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:
[X] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
I.C.H. Corporation
_________________________________________________________________
(Name of Registrant as Specified In Its Charter)
I.C.H. Corporation
_________________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2).
[ ] $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 ap-
plies: ____________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-111:_____________________
4) Proposed maximum aggregate value of transaction:
______________________________________________________________
[ ] 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:_____________________________________________
____________________
1 Set forth the amount on which the filing fee is calculat-
ed and stated how it was determined.
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PRELIMINARY COPY
PROXY SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS OF
I.C.H. CORPORATION
The undersigned hereby constitutes and appoints Robert L.
Beisenherz, and _________________________, and each of them (acting
by a majority of them present and voting, or if only one of them is
present and voting, then by that one), with full power of substitu-
tion in each of them, the attorneys and proxies of the undersigned
to vote as designated below at the Annual Meeting of Stockholders
of I.C.H. Corporation ("ICH") to be held on May 26, 1994, or at any
adjournment or adjournments thereof (the "Meeting"), all shares
which the undersigned is entitled to vote at the Meeting.
PROPOSAL NO. 1: Amendment of Article One of the Certificate of
Incorporation of the Company, to change the name
of the Company to Southwestern Life Corporation.
__ FOR __AGAINST __ABSTAIN
PROPOSAL NO. 2: Election of Directors:
Nominees: Robert L. Beisenherz, Charles L. Dun-
can, Robert P. Ewing, Jon E. M.
Jacoby, C. Fred Rice, Stanley L.
Stegner, Keith A. Tucker and Vernon
K. Zimmerman
-- VOTE FOR nominees listed above, except vote
withheld from following nominee (if any):
_____________________________________________
-- VOTE WITHHELD FROM ALL NOMINEES.
PROPOSAL NO. 3: Ratification of the selection of Coopers &
Lybrand as independent auditors for 1994.
__ FOR __AGAINST __ABSTAIN
_________________________________________________________________
PROPOSAL NO. 4: In their discretion, upon such other matters as
may be brought properly before the Meeting.
This proxy, if in proper form and not revoked, will be
voted as specified by the stockholder. IF NO CHOICE IS SPECIFIED,
THIS PROXY WILL BE VOTED FOR THE APPROVAL OF PROPOSALS NOS. 1
AND 3 AND FOR THE ELECTION OF THE NOMINEES NAMED IN PROPOSAL NO. 2.
This proxy is revocable at any time before it is voted as indicated
in the accompanying Proxy Statement. The accompanying Proxy
Statement describes the discretionary authority of the proxies to
vote for a substitute nominee if either of the nominees named above
fails to stand for election at the Meeting.
PLEASE VOTE, DATE, SIGN, AND PROMPTLY RETURN THIS PROXY.
Please sign your name legibly exactly as it appears hereon. Each
joint owner should sign. If executed by a corporation, please sign
full corporate name by a duly authorized officer. Attorneys,
executors, administrators, trustees, guardians, etc., should give
full title as such.
DATE:___________________, 1994
______________________________
______________________________
______________________________
Signature of Stockholder(s)
<PAGE>
PRELIMINARY COPIES
I.C.H. CORPORATION
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40207
_____________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD May 26, 1994
_____________________________
Notice is hereby given that an Annual Meeting of Stockholders
of I.C.H. Corporation (the "Company") will be held at 10:00 a.m.,
Eastern Daylight Savings Time, on Thursday, May 26, 1994, at the
________________, for the purpose of considering and voting upon
the following matters.
PROPOSAL NO. I. The amendment of Article One of the Certifi-
cate of Incorporation of the Company, to change the name of the
Company to Southwestern Life Corporation.
PROPOSAL NO. II. The election of eight directors to serve
until the Company's next annual meeting of stockholders or until
their respective successors are duly elected and qualified.
PROPOSAL NO. III. A proposal to ratify the selection of
Coopers & Lybrand as the Company's independent auditors for 1994.
PROPOSAL NO. IV. The transaction of such other business as
may be brought properly before the Annual Meeting or any adjourn-
ment or adjournments thereof.
Information regarding the matters to be acted upon at the
Annual Meeting is contained in the Proxy Statement accompanying
this Notice. The Annual Meeting may be adjourned from time to time
without notice other than the announcement of the adjournment at
the Annual Meeting or any adjournment or adjournments thereof, and
any and all business for which notice is hereby given may be
transacted at any such adjourned Annual Meeting.
Only holders of record of outstanding shares of the Company's
Common Stock and Series 1984-A Preferred Stock at the close of
business on March 28, 1994, are entitled to notice of and to vote
at the Annual Meeting or any adjournment or adjournments thereof.
You are invited to attend the Annual Meeting in person. However,
to ensure your representation, whether or not you plan to attend
the Annual Meeting, please promptly complete, date, sign, and
return the enclosed proxy card.
By Order of the Board of Directors
Louisville, Kentucky
April ___, 1994
<PAGE>
<PAGE>
CONTENTS
Page
____
The Annual Meeting . . . . . . . . . . . . . . . . . . .
Security Ownership*. . . . . . . . . . . . . . . . . . .
Retirement of Class B Common Stock. . . . . . . . .
Voting Securities . . . . . . . . . . . . . . . . .
Other Equity Securities . . . . . . . . . . . . . .
Amendment of Certificate of Incorporation
to Change the Corporate Name of the Company
(Proposal No. 1) . . . . . . . . . . . . . . . . . . .
Election of Directors (Proposal No. 2) . . . . . . . . .
Nominees and Required Vote. . . . . . . . . . . . .
Nominees for Director . . . . . . . . . . . . . . .
Meetings and Committees . . . . . . . . . . . . . .
Independent Directors . . . . . . . . . . . . . . .
Directors Emeritus. . . . . . . . . . . . . . . . .
Ratification of Auditors (Proposal No. 3). . . . . . . .
Other Business (Proposal No. 4). . . . . . . . . . . . .
Report on Executive Compensation . . . . . . . . . . . .
Performance Graph. . . . . . . . . . . . . . . . . . . .
Executive Compensation*. . . . . . . . . . . . . . . . .
Compensation Summary. . . . . . . . . . . . . . . .
Stock Options . . . . . . . . . . . . . . . . . . .
Compensation of Directors . . . . . . . . . . . . .
Termination of Employment Arrangements. . . . . . .
Certain Transactions* . . . . . . . . . . . . . . .
Compensation Committee Interlocks and
Insider Participation in Compensation
Decisions. . . . . . . . . . . . . . . . . . .
Other Transactions. . . . . . . . . . . . . . . . .
Stockholder Proposals. . . . . . . . . . . . . . . . . .
Annual Report. . . . . . . . . . . . . . . . . . . . . .
_______________
* Information under these headings is incorporated by reference in
the Annual Report on Form 10-K for the year ended December 31,
1993.
i
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PRELIMINARY COPY
I.C.H. CORPORATION
_____________________________
PROXY STATEMENT
DATED April __, 1994
_____________________________
THE ANNUAL MEETING
This Proxy Statement is furnished to stockholders of I.C.H.
Corporation (the "Company") in connection with the solicitation of
proxies by and on behalf of the Board of Directors of the Company
for use at the Annual Meeting of Stockholders to be held at 10:00
a.m., Eastern Daylight Savings Time, on Thursday, May 26, 1994, at
_________________________________________________, and at any
adjournment or adjournments thereof (the "Annual Meeting").
Commencing on or about April __, 1994, this Proxy Statement and the
enclosed proxy card are being mailed to stockholders of record of
the Company. The Company will bear the costs of this solicitation,
which, in addition to mail, may include personal interviews,
telephone calls, or telegrams by directors, officers, and regular
employees of the Company and its affiliates.
Only record holders of outstanding shares of the Company's
Common Stock and Series 1984-A Preferred Stock at the close of
business on the record date, March 28, 1994, are entitled to notice
of and to vote at the Annual Meeting. As of such record date,
47,834,739 shares of Common Stock and 541,563 shares of Series
1984-A Preferred Stock were outstanding and entitled to be voted at
the Annual Meeting. See "SECURITY OWNERSHIP" with respect to
ownership of voting stock of the Company by directors, executive
officers, and certain other holders and for information concerning
the Company's retirement of its Class B Common Stock, which carried
special voting rights in the election of directors. The presence,
in person or by proxy, of the holders of one-third of the outstand-
ing shares of Common Stock and Series 1984-A Preferred Stock
entitled to vote at the Annual Meeting is necessary to constitute
a quorum. With respect to any proposal on which they may vote at
the Annual Meeting, stockholders will be entitled to one vote for
each share of Common Stock and Series 1984-A Preferred Stock
respectively owned of record by them as of the record date.
Cumulative voting is not permitted with respect to any proposal to
be acted upon at the Annual Meeting.
To ensure representation at the Annual Meeting, each holder
of outstanding shares of Common Stock entitled to be voted at the
Annual Meeting is requested to complete, date, sign, and return to
the Company the enclosed proxy card, which requires no postage if
mailed in the United States. Banking institutions, brokerage
firms, custodians, trustees, nominees, and fiduciaries who are
record holders of Common Stock entitled to be voted at the Annual
Meeting are requested to forward all proxy cards, this Proxy
Statement, and the accompanying materials to the beneficial owners
of such shares and to seek authority to execute proxies with
respect to such shares. Upon request, the Company will reimburse
such record holders for their reasonable out-of-pocket forwarding
expenses. The costs of this solicitation will be borne by the
Company, including the costs of assembling and mailing the enclosed
proxy card and this Proxy Statement.
If properly executed and received by the Company before the
Annual Meeting, any proxy representing shares of Common Stock
entitled to be voted at the Annual Meeting and specifying how it is
to be voted will be voted accordingly. Any properly executed proxy
received that does not specify how it is to be voted on a proposal
for which a specification may be made will be voted FOR such
proposal.
