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
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or
240.14a-12
InterContinental Life Corporation
(Name of Registrant as Specified in Its Charter)
InterContinental Life Corporation
(Name of Persons(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i)(1), 14a-6(i)(2) or Item 22(a)(2) of
Schedule 14A.
[ ] $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act
Rules 14a-6(i)(4) and O-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 O-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:
[ ] Check box if any part of the fee is offset as
provided by Exchange Act Rule O-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:
InterContinental Life Corporation
Austin Centre, 701 Brazos, Austin, Texas 78701
Dear Shareholder:
You are invited to attend the rescheduled Annual Meeting of
Shareholders of InterContinental Life Corporation, which will be
held at the Austin Centre, 701 Brazos, Austin, Texas 78701 on
June 17, 1997, at 10:00 a.m. local time. As we previously
advised you, the date of the Annual Meeting has been changed from
the originally scheduled date (May 20, 1997) in order to include
an additional matter on the agenda for the meeting. In addition
to the election of directors, the revised agenda includes a
proposal whereby the domicile of the Company would be changed
from New Jersey to Texas.
For those of you who cannot be present at this meeting, we urge
that you participate by indicating your choices on the enclosed
proxy and completing and returning it to us in the enclosed
postage paid envelope at your earliest convenience. By returning
your proxy promptly, you will assist us in reducing the Company's
expenses relating to the meeting. You can revoke your signed
proxy at any time before it is used.
We appreciate your support and cooperation in returning the
enclosed proxy.
Cordially,
Roy F. Mitte
Chairman, President and Chief
Executive Officer
InterContinental Life Corporation
Austin Centre, 701 Brazos, Austin, Texas 78701
NOTICE OF ANNUAL MEETING
TO BE HELD JUNE 17, 1997
Notice is hereby given that the Annual Meeting of Shareholders of
InterContinental Life Corporation will be held at the Austin
Centre, 701 Brazos, Austin, Texas 78701 on June 17, 1997 at 10:00
a.m. local time. This date represents a rescheduled date for the
meeting which was originally scheduled to be held on May 20,
1997. At the Annual Meeting, the following matters are to be
considered and acted upon:
1. The election of eleven Directors for the ensuing year.
2. The approval of the Redomestication of the Company and
the related Plan and Agreement of Merger of the Company into
ILCO-Texas, a wholly-owned subsidiary of the Company.
3. Such other business that may properly come before the
meeting or any adjournment thereof.
Only those Shareholders of record at the close of business on
April 28, 1997 (the "Record Date") will be entitled to notice of
and vote at the meeting or any adjournment thereof.
We hope that you will be able to attend the meeting in person.
IF YOU DO NOT EXPECT TO ATTEND IN PERSON, PLEASE SIGN AND DATE
THE ENCLOSED PROXY AND MAIL IT PROMPTLY in the enclosed envelope
for which no postage is necessary if mailed in the United States.
It will assist us in reducing the expenses of the Annual Meeting
if Shareholders who do not attend in person return the signed
proxy promptly. You may revoke your proxy at any time before it
is voted.
May , 1997
By Order of the Board of
Directors
Eugene E. Payne
Secretary
PROXY STATEMENT FOR THE RESCHEDULED
ANNUAL MEETING OF SHAREHOLDERS
OF
InterContinental Life Corporation
701 Brazos Austin Centre Austin, Texas 78701
This Proxy is furnished in connection with the solicitation
of proxies by the Board of Directors of InterContinental Life
Corporation (ILCO or the Company) for use at the Rescheduled
Annual Meeting of Shareholders to be held June 17, 1997, at the
Austin Centre, 701 Brazos, Austin, Texas 78701. Solicitation of
proxies may be made by mail and telephone and the expenses will
be borne by the Company. The Company intends to reimburse
broker-dealers and others for forwarding the proxy materials to
beneficial owners of the Company's stock. The approximate date
on which this Proxy Statement and the enclosed Form of Proxy will
be sent or given to Shareholders is April 28, 1997.
A copy of the Annual Report to Shareholders for the year
ended December 31, 1996, including financial statements, has
either been previously forwarded to Shareholders or is included
with this Proxy Statement.
A copy of the Company's Annual Report to the Securities and
Exchange Commission on Form 10-K, including Financial Statements
and Financial Statement Schedules, may be obtained by
Shareholders without charge upon the receipt of a written request
addressed to Robert S. Cox, InterContinental Life Corporation,
701 Brazos, Austin Centre, Austin, Texas 78701.
Only Shareholders of record on the books of the Company at
the close of business on April 28, 1997, will be entitled to vote
at the Rescheduled Annual Meeting. At the close of business on
such date, there were outstanding and entitled to vote 5,339,497
shares of common stock, $.22 par value, of the Company.
Shareholders of the Company are entitled to one vote for each
share held of record at the close of business on the Record Date.
The proxy is revokable at any time prior to the exercise thereof
at the meeting by written notice filed with the Secretary of the
Company or by delivery of a later proxy. All shares represented
by executed and unrevoked proxies will be voted in accordance
with specifications therein. Proxies submitted without
specification will be voted to elect the nominees for directors
named herein.
ELECTION OF DIRECTORS
The following eleven nominees are proposed for election as
Directors to serve until the next Annual Meeting of Shareholders
or until their successors are elected and qualified. All
nominees are now Directors of the Company. Proxies solicited by
the Board of Directors will be voted in favor of the election of
these nominees unless authorization to do so is withheld in the
proxy. If any nominee for election as Director is unable to
serve, which the Board of Directors does not anticipate, the
persons acting under the proxy will vote for such other person as
management may recommend. An affirmative vote by a majority of
those shares constituting at least a quorum at the Annual Meeting
of Shareholders is required for the election of Directors. The
Board of Directors recommends a vote "FOR" each of the nominees.
The names and ages of the nominees, their principal
occupations or employment during the past five years and other
data regarding them, as of April 21, 1997, are set forth below.
The information is based on information received from the
Directors.
Joseph F. Crowe, FSA Age 58
Director Since 1991. Vice President of ILCO from May 1991 to
January 1997, when he retired from active service with the
Company. Director of ILCO since May 1991. Vice President of FIC
from February 29, 1992 to January 3, 1997. Director of FIC since
February 29, 1992. Executive Vice President and of Investors Life
Insurance Company of North America and InterContinental Life
Insurance Company from June 1991 to January 1997. Director of
Investors Life Insurance Company of North America and
InterContinental Life Insurance Company since June 1991.
Executive Vice President of Family Life Insurance Company from
June 1991 to January 1997. Director of Family Life Insurance
Company since June 1991. Executive Vice President of Investors
Life Insurance Company of Indiana from February 1995 to January
1997. Director of Investors Life Insurance Company of Indiana
since February 1995. From December 1986 to March 1991, Executive
Vice President of Personal Financial Security Division of Aetna
Life & Casualty Company.
Theodore A. Fleron, Esq. Age 57
Director Since 1991. Vice President and Director of ILCO since
May 1991. Assistant Secretary since June 1990. Vice President
and Director of FIC since August 1996. Senior Vice President,
General Counsel, Assistant Secretary and Director of Investors
Life Insurance Company of North America and InterContinental Life
Insurance Company since July 1992. General Counsel, Assistant
Secretary and Director of Investors Life Insurance Company of
North America and InterContinental Life Insurance Company from
January 1989 to July 1992. Senior Vice President, General
Counsel, Director and Assistant Secretary of Investors Life
Insurance Company of Indiana since June 1995. Senior Vice
President, General Counsel, Director and Assistant Secretary of
Family Life Insurance Company since August 1996.
W. Lewis Gilcrease, DDS Age 64
Director Since 1988. Dentist practicing in San Marcos, Texas.
Director of ILCO since 1988. Director of FIC from 1979 to July
6, 1991.
James M. Grace, CPA Age 53 Director Since 1984
Vice President and Treasurer of ILCO since January 1985.
Executive Vice President, Treasurer and Director of
InterContinental Life Insurance Company since 1989. Vice
President, Treasurer and Director of Financial Industries
Corporation since 1976. Executive Vice President and Treasurer
of Investors Life Insurance Company of North America since 1989;
Executive Vice President, Treasurer and Director of Family Life
Insurance Company (a subsidiary of FIC) since June 1991.
Director, Executive Vice President and Treasurer of Investors
Life Insurance Company of Indiana since February 1995.
Jeffrey H. Demgen Age 44 Director Since 1995
Director of FIC since May 1995. Vice President of FIC since
August 1996. Vice President and Director of ILCO since August
1996. Director of Family Life Insurance Company since October
1992. Executive Vice President of Family Life Insurance Company
since August 1996. Senior Vice President of Family Life
Insurance Company from October 1992 to August 1996. Executive
Vice President and Director of Investors Life Insurance Company
of North America since August 1996. Senior Vice President and
Director of Investors Life Insurance Company of North America
from October 1992 to June 1995. Executive Vice President of
InterContinental Life Insurance Company since August 1996.
Senior Vice President of InterContinental Life Insurance Company
from October 1992 to June 1995. Executive Vice President and
Director of Investors Life Insurance Company of Indiana since
August 1996. Senior Vice President of United Insurance Company
of America from September 1984 to July 1992.
Richard A. Kosson, CPA Age 64 Director Since 1981
Certified Public Accountant and partner in the firm of Manheim,
Kosson & Novick in Millburn, New Jersey.
Roy F. Mitte Age 65 Director Since 1984
Chairman of the Board and Chief Executive Officer of the Company
and InterContinental Life Insurance Company since 1985. President
of the Company since April, 1985. Chairman of the Board,
President and Chief Executive Officer of FIC since 1976. Chairman
of the Board, President and Chief Executive Officer of Investors
Life Insurance Company of North America since December 1988.
Chairman of the Board, President and Chief Executive Officer of
Family Life Insurance Company since June 1991. Chairman of the
Board, President and Chief Executive Officer of Investors Life
Insurance Company of Indiana since February 1995. Chairman, ILG
Securities Corporation since 1988.
Eugene E. Payne, Ph. D. Age 54 Director Since 1989
Vice President of ILCO since December 1988 and Director since
1989. Vice President and Director of Financial Industries
Corporation since February 1992. Executive Vice President,
Secretary and Director of Investors Life Insurance Company of
North America since 1988. Executive Vice President since
December 1988 and Director since May 1989 of InterContinental
Life Insurance Company. Executive Vice President, Secretary and
Director of Family Life Insurance Company since June 1991.
Executive Vice President, Secretary and Director of Investors
Life Insurance Company of Indiana since February 1995.
H. Gene Pruner Age 69 Director Since 1995
Director of ILCO since August 1996. Director of Investors Life
Insurance Company of Indiana since February, 1995. President of
Market Share, Inc. since April 1985.
Steven P. Schmitt Age 50 Director Since 1994
Senior Vice President since April 1992 and Director, Vice
President and Assistant Secretary since 1989 of Investors Life
Insurance Company of North America and InterContinental Life
Insurance Company. Senior Vice President since April 1992 and
Director and Vice President since June 1991 of Family Life
Insurance Company. Director, Senior Vice President and Assistant
Secretary of Investors Life Insurance Company of Indiana since
June 1995.
Donald Shuman Age 72 Director Since 1980
Real estate specialist, engaged in sales and management of real
estate for his own company, Don Shuman Associates, a real estate
brokerage and management firm.
Mr. Shuman was the general partner of Shuman-Carlisle Mall
Associates, a partnership that owned a 400,000 square foot
shopping mall located in Carlisle, Pennsylvania. In January
1993, the partnership filed a petition pursuant to Chapter 11 of
the Federal Bankruptcy Code, and that bankruptcy proceeding was
concluded in early 1995.
All of the nominees named on the previous pages were
elected Directors at the 1996 Annual Shareholders Meeting, except
Mr. Demgen and Mr. Pruner, who were appointed Directors by the
Board of Directors on August 26, 1996.
The incumbent directors have been nominated for submission
to vote of the shareholders for reelection at the 1997 annual
shareholders' meeting.
