve (12) months for certain executive
officers in order to place more emphasis on variable compensation.
ANNUAL INCENTIVE BONUS. Executive officers of the Corporation may be
awarded an annual incentive bonus as determined by the Compensation Committee
for individual and collective efforts resulting in the achievement of (or
progress toward) an underwriting profit, superior investment returns and
achievement of other corporate and division objectives. Under the Compensation
Plan, two-thirds of the annual incentive award for each executive officer is
formula-driven based on a predetermined performance matrix consisting of
underwriting goals and, in the case of Mr. Frohboese, investment portfolio
goals. The remaining one-third is based on a qualitative assessment of the
Corporation's progress toward corporate strategic initiatives including, but not
limited to, quality and organizational change efforts, expense control and
international expansion. Each executive has a target incentive amount expressed
as a percentage of base salary. Actual awards can range from zero percent (0%)
to two hundred percent (200%) of the target amount based on the degree of
attainment of the goals. Awards may be paid out in cash, shares of common stock,
share units or restricted NQSOs.
PERFORMANCE BONUS. Performance bonus awards may be made to executive
officers. Award payouts are based on the relationship between the Corporation's
total return to stockholders over the prior five-year period and the weighted
average return (the "Actual Return") of the Standard & Poor's 500 Index and a
peer group of property/casualty and multiline insurance companies selected by
the Committee prior to the beginning of the five-year performance period. The
amount of the award paid to an executive officer is the product of a percentage
of the salary paid during the last year of the award cycle (the target award
which is determined for each executive officer at the beginning of the five-year
period) times the performance factor relating to the Actual Return, which is set
forth in a payout matrix determined prior to the beginning of the award cycle
and which ranges from zero percent (0%) to two hundred percent (200%). Awards
may be paid out in cash, shares
16
<PAGE> 19
of common stock, share units or restricted NQSOs. For the recently completed
1990 to 1994 cycle, awards equal to one hundred twelve and two-tenth's percent
(112.2%) of the target award were paid. The Corporation's total return to
stockholders exceeded the weighted average return of the peer group and the
Standard & Poor's 500 Index.
DEFERRAL OF ANNUAL INCENTIVE AND PERFORMANCE BONUS AWARDS. Executive
officers generally may elect to defer up to twenty-five percent (25%) of their
annual incentive and performance bonus awards prior to the year in which such
awards will be earned. Such deferral awards will be awarded as share units and
restricted stock options pursuant to a formula adopted by the Compensation
Committee in 1992. The Committee has the authority to establish a mandatory
deferral amount for certain executive officers. Mr. Ferguson was required to
defer a portion of his 1994 annual incentive award and performance bonus for the
1990 to 1994 period.
STOCK-BASED AWARDS. The Corporation normally makes annual grants of NQSOs
to executive officers of the Corporation at market value on the grant date. The
Compensation Committee determines a target size of option awards based on a
percentage of salary for each participant but may vary the size of the grants in
its discretion. In determining the percentage for each executive officer, the
Committee reviews total compensation and stock option grant practices for the
companies included in the reviewed compensation surveys. Each stock option grant
typically becomes exercisable in twenty percent (20%) increments over a
five-year period. In 1994, the Compensation Committee granted stock options, not
including replacement options, certain performance-based NQSOs and NQSOs granted
in lieu of annual incentive and performance bonus awards, for a total of 74,100
shares (about 1/10th of 1% of the total shares outstanding) to eight (8)
executive officers.
The Corporation grants replacement options automatically when an executive
officer tenders a like number of shares to satisfy the option price upon
exercise of underlying stock options. Replacement options have the same
expiration date as the original options and an exercise price equal to the
market price at the new grant date. They are issued to encourage executive
officers to exercise options early and to retain the profit in shares.
Replacement options are exercisable one year from the date of grant provided the
executive officer still owns the shares acquired as a result of the original
option exercise less the number of shares withheld to pay income tax due as a
result of exercising the original NQSO. Replacement options for a total of
28,969 shares were granted in 1994.
The Compensation Committee also has the ability to grant restricted stock
options in lieu of cash annual incentive and performance bonus awards as
described above. Restricted stock options are exercisable immediately, but
shares acquired are restricted from transfer, sale, exchange and other
disposition for five (5) years from the date of grant. Restricted stock options
for a total of 8,784 shares were granted to six (6) executive officers in the
first quarter of 1995 in lieu of part of their 1994 annual incentive awards or
1990 to 1994 performance bonus awards.
Restricted stock awards and various types of other awards, such as
performance-based NQSOs, can be made in appropriate circumstances (generally
limited) to retain key executive officers of the Corporation at the discretion
of the Committee. In 1994, 11,900 restricted shares and performance-based NQSOs
for 135,000 shares were awarded to four (4) executive officers.
TAX CONSIDERATIONS. Effective January 1, 1994, Section 162(m) of the
Internal Revenue Code of 1986 (the "Code") generally denies a tax deduction to
any publicly-held corporation for compensation that exceeds $1 million paid to
certain senior executives in a taxable year, subject to an exception for
"performance-based compensation" as defined in the Code and subject to certain
transition provisions.
Going forward, it is the Committee's intention, to the extent possible,
that incentive and stock compensation paid to executive officers be deductible
for federal tax purposes. Annual incentive, performance bonus and stock option
awards granted under the Proposed Plan, if adopted, will be deductible in
accordance with Code Section 162(m). Previous grants that may result in future
compensation should be deductible under the transition rules with the exception
of restricted stock grants made after February 17, 1993.
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<PAGE> 20
The Committee is committed to ensuring that annual incentive awards are
commensurate with performance. The Committee believes that in order to meet this
objective it needs to have the ability to exercise its judgment or discretion to
evaluate performance against qualitative criteria. Therefore, the Committee will
have the right under the Proposed Plan to reduce the amount of or to not pay an
annual incentive award.
CEO'S COMPENSATION. The Corporation's Chairman, President and Chief
Executive Officer in 1994, Ronald E. Ferguson, received an annualized increase
in base salary of five and four-tenth's percent (5.4%) in response to industry
salary trends and in recognition of his ongoing contribution to the
Corporation's strong performance during the fourteen (14) months since his last
salary increase. The Compensation Committee reviewed the salary levels and total
compensation for chief executive officers of the companies reflected in the
compensation surveys.