Each stockholder returning a proxy to the Company has the
right to revoke it, at any time before it is voted, by submitting
a later dated proxy in proper form, by notifying the Secretary of
the Company in writing (signed and dated by
<PAGE>
<PAGE>
the stockholder) of such revocation, or by appearing at the Annual
Meeting, requesting the return of the proxy, and voting the shares
in Person.
SECURITY OWNERSHIP
RETIREMENT OF CLASS B COMMON STOCK
On February 11, 1994, the Company repurchased from Consoli-
dated National Corporation ("CNC") 100,000 shares of the Company's
Class B Common Stock, which represented all of the shares of that
class authorized, issued and outstanding, for $500,000 ($5 per
share). The Class B Common Stock had entitled CNC to elect 75% of
the directors of the Company, who were designated "Class B Stock
Directors". As a result of its repurchase, and subsequent
retirement, the Company is no longer authorized to issue Class B
Common Stock. All references in the Company's Certificate of
Incorporation to the Class B Common Stock, including all references
to Class B Stock Directors, have been eliminated.
Concurrently with the Company's repurchase of the Class B
Common Stock, CNC and its subsidiary, Consolidated Fidelity Life
Insurance Company ("Consolidated Fidelity"), sold a total of
4,677,243 shares of Common Stock at a price of $5 per share
($23,386,215 in the aggregate) to Torchmark Corporation ("Torch-
mark") and a total of 4,456,820 shares of Common Stock at a price
of $5 per share ($22,284,100 in the aggregate) to Stephens Inc.
("Stephens"). See "EXECUTIVE COMPENSATION -- CERTAIN TRANSACTIONS"
below for information about the transactions and arrangements
involving the Company, Torchmark, Stephens and CNC and its
affiliates. By virtue of these transactions, CNC and its affili-
ates, Robert T. Shaw and C. Fred Rice, no longer beneficially
own equity securities entitling them to elect a majority of the
directors of the Company.
VOTING SECURITIES
The following table reflects certain information regarding
the beneficial ownership of the outstanding voting securities of
the Company as of the record date for the Annual Meeting to the
extent known by the Board of Directors. Such information is
included for (i) persons who own 5% or more of such voting
securities outstanding at such date, (ii) directors and nominees,
(iii) the executive officers of the Company identified in the
discussion under the heading "EXECUTIVE COMPENSATION" below (the
"named executive officers"), and (iv) officers and directors of the
Company as a group. Unless indicated otherwise, the Company
believes that each person named below has the sole power to vote
and dispose of the voting securities beneficially owned by such
person.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY PERCENTAGE OF
STOCKHOLDER OWNED(1)(2) CLASS(1)(2)
___________ ___________________ _____________
<S> <C> <C>
COMMON STOCK
Five-percent owners:
Consolidated National Corporation
("CNC"), Robert T. Shaw and
C. Fred Rice(3)
4211 Norbourne Blvd.
Louisville, Kentucky 40207 . . . . . 3,334,119 6.73%
Stephens Inc.(4)
111 Center Street, Suite 2500
Little Rock, Arkansas 72201. . . . . 4,662,312 9.74%
Torchmark Corporation
2001 Third Avenue South
Birmingham, Alabama 35233. . . . . . 4,677,243 9.78%
<PAGE>
<PAGE>
Directors, Nominees and Named
Executive Officers:
Robert L. Beisenherz. . . . . . . . . 100,000 *
Charles L. Duncan . . . . . . . . . . 54,075 *
Robert P. Ewing . . . . . . . . . . . 2,769 *
John T. Hull. . . . . . . . . . . . . 181,575 *
Jon E.M. Jacoby(5). . . . . . . . . .
Edward R. Mekeel, Jr. . . . . . . . .
C. Fred Rice(3) . . . . . . . . . . . 3,303,273 6.67%
H. Don Rutherford . . . . . . . . . . 20,000 *
Sheryl G. Snyder. . . . . . . . . . . 56,732 *
Keith A. Tucker(5). . . . . . . . . .
S. Leroy Stegner(6) . . . . . . . . . 321,762 *
Vernon K. Zimmerman . . . . . . . . . 12,773 *
Officers and directors as a group
(13 persons) (3)(5) . . . . . . . . . 4,246,236 8.5%
SERIES 1984-A PREFERRED STOCK
CNC, Consolidated Fidelity Life Insurance Company
("Consolidated Fidelity"), Robert T. Shaw and
C. Fred Rice(1) . . . . . . . . . . . . . . . . . . . . . . . . 100.0%
Officers and directors as a group(1). . . . . . . . . . . . . . . 100.0%
<FN>
____________________
* Less than .1%.
(1) Share amounts for CNC and Messrs. Shaw and Rice include
1,713,696 shares of Common Stock issuable to CNC and Consoli-
dated Fidelity (see Note 3) upon conversion of Series 1984-A
Preferred Stock.
Share amounts for Stephens include 45,692 shares of Common
Stock issuable upon conversion of the 59,400 shares of $1.75
Convertible Exchangeable Preferred Stock, Series 1986-A owned
by Stephens. Share amounts for Messrs. Duncan, Ewing, Hull,
Snyder, and Zimmerman and officers and directors as a group
include 3,077 shares, 769 shares, 615 shares, 2,832 shares,
10,715 shares, and 18,162 shares respectively, of Common
Stock issuable upon conversion of their shares of $1.75
Convertible Exchangeable Preferred Stock, Series 1986-A,
described in "OTHER EQUITY SECURITIES."
Share amounts for Messrs. Beisenherz, Hull, Rutherford and
Snyder and for officers and directors as a group include
100,000 shares, 120,000 shares, 20,000 shares, 20,000 shares
and 380,000 shares issuable to certain executive officers
under stock options that are or will, within 60 days of the
record date become, presently exercisable.
(2) The Series 1984-A Preferred Stock and Common Stock vote as a
single class, including in the election of Directors. CNC,
Consolidated Fidelity, and Messrs. Shaw and Rice own of
record, collectively, 4.47% of the outstanding Series 1984-A
Preferred Stock and Common Stock.
(3) CNC directly owns 969,154 shares of Common Stock, and its
subsidiary, Consolidated Fidelity, owns 620,423 shares of
Common Stock and 541,563 shares of Series 1984-A Preferred
Stock. Mr. Shaw directly owns 30,846 shares of Common Stock.
Mr. Shaw beneficially owns 1,957 shares (54.84%) and Mr. Rice
beneficially owns 1,250 shares (35.02%) of the outstanding
common stock of CNC. CNC and Messrs. Shaw and Rice own
shares of the outstanding common stock of Consolidated
Fidelity as follows: CNC holds 39,500 shares (79%), Robert
T. Shaw holds 5,758 shares (11.52%) and C. Fred Rice holds
3,677 shares (7.35%) of the Class A Common Stock and CNC
holds 950,000 shares (100%) of the Class B Common Stock of
Consolidated Fidelity. Therefore, Messrs.
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<PAGE>
Shaw and Rice may be deemed to have an indirect beneficial
interest in the shares of Common Stock owned by CNC and the
shares of Series 1984-A Preferred Stock and Common Stock
owned by Consolidated Fidelity.
As discussed at pages 17-19 below, the Company, CNC and
Consolidated Fidelity are parties to an agreement contemplat-
ing the termination of reinsurance agreements under which
Consolidated Fidelity reinsures certain business written by
an existing and a former subsidiary of the Company. CNC,
Consolidated Fidelity and Messrs. Shaw and Rice have agreed
with each of Torchmark and Stephens that they will benefic-
ially own no more than 1,000,000 shares of Common Stock after
the reinsurance agreements are terminated.
(4) Stephens Inc. is an indirect wholly-owned subsidiary of
Stephens Group, Inc.
(5) Mr. Jacoby has been designated by Stephens and Mr. Tucker has
been designated by Torchmark to serve as directors of the
Company. In the agreements pursuant to which CNC and Con-
solidated Fidelity sold shares of Common Stock to Stephens
and Torchmark, the Company agreed with each of Stephens and
Torchmark to appoint a person designated by it as a director
and to exercise its best efforts to secure the election of a
person designated by it so long as it owns at least 5% of the
outstanding Common Stock. See "ELECTION OF DIRECTORS" and
"EXECUTIVE COMPENSATION -- CERTAIN TRANSACTIONS" below for
information about the transactions involving the Company,
Torchmark, Stephens and CNC and its affiliates, and the
Company's agreements with each of Torchmark and Stephens.
The amount of Common Stock beneficially owned by Torchmark,
Stephens and the officers and directors of the Company as a
group is 13,585,791 shares, or 27.18%.
(6) Includes 13,452 shares of Common Stock owned of record by Mr.
Stegner and his spouse jointly and 6,930 shares of Common
Stock owned of record by Mr. Stegner's spouse. Mr. Stegner
may share the power to vote and dispose of the shares benefi-
cially owned by his spouse.