REDOMESTICATION OF THE COMPANY
The second item which is to be considered at the Annual
Meeting is the redomestication of the Company from the State of
New Jersey to the State of Texas (the "Redomestication"). In
order to accomplish this change of domicile, the Company has
created a wholly-owned subsidiary, ILCO-Texas, a Texas company.
If the Redomestication proposal is approved by the Shareholders
of the Company, the Company would merge with ILCO-Texas (the
"Merger"), pursuant to a Plan and Agreement of Merger (the "Plan
of Merger"). The surviving company in the Merger will be ILCO-
Texas. Immediately following the completion of the Merger,
ILCO-Texas will change its name to InterContinental Life
Corporation. Each share of the common stock of InterContinental
Life Corporation, a New Jersey company, ($.22 par value), will be
automatically converted into one share of common stock of ILCO-
Texas, a Texas company, (par value $.22), by operation of the
merger. As of April 28, 1997, there were 5,339,497 shares of the
common stock of the Company issued and outstanding. The terms
and conditions of the proposed merger are described more fully in
the Plan of Merger attached hereto as Exhibit "A".
The Board of Directors of the Company unanimously approved
the proposed change of domicile of the Company and the related
Plan of Merger, by unanimous written consent, on April , 1997.
ILCO-Texas was incorporated in Texas on April 29, 1997. A
copy of the Articles of Incorporation is attached hereto as
Exhibit "B". The Board of Directors of ILCO-Texas has adopted
Bylaws, a copy of which is attached hereto as Exhibit "C". The
Bylaws of ILCO-Texas are substantially similar as the Bylaws of
the Company.
The Articles of Incorporation of ILCO-Texas provide for
authorized common stock in the amount of 15,000,000 shares of
$.22 par value. The Articles of Incorporation of the Company
provide for authorized common stock in the amount of 10,000,000
shares. In connection with the authorization of the
incorporation of ILCO-Texas, the Board of Directors of the
Company believes that it is desirable to have sufficient
authorized shares of common stock available to ILCO-Texas for
future stock splits or dividends, financing and acquisition
transactions and other general corporate purposes. The
additional shares of common stock would be available for issuance
without further action by the stockholders unless such action is
required by applicable law or regulation. Neither the Company
nor ILCO-Texas has any present intent, understandings or
arrangements for issuance of the 5,000,000 shares of common stock
authorized by the Articles of Incorporation of ILCO-Texas which
are in addition to the 10,000,000 shares of common stock
presently authorized by the Articles of Incorporation of the
Company.
The Articles of Incorporation of ILCO-Texas also provide for
authorized preferred stock in the amount of 30,000,000 shares of
$1.00 par value. This provision is intended to continue in
effect, after the Merger, the combined preferred stock structure
of the Company. The current preferred stock structure of the
Company is described in the following paragraph. ILCO-Texas has
no present intent, understandings or arrangements for issuance of
the Preferred Stock which is authorized by the Articles of
Incorporation of ILCO-Texas.
The Articles of Incorporation of the Company provide for
three classes of preferred stock - (i) Class A Preferred Stock,
5,000,000 shares of $1.00 par value, (ii) Class B Preferred
Stock, 15,000,000 shares of $1.00 par value and (iii) Class C
Preferred Stock, 10,000,000 shares of $1.00 par value. The Class
A Preferred Stock and the Class B Preferred Stock were issued in
December, 1988, in connection with the acquisition by the Company
of two life insurance companies from CIGNA Corporation. In May,
1990, the Company effected an exchange of its Class A Preferred
Stock and its Class B Preferred Stock for subordinated notes
issued to the holders of the preferred stock. The subordinated
notes were subsequently prepaid by the Company. As a result of
the May, 1990 exchange, the Class A Preferred Stock and the Class
B Preferred Stock are classified as preferred stock held in
treasury. The Company has not issued any of the Class C
Preferred Stock.
The initial Board of Directors of ILCO-Texas consists of the
same individuals who are currently members of the Board of
Directors of the Company. If the individuals who are proposed
for election as directors of the Company at this meeting are
elected by the Shareholders, such individuals would continue to
serve as directors of ILCO-Texas, until the Annual Meeting of
Shareholders of ILCO-Texas or until their successors are elected
and qualified.
Vote Required:
The affirmative vote of a majority of those shares of common
stock of the Company constituting at least a quorum is required
in order for the proposed Redomestication to be approved. Since
ILCO-Texas is a wholly-owned subsidiary of the Company, the
Company has sufficient voting power to cause ILCO-Texas to
approve the proposed transaction on behalf of ILCO-Texas.
Financial Industries Corporation ("FIC") owns approximately
46% of the outstanding common stock of the Company.
Reasons for the Redomestication:
Since 1992, the employees of the life insurance subsidiaries
of the Company have been located at the executive offices in
Austin, Texas. While the Company leases an office building in
Elizabeth, New Jersey which previously served as the home office
of the Company, and a subsidiary of the Company, InterContinental
Life Insurance Company, is currently domiciled in New Jersey and
owns several small parcels of real estate located in Elizabeth,
New Jersey, the Company currently does not have any significant
business contacts within the State of New Jersey.
The Company does not expect that the change in domicile will
effect any significant cost savings. However, the Company
believes that the proposed transaction will enable it to
centralize its primary corporate reporting and compliance
activities in the same jurisdiction where its executive offices
are located.
FIC, which owns approximately 46% of the common stock of the
Company, is also incorporated in the State of Texas.
Conditions to the Redomestication and Merger:
The proposed redomestication and the related Plan of Merger
are subject to certain conditions, including the following: (i)
the affirmative vote of a majority of those shares of common
stock of the Company constituting at least a quorum of the
outstanding shares of common stock of the Company and (ii) the
obtaining of all necessary consents or approvals of any federal
or state regulatory authority necessary for the consummation of
the proposed transaction.
The Board of Directors of the Company may terminate the Plan
of Merger if, in its opinion, consummation of the redomestication
and merger would be inadvisable or because of the number of
shares of stock held by Shareholders of the Company who vote
against the proposed transaction. No specific percentage of
shares voting against the proposal which would result in the
termination of the redomestication and the Plan of Merger has
been established at this time. See also the discussion under the
caption "Dissenters' Rights", for a description of the additional
circumstances under which the Board of Directors may terminate
the Plan of Merger.
Effective Date:
The Plan of Merger provides that the merger will become
effective (the "Effective Time") upon the filing of all required
documents with the Texas Secretary of State and the New Jersey
Secretary of State, whichever is later, provided that such
documents shall not be filed until the later of the following:
a. approval of this Merger by the affirmative vote of
a majority of those shares of common stock of ILCO
constituting at least a quorum at the meeting of
Shareholders at which the Plan of Merger is
considered;
b. approval of this Merger by the sole shareholder of
ILCO-Texas; and
c. the obtaining of all consents or approvals
necessary for the consummation of the Merger,
including, but not limited to, the consent of
approval of any federal or state regulatory
authority.
The Plan of Merger provides for automatic termination in the
event that the above described conditions have not been satisfied
on or before December 31, 1997.
Dissenters' Rights:
Under the provisions of the New Jersey Business Corporation
Act, Shareholders who do not vote in favor of the proposed
redomestication and the related Plan of Merger will not have any
"rights of dissenting shareholders", as that term is defined in
the Act. Section 14A:11-1 provides, in part, that:
(1) Any shareholder of a domestic corporation shall
have the right to dissent from any of the following
corporate actions
(a) any plan of merger or consolidation to
which the corporation is a party, provided
that, unless the certificate of incorporation
otherwise provides
(i) a shareholder shall not have
the right to dissent from any plan
of merger or consolidation with
respect to shares:
(A) of a class or series which is
listed on a national securities
exchange or is held of record by
not less that 1,000 holders of
record on the record date fixed to
determine the shareholders entitled
to vote upon the plan of merger or
consolidation;
As of the record date for the Annual Meeting, there were
1,533 holders of record of the common stock of the Company. In
addition, the common stock of the Company is listed on the Nasdaq
SmallCap Market. Accordingly, the Company believes that the
rights of dissenting shareholders (including the right to demand
payment of fair value) as described in Chapter 11 of the New
Jersey Business Corporation Act are not available to
Shareholders who do not vote in favor of the proposed
redomestication and the related Plan of Merger. In the event
that a determination is subsequently made that, notwithstanding
the foregoing discussion, shareholders of the Company do have
dissenters' rights, the Board of Directors of the Company
reserves the right to terminate the Plan of Merger if, in its
opinion, consummation of the Merger is inadvisable due to the
number of shares of stock of the Company held by stockholders who
dissent from the Plan of Merger and request payment in cash for
the fair value of their shares, in accordance with applicable
laws.
Comparison of State Law:
The following is a comparison of the general provisions of
the rights of Shareholders under the Business Corporation Acts of
New Jersey and Texas. The comparison is not intended as an
exhaustive comparison of such laws and persons interested in a
more complete review of the similarities and differences between
such laws are encouraged to consult with their own legal advisor.
If the proposed Redomestication and the related Plan of Merger is
consummated, the rights of Shareholders of the Company will be
changed as follows:
1. Governing Law. As a result of the Redomestication, the
state of incorporation will be changed to Texas from New Jersey.
The Company will be conducting business in Texas as a domestic
corporation, rather than a foreign corporation. Since the
Company will continue to have an interest in real property
located in New Jersey, it will register as a foreign corporation
in New Jersey. Except as described below, under the caption
"Shareholder Voting", there are no material differences between
the laws of Texas and New Jersey as they pertain to the operation
of the Company.
2. Classification of Directors. Under the laws of New
Jersey and Texas, there are no specific requirements pertaining
to the structure of the board of directors of a corporation. In
both states, the minimum number of directors is one. Both New
Jersey and Texas law permit the creation of classes of directors,
so as to provide for staggered terms. In the case of a New
Jersey corporation, any provision for classes of directors must
be set forth in the articles of incorporation. A corporation
domiciled in Texas may create classes of directors pursuant to
its bylaws. The articles of incorporation of the Company do not
provide for the creation of classes of directors. Neither the
articles of incorporation or the bylaws of ILCO-Texas provide for
the creation of classes of directors and there are no present
plans to create such classes.
The laws of both New Jersey and Texas permit the creation of
one or more committees of the board of directors of a
corporation. The Bylaws of the Company currently provide for an
Executive Committee and such other committees as approved by the
Board of Directors. The Bylaws of ILCO-Texas include similar
provisions. Upon consummation of the Redomestication and the
Plan of Merger, the committee structure of ILCO-Texas will be the
same as the current committee structure of the Company.
3. Shareholder Voting. Under the laws of the State of New
Jersey, shareholders do not have the right to cumulative voting
with respect to the election of directors, unless the articles of
incorporation so provides. The Articles of Incorporation of the
Company do not provide for cumulative voting.
Texas law provides for cumulative voting with respect to the
election of directors, unless the articles of incorporation
provide otherwise. The Articles of Incorporation of ILCO-Texas
preclude cumulative voting in connection with the election of
directors.
The laws of both New Jersey and Texas allow one vote for
each share on matters submitted to the vote of shareholders.
Under the laws of New Jersey, a plan of merger or consolidation
requires the vote of a majority of those shares constituting at
least a quorum of the outstanding shares of stock. The
corresponding provisions of the laws of Texas provides that the
affirmative vote of the holders of at least two-thirds of the
outstanding shares is required in order to effect the merger of a
corporation domiciled in Texas with another corporation.
4. Preemptive Rights: Under the laws of both New Jersey
and Texas, the shareholders of a corporation do not have
preemptive rights, unless the articles of incorporation
affirmatively provide for such rights. The articles of
incorporation of both the Company and ILCO-Texas do not provide
for preemptive rights.
Certain Federal Income Tax Consequences:
The following is a summary of the material U.S. federal
income tax consequences of the proposed Merger to holders of the
common stock of the Company. The summary is based upon the
Internal Revenue Code, administrative pronouncements, judicial
decisions and Treasury regulations, subsequent changes to any of
which may affect the tax consequences described herein. The
summary does not purport to be a comprehensive description of all
of the tax consequences applicable to a particular taxpayer.