Mr. Ferguson's 1994 annual incentive award was made in recognition of the
Corporation's continued out-performance of the reinsurance industry during this
difficult environment for property/casualty insurers and reinsurers and his
efforts in the successful completion of certain strategic initiatives, including
the expansion of the Corporation's international operations. For 1994, the
statutory combined ratio of the Corporation's reinsurance and insurance
subsidiaries was 101.3, compared to 107.7 for the companies reporting to the
Reinsurance Association of America (excluding the Corporation and its
subsidiaries). Mr. Ferguson received an annual incentive award in cash in the
amount of $647,500, restricted NQSOs for 2,334 shares and share units for 1,400
shares. Mr. Ferguson also received a bonus under the five-year performance bonus
program for the 1990 to 1994 performance cycle, which was awarded in cash in the
amount of $306,884, restricted NQSOs for 1,227 shares and share units for 736
shares.
In 1994, the Committee awarded Mr. Ferguson a special grant of
performance-based NQSOs for 135,000 shares. These options will become fully
exercisable on January 16, 2002 (or sooner, to the extent of the then current
performance, in the event of death, disability, change in control, merger or
consolidation) if and only if the Corporation's total return to stockholders
compounded annually from the date of grant exceeds by 150 basis points the
average return for the Standard & Poor's 500 Index and the peer group reflected
in the Performance Graph included in this proxy statement. The Committee feels
Mr. Ferguson's continued service as Chairman and Chief Executive Officer is
extremely important to the Corporation as its strategic initiatives are designed
and implemented.
In 1994, Mr. Ferguson also received NQSOs for 22,000 shares in accordance
with the Corporation's practice of granting NQSOs on an annual basis. This grant
was determined based on an analysis of total compensation and stock option grant
practices for CEOs of the companies reflected in the compensation surveys and in
recognition of the Corporation's strong performance and the continued emphasis
on creating stockholder value.
CONCLUSION. The Committee believes that it is in the best interests of
stockholders for the Corporation to compensate the executive officers well when
their performance meets or exceeds the high expectations of the Committee. The
Committee believes the Corporation's current compensation program meets its
objectives of appropriately aligning the interests of executive officers and
stockholders.
By the Compensation Committee: Andrew W. Mathieson, Chairman, William C.
Ferguson, Edward H. Malone, David E. McKinney, Walter F. Williams
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Performance Graph
The following line graph compares the yearly percentage change, over five
(5) years, in the Corporation's total stockholder return on Common Stock with
the cumulative total return on the Standard & Poor's 500 Index and the
cumulative total return of a peer group index:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
GENERAL RE CORPORATION, S&P 500 INDEX AND PEER GROUP INDEX(1)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Dec. 31, 1989 1990 1991 1992 1993 Dec. 31, 1994
General Re $100.00 $109.00 $121.00 $140.00 $132.00 $155.00
S&P 500 $100.00 $ 97.00 $126.00 $136.00 $149.00 $151.00
Peer Group $100.00 $ 87.00 $122.00 $144.00 $157.00 $163.00
</TABLE>
---------------
(1) Assuming the investment of $100 in the Corporation's Common Stock, the
Standard & Poor's 500 Index and the peer group index on December 30, 1989
and the reinvestment of all dividends. The peer group index combines the
Standard & Poor's Multiline and Property/Casualty Indexes, except for the
Corporation, and consists of the following companies: Aetna Life & Casualty
Company, American International Group, Chubb Corporation, CIGNA
Corporation, Continental Corporation, Safeco Corporation, The St. Paul
Companies and United States Fidelity & Guaranty Corporation. Three of the
companies included in the Standard & Poor's Multiline and Property/Casualty
Indexes in 1993, CNA Financial Corporation, Lincoln National Corporation
and Travelers Corporation, are no longer included in those indexes.
PROPOSAL TO AMEND THE BY-LAWS TO RAISE
THE RETIREMENT AGE FOR DIRECTORS
THE TEXT OF SECTION 2.2 OF ARTICLE II OF THE BY-LAWS RELATING TO, AMONG
OTHER THINGS, THE TERM OF OFFICE OF DIRECTORS AND THE EVENTS THAT WOULD REDUCE
THE TERM OF OFFICE OF DIRECTORS, AS PROPOSED TO BE AMENDED, IS INCLUDED AS
EXHIBIT A TO THIS PROXY STATEMENT.
Section 2.2 of Article II of the Corporation's By-laws currently provides
that the term of office of a director is three years and until the director's
successor is elected or until the earliest of the annual meeting of stockholders
next following the individual director's seventieth (70th) birthday or a
member's resignation, removal or ineligibility. As a result of the retirement
provision, in the past various directors of the Corporation have been required
to retire from the Board of Directors at the annual meeting of stockholders
immediately after their seventieth (70th) birthday.
The Board of Directors, with one director recusing himself from the vote,
has unanimously adopted a resolution recommending that the stockholders consider
and approve at the annual meeting a proposal to raise the retirement age for
directors from the annual meeting next following the director's seventieth
(70th)
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birthday to the annual meeting next following a director's seventy-second (72nd)
birthday. The Board of Directors believes that the current retirement age based
upon the director's seventieth (70th) birthday results in the premature
retirement of directors at an age when they are valuable members of the Board of
Directors and contribute in a meaningful way to the Corporation. If the proposed
amendment is adopted, Edward H. Malone, a director of the Corporation since 1985
who is seventy (70) years old, will not be required to retire from the Board of
Directors until 1997.
Under the By-laws and the Corporation's Restated Certificate of
Incorporation, the amendment to Section 2.2(a) of the By-laws requires the
approval of a majority in interest of the outstanding shares of the Corporation
entitled to vote.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE APPROVAL OF THE PROPOSED AMENDMENT TO THE BY-LAWS.
PROPOSAL TO APPROVE ADOPTION OF THE
GENERAL RE CORPORATION
1995 LONG-TERM COMPENSATION PLAN
In 1989, the Corporation's stockholders approved the 1989 Long-Term
Compensation Plan (the "Compensation Plan") under which the Corporation's
Compensation Committee has awarded bonuses and equity-based awards. Since 1989,
the Committee has awarded stock options exercisable for 3,014,425 shares of
Common Stock, 178,650 restricted shares of Common Stock and share units relating
to 33,094 shares of Common Stock. The Compensation Plan provides that no awards
can be made thereunder after December 31, 1994. Therefore, on February 7, 1995
the Compensation Committee (the "Committee") of the Board recommended to the
Board the adoption of the General Re Corporation 1995 Long-Term Compensation
Plan (the "Proposed Plan"), subject to stockholder approval. On February 8,
1995, the Board ratified the Committee's recommendation and determined to submit
the Proposed Plan to the stockholders. The stockholders are now requested to
approve the adoption of the Proposed Plan.