</TABLE>
OTHER EQUITY SECURITIES
The following table reflects certain information regarding
the beneficial ownership of each class of the nonvoting equity
securities of the Company as of the record date for the Annual
Meeting. Such information is included for (i) directors who own
such securities, (ii) named executive officers who own such
securities, and (iii) officers and directors who own such securi-
ties, as a group. Unless indicated otherwise, the Company believes
that each person named below has the sole power, if any, to vote
and dispose of the equity securities beneficially owned by such
person.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY PERCENTAGE
STOCKHOLDER OWNED OF CLASS
___________ ____________ __________
<S> <C> <C>
ICH $1.75 CONVERTIBLE EXCHANGEABLE PREFERRED STOCK, SERIES 1986-A
Charles L. Duncan . . . . . . . . . . . . . . . 4,000 *
Robert P. Ewing . . . . . . . . . . . . . . . . 1,000 *
John T. Hull. . . . . . . . . . . . . . . . . . 800 *
Sheryl G. Snyder. . . . . . . . . . . . . . . . 3,681 *
Vernon K. Zimmerman(1). . . . . . . . . . . . . 13,929 *
Officers and directors as a group(1). . . . . . 30,140 *
ICH $4.50 REDEEMABLE PREFERRED STOCK, SERIES 1987-B
CNC, Consolidated Fidelity, Robert T. Shaw, and
C. Fred Rice(2) . . . . . . . . . . . . . . . 140,000 100%
Officers and directors as a group(2). . . . . . 140,000 100%
<PAGE>
<PAGE>
<FN>
____________________
* Less than .1%.
(1) Includes 2,164 shares owned by Mr. Zimmerman's spouse.
(2) All 140,000 of such preferred shares are owned by CNC's
subsidiary, Consolidated Fidelity. As discussed in Note 3 to
the preceding Stock Ownership tables, Messrs. Shaw and Rice
own respectively 55% and 35% of the outstanding stock of CNC,
and own respectively 12% and 7% of the outstanding stock of
Consolidated Fidelity, and therefore may be deemed to have an
indirect beneficial interest in such preferred shares. See
the discussion at pages 17-19 below concerning the agreement
among the Company, CNC and Consolidated Fidelity pursuant to
which the Company intends to reacquire all of the preferred
stock of the Company held by Consolidated Fidelity upon the
termination of certain reinsurance agreements.
</TABLE>
AMENDMENT OF CERTIFICATE OF INCORPORATION TO
CHANGE THE CORPORATE NAME OF THE COMPANY
(PROPOSAL 1)
The Board of Directors of the Company has passed a resolution
proposing that Article One of the Company's Certificate of
Incorporation be amended, to change the Company's corporate name to
Southwestern Life Corporation. The Board of Directors believes
that such a change is advisable. Evoking the name of the Company's
leading life insurance subsidiary, Southwestern Life Insurance
Company, the new name will better connote the Company's business
focus -- the business of insurance. The new name is also indica-
tive of the significant changes that have occurred at the Company,
most recently the Company's elimination of the Class B Common
Stock, and the special voting rights it carried in the election of
directors. See "SECURITY OWNERSHIP -- RETIREMENT OF CLASS B COMMON
STOCK". If the new name is adopted, the Company intends to change
the symbols under which the Company's securities are listed by the
American and Chicago Stock Exchanges, and a new CUSIP number will
be assigned to the Company's securities.
The affirmative vote of a majority of the shares of Common
Stock and Series 1984-A Preferred Stock outstanding on the record
date for the Annual Meeting, voting together as a single class, is
required to amend the Certificate of Incorporation to change the
Company's name. An abstention by shares represented at the Annual
Meeting will not decrease the number of votes required to adopt the
proposal, and therefore, while not recorded as a vote against, will
have the effect of a vote against the proposed name change. The
Board of Directors recommends that stockholders vote FOR the
proposal to amend Article One of the Certificate of Incorporation.
ELECTION OF DIRECTORS
(PROPOSAL 2)
NOMINEES AND REQUIRED VOTE
In accordance with the Company's Bylaws, the Board of
Directors has fixed the number of Directors at eight. As a result
of the Company's retirement of the Class B Common Stock, the
directors to be elected at the Annual Meeting will not be classi-
fied as "Common Stock Directors" or "Class B Stock Directors." All
of the directors will be elected by the holders of the Common Stock
and the Series 1984-A Preferred Stock.
The affirmative vote of a majority of the shares of Common
Stock and Series 1984-A Preferred Stock represented at the Annual
Meeting, voting together as a single class, is required to elect
the Directors. An abstention by shares represented at the Annual
Meeting will not decrease the number of votes required
<PAGE>
<PAGE>
to elect a director, and therefore, while not recorded as a vote
against, will have the effect of a vote against the election of a
nominee as a director.
The Board of Directors has nominated Robert L. Beisenherz,
Charles L. Duncan, Robert P. Ewing, Jon E.M. Jacoby, C. Fred Rice,
S. Leroy Stegner, Keith A. Tucker and Vernon K. Zimmerman for
election as Directors at the Annual Meeting. All of the nominees
currently are serving as directors of the Company. Mr. Jacoby is
being nominated at the direction of Stephens, and Mr. Tucker is
being nominated at the direction of Torchmark. In connection with
their purchase of shares of Common Stock from CNC and Consolidated
Fidelity on February 11, 1994, the Company agreed with each of
Stephens and Torchmark that, so long as it owns at least 5% of the
outstanding Common Stock, the Company will nominate as a director
and will use its best efforts to secure the election of one person
designated by it.
Each of the nominees has consented to being named as a
nominee and to serve as a director if elected. However, if for any
reason any nominee for Director is not a candidate at the election,
the enclosed proxy will be voted for the election of a substitute
nominee at the discretion of the person or persons voting the
enclosed proxy. Directors elected at the Annual Meeting will serve
until the next annual meeting of the Company's stockholders or
until their respective successors are duly elected and qualified.
Information regarding certain of the nominees is provided below and
under "EXECUTIVE COMPENSATION" and "EXECUTIVE COMPENSATION --
CERTAIN TRANSACTIONS".
NOMINEES FOR DIRECTOR
ROBERT L. BEISENHERZ, AGE 48. Mr. Beisenherz has been a
director of the Company since March 1992 and is a member of the
Executive Committee. He has served as President of the Company
since February 1992 and as Chairman of the Board and Chief
Executive Officer of the Company since October 1992. From
June 1990 until his election as President, Mr. Beisenherz served as
Executive Vice President of the Company. Until his election as
President of the Company, he also served as an executive officer
and director of certain subsidiaries of CNC. For the 17 years
before he joined the Company, Mr. Beisenherz was a consulting
actuary with Lewis & Ellis, Consulting Actuaries.
CHARLES L. DUNCAN, AGE 74. Before his retirement in 1985,
Mr. Duncan served for 29 years as Secretary, Chief Operating
Officer, and a director of Duncan Brothers, Inc., a ready-mix
concrete distributor in Piedmont, Missouri. He has served as a
director since 1966 and is currently a member of the Audit
Committee, the Investment Committee, the Compensation Committee and
the Stock Option Committee.
ROBERT P. EWING, AGE 69. Before his retirement in 1985, Mr.
Ewing was employed for 36 years by Bankers Life and Casualty
Company ("Bankers"). He served as President of Bankers from 1974
to 1985 and as its Chairman of the Board from 1978 to 1984. Mr.
Ewing is a director of the MacArthur Foundation and a director of
NBD Bank, Park Ridge, Illinois, and he is an insurance consultant.
He has served as a director of the Company since 1985 and is a
member of the Audit Committee, the Investment Committee, the
Compensation Committee and the Stock Option Committee.
JON E.M. JACOBY, AGE 56. Mr. Jacoby is Executive Vice
President, Chief Financial Officer and Director of Stephens Inc.,
an investment banking firm headquartered in Little Rock, Arkansas,
and its parent, Stephens Group, Inc. (see "SECURITY OWNERSHIP" and
"CERTAIN TRANSACTIONS," with respect to Stephens' ownership of the
Company's securities). He has served as a director of the Company
since February 11, 1994, the date Stephens purchased shares of
Common Stock from CNC and Consolidated Fidelity. Stephens
designated Mr. Jacoby to be added to the Company's Board of
Directors, to fill an existing vacancy, as one of the conditions to
the closing of the stock purchase transaction. Mr. Jacoby
currently serves as a member of the Compensation Committee of the
Board. He also serves as a director of Beverly Enterprises,
Medicus Systems, Delta and Pine Land Company.
<PAGE>
<PAGE>
C. FRED RICE, AGE 55. A director since 1975 and a member of
the Executive Committee, the Investment Committee, the Compensation
Committee and the Stock Option Committee, Mr. Rice is an employee
of CNC (see "SECURITY OWNERSHIP" and "CERTAIN TRANSACTIONS," with
respect to CNC's ownership of the Company's securities and trans-
actions involving the Company or subsidiaries of the Company in
which CNC has direct or indirect interests). Mr. Rice has served
as Vice President, Secretary, and a director of CNC since 1984. He
has served as Senior Executive Vice President -- Marketing and Real
Estate of the Company since 1985. He also has served since 1970 as
an officer and director of various affiliates of the Company.
S. LEROY STEGNER, AGE 70. A director since 1970, Mr. Stegner
has been engaged since 1948 as an investor and farmer in Pilot
Grove, Missouri. He is a member of the Audit Committee, the
Investment Committee, the Compensation Committee and the Stock
Option Committee.
KEITH A. TUCKER, AGE 49. Mr. Tucker is an executive officer
and a director of Torchmark Corporation, having served as Vice
Chairman since May 1991 (see "SECURITY OWNERSHIP" and "CERTAIN
TRANSACTIONS," with respect to Torchmark's ownership of the
Company's securities). Before joining Torchmark, he was a Senior
Vice President of Trivest, Inc. from August 1987 until May 1991 and
President of Trivest Securities Corporation from January 1989 until
May 1991, private investment concerns based in Miami, Florida. Mr.
Tucker has served as a director of the Company since February 11,
1994, the date Torchmark purchased shares of Common Stock from CNC
and Consolidated Fidelity. Torchmark designated Mr. Tucker to be
added to the Company's Board of Directors, to fill an existing
vacancy, as one of the conditions to the closing of the stock
purchase transaction. He also serves as a director of the United
Group of Mutual Funds, Waddell & Reed Funds, Inc. and TMK/United
Funds, Inc.
