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:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as
permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 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 Annual Meeting of Shareholders of
InterContinental Life Corporation, which will be held at the
Austin Centre, 701 Brazos, Austin, Texas 78701 on May 20, 1997,
at 10:00 a.m. local time. 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 MAY 20, 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 May 20, 1997 at 10:00
a.m. local time to consider and act upon:
1. The election of eleven Directors for the ensuing year.
2. 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
March 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.
April 18, 1997
By Order of the Board of
Directors
Eugene E. Payne
Secretary
PROXY STATEMENT FOR
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 Annual Meeting
of Shareholders to be held May 20, 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 18, 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 March 28, 1997, will be entitled to vote
at the Annual Meeting. At the close of business on such date,
there were outstanding and entitled to vote 4,258,829 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 March 28, 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.
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 March 14,
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) (4) *
Jeffrey H. Demgen 3,001 (4) *
Theodore A. Fleron 14,366 (4) (5) *
W. Lewis Gilcrease -0- *
James M. Grace (1) 80,137 (2) (3) (4) 1.86%
Richard Kosson 200 *
Roy F. Mitte (1) 3,723,292 (2) (4) 62.46%
Eugene E. Payne (1) 54,199 (3) (4) 1.26%
H. Gene Pruner -0- *
Donald Shuman 450 *
Steven P. Schmitt 13,041 (4) (5) *
All Executive Officers
and Directors as a
group, all of whom
are listed above 3,912,250 (1) (2) (3) (4) (5) 64%
* Less than 1%
(1) Is an executive officer and/or director of FIC which as of
March 14, 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 30,000 shares issuable upon exercise of options
granted under the Incentive Stock Option Plan during 1987 to
James M. Grace at a price of $3.54 (as adjusted) per share, and
12,000 shares issuable upon exercise of options granted under the
Non-Qualified Stock Option Plan during 1988 to Mr. Grace at a
price of $3.33 (as adjusted) per share, all of which are
currently available for exercise. Includes 20,000 shares
issuable upon exercise of options granted under the Incentive
Stock Option Plan and 6,000 shares issuable upon exercise of
options granted under the Non-Qualified Stock Option Plan during
1988 to Eugene E. Payne at a price of $3.33 (as adjusted) per
share, all of which are currently available for exercise.
Includes 8,000 shares issuable upon exercise of options granted
under the Incentive Stock Option Plan to Joseph F. Crowe during
1991 at a price of $8.75 per share, which are currently available
for exercise.
(4) 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.
(5) Includes 6,000 shares issuable upon exercise of options
granted under the Non-Qualified Stock Option Plan during 1988 to
each of Messrs. Fleron, and Schmitt 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 Options All Other
Position Year Salary(1) Bonus(1) Other(2) (Shares) Compensation
Roy F.
Mitte,
Chairman,
President
and Chief 1996 $286,643 -0- -0- -0- $2,446,397(3)
Executive 1995 286,643 -0- -0- -0- 713,513(4)
Officer 1994 251,750 $576,159(5) -0- -0- 1,376,663(6)
James M.
Grace,
Vice
President 1996 195,000 15,000 -0-(7) -0- -0-
and 1995 195,000 10,000 -0- -0- -0-
Treasurer 1994 195,000 2,000 -0- -0- -0-
Eugene E.
Payne,
Vice
President 1996 195,000 15,000 -0-(8) -0- -0-
and 1995 195,000 10,000 -0- -0- -0-
Secretary 1994 195,000 5,000 -0- -0- -0-
Joseph F.
Crowe,
Vice 1996 196,500 15,000 -0-(9) -0- -0-
Presi- 1995 195,000 10,000 -0- -0- -0-
dent 1994 195,000 5,500 -0- -0- -0-
Jeffrey
H. Demgen
Vice
Presi-
dent(10) 1996 102,500 7,500 -0- -0- -0-
(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
April 18, 1997
InterContinental Life Corporation
P R O X Y
Annual Meeting of Shareholders, May 20, 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, May 20, 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. 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. 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.