The summary of the Proposed Plan which follows is subject to the specific
provisions contained in the official text of the Proposed Plan.
THE PROPOSED PLAN
The Proposed Plan, like its predecessor, the Compensation Plan, is intended
to be an integral part of the Corporation's executive and non-employee director
compensation program by providing incentives that will enable the Corporation to
attract and retain highly qualified officers, key employees and nonemployee
directors. The Proposed Plan provides long-term incentives in the form of grants
of stock options, approved stock options, restricted stock options, stock
appreciation rights ("SARs"), share units, restricted stock, annual incentive
bonuses and long-term performance bonuses (collectively, "Awards"). These
long-term incentives are designed also to advance the longer term interests of
the Corporation and its stockholders. The Proposed Plan also will enable
officers, other key employees and non-employee directors to acquire a larger
personal financial interest in the Corporation through stock-based awards and
stock ownership. Award recipients may include individuals ("Reporting Persons")
who are subject to the requirements of Section 16 of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). It is intended that certain Awards
provided under the Proposed Plan will be treated as qualified performance-based
compensation under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), which would otherwise limit the Corporation's deduction
for compensation in excess of $1,000,000 paid to the CEO and the top four
executive officers.
ADMINISTRATION
The Proposed Plan will be administered by the Committee, whose members must
be (and are currently) "disinterested persons" as such term is defined under
Rule 16b-3 promulgated under the Exchange Act. The members of the Committee also
must qualify (and currently do qualify) as "outside directors" as that term is
defined in proposed regulations issued by the Department of the Treasury under
Section 162(m) of the Code.
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Committee members may not receive any Award under the Proposed Plan other than
the annual automatic grant of (i) an option for five hundred (500) shares on the
first business day of each calendar year and (ii) sixty-five (65) shares of
restricted stock on the first business day following stockholder approval of the
Proposed Plan and the first business day of each calendar year thereafter, under
the non-discretionary provisions of the Proposed Plan or stock options or rights
under any other plans of the Corporation unless the Board determines that such
grant would not jeopardize their status as disinterested persons. With respect
to Awards granted to employees, the Committee has the authority under the
Proposed Plan to determine the eligibility of employees, the form of Awards, the
number of shares of Common Stock or share units subject to Awards and the terms,
conditions and restrictions of Awards, including the time of exercise and
vesting, and to establish and administer any performance objectives related to
Awards, including certifying that performance objectives were met.
BENEFITS
Options and SARs. Both nonqualified stock options ("NQSOs") and incentive
stock options ("ISOs") (as defined in Section 422 of the Code) (collectively,
"Options") may be granted under the Proposed Plan. In addition, stock options
also may be granted under the United Kingdom Sub-Plan of the Proposed Plan
("Approved Options"). Under the United Kingdom Sub-Plan, Approved Options may be
granted only to employees whose remuneration is subject to income tax in the
United Kingdom (i.e., employees who are resident and ordinarily resident in the
United Kingdom and whose duties are performed there). The total number of shares
of Common Stock with respect to which Options and SARs may be granted to any one
individual may not exceed ten percent (10%) of the aggregate shares of Common
Stock authorized for issuance under the Proposed Plan. In addition, each
non-employee director will automatically receive an NQSO for five hundred (500)
shares of Common Stock (subject to adjustment) on the first business day of 1995
and of each calendar year thereafter.
Options granted to non-employee directors will have a term of ten (10)
years. The term of other Options will be a maximum of ten (10) years in the
discretion of the Committee. The Option exercise price must be at least one
hundred percent (100%) of the fair market value of the Common Stock on the date
of the grant. On March 1, 1995, the last reported sale price of the
Corporation's Common Stock on the New York Stock Exchange composite tape was
$127.50 per share. The exercise price of options may be paid with previously
acquired shares which have been held for at least six (6) months. If NQSOs are
exercised by using shares, the grantee is automatically granted a replacement
option to purchase shares of Common Stock equal to the number of shares used to
pay the exercise price but at the then fair market value of the Common Stock.
Under the Plan, Options may include SARs exercisable only to the extent the
Option is at the time exercisable. The holder of an SAR may surrender to the
Corporation all or part of the unexercised Option in which such right is
included and receive in exchange shares of Common Stock (or, at the discretion
of the Committee, cash or a combination of shares of Common Stock and cash)
having a value equal to the difference between the current fair market value of
one share and the Option exercise price per share times the number of shares
covered by the Option or part thereof which is being surrendered.
Options and SARs granted to Reporting Persons and nonemployee directors may
not be exercised for at least six (6) months from the date of grant.
If a grantee terminates employment due to death, disability or retirement,
the Options otherwise exercisable through the date of such termination may be
exercised within five (5) years of such date; provided, however, that no Option
may be exercised after the expiration date thereof. Any Option exercisable after
death may be exercised by the decedent's legal representatives. In the event a
holder's employment terminates on account of resignation or discharge not for
cause, the Options otherwise exercisable by the holder through the date of such
termination may be exercised by the holder no later than three (3) months
following the date of such termination except that in the case of NQSOs, the
Committee may, in its sole discretion, provide for a later date; provided,
however, that no Option may be exercised after the expiration date thereof. If a
holder's employment shall terminate on account of discharge for cause, the
holder will forfeit all outstanding Options as of the date of termination. Stock
options will terminate to the extent that they are not exercisable on the
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<PAGE> 24
date of the holder's termination of employment unless otherwise provided by the
Compensation Committee with respect to a holder whose termination is not for
cause.
Approved Options. Approved Options to purchase Common Stock are granted
under the United Kingdom Sub-Plan, the portion of the Proposed Plan applicable
to certain United Kingdom employees, as described above. The following is a
summary of the terms of the United Kingdom Sub-Plan which are different from
those of the Proposed Plan.
Approved Options may not be granted to any grantee within two years prior
to his normal retirement date, nor to any grantee who, immediately following the
grant, would hold outstanding Approved Options having an aggregate exercise
price exceeding the greater of L100,000 or four times the amount of the
employee's taxable salary or wages. Approved Options may not be exercised prior
to the third anniversary of the date of grant. If a grantee dies, his legal
personal representatives may exercise his outstanding Approved Options within
twelve months after the date of death. If a grantee ceases employment by reason
of retirement, injury, sickness, disability or redundancy, he may exercise his
outstanding Approved Options within the later of twelve (12) months after such
cessation or forty-two (42) months from the date of grant. If a grantee
technically ceases employment because his employer ceases to be affiliated with
the Corporation, he may exercise his outstanding Approved Options within three
months after such cessation.