VERNON K. ZIMMERMAN, AGE 65. A director since 1986 and a
member of the Audit Committee, the Investment Committee, the
Compensation Committee and the Stock Option Committee, Dr.
Zimmerman has been employed since 1956 as a Professor of Accountan-
cy and since 1965 as Director of the Center for International
Education and Research in Accounting for the University of
Illinois, Champaign, Illinois. From 1971 to 1985, he also served
as Dean of the Business School at the University of Illinois. Dr.
Zimmerman also serves as a director of Illinois Power Company, a
public utility company, and First Busey Corporation, a bank holding
company and Busey Bank, both located in Urbana, Illinois.
MEETINGS AND COMMITTEES
During 1993, the Board of Directors held 19 meetings and
acted on 7 occasions by unanimous written consent; the Audit
Committee of the Board of Directors held one meeting; the Invest-
ment Committee of the Board of Directors held 9 meetings; the Stock
Option Committee of the Board of Directors took action at one
meeting and acted on three occasions by unanimous written consent;
the Compensation Committee met three times and acted on one
occasion by unanimous written consent; and the Executive Committee
of the Board of Directors acted on 8 occasions by unanimous written
consent. No incumbent director participated in fewer than 75% of
the total meetings during his respective tenures as a director and
committee member in 1993.
The Executive Committee is empowered to act for the Board of
Directors in the management of the business and affairs of the
Company, except as limited by law or the Company's Bylaws. The
function of the Audit Committee is to preview the overall scope and
review the results of each audit of the Company, to receive the
auditors' management letter each year, and to resolve any unre-
solved differences between the Company's auditors and management.
The Investment Committee supervises the investment policies and
strategies of the Company and its subsidiaries. The Stock Option
Committee administers the Company's 1990 Stock Option Incentive
Plan. The Compensation Committee of the Board for the purpose of
establishing policies governing and making recommendations to the
Board for executive compensation. The Board of Directors has no
standing nominating committee or committee performing similar
functions.
<PAGE>
<PAGE>
DIRECTORS EMERITUS
The Company's Bylaws provide that no person may be elected to
serve as a director of the Company if such person has attained the
age of 75 at the time of election. Under a directors emeritus
program adopted in 1985, however, the Board of Directors may
designate as directors emeritus distinguished directors who have
attained the specified senior age and who will not be nominated for
reelection as directors. The Board of Directors has designated
Victor H. deLiniere, Dr. James W. Kapp, and Dr. E.D. Suggett as
directors emeritus. Drs. Kapp and Suggett served as directors from
1966 to 1986, and Mr. deLiniere served as a director from 1971 to
1986. In addition, the Board of Directors designated Phillip E.
Allen as a Director Emeritus of the Company when he retired as Vice
Chairman of the Board at age 62 in May 1993. Directors emeritus
may attend meetings of the Board of Directors but have none of the
responsibilities or obligations of directors.
RATIFICATION OF AUDITORS
(PROPOSAL NO. 3)
A proposal to ratify the selection of Coopers & Lybrand as
the Company's independent auditors for 1994 will be offered at the
Annual Meeting by the Board of Directors for the consideration of
the stockholders. The affirmative vote of a majority of the
outstanding shares of Common Stock and Series 1984-A Preferred
Stock represented at the Annual Meeting, voting together as a
single class, is required to approve this proposal. Abstentions by
shares represented at the Annual Meeting will not decrease the
number of votes required to approve this proposal, and therefore,
while not recorded as a vote against, will have the effect of a
vote against this proposal.
Coopers & Lybrand has served as the Company's independent
auditors since 1976. The Board of Directors is of the opinion that
Coopers & Lybrand is well qualified to continue in such service and
recommends that the stockholders vote for ratification of the
selection of Coopers & Lybrand. One or more representatives of
Coopers & Lybrand are expected to be present at the Annual Meeting,
to have the opportunity to make a statement if they desire to do
so, and to be available to respond to appropriate questions.
OTHER BUSINESS
(PROPOSAL NO. 4)
The Board of Directors of the Company currently is unaware of
any proposal to be presented at the Annual Meeting other than the
matters specified in the Notice of Annual Meeting accompanying this
Proxy Statement. Should any other proposal properly come before
the Annual Meeting, the persons named in the enclosed proxy card
will vote on each such proposal in accordance with their discre-
tion.
PERFORMANCE GRAPH
The following graph illustrates, for each of the past five
years, the yearly change in the cumulative total stockholder return
on the Company's Common Stock, in accordance with the measurement
criteria recently imposed by the Securities and Exchange Commis-
sion, assuming an initial $100 investment. Under these criteria,
cumulative total shareholder return for a given year is measured by
the dividends paid, assuming dividend reinvestment, and the change
in the share price during that year; the sum of these two factors
is then divided by the per share price at the beginning of that
year. Because the Company has paid no dividends on its Common
Stock during the past five years, stockholder return on the
Company's common stock during the past five years is based on
trading price.
<PAGE>
<PAGE>
For comparison purposes, the graph also shows the yearly
percentage change in the cumulative stockholder return, assuming
reinvestment of dividends, of (1) the AMEX Market Value Index pre-
pared by the American Stock Exchange, which includes companies
whose equity securities are traded, like the Company's Common
Stock, on the American Stock Exchange, and (2) the Financial Sub-
Index of the AMEX Market Value Index prepared by the American Stock
Exchange, which is an index of insurance companies and other
financial institutions whose securities are traded on the American
Stock Exchange.
<GRAPH>
AMEX Financial Sub-Index ICH
_____ ___________________ ___
1988 100 100 100
1989 123.53 107.65 123.79
1990 100.69 92.82 68.42
1991 129.1 118.06 63.16
1992 130.46 132.28 85.47
1993 155.93 142.14 108
</GRAPH>
<PAGE>
<PAGE>
REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors estab-
lishes the policies governing, and makes recommendations to the
Board of Directors concerning, executive compensation. All of the
members of the Compensation Committee are non-employee directors
and also serve as the members of the Stock Option Committee of the
Board.
The Compensation Committee believes that the compensation of
executive management should reward individual performance; provide
an incentive to improve Company performance, and the Company's
progress in accomplishing its strategic goals; and be competitive,
in comparison to the levels of executive compensation paid by the
Company's peers, to attract and retain top executive management.
The Compensation Committee reviews the results of executive
compensation studies prepared for distribution by independent
consulting firms, and, with respect to the compensation of
executive employees other than the Chairman of the Board and Chief
Executive Officer, the Compensation Committee relies heavily on the
recommendations of the Chairman and CEO. The Committee believes
the Chairman and CEO is generally better positioned to judge the
contributions made by individual executive employees. In develop-
ing compensation recommendations for individual officers, the
Chairman and CEO considers factors such as position, responsibility
and tenure with the Company, any planned changes in functional
responsibility, and subjective factors, including his perception of
individual performance and the importance of the individual to the
successful operation of the management team.
The basic components of compensation awarded executive
employees during 1993 consisted of salary and bonuses. Historical-
ly, executive bonuses have not functioned as a form of incentive
compensation, but were viewed as a complement to salary to achieve
targeted levels of cash compensation. While the goal of the
Compensation Committee is to ultimately achieve an appropriate
balance so that executive bonuses can serve as a reward for
individual and Company performance, significant changes in
executive compensation were not introduced in 1993.
The dominant strategic goals of the Company throughout 1993
were the development and implementation of a program to rebalance
the Company's capital structure, the restructuring of the Company's
insurance holding company organization, and the completion of a
reorganization and consolidation of administrative operations, to
reduce costs and increase efficiencies. The actions taken to
accomplish these goals targeted fundamental changes in the
financial condition and results of operations of the Company and
its subsidiaries, and numerical tests, designed to measure the
results of these actions, were not adopted to determine executive
compensation. Neither the profitability of the Company nor the
market value of the Company's stock were considered in setting
executive officer compensation during 1993. Instead, the cash
compensation paid executive employees in the form of salary and
bonuses generally was not increased, except in specific cases where
individual executive officers assumed increased responsibilities as
a result of the Company's operational reorganization and consolida-
tion.
During 1993, there was no increase in the compensation paid
the Company's Chairman and CEO. The cash compensation paid to Mr.
Beisenherz, consisting solely of salary, has remained constant at
$500,000. This level of compensation for the employee who serves
as the Company's CEO was first fixed in 1989 as to a predecessor of
Mr. Beisenherz, and it has not been specifically related to the
performance of the Company.
With the recommendation of the Compensation Committee, the
Company, during 1993, entered into a retirement/retainer agreement
with an executive officer, in connection with his retirement from
the Company, and agreements with certain employees, including two
executive officers, to provide supplemental severance and bonuses
in the event of the future voluntary or involuntary termination of
their employment. The individuals were selected based on years of
service and position, and the special contribution these individu-
als had made to the Company;
<PAGE>
<PAGE>
the Committee believes the compensation provided by these agree-
ments is reasonable, especially because the Company had no long
term compensation plan.
During 1993, Consolidated National Corporation and its
affiliates, Robert T. Shaw and C. Fred Rice, provided management
and consulting services to the Company pursuant to the Management
and Consulting Agreement between CNC and the Company that was
effective January 1985 and was terminated effective February 11,
1994. As fixed by that agreement, the cash compensation paid CNC,
and through CNC, Messrs. Shaw and Rice, was $2 million during 1993.