Shareholders are urged to consult their tax advisors as to the
particular federal income tax consequences to them of the Merger
and as to state, local and other tax consequences, if any.
The Merger is intended to qualify for federal income tax
purposes as a "reorganization" within the meaning of Section 368
of the Internal Revenue Code. The Company intends to obtain an
opinion from , tax advisors to the
Company that based upon customary representations and
assumptions, the Merger so qualifies. The consummation of the
Merger is contingent upon the receipt of such opinion. If the
Merger qualifies as a reorganization under the Internal Revenue
Code, the Company anticipates that the opinion of its tax
advisors will confirm the following tax consequences: (i) no
gain or loss will be recognized to the Company or ILCO-Texas as a
result of the Merger, (ii) no gain or loss will be recognized to
the shareholders of the Company upon the conversion of their
shares of stock of the Company into shares of ILCO-Texas, (iii)
the tax basis of shares of stock of the Company will continue to
be the tax basis for shares of ILCO-Texas stock with respect to
individuals whose shares of stock in the Company are converted
into shares of ILCO-Texas, (iv) the holding period of shares of
stock of ILCO-Texas received by shareholders will include the
holding period of the shares of the Company for such individuals,
provided that such shares were capital assets in the hands of the
shareholder of the Company at the time of the Merger, and (v) the
Merger will permit the following federal income tax attributes to
be carried over from the Company to ILCO-Texas: (a) net operating
loss carryovers, (b) unused investment credit, (c) capital loss
carryovers, (d) accounting methods, (e) tax year and (e) earnings
and profits.
EXECUTIVE OFFICERS
The following table sets forth the names and ages of the
persons who currently serve as the Company's executive officers
together with all positions and offices held by them with the
Company. Officers are elected to serve at the will of the Board
of Directors or until their successors have been elected and
qualified.
Name Age Positions and Offices
Roy F. Mitte 65 Chairman of the Board,
President and
Chief Executive Officer
James M. Grace 53 Vice President and
Treasurer
Eugene E. Payne 54 Vice President and
Secretary
Jeffrey Demgen (1) 44 Vice President
In May 1991, Roy F. Mitte suffered a stroke, resulting in
partial paralysis affecting his speech and mobility. Mr. Mitte
continues to make the requisite decisions in his capacity as
Chief Executive Officer, although his ability to communicate and
his mobility are impaired.
(1) Mr. Demgen was appointed a Vice President of the Company
on August 26, 1996.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF
1934
Section 16(a) of the Securities Exchange Act of 1934
requires the Company's officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities, to file reports of beneficial ownership on
Form 3 and changes in beneficial ownership on Forms 4 and 5 with
the Securities and Exchange Commission. Officers, directors and
greater than ten percent shareholders are required by SEC
regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on review of the copies of
such forms furnished to the Company, or written representations
that no Forms 5 were required, the Company believes that during
the period from January 1, 1996 through December 31, 1996, all
Section 16(a) filing requirements applicable to its officers,
directors and greater than ten percent beneficial owners were
complied with, except as follows: (i) Jeffrey H. Demgen filed a
Form 5 in February, 1997, to report his appointment as a Director
of the Company as of August 26, 1996, and to report beneficial
ownership of (a) 198.5076 shares of ILCO common stock through the
Employee Stock Purchase Plan made available to employees of the
Company and 2,803 shares of ILCO common stock through the
Employee Stock Ownership Plan, a non-contributory, tax-qualified
plan made available to employees of the Company; (ii) W. Lewis
Gilcrease filed a Form 5 in February, 1997, to report the
disposition in December, 1996 of 4,420 shares of ILCO common
stock to participants in a tax qualified retirement plan for
which he served as trustee; (iii) Eugene E. Payne filed a Form 5
in February, 1997, to report the purchase in August, 1990, of
1,200 shares of ILCO common stock which had not been included in
prior Form 4 filings; and (iv) Roy F. Mitte filed a Form 5 in
February, 1997, to report the surrender, in December, 1996, of
options to acquire 120,000 shares of ILCO common stock and the
receipt of final payment from the Company of amounts payable in
connection with such cancellation.
H. Gene Pruner filed a Form 5 in February, 1997, to report
his appointment as a Director of the Company as of August 26,
1996 and to report no beneficial ownership of ILCO common stock.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table presents information as of March 14,
1997 as to all persons who, to the knowledge of the Company, were
beneficial owners of five percent (5%) or more of the Common
Stock of the Company.
Amount & Nature of
Name and Address Beneficial Ownership Percent of
Class
Financial Industries
Corporation
701 Brazos, Suite 1400
Austin, Texas 78701..........3,668,501(1) 61.54%(6)
Roy F. Mitte
701 Brazos, Suite 1400
Austin, Texas 78701..........3,723,392(2)(3)
62.46%(6)
Investors Life Insurance
Company of North America
701 Brazos, Suite 1400
Austin, Texas 78701.......... 334,960(4) 7.86%(6)
InterContinental Life
Insurance Company
701 Brazos, Suite 1400
Austin, Texas 78701.......... 281,560(5) 6.61%(6)
Fidelity Management
& Research Company
82 Devonshire Street
Boston, MA 02109 ............ 418,300(7) 9.82%(6)
(1) Includes 1,966,346 shares of the Company's stock presently
owned and an option to purchase up to 1,702,155 shares of the
Company's authorized but unissued Common Stock which is the
balance of the option granted to Financial Industries Corporation
(FIC) by the Company in December 1985. This option may be
exercised by FIC at any time at an exercise price equal to the
average bid prices of the Company's Common Stock over the six
month period immediately preceding such exercise.
(2) As of March 14, 1997, Mr. Mitte owned directly 25,000 shares
of the Company's stock . Mr. Mitte, jointly with his wife,
Joann, also owns 1,866,520 common shares of FIC which constitutes
34.39 percent of the outstanding common stock of that company,
and Mr. Mitte holds the position of Chairman, President and Chief
Executive Officer of FIC.
Since FIC holds a controlling interest in the Company, Mr.
Mitte's personal holdings in the Company have been combined with
the holdings of FIC in determining the amount and percentage of
Mr. Mitte's beneficial ownership of the Company.
(3) Includes 14,611 shares allocated to Mr. Mitte's account
under the Employee Stock Ownership Plan.
(4) Represents 281,560 shares owned by InterContinental Life
Insurance Company (ILIC) and 53,400 shares owned by Investors
Life Insurance Company of North America (Investors-NA). ILIC is
a life insurance subsidiary of Investors-NA. All of these shares
are treated as treasury shares.
(5) All are directly owned by ILIC and are treated as treasury
shares.
(6) Assumes that the outstanding stock options or warrants
available to other persons have not been exercised.
(7) As reported to the Company on a Schedule 13(G) filed by FMR
Corporation, the parent company of Fidelity Management Company
( Fidelity ). According to the Schedule 13(G), Fidelity acts as
investment advisor to the Fidelity Low-Priced Stock Fund, a
registered investment company, and the Fund is the owner of
418,300 shares of ILCO common stock.
The following table contains information as of April 21,
1997 as to the Common Stock of the Company beneficially owned by
each Director, nominee and executive officer and by all executive
officers and directors of the Company as a group. The
information contained in the table has been obtained by the
Company from each director and executive officer except for
information known to the Company. Except as indicated in the
notes to the table, each beneficial owner has sole voting power
and sole investment power as to the shares listed opposite his
name.
Name Amount & Nature of Beneficial Ownership Percent of
Class
Joseph F. Crowe(1) 38,744 (3) *
Jeffrey H. Demgen 3,001 (3) *
Theodore A. Fleron 14,366 (3) (4) *
W. Lewis Gilcrease -0- *
James M. Grace (1) 68,137 (2) (3) 1.86%
Richard Kosson 200 *
Roy F. Mitte (1) 3,723,292 (2) (3) 62.46%
Eugene E. Payne (1) 48,199 (3) 1.26%
H. Gene Pruner -0- *
Donald Shuman 450 *
Steven P. Schmitt 7,041 (3) *
All Executive Officers
and Directors as a
group, all of whom
are listed above 3,888,250 (1) (2) (3) (4) 64%
* Less than 1%
(1) Is an executive officer and/or director of FIC which as of
April 21, 1997, beneficially owned 3,668,501 shares of the
Company's Common Stock (including option rights to purchase
1,702,155 shares of the Company). In addition to the
shareholdings of Mr. Mitte in FIC (see Note 2, prior page), Mr.
Grace owns 5,600 shares of FIC Common Stock.
(2) 379,738 shares of the Company's Common Stock are held by
the Trustees of the Company's Employee Stock Ownership Plan
("ESOP") of which 15,180 shares are unallocated to any
participant's account. Messrs. Grace and Mitte are the Trustees
of the ESOP and are entitled to vote such unallocated shares.
The ESOP participants have the right to direct the voting of
shares allocated to their respective accounts. Beneficial
ownership of these unallocated shares is disclaimed by Messrs.
Grace and Mitte. The same 15,180 shares are included in the
above table for each of Messrs. Grace and Mitte as required for
technical compliance with the definition of beneficial ownership
promulgated by the Securities and Exchange Commission, and are
counted once for purposes of executive officers and directors as
a group.
(3) Includes shares beneficially acquired through participation
in the Company's ESOP and/or the Employee Stock Purchase Plan,
which are group plans for eligible employees.
(4) Includes 6,000 shares issuable upon exercise of options
granted under the Non-Qualified Stock Option Plan during 1988 to
Mr. Fleron at a price of $3.33 (as adjusted) per share, which are
currently exercisable.
COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS
Summary Compensation Table
The following table sets forth information concerning the
compensation of the Company's Chief Executive Officer and each of
the four other persons who were serving as executive officers of
the Company at the end of 1996 and received cash compensation
exceeding $100,000 during 1996.
Annual Compensation
Long Term
Compensa-
tion
Awards
Name and Stock
Principal Year Salary1 Bonus1 Other2 Options All Other
Position (Shares) Compen-
sation
Roy F.
Mitte,
Chairman,
President 1996 $286,643 -0- -0- -0- $2,446,397(3)
and Chief 1995 286,643 -0- -0- -0- 713,513(4)
Executive 1994 251,750 $576,1595 -0- -0- 1,376,663(6)
Officer
James M.
Grace,
Vice 1996 195,000 15,000 -0-7 -0- -0-
President 1995 195,000 10,000 -0- -0- -0-
and 1994 195,000 2,000 -0- -0- -0-
Treasurer
Eugene E.
Payne,
Vice 1996 195,000 15,000 -0-8 -0- -0-
President 1995 195,000 10,000 -0- -0- -0-
and 1994 195,000 5,000 -0- -0- -0-
Secretary
Joseph F.
Crowe, 1996 196,500 15,000 -0-9 -0- -0-
Vice 1995 195,000 10,000 -0- -0- -0-
Presi- 1994 195,000 5,500 -0- -0- -0-
dent
Jeffrey
H. Demgen
Vice
Presi- 1996 102,500 7,500 -0- -0- -0-
dent10
(1) The executive officers of the Company have also been
executive officers of the Company's insurance subsidiaries and
FIC and FIC's insurance subsidiary, Family Life. The only
executive officer who has been paid compensation directly by
Family Life is Mr. Mitte, who received $216,857 in salary in
1996, $216,857 in salary 1995 and $251,750 in salary and $538,080
in bonus in 1994 from Family Life, which amounts are not included
in the table above. Family Life reimbursed the Company (or, in
the case of Mr. Mitte, paid Mr. Mitte directly) the following
amounts as Family Life's share of these executive officers' cash
compensation for 1994, 1995 and 1996: $789,780, 216,857 and
$216,857, respectively, for Mr. Mitte; $70,590, $88,293 and
$83,987, respectively, for Mr. Grace; $126,750, 79,875 and
$83,987, respectively, for Dr. Payne; $68,250, $88,293 and
$84,633, respectively, for Mr. Crowe; and $46,125 (1996 only) for
Mr. Demgen.