The United Kingdom Sub-Plan and the grant of Approved Options thereunder,
and any amendments thereto (including adjustments due to recapitalization,
merger, consolidation and similar transactions), are subject to the prior
approval of the United Kingdom Board of Inland Revenue.
Bonuses. The Committee, in its discretion, may grant bonuses to grantees
to be paid if annual performance objectives or long-term performance objectives
are satisfied ("Annual Incentive Bonuses" and "Performance Bonuses,"
respectively).
Prior to the beginning of the fiscal year for Annual Incentive Bonuses and
the first fiscal year of a period of three (3) to five (5) years for Performance
Bonuses (the "Award Period") (or during the first ninety (90) days of an Award
Period if permitted under the final regulations adopted under Section 162(m) of
the Code), the Committee will determine, in writing, the performance objectives
applicable to a grantee or group of grantees. In addition, prior to the
beginning of an Award Period (or the ninety-day period described above), the
Committee will determine the percentage of the Annual Incentive or Performance
Bonus to be awarded if a performance objective is not fully achieved or is
exceeded. The Committee will retain the discretion to award a bonus in an amount
equal to less than the amount otherwise payable for the Award Period.
Performance objectives applicable to the Annual Incentive Bonus may be
measured by the Corporation's statutory underwriting combined ratio, a targeted
improvement in the statutory underwriting combined ratio, the relationship
between the statutory combined ratio of the Corporation's reinsurance and
insurance subsidiaries and that of the companies reporting to the Reinsurance
Association of America (excluding the Corporation's subsidiaries), the total
return on various investment portfolios, or in any other manner the Committee
deems an appropriate measure of performance. The amount of an Annual Incentive
Bonus awarded to a grantee will be based on a percentage of the grantee's salary
rate in effect at the end of the fiscal year. The performance objective
applicable to a Performance Bonus will be based on the relative total return to
stockholders over the Award Period as described below, and may range from zero
percent (0%) to two hundred percent (200%) of the target awards, which are
expressed as a percentage of the grantee's paid salary for the final year of the
Award Period. Relative total return to stockholders means the comparison of the
total return to stockholders, including reinvestment of dividends, to the total
return to an individual who had invested in an index comprised of the Standard &
Poor's 500 Index and a group of property/casualty, multiline insurance and/or
reinsurance companies, as determined by the Committee. Performance objectives
may be revised if there are adjustments to the accounting standards applicable
in determining the objectives. A grantee may not receive in any one year either
an Annual Incentive Bonus or a Performance Bonus in excess of $1,500,000. The
aggregate dollar amount available for Annual Incentive Bonuses for Reporting
Persons in any fiscal year may not exceed one percent (1%) of the consolidated
net income of the Company and its
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subsidiaries. If an Annual Incentive Bonus or Performance Bonus is to be paid to
a Reporting Person, prior to payment the Committee must certify, in writing,
that the applicable performance objectives have been satisfied.
Annual Incentive Bonuses and Performance Bonuses are payable in cash,
shares of Common Stock, share units or restricted NQSOs, or any combination
thereof. At the Committee's discretion, a bonus Award may be deferred by a
grantee into share units and restricted stock options. The Committee has the
authority to require certain executive officers to defer portions of their
bonuses.
If a grantee terminates employment due to death, disability or retirement,
he may receive, at the Committee's discretion, a payment proportionate to the
number of full months of active service performed during the Award Period over
the total number of months in the Award Period. If the grantee otherwise
terminates employment, the right to receive a bonus will be forfeited. However,
the Committee, in its discretion, may award a grantee (other than a Reporting
Person) a portion of the Performance Bonus if termination of employment occurs
during the Award Period.
Restricted Stock Options. The terms of a restricted stock option awarded
as payment of all or a portion of an Annual Incentive or Performance Bonus will
be the same as those applicable to an NQSO except that a restricted stock option
will continue to be exercisable upon the termination of an optionee's employment
with the Corporation, unless the holder is terminated for cause or engages in
the unauthorized use of proprietary information. In addition, the shares of
Common Stock issuable upon the exercise of a restricted stock option will be
subject to such restrictions as to the transfer and sale thereof as the
Committee, in its discretion, may set forth in the notice of the Award.
Restricted Stock. Under the Proposed Plan, the Committee may make grants
of shares restricted as to transfer, sale, exchange and other disposition (or as
the Committee may otherwise determine) ("Restricted Stock"). The Committee will
specify the terms and conditions upon which restrictions will expire. Such
restrictions will lapse upon a grantee's termination of employment due to death,
disability or attainment of normal retirement age, as defined in the Proposed
Plan. Unless the Committee, in its discretion, determines otherwise, Restricted
Stock upon which restrictions have not yet expired are forfeited upon any other
termination of employment. Grantees granted Restricted Stock will be entitled to
dividends and voting rights with respect to such shares.
Each non-employee director will receive an automatic grant of sixty-five
(65) shares of Restricted Stock immediately following approval of the Proposed
Plan by stockholders and on the first business day of each calendar year
thereafter in which the individual is a member of the Board of Directors of the
Corporation. The restrictions on such shares will lapse upon the later of five
(5) years from the date of grant or retirement from the Board of Directors.
Share Units. Under the Proposed Plan, the Committee may make an Award to a
grantee of the right to receive one or more shares of Common Stock at a
specified time in the future, at least five (5) years from the date of the
Award. The Award will be expressed in terms of share units equal to the number
of shares of Common Stock underlying the Award. Share units may be awarded in
lieu of all or a portion of an Annual Incentive or Performance Bonus or
independently of a bonus Award. Share units attributable to bonuses will be
fully vested on the date of the Award. The number of share units awarded in lieu
of a bonus will be determined by reference to the fair market value of one share
of Common Stock but taking into account the illiquidity of the share unit, the
investment risk for the deferral period of time, the absence of voting rights
and the risk of forfeiture; provided, however, that the value will not be less
than seventy-five percent (75%) of the fair market value of a share of Common
Stock on the grant date. The Award will specify its terms, including vesting
schedules for share units not attributable to bonuses. Awards of share units not
attributable to bonuses will vest upon a grantee's termination of employment due
to death, disability or attainment of a grantee's normal retirement age. Unless
the Committee provides otherwise, unvested share units will be forfeited upon
any other termination of employment. Any unauthorized use of proprietary
information by a holder of share
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units will result in the holder's forfeiture of such units. Share units will be
paid in shares of Common Stock. Fractional shares will be paid in cash.