<TABLE>
<C> <C> <C>
Charles L. Duncan Robert P. Ewing C. Fred Rice
S. Leroy Stegner Vernon K. Zimmerman
</TABLE>
EXECUTIVE COMPENSATION
COMPENSATION SUMMARY
The following table sets forth information about the
compensation paid or accrued by the Company and its subsidiaries
during the last three fiscal years to or for the benefit of (i) the
Company's Chief Executive Officer ("CEO"), as of year-end 1993, and
(ii) the four executive officers of the Company receiving the
highest total salary and bonus during 1993, other than the CEO. In
addition, information is presented with respect to one executive
officer who was compensated indirectly, pursuant to the Management
and Consulting Agreement between the Company and CNC. These six
executive officers of the Company are referred to, from time to
time, collectively as the "named executive officers" and their
principal positions with the Company as of year-end 1993 are shown
in the table.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
OTHER
NAME AND PRINCIPAL POSITION ANNUAL COMPENSATION ANNUAL
WITH THE COMPANY YEAR SALARY(1) BONUS(1) COMPENSATION
___________________________ ____ _____________________ ____________
<S> <C> <C> <C>
Robert L. Beisenherz, 1993 $500,016(3)
Chairman of the Board, 1992 500,016(3)
Chief Executive Officer 1991 500,016(3)
and President
C. Fred Rice, Senior 1993
Executive Vice President 1992
and a Director 1991
Edward R. Mekeel, Jr., 1993 $300,000 $52,510(4)
Executive Vice President 1992 93,269 11,852(4)
and Chief Financial Officer 1991
Sheryl G. Snyder, Executive 1993 $242,000 $70,000
Vice President and General 1992 240,000 70,000
Counsel 1991 230,000 70,000
H. Don Rutherford, 1993 $200,000 $75,000
Senior Vice President 1992 162,620 85,000
Individual Marketing 1991 152,250 85,000
John T. Hull, Executive 1993 $206,500 $25,000 $70,199(5)
Vice President, Treasurer 1992 202,667 79,400
and Chief Accounting Officer 1991 180,000 40,000
<CAPTION>
<S> <C> <C>
LONG-TERM
NAME AND PRINCIPAL POSITION COMPENSATION ALL OTHER
WITH THE COMPANY OPTIONS(#) COMPENSATION(2)
___________________________ ____________ _______________
Robert L. Beisenherz, $ 3,240
Chairman of the Board, 400,000 3,240
Chief Executive Officer 3,240
and President
C. Fred Rice, Senior $700,476
Executive Vice President 700,476
and a Director 700,476
Edward R. Mekeel, Jr., $ 86,156
Executive Vice President 100,000 38,123
and Chief Financial Officer
Sheryl G. Snyder, Executive $ 3,816
Vice President and General 125,000 2,765
Counsel 1,490
H. Don Rutherford, $ 3,095
Senior Vice President 75,000 3,304
Individual Marketing 3,034
John T. Hull, Executive $552,373
Vice President, Treasurer 100,000 3,495
and Chief Accounting Officer 3,307
<PAGE>
<PAGE>
<FN>
_______________
(1) "Salary" and "Bonus" in the above table includes salary
deferred and bonuses awarded under the I.C.H. Corporation
Deferred Compensation Plan. There were no deferred bonus
awards made in 1993. "Salary" also includes salary deferred
under the ICH Companies Savings Investment Plan (the "Savings
Plan"), which is a voluntary, contributory plan under which
employees of the Company and its affiliates may, among other
things, elect to defer compensation for federal income tax
purposes under Section 401(k) of the Internal Revenue Code of
1986.
(2) The column "All Other Compensation" in the above table
includes:
For Mr. Beisenherz, the dollar value of insurance premiums
paid to a wholly-owned subsidiary by or on behalf of the
Company with respect to term life insurance for his benefit.
For Mr. Snyder, contributions or other allocations made by
the Company and its subsidiaries for his account pursuant to
the Savings Plan ($2,248 in 1993 and $1,210 in 1992) and the
dollar value of insurance premiums paid to a wholly-owned
subsidiary by or on behalf of the Company with respect to
term life insurance for his benefit ($1,568 in 1993, $1,555
in 1992 and $1,490 in 1991).
For Mr. Rutherford, contributions or other allocations made
by the Company and its subsidiaries for his account pursuant
to the Savings Plan ($1,799 in 1993, $2,248 in 1992, and
$2,022 in 1991) and the dollar value of insurance premiums
paid to a wholly-owned subsidiary by or on behalf of the
Company with respect to term life insurance for his benefit
($1,296 in 1993, $1,056 in 1992 and $1,012 in 1991).
For Mr. Hull, contributions or other allocations made by the
Company and its subsidiaries for his account pursuant to the
Savings Plan ($2,315 in 1993, $2,182 in 1992, and $2,119 in
1991); the dollar value of insurance premiums paid to a
wholly-owned subsidiary by or on behalf of the Company with
respect to term life insurance for his benefit ($1,338 in
1993, $1,313 in 1992 and $1,188 in 1991) and, in 1993, the
amount accrued by the Company for supplemental severance and
bonus benefits payable in connection with a voluntary or
involuntary termination of his employment pursuant to an
agreement between the Company and Mr. Hull. In its financial
statements for the year ended December 31, 1993, the Company
accrued $548,720 severance benefits with respect to Mr. Hull,
which amount includes $137,720 accrued with respect to the
supplemental bonus that might be payable upon termination of
employment to the extent the market value of shares of the
Company's Common Stock is below $5.875.
For Mr. Mekeel, moving and relocation expenses paid by the
Company ($84,212 in 1993 and $37,637 in 1992) and the dollar
value of insurance premiums paid to a wholly-owned subsidiary
by or on behalf of the Company with respect to term life
insurance for his benefit ($1,944 in 1993 and $486 in 1992).
For Mr. Rice, the portion of the $2,000,000 of fees paid or
accrued in each of 1993, 1992 and 1991 to CNC by a subsidiary
of the Company under a management and consulting agreement.
For purposes of the above table, Mr. Rice has been allocated
a portion of such fees based solely upon his percentage
ownership of CNC. See "CERTAIN TRANSACTIONS" below for
additional information regarding the management and consult-
ing agreement with CNC.
Robert T. Shaw is the President, a director and 55% stock-
holder of CNC, and throughout 1993, he provided services to
the Company under the Management and Consulting Agreement CNC
has with the Company. If Mr. Shaw were allocated a portion
of the fees paid or accrued to CNC by the Company
<PAGE>
<PAGE>
under that agreement based on his percentage ownership of
CNC, his share of those fees would have been $1,096,666 for
each of the past three years.
(3) The compensation of Mr. Beisenherz includes compensation for
which the Company was reimbursed as a result of services
rendered Consolidated Fidelity Life Insurance Company and
Marquette National Life Insurance Company, subsidiaries of
CNC. The amount of Mr. Beisenherz's salary for which the
Company and its subsidiaries were reimbursed totaled $125,000
in 1992 and $200,006 in 1991.
(4) Amounts reimbursed for the payment of taxes attributable to
the Company's payment of moving and relocation expenses.
(5) Represents the difference between the exercise price paid
upon the exercise of stock options and the market value of
the stock acquired on the date of exercise.
(6) The above table excludes noncash benefits received by certain
of the named executive officers of the Company, which the
Company believes did not exceed, in the aggregate during any
year, $50,000 or an amount equal to 10% of the total annual
salary and bonuses for such executive officers named in the
table.
</TABLE>
STOCK OPTIONS
The following table provides information about options
exercised during 1993 and the unexercised options held at December
31, 1993 by the named executive officers. None of these executive
officers of the Company exercised any stock options during 1992.
The value of the unexercised options is calculated based on the
difference between the exercise price and mean of the high and low
trading price of Common Stock as of December 31, 1993, as quoted by
the American Stock Exchange.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SHARES NUMBER OF UNEXERCISED
ACQUIRED VALUE OPTIONS AT YEAR END 1993
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE
____ ___________ ________ ___________ _____________
<S> <C> <C> <C> <C>
Robert L. Beisenherz 100,000 400,000
Edward R. Mekeel, Jr. 100,000
Sheryl G. Snyder 50,000 125,000
H. Don Rutherford 20,000 75,000
John T. Hull 22,110 $70,199 120,000
<CAPTION>
VALUE OF UNEXERCISED IN-THE-MONEY
OPTIONS AT YEAR END 1993
NAME EXERCISABLE UNEXERCISABLE
____ ___________ _____________
<S> <C> <C>
Robert L. Beisenherz $128,125 $425,000
Edward R. Mekeel, Jr. 0 106,250
Sheryl G. Snyder 79,713 132,813
H. Don Rutherford 38,125 79,688
John T. Hull 144,375
</TABLE>
COMPENSATION OF DIRECTORS
Each director who is not an officer or employee of the
Company or its subsidiaries receives a fee of $2,000 per month and
$500 for each meeting of the Board or Board Committee attended by
him in person and $250 for each meeting attended by telephone
conference.
TERMINATION OF EMPLOYMENT ARRANGEMENTS
DEFERRED COMPENSATION PLAN. Messrs. Rutherford and Hull
participate in the I.C.H. Corporation Deferred Compensation Plan
(the "Compensation Plan") under which each is permitted to defer
all or part of his or her salary, but no less than $2,000 per year.
In addition, the Company and its affiliates may make bonus awards
to participants in the Deferred Compensation Plan based upon their
performance. Deferred salary amounts and bonus awards accrue
interest at rates determined quarterly by the committee administer-
ing the Plan. Each employee's deferred salary amounts and interest
thereon are 100% vested at all times, and bonus awards and interest
thereon vest in increments of 20% for each year of employment by
the Company or its affiliates or in full upon disability or
retirement. Upon an employee's disability, retirement, or other
termination of service other than by reason of death, the employee
may elect to receive his or her vested benefits in a lump sum or
periodically over no more than 15 years, except that bonus awards
and interest thereon are forfeited by an employee discharged for
gross misconduct. The beneficiaries of a deceased eligible
employee are entitled to a death benefit as specified in writing at
the time of the employee's enrollment in the Compensation Plan.