(2) Does not include the value of perquisites and other personal
benefits because the aggregate amount of any such compensation
does not exceed the lesser of $50,000 or 10 percent of the total
amount of annual salary and bonus for any named individual.
(3) During 1996, the Company paid Mr. Mitte: (i) $1,862,000 for
the cancellation in 1996 of options to purchase 121,500 shares of
the Company's common stock, plus interest at the rate of 8% per
year on such amount for a one year period (for a total of
$2,011,737); (ii) $120,700 for the federal income tax
reimbursement relating to the cancellation in 1995 of options to
purchase 50,000 shares of the Company's common stock; and (iii)
$313,960 for the federal income tax reimbursement relating to the
1996 options cancellation described above in this footnote.
Each of these payments were made pursuant to the contract
referred to in footnote (4).
(4) In 1989, the Board of Directors granted Mr. Mitte options
to purchase 600,000 shares (as adjusted for the three-for-one
stock split effective February 15, 1990) of the Common Stock of
the Company in equal annual installments of 150,000 shares each.
Each installment was subject to the approval of the Board of
Directors and is exercisable for a period of ten years from the
date the options become exercisable at a price of $1.00 per share
(as adjusted). The Board of Directors voted to award installments
of 150,000 shares in each of 1989, 1990, 1991 and 1992. In
October 1992, Mr. Mitte surrendered to the Company for
cancellation options to purchase 120,000 shares. The Company and
Mr. Mitte entered into a contract in 1993 providing for the
cancellation in 1993 of 240,000 options for an aggregate amount
of $3,237,120 and the cancellation in subsequent years of the
remaining options for an aggregate amount of $3,610,240. In
addition, the Company agreed to pay Mr. Mitte the amount
necessary to ensure that Mr. Mitte will receive the same amount,
after federal income tax, that he would have received if the
options had been cancelled in 1992. During 1995, Mr. Mitte was
paid $836,582 for the cancellation in 1995 of options to purchase
50,000 shares of ILCO's Common Stock, $156,323 for the federal
income tax reimbursement relating to the cancellation in 1994 of
options to purchase 68,500 shares and $127, 608 as the final
payment relating to the cancellation in 1993 of options to
purchase 240,000 shares. These option cancellation payments were
made pursuant to the contract referred to above. FIC's
Compensation Committee made a recommendation to FIC's Board of
Directors, which it adopted, that, in lieu of paying Mr. Mitte a
bonus as it has in the past, FIC pay $407,000 of these option
cancellation payments to Mr. Mitte, with the balance of $713,513
being paid by ILCO.
(5) The Company's Compensation Committee made a recommendation
to the Board of Directors, which the Board adopted, that a bonus
be paid to Mr. Mitte to enable him to pay off the $650,000 loan
that the Company had made to Mr. Mitte in 1989 and to reimburse
him for the amount of federal income tax payable on the bonus.
Since the Company and FIC have usually each paid one-half of Mr.
Mitte's cash compensation, FIC's Board of Directors, acting on
the recommendation of its Compensation Committee, subsequently
authorized FIC to pay $500,000 of that bonus to Mr. Mitte.
Therefore, the Company paid $576,159, and FIC paid $500,000, of
the bonus.
(6) During 1994, the Company paid Mr. Mitte $997,520 for the
cancellation in 1994 of options to purchase 68,500 shares of the
Company's Common Stock and $379,143 for the federal income tax
reimbursement relating to the cancellation in 1993 of options to
purchase 240,000 shares. Both of these payments were made
pursuant to the contract referred to in footnote (4).
(7) Mr. Grace exercised stock options in 1996 to purchase
12,000 shares of the Company's Common Stock. See "Aggregated
Option Exercises in 1996" below.
(8) Dr. Payne exercised stock options in 1996 to purchase
6,000 shares of the Company's Common Stock. See "Aggregated
Option Exercises in 1996" below.
(9) Mr. Crowe exercised stock options in 1996 to purchase 8,000
shares of the Company's Common Stock. See "Aggregated Option
Exercises in 1996" below.
(10) Mr. Demgen became an executive officer of the Company
in August, 1996.
Aggregated Option Exercises in 1996
The following table sets forth information concerning each
exercise of stock options during 1996 by each of the executive
officers of the Company.
Shares Acquired Value
Name on Exercise (#) Realized ($)
Joseph F. Crowe 8,000 $ 44,000
James M. Grace 12,000 119,040
Eugene E. Payne 6,000 58,020
Aggregated Stock Option Values
The following table sets forth information with respect to
the unexercised options held by the executive officers of the
Company.
Number of Unexercised Value of Unexercised
Options Held At In-the Money
December 31, 1996 Options at December 31,
1996(1)
Exercisable Unexercisable Exercisable Unexercisable
James M.
Grace 42,000 24,000 $420,840 $244,080
Eugene E.
Payne 26,000 12,000 264,420 122,040
Joseph F.
Crowe 22,000 0 104,500 0
(1) Based on the closing price of the Company's Common Stock on
NASDAQ on December 31, 1996 ($13.50).
Pension Plan Table
The following table sets forth estimated annual pension
benefits payable upon retirement at age of 65 under the Company's
noncontributory defined benefit plan ("Pension Plan") to an
employee in the final pay and years of service classifications
indicated, assuming a straight life annuity form of benefit. The
amounts shown in the table do not reflect the reduction related
to Social Security benefits referred to below.
Years of Service
Remuneration 15 20 25 30 or more
$125,000 $31,250 $41,667 $52,083 $62,500
150,000 37,500 50,000 62,498 75,000
175,000 43,750 58,333 72,914 87,500
200,000 50,000 66,667 83,330 100,000
The normal retirement benefit provided under the Pension
Plan is equal to 1.57% of final average eligible earnings less
.65% of the participant's Social Security covered compensation
multiplied by the number of years of credited service (up to 30
years). The compensation used in determining benefits under the
Pension Plan is the highest average earnings received in any five
consecutive full-calendar years during the last ten full-calendar
years before the participant's retirement date. The maximum
amount of annual salary and bonus that can be used in determining
benefits under the Pension Plan is $200,000 for any year prior to
1994 and is $150,000 for 1994 and each subsequent year.
The annual eligible earnings for 1996 only covered by the
Pension Plan (salary and bonus up to $150,000) with respect to
the individuals reported in the Summary Compensation Table were
as follows, with their respective years of credited service under
the Pension Plan at December 31, 1996 being shown in parentheses:
Mr. Mitte, $150,000 (9 years), Mr. Grace, $150,000 (9 years), Dr.
Payne, $150,000 (8 years) and Mr. Crowe, $150,000 (5 years) and
Mr. Demgen (4 years).
Directors' Compensation
Directors who are not officers or employees of the Company
are paid a $5,000 annual fee, and are compensated $1,000 for each
regular or special meeting of the Board of Directors which they
attend in person. In the case of telephonic meetings of the
Board, non-employee directors who participate in such telephonic
meetings are compensated $500 for such a meeting. Directors who
participate via telephone in a regular or special meeting which
is held by other than conference telephone are not entitled to a
fee for such meeting.
Non-employee directors serving on committees of the Board
are compensated in the amount of $500 for each committee meeting
they attend whether such participation is in person or by
telephone, provided that the committee meeting is held on a day
other than that on which the Board meets.
Members of Compensation Committee
W. Lewis Gilcrease, Donald Shuman and Richard A. Kosson are
the members of the Company's Compensation Committee, which makes
recommendations to the Board of Directors with respect to the
Chief Executive Officer's compensation.
Compensation Committee Interlocks and Insider Participation
Roy F. Mitte determines the compensation of all executive
officers of the Company, other than the Chief Executive Officer.
Mr. Mitte is the Chairman of the Board, President and Chief
Executive Officer of the Company and FIC. He also determines the
compensation of all executive officers of FIC, other than the
Chief Executive Officer.
Reports on Executive Compensation
The following report and the performance graph following
those reports shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1993 or
under the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such
Acts.
Chief Executive Officer's Report
The following report is made by the Chief Executive Officer
with respect to compensation policies applicable to the Company's
executive officers, other than the Chief Executive Officer.
The goal of the Company's executive compensation policies is
to ensure that an appropriate relationship exists between
executive pay and the creation of shareholder value, while at the
same time motivating and retaining senior managers. Executive
compensation is based on several factors, including corporate
performance. While sales, earnings, return on equity and other
performance measures are considered in making annual executive
compensation decisions, no formulas, preestablished target levels
or minimum performance thresholds are used. Each executive
officer's individual initiatives and achievements and the
performance of the operations directed by the executive are
integral factors utilized in determining that officer's
compensation.
The Company's compensation program consists of cash
compensation, long-term equity-based compensation in the form of
stock options and interests in the Employees Stock Ownership Plan
("ESOP") and various other benefits, including medical and
pension plans generally available to employees of the Company.
The objectives of the stock option plans and the ESOP are to
create a strong link between executive compensation and
shareholders return and enable senior managers to develop and
retain a significant and long-term ownership position in the
Company's Common Stock. This assures that key employees have a
meaningful stake in the Company, the ultimate value of which is
dependent on the Company's continued long-term success, and that
the long-term interests of those employees are aligned with those
of the shareholders.
Under the Company's Incentive Stock Option Plan, options to
purchase shares of the Company's Common Stock at 100% of fair
market value on the date of grant have been granted to certain
executive officers and other key employees. At December 31,
1996, options to acquire 72,000 shares were outstanding, all of
which options are held by executive officers. Under the
Company's Non-Qualified Stock Option Plan, options to buy
Company's Common Stock at 100% of the fair market value on the
date of grant but in no event less than $3.33 per share can be
granted to officers, directors, agents and others. At December
31, 1996, options to purchase 174,000 shares were outstanding, of
which options to buy 84,000 shares were held by executive
officers. The Company's Board of Directors administers both
plans. Options were granted in 1988, 1991 and 1995. No options
were granted in 1992, 1993, 1994, or 1996 and no further options
can be granted under the Incentive Stock Option Plan.
The Company's ESOP is a noncontributory employee benefit
plan available to all employees who have completed one year of
service. Allocations of the Company's contributions are made to
participants in accordance with their compensation. Vesting of
participants in their accounts occurs in annual installments over
a period of approximately ten years. The assets of the ESOP
consist of 365,417 shares of the Company's Common Stock, of which
76,835 shares are allocated to the accounts of executive officers
and 273,402 shares are allocated to the other participants.
The Company provides medical and pension benefits to the
executive officers that are generally available to employees. In
addition, executive officers may participate in the Company's
Savings and Investment Plan (401K Plan). Although the Company
does not make contributions to the plan, eligible employees may
make contributions to the plan on a tax-deferred basis.
The foregoing report has been furnished by Roy F. Mitte.
Compensation Committee's Report
The Compensation Committee of the Board of Directors makes a
recommendation to the Board of Directors each year with respect
to the Chief Executive Officer's compensation for that year. In
June, 1996, the Committee recommended that the Chief Executive
Officer's 1996 Compensation continue at the same level in effect
for the year 1995 ($286,643).
The compensation policies and practices of the Compensation
Committee are subjective and are not based upon specific
criteria. The Committee did consider the Company's overall
financial performance and its continuing progress in expense
management, maintenance of a high quality investment portfolio
and marketing of insurance products designed to generate an
acceptable level of profitability. The Committee recognized the
Chief Executive Officer's leadership role in the Company's
performance and his ability to select, recruit and motivate
qualified people to implement the Company's policies that have
contributed to that performance. Although the Committee believed
that an increase in the Chief Executive Officer's annual base
compensation in 1996 would have been justified, it accepted his
request that his annual base compensation for 1996 remain the
same as it was in 1995.
Since the Chief Executive Officer's 1996 compensation is not
based on any particular measures of the Company's performance,
such as sales, earnings or return on equity, there is no specific
discussion in this report of the relationship of the Company's
performance to the Chief Executive Officer's compensation for
1996. Nevertheless, the Committee notes that the Company's net
income for 1996 was $26,938,000 ($5.12 per share) as compared to
net income in 1995 of $10,714,000 ($2.11 per share).