SHARES AVAILABLE
The maximum number of shares of Common Stock that may be subject to Awards
under the Proposed Plan is 5,000,000 shares. However, the maximum number of
shares of Common Stock available for grants of Restricted Stock and share units
is 500,000 shares (out of the total 5,000,000 authorized shares) unless such
Restricted Stock and/or share unit is granted in lieu of cash compensation. The
maximum number of shares of Common Stock available for Option grants and grants
of Restricted Stock to non-employee directors is 60,000 shares. Any shares that
are not issued because an Award (i) terminates upon its expiration, forfeiture,
cancellation or otherwise; (ii) is settled in cash; or (iii) is exchanged for an
Award that is not stock-based are available for regrant to grantees who are not
Reporting Persons. Common Stock issued under the Proposed Plan may be either
authorized and unissued shares or treasury shares of Common Stock.
ADJUSTMENTS
The number of shares subject to awards granted under the Proposed Plan may
be adjusted due to various types of transactions, including recapitalizations,
mergers, consolidations and similar transactions under which the number of
shares of Common Stock outstanding is increased, decreased or changed into or
exchanged for a different number or kind of shares of capital stock of the
Corporation or of another corporation.
CHANGE IN CONTROL
Awards under the Proposed Plan may accelerate upon a "change in control" of
the Company as defined in the Proposed Plan. Upon a change in control: (i) all
Options become immediately exercisable; (ii) all Performance Bonuses become
immediately payable at the higher of the amount determined assuming the
performance objectives have been met or the amount payable based on actual
performance achieved and then are prorated for the term of the Award Period;
(iii) all Annual Incentive Bonuses become payable at the amount determined
assuming the performance objectives have been met and then are prorated over the
portion of the year that has elapsed; (iv) all restrictions on restricted stock
options will lapse and share units attributable to bonuses will become fully
payable; and (v) Restricted Stock and all other share units will become vested
if the grantee's employment is terminated within two (2) years after the change
in control, provided that the Committee may determine, in its discretion, to
vest all or some percentage of the grantee's Restricted Stock and/or share
units.
AMENDMENT AND TERMINATION
The Proposed Plan may be amended by the Board of Directors or the Committee
(or its delegate), except that, without the approval of the Corporation's
stockholders, no amendment may increase the number of shares subject to the
Proposed Plan, decrease the exercise price of an Option or SAR, increase the
amount to be received upon exercise of an Option or SAR, materially increase the
benefits to grantees under the Proposed Plan or materially modify the
eligibility for participation in the Proposed Plan.
If adopted, the Proposed Plan will terminate at the later of (i) December
31, 1999; or (ii) the exercise, expiration or termination of all Options, SARs
or other Awards under the Proposed Plan; provided that Awards cannot be granted
under the Proposed Plan after December 31, 1999.
TAX CONSEQUENCES
Under the present provisions of the Code, the Federal income tax
consequences of the Proposed Plan are summarized as follows:
1. Nonqualified Stock Options. The granting of an NQSO to an optionee will
not result in taxable income to the optionee or a deduction in computing the
income tax of the Corporation. Upon exercise of an NQSO, the excess of the fair
market value of the shares acquired over the option price is (i) taxable to the
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optionee as ordinary income; and (ii) deductible in computing the Corporation's
income tax, subject to satisfying general rules relating to reasonableness of
compensation.
2. Incentive Stock Options. An optionee will not be deemed to receive any
income at the time an ISO is granted or exercised, although the exercise may
give rise to alternative tax liability for the optionee. If an optionee does not
dispose of the shares acquired on exercise of an ISO within the two-year period
beginning on the day after the grant date of the ISO or within the one-year
period beginning on the day after the day of the transfer of the shares to the
optionee, the gain (if any) on a subsequent sale (i.e., the excess of the
proceeds received over the option price) will be long term capital gain and any
loss the optionee may sustain on such sale will be long term capital loss.
If the optionee disposes of the shares within the two-year or one-year
period referred to above, the disposition is a "disqualifying disposition," and
the optionee will generally realize ordinary income taxable as compensation in
the year of the disqualifying disposition to the extent of the excess of the
fair market value of the shares on the date of purchase over the option price,
and the balance, if any, will be long-term or short-term capital gain depending,
generally, on whether the shares were held more than one year after the ISO was
exercised. To the extent the optionee recognizes compensation income with
respect to a disqualifying disposition, the Corporation will be entitled to a
corresponding deduction, subject to general rules relating to reasonableness of
compensation.
3. Approved Options. Assuming the United Kingdom Sub-Plan receives the
approval of the United Kingdom Board of Inland Revenue, no income tax is paid by
an employee resident in the U.K. upon exercise of an Approved Option, provided
that the Approved Option is exercised in accordance with rules of the United
Kingdom Sub-Plan. If the shares are subsequently sold, capital gains tax will be
payable on the difference between the acquisition cost and the sales price (if
higher) at that time. Neither the Corporation nor any of its U.K. subsidiaries
will be entitled to a deduction upon the exercise of an Approved Option.
4. Stock Appreciation Rights. The inclusion of an SAR in an Option grant
will not result in taxable income to the optionee or a deduction in computing
the income tax of the Corporation. However, the amount of any cash, or the fair
market value of any shares, received by the employee pursuant to the exercise of
any such right will be, upon receipt by the optionee, taxable to the optionee as
ordinary compensation income and the Corporation will be entitled to a
corresponding deduction, subject to satisfying general rules relating to the
reasonableness of compensation.
5. Bonuses. Amounts paid in cash or shares of common stock are included in
an employee's income as taxable compensation in the year paid and, subject to
the applicability of Section 162(m) of the Code and general rulings relating to
reasonableness of compensation, the Corporation will be entitled to a
corresponding deduction. If an Annual or Performance Bonus is paid in restricted
stock options or share units, the tax consequences to the grantees are indicated
elsewhere in this subsection.