SEVERANCE COMPENSATION ARRANGEMENTS. Messrs. Beisenherz,
Mekeel, Snyder, Rutherford and Hull participate in the I.C.H.
Companies Salaried Employees Severance Pay Plan. This plan
generally provides an employee of the Company and certain of its
subsidiaries the equivalent of a week of pay at the employee's base
rate for each full year of the employee's term of service if his
employment is terminated involuntarily through no fault of the
employee. Management employees are entitled to minimum payments of
from four to 26 weeks of pay. The maximum amount of severance pay
for any employee is the equivalent of 52 weeks of pay. Mr. Rice,
who is not an employee, is not eligible for benefits under the
plan.
Mr. Hull also participates in the Supplemental Severance and
Bonus Plan, which the Company adopted during 1993 for certain
specified employees and which is evidenced by agreements between
the Company and each of the participating employees. Under the
terms of agreement between the Company and Mr. Hull, Mr. Hull is
entitled to receive supplemental severance benefits and a supple-
mental bonus if his employment with the Company and its affiliates
or successors is voluntarily or involuntarily terminated for any
reason other than his gross misconduct. The amount of the supple-
mental severance benefits to which he is entitled is equal to 200%
of his salary during the 12 months preceding the termination of his
employment, less any amounts received by him under the I.C.H.
<PAGE>
<PAGE>
Companies Salaried Employees Severance Pay Plan. The supplemental
bonus is designed to compensate Mr. Hull to the extent shares of
Common Stock of the Company acquired by him in connection with his
employment are sold through a stock exchange at prevailing prices
which are less than $5.875 per share. Shares covered by the
agreement, as amended, include shares acquired by him pursuant to
the Restricted Stock Purchase Agreement, dated March 12, 1982,
between Mr. Hull and a predecessor of FMI, as amended, and shares
acquired pursuant to stock options granted him prior to the date of
the agreement. To give rise to a supplemental bonus payment, sales
of such shares must occur only on designated dates occurring during
the term of the agreement, or within 90 days after his death, if
his employment is terminated as a result of his death.
CERTAIN TRANSACTIONS
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
IN COMPENSATION DECISIONS
The members of the Compensation Committee during 1993 were
Charles L. Duncan, S. Leroy Stegner, Robert E. Ewing, C. Fred Rice
and Vernon K. Zimmerman.
All of the members of the Compensation Committee are indepen-
dent directors with the exception of Mr. Rice. Mr. Rice serves as
an executive officer of the Company and certain of its subsidiar-
ies. During 1993, Mr. Rice was compensated for his services to the
Company by CNC, in which Mr. Rice is a 35% stockholder, and of
which he is an officer and director. Mr. Rice, directly and
through his affiliation with CNC and its subsidiaries, had an
interest in certain transactions and business relationships with
the Company. Mr. Shaw is also an officer and director and he is a
55% stockholder of CNC.
TRANSACTIONS INVOLVING CNC, TORCHMARK AND STEPHENS. On
January 15, 1994, the Company entered into a series of agreements
pursuant to which, at simultaneous closings on February 11, 1994,
(1) the Company repurchased from CNC 100,000 shares of Class B
Common Stock for $500,000 ($5 per share); (2) CNC and its subsid-
iary, Consolidated Fidelity, sold a total of 4,677,243 shares of
Common Stock of the Company at a price of $23,386,215 ($5 per
share) to Torchmark; and (3) CNC and Consolidated Fidelity sold a
total of 4,456,820 shares of Common Stock of the Company at a price
of $22,284,100 ($5 per share) to Stephens. In conjunction with
these agreements, the Company also granted Mr. Shaw an option to
purchase, at depreciated book value, either or both of the two
aircraft owned by the Company and agreed to maintain certain
operations of the Company in Louisville, Kentucky, so long as they
are continued.
To satisfy conditions to the closing of the transactions, Jon
E.M. Jacoby and Keith A. Tucker, designees of Stephens and Torch-
mark, respectively, were appointed as directors to fill existing
vacancies on the Board of Directors; the Company amended its Bylaws
to delete the requirement that the number of directors be divisible
by four; the Company and CNC terminated the Management and
Consulting Agreement pursuant to which CNC has rendered management
and consulting services to the Company since 1985; and the Company
entered into ten year Independent Contractor and Services Agree-
ments with each of Messrs. Shaw and Rice. Under these services
agreements, which cannot be terminated for any reason, each of
Messrs. Shaw and Rice will attempt to identify business opportuni-
ties in the insurance industry and will be available to consult
with the Company during the term of his agreement. The consulting
fees payable to Mr. Shaw pursuant to his agreement with the Company
consist of $1,222,000, which was payable at the time of execution
in consideration of past services, and an annual fee of $800,000
for each of the first five years of the agreement, $575,000 for the
sixth year of the agreement, and $75,000 for each of the seventh
through tenth years of the agreement. The consulting fees payable
to Mr. Rice pursuant to his agreement with the Company consist of
$778,000, which was payable at the time of execution in consider-
ation of past services, and an annual fee of $600,000 for each of
the first five years of the agreement, $500,000 for the sixth year
of the agreement, and $50,000 for each of the seventh through tenth
years of the agreement. The Company has accrued the present value
of the consulting fees payable to Messrs. Shaw and Rice in its
financial statements as
<PAGE>
<PAGE>
of and for the year ended December 31, 1993. The Company also has
agreed to reimburse Messrs. Shaw and Rice for the reasonable
out-of-pocket expenses incurred by them in the performance of their
services, to provide Messrs. Shaw and Rice with employee benefits
available from time to time to the Company's senior executive
officers of the Company, to the extent permitted by law, and,
subject to reimbursement by Messrs. Shaw and Rice, to provide
certain benefits to their dependents, certain benefits upon the
termination of the agreements and certain support services during
the term of the agreement. The Company and CNC and its stockhold-
ers, Messrs. Shaw and Rice and Edward C. Carlisle, also executed a
Mutual Release, pursuant to which, subject to certain exceptions,
including the continuation of certain indemnification and contrac-
tual rights, they released one another from any claims or liabili-
ties.
The Company joined in the stock purchase agreements CNC,
Consolidated Fidelity and Messrs. Shaw and Rice executed with each
of Torchmark and Stephens. In addition to making certain represen-
tations and warranties, the Company granted each of Torchmark and
Stephens the right to require the Company to file a registration
statement under federal and applicable state securities laws,
pursuant to which it can sell the shares purchased from CNC and
Consolidated Fidelity (or any securities issued in respect of such
shares). The Company also granted each of Torchmark and Stephens
piggy-back registration rights that, subject to certain customary
exceptions, will enable them to publicly sell shares as a part of
a public offering of Common Stock by the Company.
The Company further agreed with each of Torchmark and
Stephens to exercise its best efforts to nominate and secure the
election to the Company's Board of Directors of one person
designated by it, so long as it owns at least 5% of the outstanding
Common Stock of the Company or any successor of the Company. The
Company agreed to exercise its best efforts to amend its Certifi-
cate of Incorporation to eliminate all references to the Class B
Common Stock, which the Company has accomplished by the Board of
Directors' retirement of the Class B Common Stock in accordance
with the General Corporation Law of the State of Delaware.
Because of its expertise in investment banking matters, the
Company may in the future engage Stephens to render services to the
Company. Any such arrangement will be subject to agreement by the
parties and approval by the disinterested directors of the Company.
MANAGEMENT AND SERVICES AGREEMENTS. During 1993, CNC
provided certain executive services and advice to the Company and
its subsidiaries under a management and consulting agreement
entered into in 1985 with the approval of disinterested directors
of the Company. This agreement required CNC to devote substantial-
ly all its time and effort on a non-exclusive basis to advise and
consult with the Company and its subsidiaries in connection with
all management and policy decisions with respect to their manage-
ment, operations, insurance programs, and acquisition programs.
CNC provided the required services through its employees, including
primarily Messrs. Shaw and Rice. Under the agreement, CNC was paid
or accrued a fixed fee of $2,000,000 during 1993. The Summary
Compensation Table on page 11 shows amounts from this fee attribut-
ed to Mr. Rice, in lieu of other compensation to him. CNC was also
entitled to reimbursement for all reasonable travel, entertainment,
promotional, and similar expenses and to adequate office space,
equipment, and support personnel in connection with performance of
its obligations to the Company.
As in effect during 1993, the Management and Consulting
Agreement between ICH and CNC renewed automatically for successive
one year terms until its final expiration date in January 1995. On
February 11, 1994, the Company terminated the Management and
Consulting Agreement, other than the indemnification provisions
contained therein, and entered into Independent Contractor and
Services Agreements with each of Messrs. Shaw and Rice.
REINSURANCE AND SERVICE TRANSACTIONS INVOLVING CNC'S SUBSID-
IARIES. The Company's subsidiary, Southwestern Life Insurance
Company ("Southwestern"), and former subsidiary, Bankers Life and
Casualty Company ("Bankers") are parties to
<PAGE>
<PAGE>
reinsurance agreements with Employers Reassurance Corporation
("ERC"), an independent third party reinsurer that in turn
retroceded the reinsured business to a subsidiary of CNC, current-
ly, Consolidated Fidelity. Southwestern is an indirect wholly-
owned subsidiary of the Company, and Bankers was an indirect wholly
owned subsidiary of the Company until November 1992. These
reinsurance and retrocession arrangements were established in
connection with Bankers' sale of Marquette National Life Insurance
Company ("Marquette") to CNC and its three stockholders, Robert T.