The foregoing report is submitted by W. Lewis Gilcrease,
Richard A. Kosson and Donald Shuman, the members of the
Compensation Committee.
Performance Graph
The graph and table below compare the cumulative total
shareholder return on the Company's Common Stock for the last
five calendar years with the cumulative total return on the
Nasdaq Stock Market (U.S.) and an index of stocks of life
insurance companies traded on Nasdaq over the same period
(assuming the investment on December 31, 1991 of $100 in the
Company's Common Stock, The Nasdaq Stock Market (U.S.) and an
index of stocks of life insurance companies traded on Nasdaq and
the reinvestment of all dividends).
(Performance Graph Omitted)
12/31/91 12/31/92 12/31/93 12/31/94 12/30/95 12/31/96
The Company(1) $100 $150.0 $168.8 $131.3 $159.4 $168.8
The Nasdaq
Stock Market
(US) $100 $116.4 $133.6 $130.6 $184.7 $227.2
Index of
Nasdaq Life
Insurance
Stocks(2) $100 $138.0 $165.1 $142.0 $213.4 $275.2
(1) The dollar amounts for the Company's Common Stock are based
on the closing bid prices on Nasdaq on the dates indicated.
(2) The Index of Nasdaq Life Insurance Stocks is comprised of
life insurance companies whose stocks were traded on Nasdaq
during the last five calendar years (50 issues traded during that
period, of which, 26 issues were traded on December 31, 1996).
These peer companies were selected by the Company on a line-of-
business basis.
Employments Agreements and Change in Control Arrangements
The terms and conditions of employment agreements that the
Company would enter into upon the occurrence of certain events
that result in the agreements taking effect were approved by the
Board of Directors with respect to Messrs. Grace, Payne and
Crowe in 1991. Each agreement would include two independent
provisions with respect to the effective date and the term of
each agreement. First, the term of the agreement would begin on
the earlier of (i) the date of retirement (early, normal or
deferred) of Roy F. Mitte from his position as Chairman,
President and Chief Executive Officer of the Company or (ii) the
date of death or disability of Mr. Mitte, and would terminate on
the last day of the twelfth month next following the commencement
date of the term of the agreement, unless extended upon mutually
acceptable terms.
Independently, the term of the agreement would commence upon
the date that any person who is not currently a control person
with respect to the Company acquires, or enters into an agreement
to acquire, control of the Company, directly or indirectly, and
would end on the last day of the twelfth month next following the
date on which the employee receives notice of the termination of
his employment with the Company or the life insurance
subsidiaries of the Company.
During the term of the agreement, the employee would be
entitled to perform all of the duties of the position or
positions held by the employee with the Company and all the
subsidiaries of the Company on the date immediately preceding the
commencement date of the term of the agreement.
During the term of the agreement, the employee would be
entitled to an annual rate of compensation which is not less than
the annual rate of compensation in effect as of the date
immediately preceding the commencement date of the term of the
agreement. During the term of the agreement, the employee would
be entitled to participate in and benefit from all employee
benefit plans and other fringe benefits on the same basis as such
plans and benefits are made available to other executive
personnel of the Company.
The agreement may be terminated by the Company only in the
event that the employee is guilty of theft of property of the
Company or commits a wrongful act which has a material adverse
effect upon the business of the Company and with respect to which
the employee would not be entitled to indemnification under the
provisions of the Bylaws of the Company in effect as of the
commencement date of the term of the agreement. The employee may
terminate the agreement upon thirty days advance written notice
to the Company.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS WITH MANAGEMENT
The obligations of the Company under its Senior Loan are
guaranteed by FIC. FIC presently owns 1,966,346 shares of the
company's common Stock, constituting 46.17% of such shares
outstanding, and holds options to acquire an additional 1,702,155
shares at the average bid price of such shares during the six-
month period preceding the date of any such purchase. In the
event that such options were to be fully exercised, the total
number of the Company's shares owned by FIC would constitute
61.54% of the outstanding shares of the Company's Common Stock.
In May 1989, the Board of Directors of ILCO granted Roy
F. Mitte the right to borrow up to $650,000 from ILCO to be used
solely for the purchase of FIC common stock pursuant to Mr.
Mitte's then existing options. A principal purpose of said loan
was to enable Mr. Mitte to maintain his equity position in FIC,
as required under the terms of the lending agreements entered
into in connection with the purchase of the Investors Life
Companies. Said loan, which was exercised on June 1, 1989,
carried no interest and was payable in five years. The loan was
paid in full in 1994. See "Compensation of Executive Officers and
Directors".
When it acquired Austin Centre, Investors-NA leased the
hotel to FIC Realty Services, Inc. ("FIC Realty"), a subsidiary
of FIC, pursuant to which FIC Realty pays monthly rent to
Investors-NA in an amount equal to 95% of the net operating
profits of the hotel for the preceding month (excess of all hotel
revenues over all hotel expenses, including insurance, utilities
and property taxes). Any net operating loss for a month is
carried forward and deducted from the net operating profit for
the next month that has such a profit. During 1996, FIC Realty
paid $658,509 of rent to Investors-NA pursuant to this lease.
FIC Realty has delegated the management of the hotel to an
unrelated third party pursuant to a management agreement, but FIC
Realty bears most of the economic risks in operating the hotel.
As an inducement to FIC Realty's agreeing to bear those risks,
Investors-NA has agreed to provide funds to pay expenses in
operating the hotel to the extent that the cash flow from such
operations is not sufficient to do so. This arrangement was
terminated upon the sale of the Austin Centre in March, 1996.
FIC Realty conducts the leasing activities for the
Bridgepoint Square properties owned by Investors-NA. In payment
for such services, FIC Realty receives a commission of 4% of the
gross rent under each lease which is negotiated by it. During
1996, Investors-NA paid commission in the amount of $108,811 to
FIC Realty.
Alcoholic beverages had been sold at the hotel by an
unrelated third party pursuant to a lease it had with FIC Realty
until September 30, 1994. Commencing October 1, 1994, all
alcoholic beverages sales have been conducted by Atrium Beverage
Corporation ("Atrium Beverage"), a new subsidiary of FIC Realty.
Atrium Beverage subleases from FIC Realty space in the hotel for
the storage, service and sale of alcoholic beverages pursuant to
which Atrium Beverage pays monthly rent to FIC Realty of $12,500.
The sublease provides that the rent paid during each calendar
year will be reduced to the extent necessary to insure that
Atrium Beverage's net operating profit from alcoholic beverage
sales is not less than 5% of its gross receipts from such sales.
Atrium Beverage and FIC Realty are also parties to a management
agreement whereby FIC Realty manages Atrium Beverage's alcoholic
beverage operations at the hotel for a monthly fee equal to 28%
of the gross receipts from alcoholic beverages sales. During
1996, Atrium Beverage paid FIC Realty rent and management fees
totalling $117,998. All of that amount was included in the hotel
revenues of FIC Realty for purposes of determining its net
operating profits under the hotel lease agreement with Investors-
NA.
Investors-NA entered into a management agreement in
September 1991 with FIC Property Management, Inc. ("FIC
Management"), a subsidiary of FIC, whereby it appointed FIC
Management to manage, lease and operate the office tower, retail
areas, underground parking garage and common areas of Austin
Centre. FIC Management is paid fees in an amount equal to 5% of
the net operating profit that Investors-NA receives from the
properties managed and leased by FIC Management. During 1996,
Investors-NA paid $33,027 of fees to FIC Management under this
agreement. This arrangement was terminated upon the sale of the
Austin Centre in March, 1996.
As part of the financing arrangement for the acquisition
of Family Life Insurance Company, Family Life Corporation
("FLC"), a subsidiary of FIC, entered into a senior loan
agreement under which $50 million was provided by a group of
banks. The balance of the financing consisted of a $30 million
subordinated note issued by FLC to Merrill Lynch Insurance Group,
Inc. ("Merrill Lynch") and $14 million borrowed by another
subsidiary of FIC from an affiliate of Merrill Lynch and
evidenced by a senior subordinated note in the principal amount
of $12 million and a junior subordinated note in the principal
amount of $2 million and $25 million lent by two insurance
company subsidiaries of ILCO. The latter amount was represented
by a $22.5 million loan from Investors-NA to FLC and a $2.5
million loan provided directly to FIC by Investors-CA. In
addition to the interest provided under those loans, Investors-NA
and Investors-CA were granted by FIC nontransferable options to
purchase, in the amounts proportionate to their respective loans,
up to a total of 9.9 percent of shares of FIC's common stock at a
price of $10.50 per share ($2.10 per share as adjusted for the
five-for-one stock split in November, 1996), equivalent to the
then current market price, subject to adjustment to prevent
dilution. The original provisions of the options provided for
their expiration on June 12, 1998 if not previously exercised. In
connection with the 1996 amendments to the subordinated notes, as
described below, the expiration date of the options were extended
to September 12, 2006.
On July 30, 1993, the subordinated indebtedness owed to
Merrill Lynch and its affiliate was prepaid. The Company paid $38
million plus accrued interest to retire the indebtedness, which
had a principal balance of approximately $50 million on July 30,
1993.
The primary source of the funds used to prepay the
subordinated debt was new subordinated loans totalling $34.5
million that FLC and another subsidiary of FIC obtained from
Investors-NA. The principal amount of the new subordinated debt
is payable in four equal annual installments in 2000, 2001, 2002
and 2003 and bears interest at an annual rate of 9%. The other
terms of the new debt are substantially the same as those of the
$22.5 million subordinated loans that Investors-NA had previously
made to FLC and that continue to be outstanding.
As of June 12, 1996, the provisions of the notes from
Investors-NA to FIC, FLC and FLIIC were modified as follows: (a)
the $22.5 million note was amended to provide for twenty
quarterly principal payments, in the amount of $1,125,000 each,
to commence on December 12, 1996; the final quarterly principal
payment is due on September 12, 2001; the interest rate on the
note remains at 11%, (b) the $30 million note was amended to
provide for forty quarterly principal payments, in the amount of
$163,540 each for the period December 12, 1996 to September 12,
2001; beginning with the principal payment due on December 12,
2001, the amount of the principal payment increases to
$1,336,458; the final quarterly principal payment is due on
September 12, 2006; the interest rate on the note remains at 9%,
(c) the $4.5 million note was amended to provide for forty
quarterly principal payments, in the amount of $24,531 each for
the period December 12, 1996 to September 12, 2001; beginning
with principal payment due on December 12, 2001, the amount of
the principal payment increases to $200,469; the final quarterly
principal payment is due on September 12, 2006; the interest rate
on the note remains at 9%, (d) the $2.5 million note was amended
to provide that the principal balance of the note is to be repaid
in twenty quarterly installments of $125,000 each, commencing
December 12, 1996 with the final payment due on September 12,
2001; the rate of interest remains at 12%, (e) the Master PIK
note, which was issued to provide for the payment in kind of
interest due under the terms of the $2.5 million note prior to
June 12, 1996, was amended to provide that the principal balance
of the note ($1,977,119) is to be paid in twenty quarterly
principal payments, in the amount of $98,855.95 each, to commence
December 12, 1996 with the final payment due on September 12,
2001; the interest rate on the note remains at 12%.
The Company believes that this restructuring of
subordinated debt should enhance the value of the loans that
Investors-NA has made to FIC's subsidiaries and the options it
holds to purchase FIC's stock.
The Company reimbursed FIC for rental expenses and certain
other operating expenses incurred during 1996 on behalf of the
Company. The amount of such reimbursement was approximately
$305,000.
Pursuant to a data processing agreement with a major
service company, the data processing needs of ILCO's and FIC's
insurance subsidiaries were provided at a central location until
November 30, 1994. Commencing December 1, 1994, all of those data
processing needs are provided to ILCO's and FIC's Austin, Texas
and Seattle, Washington facilities by FIC Computer Services, Inc.