6. Restricted Stock. No taxable income will be recognized by a grantee
upon the grant of Restricted Stock. In the year that the Restricted Stock is no
longer subject to "a substantial risk of forfeiture," within the meaning of
Section 83 of the Code, the grantee will realize ordinary income taxable as
compensation equal to the excess of the fair market value of shares upon which
restrictions lapse over the amount paid, if any. The Corporation will be
entitled to a corresponding deduction, subject to satisfying general rules
relating to the reasonableness of compensation.
7. Share Units. No taxable income will be recognized by a grantee upon the
grant of an Award. A grantee of share units will be considered to have taxable
income at the time amounts payable are first considered to be made available to
the grantee. When the Award becomes payable, the grantee will realize ordinary
income equal to the fair market value of the shares and cash payable at such
time. The Corporation will be entitled to a corresponding deduction subject to
general rules relating to the reasonableness of compensation. When an Award of
share units vests, the then current value of the units is reported as earnings
subject to FICA tax withholding.
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WITHHOLDING OF TAXES
The Proposed Plan requires a grantee to pay, or make provision satisfactory
to the Committee for payment of, federal, state, and local income taxes, or
other taxes, which the Corporation may be obligated to collect as a result of
the payment of any Award. The Proposed Plan permits a grantee to instruct the
Corporation to withhold up to the number of nonrestricted shares otherwise
deliverable to a grantee with a fair market value equal to the amount of tax to
be withheld; provided, that a Reporting Person's election is made during a
"window period", six months prior to the date an Award becomes taxable or during
any other period permitted by Rule 16b-3 under the Exchange Act.
Grantees should consult with their own tax advisors to determine the
particular tax consequences that may result from participation in the Proposed
Plan and the subsequent disposition of shares of Common Stock. Nothing contained
herein should be treated as tax advice.
NEW PLAN BENEFITS
No benefits have been received by or allocated to any employee under the
Proposed Plan except that, subject to stockholder approval of the Proposed Plan:
(i) each non-employee director was automatically granted as of January 3, 1995
an option to purchase five hundred (500) shares of Common Stock as described
above; (ii) share units and restricted stock options have been granted pursuant
to elections to defer Annual Incentive or Performance Bonuses which would have
been payable during the first quarter of 1995; (iii) share units have been
granted to key employees of Kolnische Ruckversicherungs-Gesellschaft AG
("Cologne Re"); (iv) replacement options have been granted automatically
pursuant to certain option exercises under the Compensation Plan occurring
during 1995; and (v) Restricted Stock has been granted. The Proposed Plan is
replacing the Compensation Plan. Therefore, the Awards that would have been made
under the Proposed Plan if it and not the Compensation Plan had been in effect
for fiscal year 1994 would have been at least those that were granted for 1994
under the provisions of the Compensation Plan as well as those described above
granted under the Proposed Plan subject to stockholder approval. Reference is
made to the Summary Compensation Table, the Option Grants Table and the
Long-Term Incentive Plan ("LTIP") Awards Table which show the grants and awards
that were made under the Compensation Plan in 1994. In addition to those awards,
for 1994 the following awards were made: (i) stock options exercisable for
239,447 shares of Common Stock were granted to all executive officers as of
March 1, 1995 as a group, for 5,000 shares to all current non-employee directors
as a group, and for 570,024 shares to all employees, including all officers as
of March 1, 1995 who are not executive officers as a group; (ii) share units for
4,812 shares of Common Stock were granted to all executive officers as of March
1, 1995 as a group, and for 45,532 shares to all employees, including all
officers as of March 1, 1995 who are not executive officers as a group; (iii)
Annual Incentive Bonuses earned under the Compensation Plan were paid in the
amount of $2,492,500 in cash or stock to all executive officers as of March 1,
1995 as a group and in the amount of $20,489,675 to all employees, including all
officers as of March 1, 1995 who are not executive officers as a group; (iv)
Performance Bonuses earned under the Compensation Plan were paid in the amount
of $1,070,480 in cash or stock to all executive officers as of March 1, 1995 as
a group and in the amount of $4,753,562 to all employees, including all officers
as of March 1, 1995 who are not executive officers as a group. In addition,
rights to receive Performance Bonuses were granted in 1994 under the
Compensation Plan for the 1994-1998 performance period to all executive officers
as of March 1, 1995 as a group having a target value of $1,541,500 and to all
employees, including all officers as of March 1, 1995 who are not executive
officers as a group, having a target value of $5,187,234.
26
<PAGE> 29
The following awards were made for 1994 under the Proposed Plan to the
persons or groups of persons identified as of March 1, 1995, subject to
stockholder approval:
AWARDS MADE UNDER THE
GENERAL RE CORPORATION 1995 LONG-TERM COMPENSATION PLAN
<TABLE>
<CAPTION>
OPTIONS
-----------------------------------
# OF
SHARES
UNDERLYING
GRANT OPTIONS GRANT
DATE GRANTED PRICE(1)
-------- ------ ---------
<S> <C> <C> <C>
Ronald E. Ferguson.................. 01/03/95 1,227(2) $123.5000
Director, Chairman, 02/09/95 11,634(3) 131.3750
President and Chief Executive 03/01/95 2,334(2) 128.5625
Officer
John C. Etling...................... 0 0 0
Director and Vice Chairman
Ernest C. Frohboese................. 01/03/95 305(2) 123.5000
Vice President 03/01/95 692(2) 128.5625
Edmond F. Rondepierre............... 01/03/95 400(2) 123.5000
Former Vice President, 03/01/95 361(2) 128.5625
General Counsel and Secretary
Joseph P. Brandon................... 03/01/95 721(2) 128.5625
Vice President
Charles F. Barr..................... 0 0 0
Vice President, General Counsel
and Secretary
Executive officers.................. Various 20,448 Various
as a group (including those
named above)
Non-employee........................ 01/03/95 5,000 123.5000
directors as a group
Non-executive....................... Various 38,492 Various
officer employee group
<CAPTION>
SHARE UNITS
-----------------------
RESTRICTED STOCK # OF
----------------- SHARES
GRANT UNDERLYING
DATE GRANT DATE SHARE
VALUE # VALUE UNITS
-------- ----- ---------- ----------
<S> <C> <C> <C> <C>
Ronald E. Ferguson.................. 0 0 $ 270,928 2,136
Director, Chairman,
President and Chief Executive
Officer
John C. Etling...................... 0 0 0 0
Director and Vice Chairman
Ernest C. Frohboese................. 0 0 75,964 598
Vice President
Edmond F. Rondepierre............... 0 0 57,488 456
Former Vice President,
General Counsel and Secretary
Joseph P. Brandon................... 0 0 54,382 423
Vice President
Charles F. Barr..................... 0 0 0 0
Vice President, General Counsel
and Secretary
Executive officers.................. $654,375 5,000 611,502 4,812
as a group (including those
named above)
Non-employee........................ 0 0 0 0
directors as a group
Non-executive....................... 515,938 4,000 5,686,039 45,532
officer employee group
</TABLE>
---------------
(1) Options were NQSOs granted at fair market value on the date of grant.