Shaw, C. Fred Rice and Edward J. Carlisle, in 1990. They were
amended during the first quarter of 1994 to, among other things,
conform the investment criteria applicable to the business
reinsured by Southwestern and to clarify the manner in which the
experience refund was calculated. The Company has agreed with ERC,
and, separately, CNC, to compensate ERC if assets supporting the
reserve liabilities of the reinsured business do not meet certain
investment criteria and to guarantee the collectability of certain
risk fees payable to ERC.
The Southwestern reinsurance and retrocession arrangement
provides for the payment to Southwestern of an experience refund of
95% of the amount by which actual future profits on the reinsured
business and related assets exceed the $25 million projected value
of the business. The fees paid or accrued by Southwestern to ERC
as compensation for its obligation as reinsurer in 1993 were
$65,000. Southwestern's experience refund under the reinsurance
and retrocession arrangement was $4,851,000 for 1993.
In connection with the reinsurance and retrocession arrange-
ments, Southwestern provided investment management, administrative,
data processing and general supervisory services related to the
reinsured, retroceded business. Fees earned by Southwestern during
1993 totaled $1,531,915. In addition, another subsidiary of the
Company provided administrative services to Marquette under a
separate service agreement for fees totaling $449,000 during 1993.
On June 15, 1993, the Company, CNC and Consolidated Fidelity
entered into an agreement that gives the Company the right, and
under which the Company has the obligation, to negotiate the
termination of these reinsurance agreements. The agreement
requires that the termination of the agreements be structured so
that Consolidated Fidelity will retain specified assets upon
completion of the transactions contemplated by the agreement. As
part of the agreement, the Company acquired $63 million of
Consolidated Fidelity preferred stock in exchange for its ownership
in certain investments with an estimated fair value as of June 15,
1993, of $63 million, including its ownership in a partnership
(HMC/Life Partners, L.P.), which has since been liquidated, and 83%
of the Company's ownership interest in I.C.H. Funding Corporation
("ICH Funding"). ICH Funding is a special purpose entity that was
formed in 1992 to hold the Company's residual interest in a pool of
mortgage-backed securities acquired from Bankers. The purpose of
the preferred stock acquisition was (i) to increase Consolidated
Fidelity's risk-based capital until termination of the reinsurance
treaties is complete, and (ii) to facilitate the ultimate retire-
ment of the Company's debt and preferred stock currently held by
Consolidated Fidelity as discussed below.
As currently under negotiation, the termination of Consoli-
dated Fidelity's reinsurance agreements will be accomplished by
ERC, and then Bankers and Southwestern, respectively, recapturing
the reserve liabilities that each has reinsured. Concurrently with
the transfer of the reserve liabilities, assets with a fair value,
as of the date of the recaptures, equal to those reserve liabili-
ties, less agreed upon ceding commissions, will be conveyed by
Consolidated Fidelity. The assets to be transferred to Southwest-
ern upon termination of the reinsurance arrangements with Consoli-
dated Fidelity have not been finally determined pending the
completion of negotiations with Bankers relative to the recapture
of its business from Consolidated Fidelity, the completion of
negotiations with ERC, and obtaining requisite approvals from the
Texas Department of Insurance. Moreover, the amount of the ceding
commission payable, as well as the fair value of a substantial
portion of the assets to be conveyed in the recaptures, are
sensitive to changes in market interest rates and other factors,
and therefore the exact terms of the recaptures are subject to
change will remain volatile until the effective date of recaptures.
<PAGE>
<PAGE>
As of December 31, 1993, the amount of Southwestern's reserve
liabilities reinsured by Consolidated Fidelity was approximately
$330.0 million. Based on market conditions existing at that time,
the Company's management anticipated that, after deduction of a
ceding fee to be paid by Southwestern totaling approximately $18.1
million, assets valued at $311.9 million would be transferred to
Southwestern in the transaction. The assets anticipated to be
transferred to Southwestern consist of cash, short-term investments
and marketable fixed maturity investments (year-end fair value of
$225.3 million), Consolidated Fidelity's investment in Marquette
(year-end fair value of $32.7 million), Consolidated Fidelity's
investment in ICH Funding (year-end fair value of $16.1 million),
collateral loans due from James M. Fail and CFSB Corporation
totaling $23.4 million, a loan collateralized by a real estate
development totaling $3.6 million, mortgage loans totaling $4.8
million, a residual interest in a collateralized mortgage obliga-
tion totaling $1.9 million, and real estate, consisting of a 300
room income-producing hotel in Fort Worth, Texas, totaling $4.1
million.
An independent actuarial firm was retained prior to entering
into the agreements with CNC and Consolidated Fidelity to develop
the assumptions and methodology to be used in determining the
ceding fee to be paid by Southwestern. The Company's in-house
actuarial staff has subsequently estimated the ceding fee to be
paid utilizing the methodology developed by the independent
actuarial firm, with appropriate adjustments in assumptions to
reflect changes in market interest rates and other factors. The
fair values of marketable fixed maturity investments are to be
determined based on the quoted market prices as published by
nationally recognized pricing services. The fair value of
Marquette will be based on the fair value of its assets and
liabilities, and adjusted for the value of its charter and
licenses. The fair value of Consolidated Fidelity's investment in
ICH Funding is to be based on an appraisal of its underlying assets
by an investment banking firm. The remaining assets, totaling
$37.8 million, are to be transferred at their book value, which in
management's opinion approximates fair value. If not sold or
otherwise liquidated prior to June 15, 1995, CNC has agreed to
purchase certain of the assets which will be transferred to
Southwestern, including the real estate and the loan collateralized
by a real estate development, at their remaining book value.
Upon completion of both the Bankers and Southwestern recap-
tures, Consolidated Fidelity is obligated to redeem its preferred
stock by transferring its ownership in certain of the Company's
securities to the Company. These securities include the
$30,000,000 principal balance outstanding on the Company's senior
secured loan, $22,242,000 stated value of the Company's Series
1984-A Preferred Stock, and $7,000,000 stated value of the
Company's Series 1987-B Preferred Stock. The aggregate book value
of these securities, totals $59,242,000, and exceeds the
$54,000,000 carrying value of the Company's investment in the
Consolidated Fidelity preferred stock at December 31, 1993 by
$5,242,000. The Company is also entitled to receive any remaining
cash and other assets of Consolidated Fidelity, other than the
specified assets to be retained by Consolidated Fidelity, and is
obligated to assume certain miscellaneous liabilities. The amount
of such excess cash and assets, if any, will depend on the exact
terms negotiated for the recaptures. Based on management's year-
end analysis, under terms of the agreement, at December 31, 1993,
the Company would have received additional net assets, principally
cash, totaling approximately $1.5 million, and the 620,423 shares
of the Company's Common Stock held by Consolidated Fidelity. The
Company has also agreed that it will bear the federal income tax
consequences, if any, directly resulting from the recaptures.
Based on effecting the recapture of Southwestern's annuity business
as described above, management of the Company has estimated that
Consolidated Fidelity could incur additional income tax expense of
approximately $6.0 million, which amount would be reimbursable by
the Company.
As part of the transactions involving CNC, Torchmark and
Stephens described above, the Company, CNC and Consolidated
Fidelity agreed with each of Torchmark and Stephens that Consoli-
dated Fidelity's reinsurance agreements will be terminated by
May 30, 1994, on substantially the same terms as set out in the
June 15, 1993 agreement, and the Company agreed that, if the
recaptures had not
<PAGE>
<PAGE>
been completed by March 31, 1994 CNC will have the right to
transfer its ownership interest in Consolidated Fidelity to the
Company, in exchange for the specified assets to be retained by
Consolidated Fidelity following the transactions, if the recaptures
had not been completed by March 31, 1994. The transfer of CNC's
ownership interest in Consolidated Fidelity would be subject to
regulatory approvals and would be required to be completed within
sixty days following date of notification. CNC, Consolidated
Fidelity and Messrs. Shaw and Rice also agreed with each of
Torchmark and Stephens that, upon completion of the pending
transactions among the Company, CNC and Consolidated Fidelity, they
would own no more than 1,000,000 shares of the Common Stock of the
Company. In conjunction with entering into the various agreements,
in January 1994, the Company advanced to CNC a cash payment
totaling $875,000, representing the net after-tax earnings on the
specified assets to be retained by Consolidated Fidelity for the
six month period ended December 31, 1993 and agreed to continue to
advance such after-tax net earnings quarterly, until completion of
the recaptures. On the basis of accounting practices as prescribed
by regulatory authorities, Consolidated Fidelity had assets
totaling $834.2 million, policy and other liabilities totaling
$741.7 million, and capital and surplus totaling $92.5 million at
December 31, 1993. Consolidated Fidelity's carrying value of the
specified assets that would be distributed to CNC as consideration
for such transfer of its ownership in Consolidated Fidelity totaled
$66.4 million. In the opinion of the Company's management, such a
transfer of CNC's ownership in Consolidated Fidelity would not
produce economic effects materially different than those that would
result from the pending transactions among the Company, CNC and
Consolidated Fidelity. As of the date of this Proxy Statement, the
Company had not received notification from CNC that it intends to
exercise such right, and the Company cannot predict if such right
will be exercised.