("FIC Computer"), a new subsidiary of FIC. Each of FIC's and
ILCO's insurance subsidiaries has entered into a data processing
agreement with FIC Computer whereby FIC Computer provides data
processing services to each subsidiary for fees equal to such
subsidiary's proportionate share of FIC Computer's actual costs
of providing those services to all of the subsidiaries. The
Company's insurance subsidiaries paid $2,243,234 and Family Life
paid $1,055,639 to FIC Computer for data processing services
provided during 1996.
In 1995, Investors-NA entered into a reinsurance agreement
with Family Life pertaining to universal life insurance written
by Family Life. The reinsurance agreement is on a co-insurance
basis and applies to all covered business with effective dates on
and after January 1, 1995. The agreement applies to only that
portion of the face amount of the policy which is less than
$200,000; face amounts of $200,000 or more are reinsured by
Family Life with a third party reinsurer.
In 1996, Investors-NA entered into a reinsurance agreement
with Family Life, pertaining to annuity contracts written by
Family Life. The agreement applies to contracts written on or
after January 1, 1996.
Roy F. Mitte serves as Chairman, President and Chief
Executive Officer of both FIC and ILCO. James M. Grace serves as
Vice President, Treasurer and Director of both companies and
Secretary of FIC, Dr. Payne serves as Vice President and Director
of both companies and secretary of ILCO; Messrs. Demgen and
Fleron serve as Vice Presidents and Directors of both companies;
and Mr. Crowe serves as a Director of both companies and, until
his retirement in January, 1997, served as a Vice President of
both companies. Mr. Roy Mitte holds beneficial ownership of
34.39% of the outstanding shares of FIC (see "Security Ownership
of Certain Beneficial Owners and Management").
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's accounting firm for the current year is Price
Waterhouse LLP. Representatives of Price Waterhouse LLP are
expected to be available for comment at the Shareholders Meeting
and will be given an opportunity to respond to appropriate
questions.
BOARD AND COMMITTEES
ILCO's Board of Directors met formally three times during
1996. All of the incumbent Directors attended at least 75% of
the required meetings, except W. Lewis Gilcrease, who attended 2
of the 3 meetings (66%).
Members of the Nominating Committee are: Roy F. Mitte,
Eugene E. Payne and James M. Grace. The Nominating Committee
makes recommendations to the Board of Directors with respect to
vacancies and as to additions to the Board of Directors. The
Nominating Committee will consider nominees recommended by
Shareholders. All such nominations must be submitted in writing
to the Nominating Committee no later than December 31, 1996. The
Nominating Committee held one meeting in 1996.
The members of the Audit Committee are: Joseph F. Crowe,
Richard A. Kosson, Eugene E. Payne and Steven P. Schmitt. The
Audit Committee reviews the financial statements and the results
of the Company's annual independent audit. The Audit Committee
did not meet on a formal basis in 1996.
The members of the Compensation Committee are: W. Lewis
Gilcrease, Richard A. Kosson and Donald Shuman. The Compensation
Committee held one meeting during 1996.
SHAREHOLDER PROPOSALS
It is contemplated by the management of the Company that the
next Annual Meeting of the Shareholders of the Company will be
held on or about May 19, 1998. Accordingly, all proposals of
security holders intended to be submitted by the Company for
inclusion in the Proxy Statement and Form of Proxy relating to
the meeting must by received by the Company no later than
December 31, 1997 and must be in compliance with applicable laws
and Securities and Exchange Commission regulations.
OTHER MATTERS
As of the date of this Proxy Statement, management does not
know of any other matters which will be presented to the
Shareholders at the Annual Meeting. However, if any other matter
should be presented, the persons named in the accompanying proxy
will vote according to their best judgment in the interest of the
Company.
By Order of the Board of Directors
InterContinental Life Corporation
Eugene E. Payne, Secretary
May , 1997
EXHIBIT A
PLAN AND AGREEMENT OF MERGER
BETWEEN
INTERCONTINENTAL LIFE CORPORATION
AND
INTERCONTINENTAL LIFE CORPORATION OF TEXAS
This PLAN AND AGREEMENT OF MERGER (the "Agreement") is dated
this day of , 1997, by and between
InterContinental Life Corporation of Texas, a Texas domiciled
company (hereinafter "ILCO-Texas" or the "Surviving Company") and
InterContinental Life Corporation, an New Jersey domiciled
company (hereinafter "ILCO" or the "Merging Company"), in
accordance with Article 5.01 of the Texas Business Corporation
Act and Section 14A:10-7 of the New Jersey Business Corporation
Act.
RECITALS
A. ILCO-Texas is a duly organized and validly existing company
under the Texas law and is in good standing under the laws
of the State of Texas. ILCO-Texas is a direct, wholly-owned
subsidiary of ILCO;
B. ILCO is a duly organized and validly existing company under
the New Jersey law and is in good standing under the laws of
the State of New Jersey;
C. The Board of Directors of ILCO has determined that it is
desirable and in the best interests of ILCO to change the
domicile of ILCO from New Jersey to Texas. To accomplish
that change, the Board of Directors of ILCO authorized the
creation of ILCO-Texas, as a wholly-owned subsidiary of
ILCO. In addition, the Board of Directors of ILCO has
adopted a resolution authorizing the merger of ILCO with and
into ILCO-Texas (the "Merger") in accordance with the terms
and conditions set forth in this Plan and Agreement of
Merger and pursuant to the provisions of the laws of the
State of New Jersey and the State of Texas.
E. This Plan and Agreement of Merger and the Merger is subject
to the approval of the shareholders of ILCO, by an
affirmative vote by a majority of those shares of ILCO
constituting at least a quorum at the Annual Meeting. This
Plan and Agreement of Merger and the Merger has been
authorized and approved by the sole shareholders of ILCO-
Texas.
F. No director, officer, agent or employee of ILCO or ILCO-
Texas has received or will receive any fee, commission,
compensation or other valuable consideration for aiding,
promoting or assisting the Merger.
NOW THEREFORE, ILCO and ILCO-Texas, in consideration of the
mutual covenants, agreements and provisions hereinafter
contained, do hereby agree upon and prescribe the terms and
conditions of the Merger and the mode of carrying it into effect,
as follows:
ARTICLE I
MERGER AND SURVIVING CORPORATION
1.1. At the Effective Time, as defined in Section 4.1 below,
ILCO shall be merged into and with ILCO-Texas. The
Surviving Company shall be ILCO-Texas.
1.2. The Merger shall occur pursuant to the provisions of
Part 5, Articles 5.01, 5.03, 5.04 and 5.05 of the Texas
Business Corporation Act and Section 14A:10-7 of the
New Jersey Business Corporation Act.
ARTICLE II
TERMS, CONDITIONS AND MODE OF MERGER
2.1. The Articles of Incorporation and Bylaws of the
Surviving Company shall not be amended by this Merger
and shall remain in effect unchanged until those
Articles of Incorporation or Bylaws may be amended in
accordance with the laws of the State of Texas.
2.2. The directors and officers of the Surviving Company at
the Effective Time shall continue to be the directors
and officers of the Surviving Company until their
respective successors shall have been elected and
qualified as provided by the Bylaws of the Surviving
Company and the laws of the State of Texas.
2.3. At the Effective Time, the separate existence of the
Merging Company shall cease and all the property,
rights, privileges, franchises, patents, trademarks,
licenses, registrations, causes of action, and other
assets of every kind and description of the Merging
Company at the Effective Time shall, to the extent
permitted by law, transfer to, vest in and devolve upon
the Surviving Company without further act or deed.
2.4 All rights of creditors, including but not limited to
insurance policyholders, and all liens upon the
property of the Surviving Company and the Merging
Company shall be preserved unimpaired, notwithstanding
the Merger, and from and after the Effective Time all
debts, liabilities and duties of the Merging Company
shall attach to the Surviving Company and may be
enforced against it to the same extent as if said
debts, liabilities and duties had been incurred or
contracted by the Surviving Company.
ARTICLE III
TREATMENT OF SHARES
3.1. At the Effective Time, all of the issued and
outstanding shares of the common stock of ILCO,
consisting of 5,339,497 shares of common stock, par
value of $.22 per share, shall be converted into issued
and outstanding shares of ILCO-Texas, par value of $.22
per share.
3.2. At the Effective Time, all of the authorized shares of
(i) the Class A preferred stock of ILCO, consisting of
5,000,000 shares, par value of $1.00 per share, held in
treasury and (ii) the Class B preferred of ILCO,
consisting of 15,000,000 shares, par value of $1.00 per
share, held in treasury shall be converted into
authorized and unissued shares of the preferred stock
of ILCO-Texas, par value of $1.00 per share.
ARTICLE IV
EFFECTIVE TIME
4.1. This Merger shall become effective (the "Effective
Time") upon the filing of all required documents with
the Texas Secretary of State and the New Jersey
Secretary of State, whichever is later, provided that
such documents shall not be filed until the later of
the following:
a. approval of this Merger by the affirmative vote of
a majority of those shares of common stock of ILCO
constituting at least a quorum at the meeting of
shareholders at which the Merger is considered;
b. approval of this Merger by the sole shareholder of
ILCO-Texas; and
c. the obtaining of all necessary consents or
approvals of any federal or state regulatory
authority necessary for the consummation of the
Merger.
4.2. Notwithstanding anything to the contrary in this Plan
and Agreement of Merger, in the event that the
conditions set forth in Section 4.1.a. to 4.1.c.,
hereof, have not been satisfied on or before December
31, 1997, this Agreement shall be automatically
terminated without the need for further action by
either party.
ARTICLE V
POWER OF ATTORNEY
5.1 As of the Effective Time, ILCO-Texas hereby appoints
the New Jersey Secretary of State and his or her
successors in office as the attorney-in-fact or agent
of ILCO-Texas to accept service of process in any
proceeding to enforce any obligation of the Surviving
Company (including any obligations of ILCO), and
service on the New Jersey Secretary of State shall be
deemed sufficient service on the Surviving Company,
This power of attorney shall be irrevocable so long as
the Surviving Company has outstanding in the State of
New Jersey any contracts or other obligation
whatsoever.
ARTICLE VI
TERMINATION
6.1 Subject to applicable law, this Plan and Agreement of
Merger may be amended, modified, supplemented or
abandoned by mutual consent of the respective Boards of
Directors of ILCO and ILCO-Texas before or after
approval hereof by the respective shareholders of ILCO
or ILCO-Texas.
ARTICLE VII
GOVERNING LAW
7.1. THIS PLAN AND AGREEMENT OF MERGER SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF TEXAS, EXCEPT TO THE EXTENT THE LAWS OF THE STATE OF
NEW JERSEY SHALL MANDATORILY APPLY TO THIS MERGER.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized
officers on this day of , 1997.
INTERCONTINENTAL LIFE CORPORATION
By:
Roy F. Mitte
Chairman of the Board,
President
and Chief Executive Officer
Attest:
Eugene E. Payne, Secretary
INTERCONTINENTAL LIFE CORPORATION OF
TEXAS
By:
Roy F. Mitte
Chairman of the Board,
President
and Chief Executive Officer
Attest:
Eugene E. Payne, Secretary
Exhibit B
ARTICLES OF INCORPORATION
OF
INTERCONTINENTAL LIFE CORPORATION OF TEXAS
The undersigned natural person of the age of 18 years or more,
acting as sole incorporator of a corporation under the Texas
Business Corporation Act, does hereby adopt the following
Articles of Incorporation for such corporation:
ARTICLE I
The name of the corporation is INTERCONTINENTAL LIFE CORPORATION
OF TEXAS
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The purpose for which the corporation is organized is to transact
any lawful business for which corporations may be incorporated
under the Texas Business Corporation Act.