(2) Restricted NQSOs were granted in lieu of cash bonuses under the 1994 Annual
Incentive Bonus and 1990-1994 Performance Bonus provisions of the
Compensation Plan.
(3) Replacement options were granted following the tender of a like number of
shares to satisfy the option price upon exercise of the underlying stock
option. Replacement options have the same expiration date as the original
option and an exercise price equal to the market price at the date of the
new grant. They are first exercisable one year from the grant date provided
the employee still owns the shares acquired as a result of the original
option exercise, less the number of shares withheld to pay income tax due as
a result of exercising the original option.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
THE ADOPTION OF THE 1995 LONG-TERM COMPENSATION PLAN.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors has selected Coopers &
Lybrand LLP as independent public accountants to audit the financial statements
of the Corporation and its domestic subsidiaries for fiscal year 1995. This
selection is being presented to the stockholders for their ratification at this
annual meeting. The firm of Coopers & Lybrand LLP has audited the Corporation's
financial statements since prior to January 1, 1975.
It is expected that representatives of Coopers & Lybrand LLP will attend
the meeting, will have the opportunity to make a statement if they so desire and
will be available to respond to appropriate stockholder questions.
27
<PAGE> 30
Ratification of the selection of Coopers & Lybrand LLP as independent
public accountants will require the affirmative vote of a majority of the shares
present in person or represented by proxy at the annual meeting. The Board of
Directors and management recommend a vote FOR ratification and, unless a
stockholder signifies otherwise, the persons named in the proxy will so vote.
OTHER MATTERS
The Board of Directors and management of the Corporation do not know of any
other matters to be presented for action at the meeting. Should any other
matters come before the meeting, however, the persons named in the enclosed
proxy will have discretionary authority to vote all proxies with respect to such
matters in accordance with their judgment except to the extent the proxy is
limited to the contrary.
The expense of proxy solicitation will be borne by the Corporation. Proxies
will be solicited on behalf of the directors by Georgeson & Co. Inc. for a fee
which will not exceed $13,000. Expenses incurred by Georgeson & Co. Inc. will be
reimbursed by the Corporation. Proxies may also be solicited in person or by
telephone or telegraph by officers or regular employees of the Corporation and
its subsidiaries.
In order for stockholder proposals for the 1996 annual meeting of
stockholders to be eligible for inclusion in the Corporation's proxy statement,
they must be received by the Corporation at its principal office in Stamford,
Connecticut, prior to November 29, 1995.
CHARLES F. BARR
Secretary
March 28, 1995
28
<PAGE> 31
EXHIBIT A
TEXT OF SECTION 2.2 OF
ARTICLE II OF THE BY-LAWS
AS PROPOSED TO BE AMENDED
THE FOLLOWING ARE THE PROVISIONS OF SECTION 2.2 OF ARTICLE II OF THE
BY-LAWS OF GENERAL RE CORPORATION AS PROPOSED TO BE AMENDED. MATERIAL TO BE
ADDED BY THE PROPOSED AMENDMENT IS ITALICIZED. MATERIAL TO BE DELETED BY THE
PROPOSED AMENDMENT IS IN BRACKETS.
SECTION 2.2 TERM OF OFFICE. Directors shall be classified by dividing them
into three classes, each consisting as nearly as possible of an equal number of
members. At each annual meeting of stockholders, one class of directors shall be
elected by a majority of the votes cast to hold office for a term of three
years, and until their successors are elected or until the earliest of the
following:
(a) The Annual Meeting of Stockholders next following the individual
Director's 72nd [70th] birthday;
(b) Resignation in accordance with Section 2.7 hereof;
(c) Removal in accordance with Section 2.8 hereof; or
(d) Ineligibility in accordance with Section 2.10 hereof.
<PAGE> 32
GENERAL RE CORPORATION PROXY
695 EAST MAIN STREET
STAMFORD, CONNECTICUT 06904-2351
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Revoking any such prior appointment, the undersigned hereby appoints Ronald
E. Ferguson, John C. Etling, Charles F. Barr, Elizabeth A. Monrad and Robert D.
Graham, and each of them, attorneys and agents, with power of substitution to
vote as Proxy for the undersigned, as herein stated, at the annual meeting of
stockholders of General Re Corporation to be held at the offices of the
Corporation, 695 East Main Street, Stamford, Connecticut, on Friday, May 19,
1995, at 9:00 A.M., and at any adjournment thereof, with respect to the number
of shares the undersigned would be entitled to vote if personally present.
This proxy, when properly executed, will be voted (1) for the election of
Directors, (2) for the proposal to amend the Corporation's By-laws to raise the
retirement age for directors, (3) for the proposal to adopt the 1995 Long-Term
Compensation Plan, and (4) for the proposal to ratify the selection of
independent public accountants, if no instructions to the contrary are indicated
in Items (1), (2), (3) or (4) below, and in the discretion of the named
attorneys and agents on such other matters as may properly come before the
meeting.
The undersigned hereby acknowledges receipt of a copy of the Proxy Statement
relating to such annual meeting.
Your Board of Directors recommends a vote for each of the following
proposals. PLEASE MARK BOXES OR /X/ IN BLUE OR BLACK INK.
1. Election of Directors:
Lucy Wilson Benson, Walter M. Cabot, John C. Etling, William C. Ferguson, Kay
Koplovitz and Walter F. Williams
FOR ALL NOMINEES LISTED / / (Except as indicated to the contrary
below) WITHOLD AUTHORITY / / (To vote for all nominees)
2. Proposal to amend the Corporation's By-laws to raise the retirement age for
directors from age seventy (70) to age seventy-two (72).
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name.)
--------------------------------------------------------------------------------
(Continued, and to be signed on other side.)
<PAGE> 33
3. Proposal to adopt the 1995 Long-Term Compensation Plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
4. Proposal to ratify the selection of independent public accountants.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
5. In accordance with their discretion on any other matters or proposal which
may properly come before the meeting.