INDEBTEDNESS OF THE COMPANY. CNC's subsidiary, Consolidated
Fidelity, as assignee, holds the senior secured loans that were
extended to the Company by financial institution lenders pursuant
to a Credit Agreement, dated September 28, 1990, among the Company,
certain banks and The Chase Manhattan Bank (National Association),
as agent for the banks. The loans bear interest at a variable rate
equal to 7-1/4% (prime plus 1%) as of April 4, 1994, and are
secured by a pledge of the outstanding stock of the Company's
subsidiaries, Modern American Life Insurance Company ("Modern
American"), Facilities Management Installation, Inc., and, as a
result of the substitution of collateral resulting from the
restructuring of the Company's insurance holding company organiza-
tion in September 1993, SWL Holding Corporation. During 1993,
Consolidated Fidelity waived certain covenants in the Credit
Agreement in connection with the Company's restructuring of its
insurance organization. Throughout 1993, the senior secured loans
had an outstanding principal balance of $30 million, which is
payable in full on December 31, 1994.
OPTIONS RELATING TO COMMON STOCK. The Company holds an
option to purchase 500,000 shares of Common Stock (the "Shares")
held by Consolidated Fidelity on or before December 31, 1996, for
a purchase price per share equal to the greater of (a) $4.00 plus
interest thereon for the period of time that Consolidated Fidelity
owns the Shares at the simple rate of 10% per annum, or (b) the
average closing sale price of the Common Stock, as reported by the
American Stock Exchange, for the five trading days immediately
preceding the date written notice of exercise is delivered. Under
the terms of the option, Consolidated Fidelity also has the right
to require the Company to purchase the Shares, on December 31,
1996, at a price equal to $4.00 per share, plus interest thereon
for the period of time that Consolidated Fidelity owns the Shares
at the simple rate of 10% per annum.
OTHER INVESTMENT TRANSACTIONS. Under the June 15, 1993
agreement between the Company, CNC and Consolidated Fidelity,
described above, Consolidated Fidelity is required to use the
services of the Company and its subsidiaries in the management of
its investment portfolios.
On July 30, 1993, subsidiaries of both the Company and CNC
sold a substantial portion of their interest-only and residual
collateralized mortgage obligations ("CMOs") to Fund America
Investors Corporation II, which in turn
<PAGE>
<PAGE>
deposited the purchased securities, together with other purchased
securities, in trust. Each selling subsidiary received net cash
proceeds and a residual participation interest in the trust, based
on the relative fair value of the CMOs sold by that subsidiary. In
the transaction, subsidiaries of the Company received net cash
proceeds of $57,904,000 and participation certificates with a fair
value of $65,559,000; Consolidated Fidelity received net cash
proceeds of $11,574,000 and participation certificates with a fair
value of $10,928,000; and ICH Funding, which was owned 83% by
Consolidated Fidelity and 17% by the Company, received net cash
proceeds of $90,349,000 and participation certificates with a fair
value of $91,377,000.
Subsidiaries of both the Company and CNC participated, as
selling stockholders, in an underwritten public offering registered
by CCP Insurance, Inc. ("CCP Insurance"). The subsidiaries had
acquired the shares as a result of their respective investments in
predecessors of CCP Insurance, and they were parties to a Stock-
holders' Agreement with CCP Insurance and its the initial stock-
holders, pursuant to which they had registration rights. The
proceeds derived from the sale of CCP Insurance stock, net of
expenses, were $47,272,289 for the Company's subsidiaries and
$13,198,654 for CNC's subsidiaries, Consolidated Fidelity and
Marquette.
TRANSACTIONS ARISING FROM RELATIONSHIPS WITH JAMES M. FAIL.
CNC has agreed to share with the Company certain economic benefits
it receives in relation to CFSB Corporation ("CFSB"), the holding
company James M. Fail organized to acquire Bluebonnet Savings
Bank, FSB ("Bluebonnet"). As memorialized in an agreement dated
January 25, 1993, among CNC, Mr. Fail and CFSB, CNC has the right
to receive, up to 50% of the dividends paid with respect to common
stock of Bluebonnet held by CFSB and up to 50% of any profits
derived by CFSB from the sale of that stock (in each case computed
after the deduction of certain amounts). In accordance with a
separate agreement between CNC and the Company, the Company is
entitled to receive 27.7% of the payments CNC receives under CNC's
agreement with CFSB and Mr. Fail, entitling the Company to share in
up to 13.8% of the common stock dividends paid by and of the net
proceeds derived from the sale of Bluebonnet. During 1993, the
Company received cash payments totaling $1,086,000 under this
agreement.
During 1993, a subsidiary of the Company held a 10% promis-
sory note of CNC in the principal amount of $2,000,000, which had
a scheduled maturity date of December 20, 1995. The amount of the
promissory note represented a portion of the contingent interest
payable to CNC under a loan CNC made in 1989 in connection with Mr.
Fail's investment in Bluebonnet and CFSB; a subsidiary of the
Company had also previously extended a loan to finance, in part,
Mr. Fail's acquisition of CFSB. The largest amount outstanding
under the CNC note during 1993 was $2,050,000. The note was paid
in full on February 11, 1994.
Subsidiaries of both the Company and CNC had loans outstand-
ing to Mr. Fail and CFSB at year end 1992 which were extended and
restructured in January 1993. With respect to the loans extended
by a subsidiary of the Company to Mr. Fail and CFSB, the largest
amount outstanding during 1993 was $29,513,777 million, and the
aggregate principal balance was $21,753,712 million at December 31,
1993. With respect to the loans extended by CNC's subsidiary,
Consolidated Fidelity, to Mr. Fail and CFSB, the largest amount
outstanding during 1993 was $77,476,877, and the aggregate
principal balance was $56,694,524 million at December 31, 1993. As
lenders, these subsidiaries are parties to an Intercreditor
Agreement designed to protect their respective rights in the
collateral securing the loans.
LEASE OF PROPERTY. FMI, a wholly-owned subsidiary of the
Company, leased office space in Englewood, Colorado from a partner-
ship owned equally by C. Fred Rice and Robert T. Shaw, pursuant to
a lease that was entered into in 1983 and that expired in
June 1993. During 1993, until the expiration of the lease, FMI
subleased approximately 96,000 square feet of the approximately
111,000 square feet of office space under this lease, on terms
identical to the terms of the lease from Messrs. Rice and Shaw.
During 1993, FMI paid or accrued total rentals and expenses of
approximately $157,900 under the lease. Messrs. Shaw and Rice
<PAGE>
<PAGE>
also have received certain tax benefits as a result of their
ownership of the office building.
OTHER TRANSACTIONS. In March, 1982, restricted shares of
stock of certain subsidiaries of the Company were purchased by
employees who, in subsequent years, were elected officers of the
Company. Each employee paid the entire purchase price for the
shares with his note, which bears interest at 9% per year and on
which principal and accrued interest are payable at maturity or, if
earlier, upon notice given after the employee's employment
terminates or the restrictions on transfer of the shares lapse.
The purchased shares were converted into shares of Common Stock in
connection with the Company's acquisition of the minority interests
in its publicly-held subsidiaries in 1982. By virtue of a 1985
affiliate merger transaction, the Company acquired the participat-
ing employees' notes, which were scheduled to mature during 1992.
During 1992, the Company agreed to amend and extend the notes of
employees it held that were secured by Common Stock to extend their
term until December 31, 1996, to prohibit the sale of the purchased
and pledged shares prior to December 31, 1993, and to enable the
employee to apply the pledged stock to pay in full the notes upon
termination of employment or at maturity. The following table
summarizes certain information regarding the stock purchases and
indebtedness of Mr. Allen, who served as an executive officer and
director of the Company until his retirement in May 1993, and
Messrs. Hull and Lay, executive officers.
<TABLE>
<CAPTION>
NUMBER OF ORIGINAL
NAME AND SHARES OF PURCHASE
OFFICER SINCE COMMON STOCK PRICE NOTE MATURES
_____________ ____________ _________ ____________
<S> <C> <C> <C>
Phillip E. Allen (1983). . . 155,412 $292,800 December 31, 1996
John T. Hull (1983). . . . . 38,850 $ 73,200 December 31, 1996
W. Sherman Lay (1986). . . . 93,246 $175,680 December 31, 1996
<CAPTION>
LARGEST DEBT
NAME AND AMOUNT OUTSTANDING AT
OFFICER SINCE OWED IN 1993 March 31, 1994
_____________ ____________ ______________
<S> <C> <C>
Phillip E. Allen (1983). . . $593,501 --
John T. Hull (1983). . . . . $150,975 $157,563
W. Sherman Lay (1986). . . . $362,339 $378,150
</TABLE>
In connection with Mr. Allen's retirement from his positions
as a director and officer of the Company in May 1993, the Company
agreed to repurchase from Mr. Allen the 155,412 shares of the
Company's common stock that Mr. Allen acquired under his restricted
purchase agreement at $6.00 per share, and agreed to amend his
agreement to permit him to sell those shares. The Company also
entered into a Retirement and Retainer Agreement with Mr. Allen
pursuant to which, among other things, Mr. Allen will receive
lifetime retirement pay of $80,000 annually; Mr. Allen is guaran-
teed continued participation in the Company's insurance plans; the
Company paid Mr. Allen a lump sum payment of $1,260,000, in
cancellation of Mr. Allen's stock options and in lieu of severance
pay; the Company retained Mr. Allen's legal advisory and consulting
services (up to 50% of his time over the next ten years, provided
he remains able), for compensation of $105,000 the first year,
$95,000 the second year, and $80,000 years three through ten; and
the Company agreed to provide Mr. Allen office space for one year
and grant him the right to buy his office furniture at 20% of cost.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder of the Company intends to
present at the 1995 Annual Meeting of Stockholders must be received
by the Secretary at the Company's principal executive offices by
December ___, 1994, in order to be considered by the Board of
Directors for inclusion in the Board of Directors' proxy solicita-
tion materials for that meeting.
<PAGE>
<PAGE>
ANNUAL REPORT
The Company's 1993 Annual Report to Stockholders accompanies
this Proxy Statement. The Annual Report does not form any part of
the material for the solicitation of proxies.