ARTICLE IV
(A) The aggregate number of shares of capital stock which the
corporation shall have the authority to issue is forty-five
million (45,000,000) to be divided into two classes as follows:
(1) 30 million shares of Preferred Stock with a par value
of one dollar ($1.00) each, which may be issued from
time to time in one or more series, each series to be
designated by a distinguishing letter or title. The
Board of Directors of the corporation is hereby
authorized, within the restrictions stated within this
Article IV, to establish each series of Preferred
Stock, to provide for the number of shares in such
series and to establish preferences, qualifications,
limitations, restrictions and special or relative
rights of such series. The authority of the Board of
Directors of the corporation with respect to each
series shall include, but not be limited to, the
determination of the following:
(a) Liquidation: The rights of the shares of each
such series in the event of voluntary or
involuntary liquidation, dissolution or winding up
of the corporation and the relative rights of
priority, if any, of payment of such shares of
such series.
(b) Designation: The number of shares constituting
each such series and the distinctive designation
thereof.
(c) Dividends: The dividend rate on each such
series, whether dividends on the shares of such
series shall be cumulative (and, if cumulative,
the date or dates from which such dividends would
accumulate), and the relative rights of priority,
if any, of payment of dividends on shares of such
series.
(d) Voting Rights: The voting rights, if any, of
each such series, in addition to the voting rights
provided by law, and the terms thereof.
(e) Redemption: The redemption options or
obligations, if any, in respect of each such
series and the terms and conditions thereof,
including, without limitation, the date or dates
upon or after which such shares are redeemable and
the redemption price payable in respect of such
shares being so redeemed.
(f) Sinking Fund: The sinking fund requirements,
if any, in respect of any redemption required
pursuant to Clause (e) of this Article IV.
(g) Conversion: The conversion privileges, if any,
of each such series and the terms and conditions
thereof.
Dividends on outstanding shares of any series of
Preferred Stock shall be paid or declared and set apart
for payment before any dividends shall be paid or
declared or set apart for payment on the Common Stock
with respect to the same dividend period.
(2) 15 million shares of Common Stock with a par value of
$0.22 each, which may be issued from time to time in
one or more series, each series to be designated by a
distinguishing letter or title. The Board of Directors
of the corporation is hereby authorized, within the
restrictions stated within this Article IV, to
establish each series of Common Stock, to provide for
the number of shares in such series and to establish
preferences, qualifications, limitations, restrictions
and special or relative rights of such series. The
Preferred Stock is senior to the Common Stock, and the
Common Stock is subject to the rights and preferences
of the Preferred Stock.
(B) No shareholder shall be entitled to cumulate his votes by
giving one candidate as many votes as the number of such
directors to be elected multiplied by the number of shares owned
by such shareholder or by distributing such votes on the same
principle among any number of such candidates.
ARTICLE V
The corporation will not commence business until it has received
for the issuance of its shares consideration of a value not less
than One Thousand Dollars ($1,000.00), consisting of money, labor
done, or property actually received.
ARTICLE VI
The address of the corporation's initial registered office is 701
Brazos, Suite 1400, Austin, Texas 78701, and the name of its
initial registered agent at such address is James M. Grace.
ARTICLE VII
If, with respect to any action taken by the shareholders of the
corporation, other than plan of merger or consolidation, any
provision of the Texas Business Corporation Act would, but for
this Article, require the vote or concurrence of the holders of
shares having more than a majority of the votes entitled to be
cast thereon, or any class or series thereof, the vote or
concurrence of the holders of shares having only a majority of
the votes entitled to be cast thereon, or any class or series
thereof, shall be required with respect to any such action.
ARTICLE VIII
The number of directors constituting the initial Board of
Directors is eleven (11) and the names and addresses of the
persons who are to serve as directors until the first annual
meeting of the shareholders or until their successors are elected
and qualify are:
Name Address
Roy F. Mitte 701 Brazos, Suite 1400
Austin, Texas 78701
James M. Grace 701 Brazos, Suite 1400
Austin, Texas 78701
Eugene E. Payne 701 Brazos, Suite 1400
Austin, Texas 78701
Jeffrey H. Demgen 701 Brazos, Suite 1400
Austin, Texas 78701
Theodore A. Fleron 701 Brazos, Suite 1400
Austin, Texas 78701
Joseph F. Crowe 706 Golf Crest Lane
Austin, Texas
W. Lewis Gilcrease 114 West San Antonio
San Marcos, Texas
Richard A Kosson 18 Rale Terrace
Livingston, New Jersey
H. Gene Pruner 8705 Flagship Circle
Indianapolis, Indiana
Name Address
Steven P. Schmitt 701 Brazos, Suite 1400
Austin, Texas 78701
Donald P. Shuman 2 Dayton Road
Flemington, New Jersey
ARTICLE IX
The name and address of the incorporator is:
Christopher W. Schrauff
701 Brazos, Suite 1400
Austin, Texas 78701
EXECUTED BY THE UNDERSIGNED on this 29th day of April, 1997.
Christopher W. Schrauff
SWORN TO BEFORE ME on this 29th day of April, 1997, by the above
named incorporator,
Notary Public in and for
Travis County, Texas
Exhibit C
BY-LAWS OF
INTERCONTINENTAL LIFE CORPORATION OF TEXAS
ARTICLE I
OFFICES
Section 1. The principal office shall be located at 701
Brazos, Austin, Texas 78701. The registered office of the
Corporation shall be located at 701 Brazos, Austin, Texas 78701.
The Agent upon whom process against the corporation may be served
is James M. Grace at said address. The corporation may also have
offices at such other places within and without the State of
Texas as the Board of Directors may, from time to time, determine
or the business of the corporation may require.
Section 2. The corporation may also have offices at such
other places as the Board of Directors may from time to time
determine or the business of the corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
Section 1. All meetings of the stockholders shall be held
at the principal office of the corporation or at such other place
as may from time to time be designated by the Board of Directors
and stated in the notice of the meeting.
Section 2. An annual meeting of stockholders, commencing
with the year 1997, shall be held on the first Friday of July in
each year if not a legal holiday, and if a legal holiday, then on
the next secular day following, at 3:00 P.M., or at such other
time and place as designated in a Resolution adopted by the Board
of Directors, when the stockholders shall elect by a plurality
vote, by ballot, a Board of Directors, and transact such other
business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting shall be
served upon or mailed to each stockholder entitled to vote
thereat, at such address as appears on the stock books of the
corporation, not less than ten nor more than sixty days prior to
the meeting.
Section 4. At least ten days before every election of
Directors, the Secretary shall make a complete list of the
stockholders entitled to vote at the ensuing election, arranged
in alphabetical order, with the post office address, and the
number of shares held be each, which list shall be at all times,
during the usual hours of business, be kept at the principal
office, open to the examination of any stockholder. The Board of
Directors shall produce at the time and place of each election
the transfer books and stock books of the corporation and said
list of stockholders which shall remain there during the
election.
Section 5. Special meetings of the stockholders, for any
purpose or purposes, other than those prescribed by statute or by
the Articles of Incorporation, may be called by the Chairman of
the Board, or by the President and shall be called by the
Chairman of the Board or the President or Secretary at the
request in writing of a majority of the members of the Board of
Directors.
Section 6. Written notice of a special meeting of
stockholders, stating the time and place and object thereof,
shall be served upon or mailed to each stockholders entitled to
vote thereat, at such address as appears on the books of the
corporation, not less than ten days nor more than sixty days
before such meeting.
Section 7. Business transacted at all special meetings
shall be confined to the objects stated in the call.
Section 8. The holders of a majority of the stock issued
and outstanding and entitled to vote thereat, present in person
or represented by proxy, shall be requisite and shall constitute
a quorum at all meetings of the stockholders for the transaction
of business, except as otherwise provided by statute, by the
Articles of Incorporation or by these By-Laws. If, however, a
quorum shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn
the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall
be present or represented, any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 9. When a quorum is present or represented at any
meeting, vote of the holders of a majority of the stock having
voting power present in person or represented by proxy shall
decide any question brought before such meeting, unless the
question is one upon which by express provision of the statutes
or of the Articles of Incorporation or of these By-laws, a
different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 10. At any meeting of the stockholders every
stockholder having the right to vote shall be entitled to vote in
person or by proxy appointed by an instrument in writing
subscribed by such stockholder or by his duly authorized attorney
and bearing a date not more than three years prior to said
meeting. Each proxy shall be delivered to the Secretary of the
corporation prior to the holding of the meeting. The attendance
at any meeting of a stockholder who may theretofore have given a
proxy shall not have the effect of revoking the proxy unless the
stockholder so attending shall, in writing, so notify the
Secretary at any time prior to the voting of the proxy. Each
stockholder shall have one vote for each share of stock having
voting power registered in his name at the time of the closing of
the transfer books or on the date fixed as a record date for said
meeting. In case the transfer books of the corporation shall not
have been closed and no date shall have been fixed as a record
date for the determination of the stockholders entitled to vote,
no share of stock shall be voted on at any election of Directors,
after the first election of Directors, which has been transferred
on the books of the corporation within twenty days next preceding
such election of Directors.
Section 11. Any action required to be taken at a meeting of
the stockholders may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by
all of the stockholders entitled to vote with respect to the
subject matter thereof.
ARTICLE III
DIRECTORS
Section 1. The number of Directors which shall constitute
the whole Board shall be any number not less than three nor more
than twenty-five as authorized by vote of a majority of the
entire Board of Directors at any regular or special meeting,
provided that no decrease shall shorten the term of any incumbent
Director. The Directors shall be elected by the stockholders at
the annual meeting of stockholders, and each Director shall be
elected to serve until his successor shall be elected and shall
qualify.
No Director's name shall be submitted to the shareholders at
the Annual Meeting for reelection unless said Director during his
preceding term in office attended at least half of the duly
called meetings of the Directors of the Company unless the Board
in light of existing circumstances determines otherwise.
Section 2. A regular meeting of the Board shall be held
without notice immediately following and at the same place as the
annual shareholders' meeting for the purposes of electing
officers and conducting such other business as may come before
the meeting. The Board, by resolution, may provide for
additional regular meetings which may be held without notice.
Section 3. A special meeting of the Board may be called at
any time by the Chairman of the Board or by a majority of the
members of the Board of Directors for any purpose. Such meeting
shall be held upon not less than three (3) days notice. Such
notice shall be given by posting written notice in the United
States mail, postage prepaid. Such notice shall specify the
date, time and place of the meeting.
Section 4. The Board may act without a meeting if, prior or
subsequent to such action, each member of the Board shall consent
in writing to such action. Such written consent or consents
shall be filed in the minute book.
Section 5. At all meetings of the Board, the presence of a
majority of the Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business, and the act
of a majority of the Directors present at any meeting at which
there is a quorum shall be the act of the Board of Directors,
except as may be otherwise specifically provided by statute or by
the Articles of Incorporation or by these By-laws. Any Director
may participate in a meeting of the Board or a committee thereof
by means of a conference telephone or any other means of
communication, provided, that all persons participating in the
meeting are able to hear each other. Any Director participating
in accordance with the preceding sentence of this Section 5 of
Article III shall be deemed present for all purposes of the
meeting. If a quorum shall not be present at any meeting of
Directors, the Directors present thereat may adjourn the meeting
from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
Section 6. Any vacancy in the Board, including a vacancy
caused by an increase in the number of Directors, may be filled
by the affirmative vote of a majority of the remaining Directors,
even though less than a quorum of the Board, or by a sole
remaining Director.
Section 7. The property and business of the corporation
shall be managed by its Board of Directors who may exercise all
such powers of the corporation and do all such lawful acts and
things as are not by statute or by the Articles of Incorporation
or by these By-laws directed or required to be exercised or done
by the stockholders.
If the Corporation owns 10% or more of the shares of stock
of another corporation, any voting or other action that may be
taken by the Corporation in its capacity as shareholder of such
corporation shall be taken by a majority vote of the
Corporation's Board of Directors or a majority vote of the
Executive Committee of the Board of Directors.
Section 8. The Board of Directors shall have the power to
remove Directors for cause and to suspend Directors pending a
final determination that cause exists for removal.
EXECUTIVE AND OTHER COMMITTEES
Section 9. The Board of Directors may appoint an executive
committee, to consist of two or more of the Directors, which,
except to the extent limited in said resolution, shall have and
may exercise the powers of the Board of Directors in the
management of the business, affairs and property of the
corporation during the intervals between the meetings of the
Directors, and may have power to authorize the seal of the
corporation to be affixed to all papers which may require it.