(Signatures should conform exactly
to name shown on this proxy.
Executors, administrators,
guardians, trustees, attorneys and
officers signing for corporations
should give full title.)
Dated: ......................., 1995
Signed..............................
...................................
SIGN, DATE AND RETURN THIS PROXY
PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE> 34
SAVINGS PLAN
CONFIDENTIAL VOTING DIRECTION DIRECTION
ANNUAL MEETING OF STOCKHOLDERS MAY, 19, 1995
Under the provisions of the trust relating to the General Re Corporation
Employee Savings & Stock Ownership Plan, Fidelity Management Trust Company (FMT
Co.), as Trustee, is required to request your confidential instructions as to
how your proportionate interest in the shares of General Re common stock held
under the Plan is to be voted at the annual meeting of stockholders scheduled to
be held on May 19, 1995 and any adjournments thereof. Your instructions to FMT
Co. will not be divulged or revealed to anyone at General Re Corporation. You
may indicate your instructions to FMT Co. by completing the following which is a
reprint of the proxy card sent to all shareholders.
This vote authorization form, when properly executed, will serve to instruct
the Trustee to vote (1) for the election of Directors, (2) for the proposal to
amend the Corporation's By-laws to raise the retirement age for directors, (3)
for the proposal to adopt the 1995 Long-Term Compensation Plan, and (4) for the
proposal to ratify the selection of independent public accountants, if no
instructions to the contrary are indicated in Items (1), (2), (3) or (4) below,
and in the discretion of the Trustee on such other matters as may properly come
before the meeting.
The undersigned hereby acknowledges receipt of a copy of the Proxy Statement
relating to such annual meeting.
Your Board of Directors recommends a vote for each of the following proposals.
PLEASE MARK BOXES OR /X/ IN BLUE OR BLACK INK.
1. Election of Directors:
Lucy Wilson Benson, Walter M. Cabot, John C. Etling, William C. Ferguson, Kay
Koplovitz and Walter F. Williams
FOR ALL NOMINEES LISTED / / (Except as indicated to the contrary
below) WITHHOLD AUTHORITY / / (To vote for all nominees)
2. Proposal to amend the Corporation's By-laws to raise the retirement age for
directors from age seventy (70) to age seventy-two (72).
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, print
that nominee's name.)
--------------------------------------------------------------------------------
(Continued, and to be signed on other side.)
<PAGE> 35
3. Proposal to adopt the 1995 Long-Term Compensation Plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
4. Proposal to ratify the selection of independent public accountants.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
5. In accordance with their discretion on any other matters or proposals which
may properly come before the meeting.
(Signatures should conform exactly
to name shown on this direction.)
Dated: ......................., 1995
Please be sure to insert date
Signed..............................
...................................
SIGN, DATE AND RETURN THIS DIRECTION
PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE> 36
GENERAL RE CORPORATION ESOP
695 EAST MAIN STREET DIRECTION
STAMFORD, CONNECTICUT 06904-2351
THIS DIRECTION IS SOLICITED ON BEHALF OF STATE STREET BANK AND TRUST COMPANY,
ESOP TRUSTEE
Revoking any such prior direction, the undersigned participant hereby
directs State Street Bank and Trust Company, ESOP Trustee to vote for the
undersigned, as herein stated, at the annual meeting of stockholders of General
Re Corporation, to be held at the offices of the Corporation, 695 East Main
Street, Stamford, Connecticut, on Friday, May 19, 1995, at 9:00 A.M., and at any
adjournments thereof with respect to the number of shares the undersigned is
entitled to give direction for.
This direction, when properly executed, will serve to instruct the Trustee
to vote (1) for the election of Directors, (2) for the proposal to amend the
Corporation's By-laws to raise the retirement age for directors, (3) for the
proposal to adopt the 1995 Long-Term Compensation Plan, and (4) for the proposal
to ratify the selection of independent public accountants, if no instructions to
the contrary are indicated in Items (1), (2), (3) or (4) below, and in the
discretion of the named attorneys and agents on such other matters as may
properly come before the meeting.
The undersigned hereby acknowledges receipt of a copy of the Proxy Statement
relating to such annual meeting.
Your Board of Directors recommends a vote for each of the following proposals.
PLEASE MARK BOXES OR /X/ IN BLUE OR BLACK INK.
1. Election of Directors:
Lucy Wilson Benson, Walter M. Cabot, John C. Etling, William C. Ferguson, Kay
Koplovitz and Walter F. Williams
FOR ALL NOMINEES LISTED / / (Except as indicated to the contrary
below) WITHOLD AUTHORITY / / (to vote for all nominees)
2. Proposal to amend the Corporation's By-laws to raise the retirement age for
directors from age seventy (70) to age seventy-two (72).
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
(INSTRUCTION: To withhold authority instruction to vote for any individual
nominee, print that nominee's name.)
--------------------------------------------------------------------------------
(Continued, and to be signed on other side.)
<PAGE> 37
3. Proposal to adopt the 1995 Long-Term Compensation Plan.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
4. Proposal to ratify the selection of independent public accountants.
<TABLE>
<S> <C> <C>
FOR AGAINST ABSTAIN
/ / / / / /
</TABLE>
5. In accordance with their discretion on any other matters or proposals which
may properly come before the meeting.
(Signatures should conform exactly
to name shown on this direction.)
Dated: ......................., 1995
Please be sure to insert date
Signed..............................
...................................
SIGN, DATE AND RETURN THIS DIRECTION
PROMPTLY USING THE ENCLOSED ENVELOPE
<PAGE> 38
APPENDIX
List and description of graphic and image information
I. Under caption "Information concerning NOMINEES for Terms
Expiring in 1998:"
A. Photograph of Lucy Wilson Benson
B. Photograph of John C. Etling
C. Photograph of William C. Ferguson
D. Photograph of Kay Koplovitz
E. Photograph of Walter F. Williams
II. Under caption "Information concerning NOMINEE for Term
Expiring in 1997:"
A. Photograph of Walter M. Cabot
III. Under caption "Information concerning Directors Whose Terms
Expire in 1996:"
A. Photograph of Andrew W. Matheson
B. Photograph of David E. McKinney
C. Photograph of Stephen A. Ross
IV. Under caption "Information Concerning Directors Whose Terms
Expire in 1997:"
A. Photograph of Ronald E. Ferguson
B. Photograph of Donald J. Kirk
C. Photograph of Edward H. Malone