Vacancies in the membership of the committee shall be filled by
the Board of Directors at a regular meeting thereof or at a
special meeting called for that purpose. The executive committee
shall keep regular minutes to its proceedings and report the same
to the Board when required. The Board of Directors is authorized
from time to time by a resolution adopted by a majority of the
entire board to establish one or more other committees, each
committee shall have at least three members. Said resolution may
provide the committees with powers consistent with the laws of
the State of Texas. The Board of Directors may be resolution
adopted by a majority of the entire Board abolish any such
committees or amend any resolution authorizing such committees.
COMPENSATION OF DIRECTORS
Section 10. Directors, as such, shall not receive any
stated salary for their services, but, by resolution of the
Board, a fixed sum and expenses of attendance, if any, may be
allowed for attendance at each regular or special meeting of the
Board; provided, that nothing herein contained shall be construed
to preclude any Director from serving the corporation in any
other capacity and receiving compensation therefor. Members of
the executive or any other committee may be allowed like
compensation for attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Any notice required by these By-laws, by the
Articles of Incorporation, or by the Texas Business Corporation
Act may be waived in writing by any person entitled to notice.
The waiver or waivers may be executed either before or after the
event with respect to which notice is waived. Each Director or
shareholder attending a meeting without protesting, prior to its
conclusion, the lack of proper notice shall be deemed
conclusively to have waived notice of the meeting.
Section 2. Whenever under the provisions of the statutes or
of the Articles of Incorporation or of these By-Laws, notice is
required to be given to any Director or stockholder, it shall not
be construed to mean personal notice, but such notice may be
given in writing, by mail, addressed to such Director or
stockholder at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the
time when the same shall be thus mailed.
ARTICLE V
OFFICERS
Section 1. The officers of the Corporation shall be a
Chairman of the Board, President, one or more Vice Presidents, a
Secretary, a Treasurer and one or more Assistant Secretaries.
Any two of the aforesaid offices, except those of President and
Vice President, may be held by the same person.
Section 2. The Board of Directors at its first meeting
after each annual meeting of stockholders shall elect a President
from its members, and the Board shall also annually choose a Vice
President, a Secretary and a Treasurer none of whom need be
members of the Board.
Section 3. The Board may appoint additional Vice Presidents
and Assistant Secretaries and Assistant Treasurers and such other
officers, and agents as it shall deem necessary, who shall have
such authority and shall perform such duties as from time to time
shall be prescribed by the Board.
Section 4. The officers of the corporation shall hold
office until their successors are chosen and qualify in their
stead. Any officer elected or appointed by the Board of
Directors may be removed with or without cause, at any time, by
the affirmative vote of a majority of the whole Board of
Directors. If the office of any officer becomes vacant for any
reason, the vacancy shall be filled by the Board of Directors.
CHAIRMAN
Section 6. The Chairman of the Board shall be the Chief
Executive Officer of the Corporation and shall preside at all
meetings of the shareholders and the Board of Directors. Subject
only to the authority of the Board of Directors, he shall have
general charge and supervision over, and responsibility for, the
business and affairs of the Corporation. All other officers of
the Corporation shall be subject to the authority, supervision
and direction of the Chairman of the Board. The Chairman may
enter into and execute in the name of the Corporation, contracts
or other instruments in the regular course of business and
contracts and other instruments not in the regular course of
business and contracts and other instruments not in the regular
course of business which are authorized, either generally or
specifically, by the Board of Directors or the Executive
Committee.
PRESIDENT
Section 7. The President shall perform such duties and
shall have such authority as is usually vested in the office of
the president of a corporation, subject to the supervision and
direction of the Chairman of the Board of Directors.
VICE PRESIDENT
Section 8. One or more Vice President shall be elected to
perform such duties and have such authority as from time to time
may be delegated to them by the Chairman of the Board or by the
President or by the Executive Committee.
TREASURER
Section 9. The Treasurer shall have the custody of the
funds and securities of the corporation and shall keep or cause
to be kept regular books of account for the Corporation. The
Treasurer shall perform such other duties and possess such other
powers as are incident to that office or as shall be assigned by
the Chairman of the Board or by the President or by the Executive
Committee.
SECRETARY AND ASSISTANT SECRETARY
Section 10. The Secretary shall cause notices of all
meetings to be served as prescribed in these By-laws and shall
keep or cause to be kept the minutes of all meetings of the
shareholders and the Board and Executive Committee. The
Secretary shall perform such other duties and possess such other
powers as are incident to that office or as are assigned by the
Chairman of the Board or by the President or the Executive
Committee. One or more Assistant Secretaries may be elected to
perform such duties as may be assigned to them by the Chairman of
the Board or by the President or by the Executive Committee, but
they shall not have authority to give notices of meetings. The
Secretary shall be the only person authorized to give notices of
meetings and shall cause notices of all meetings to be served as
prescribed in these By-laws.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. The certificates of stock of the corporation
shall be numbered and entered into the books of the corporation
as they are issued. They shall exhibit the holder's name and the
number of shares owned by him in the corporation, and shall be
signed by the president or Vice-President and Treasurer or
Assistant Treasurer or the Secretary or Assistant Secretary. If
any certificate is signed by a transfer agent or an assistant
transfer agent or by a transfer clerk on behalf of the
corporation and a registrar, the signature of any such officer
may be facsimile.
LOST CERTIFICATES
Section 2. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the
corporation, alleged to have been lost or destroyed, upon the
making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing
such issue of a new certificate or certificates, the Board of
Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require and/or give
the corporation a bond in such sum and with such surety or
sureties as it may direct as indemnity against the corporation
with respect to the certificate alleged to have been lost or
destroyed.
TRANSFER OF STOCK
Section 3. Upon surrender to the corporation or transfer
agent of the corporation of a certificate of stock duly endorsed
or accompanied by proper evidence of succession, assignment or
authority of transfer, it shall be the duty of the corporation to
issued a new certificate to the person entitled thereto, cancel
the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 4. The Board of Directors may close the stock
transfer books of the corporation in its discretion for a period
not exceeding fifty days preceding the date of any meeting,
annual or special, of the stockholders, or the date for payment
of any dividend, or the date for the allotment of rights or the
date when any change or conversion or exchange of capital stock
shall go into effect. In lieu of closing the stock transfer
books, the Board of Directors may fix, in advance, a date not
exceeding fifty (50) days preceding the date of any meeting,
annual or special, of stockholders or the date for the payment of
any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock
shall go into effect, as a record date for the determination of
the stockholders entitled to notice of and to vote at any such
meeting, or entitled to receive payment of any such dividend, or
any such allotment of rights, or to exercise the rights in
respect to any such change, conversion or exchange of capital
stock, and in such case only stockholders of record on the date
so fixed shall be entitled to such notice of, and to vote at,
such meeting or to receive payment of such dividend or allotment
of rights, or to exercise such rights, as the case may be,
notwithstanding any transfer of any stock on the books of the
corporation after such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
Section 5. The corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in
fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other
notice thereof, except as expressly provided by the laws of
Texas.
ARTICLE VII
INDEMNITY
Section 1. Any present or future director or officer of the
corporation and any present or future director or officer of any
other corporation serving as such at the request of the
corporation because of the corporation's interest in such other
corporation, or the legal representative of any such director or
officer, shall be indemnified by the corporation against
reasonable costs, expenses (exclusive of any amount paid to the
corporation in settlement) and counsel fees paid or incurred in
connection with any action, suit or proceeding to which any such
director or officer or his legal representative may be made a
party by reason of his being or having been such director or
officer and shall otherwise be accorded the fullest benefits
contemplated and set forth in Articles 2.02 and 2.02-1 of the
Texas Business Corporation Act, subject to the qualifications set
forth in said Statute.
ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon stock of the corporation, subject
to the provisions of the Articles of Incorporation, if any, may
be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be declared in cash, in
property or in stock.
Section 2. Before payment of any dividend, there may be set
aside out of the funds of the corporation available for dividends
such sum or sums as the Directors from time to time, in their
absolute discretion, think proper as a reserve fund to meet
contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the corporation, or for such other
purpose as the Directors shall think conducive to the interests
of the corporation, and the Directors may modify or abolish any
such reserve in the manner in which it was created.
CHECKS
Section 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors may, from time
to time, designate.
FISCAL YEAR
Section 4. The fiscal year shall begin the first date of
January in each year.
SEAL
Section 5. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the
words "Corporate Seal, Texas."
ARTICLE IX
AMENDMENTS TO AND EFFECT OF BY-LAWS
Section 1. These By-laws are subject to the provisions of
the Texas Business Corporation Act and the Corporation's Articles
of Incorporation, as it may be amended from time to time. If any
provision in these By-laws is inconsistent with a provision in
that Act or the Articles of Incorporation, the provision of that
Act or the Articles of Incorporation shall govern.
Section 2. These By-laws may be altered, amended or
repealed by the shareholders or the Board. Any By-law adopted,
amended or repealed by the shareholders may be amended or
repealed by the Board, unless the resolution of the shareholders
adopting such By-law expressly reserves to the shareholders the
right to amend or repeal it.
CERTIFICATION
I hereby certify to the best of my knowledge as Secretary of
Intercontinental Life Corporation of Texas that the attached copy
of the Articles of Incorporation is a true and correct copy.
Date:
Eugene E. Payne
CERTIFICATION
I hereby certify as Secretary of InterContinental Life
Corporation of Texas that the attached copy of the By-Laws is a
true and correct copy of the By-Laws of InterContinental Life
Corporation of Texas.
Dated:
Eugene E. Payne
InterContinental Life Corporation
P R O X Y
Annual Meeting of Shareholders, June 17, 1997
This Proxy is Solicited on Behalf of the Board of Directors of
InterContinental Life Corporation
Roy F. Mitte and James Grace, or either of them, each with
the power of substitution, are hereby authorized to represent and
vote the shares of the undersigned, with all the powers that the
undersigned would possess if personally present at the Annual
Meeting of Shareholders of InterContinental Life Corporation to
be held on Tuesday, June 17, 1997 or at any postponements or
adjournments thereof, as indicated on the reverse side of this
card.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE
MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO
DIRECTIONS ARE GIVEN, THIS PROXY WILL CONSTITUTE AUTHORIZATION TO
VOTE THE UNDERSIGNED'S SHARES FOR THE ELECTION OF NOMINEES FOR
DIRECTOR WHOSE NAMES ARE LISTED ON THE REVERSE AND IN FAVOR OF
ITEM NO. 2. It will be voted on other business matters which may
properly be brought before the meeting in accordance with the
best judgment of the proxies.
The Board of Directors recommends a vote "FOR" on all matters set
forth in this proxy.
(Continued and to be signed on reverse side)
1. ELECTION OF DIRECTORS
FOR all nominees listed below
WITHHOLD AUTHORITY to vote for all nominees listed below
EXCEPTIONS
Nominees: J. Crowe, J. Demgen. T. Fleron, L. Gilcrease, J.
Grace, R. Kosson, R. Mitte, E. Payne, H.G. Pruner, S.
Schmitt, D. Shuman
INSTRUCTIONS: To withhold authority to vote for any individual
nominee, mark the exceptions box and strike a line through that
nominee's name.
2. REDOMESTICATION OF THE COMPANY AND THE RELATED PLAN AND
AGREEMENT OF MERGER OF THE COMPANY INTO ILCO-TEXAS, A WHOLLY-
OWNED SUBSIDIARY OF THE COMPANY
FOR AGAINST ABSTAIN
3. In their discretion, the proxies are authorized to vote upon
such other matters which may properly come before the
meeting or at any postponements or adjournments thereof.
Please mark boxes in blue or black ink.
Address Change and/or Comments Mark Here
In the case of joint or common
ownership, each owner should sign.
Dated: , 1997
Signature
Signature if held jointly
Please Mark, Sign, Date and Return This Proxy Card Promptly Using
the Enclosed Envelope.
