Reg. Section 240.14a-101
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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permitted by Rule 14a-6(e)(2))
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14a-12
Loews Corporation
- -----------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
N/A
- -----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the
Registrant )
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Exchange Act Rule 14a-6(i)(3).
| | Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which
transaction applies: NA
--------------------------------------------------
(2) Aggregate number of securities to which
transaction applies: NA
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(3) Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule
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(5) Total fee paid:
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by Exchange Act Rule 0-11(a)(2) and identify the filing
for which the offsetting fee was paid previously.
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LOEWS
CORPORATION
667 Madison Avenue
New York, New York 10021-8087
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 9, 1995
To the Shareholders:
The Annual Meeting of Shareholders of Loews Corporation (the "Company") will
be held at the Chemical Corporate Headquarters Auditorium, Third Floor, 270 Park
Avenue at 48th Street, New York, New York, on Tuesday, May 9, 1995 at 11:00 A.M.
New York City Time, for the following purposes:
I To elect ten directors;
II To consider and act upon a proposal to ratify the appointment by the Board
of Directors of Deloitte & Touche LLP as independent certified public
accountants for the Company;
III To consider and act upon four shareholder proposals; and
IV To transact such other business as may properly come before the meeting or
any adjournment thereof.
Shareholders of record at the close of business on March 13, 1995 are entitled
to notice of and to vote at the meeting and any adjournment thereof.
By order of the Board of Directors,
BARRY HIRSCH
Secretary
Dated: March 23, 1995
SHAREHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
AND MAIL IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO
POSTAGE IF MAILED IN THE UNITED STATES.
LOEWS
CORPORATION
-------------------------------
PROXY STATEMENT
-------------------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Loews Corporation (the "Company") of proxies to be voted
at the Annual Meeting of Shareholders of the Company to be held May 9, 1995. All
properly executed proxies in the accompanying form received by the Company prior
to the meeting will be voted at the meeting. Any proxy may be revoked at any
time before it is exercised by giving notice in writing to the Secretary of the
Company, by granting a proxy bearing a later date or by voting in person. The
Company expects to mail proxy materials to the shareholders on or about March
23, 1995.
The mailing address of the Company is 667 Madison Avenue, New York, N.Y.
10021-8087.
As of March 13, 1995, the record date for determination of shareholders
entitled to notice of and to vote at the meeting, there were 58,916,400 shares
of Common Stock of the Company (the "Common Stock") outstanding. Each
outstanding share is entitled to one vote on all matters which may come before
the meeting. In accordance with the Company's by-laws and applicable law, the
election of directors will be determined by a plurality of the votes cast by the
holders of shares present in person or by proxy and entitled to vote.
Consequently, the ten nominees who receive the greatest number of votes cast for
election as directors will be elected as directors of the Company. Shares
present which are properly withheld as to voting with respect to any one or more
nominees, and shares present with respect to which a broker indicates that it
does not have authority to vote ("broker non-votes") will not be counted. The
affirmative vote of shares representing a majority of the votes cast by the
holders of shares present and entitled to vote is required to approve the other
matters to be voted on at the Annual Meeting. Shares which are voted to abstain
will be considered present at the meeting, but since they are not affirmative
votes for the matter they will have the same effect as votes against the matter.
Broker non-votes are not counted as present.
1
Principal Shareholders
The following table contains certain information as to all persons who, to the
knowledge of the Company, were the beneficial owners of 5% or more of the
outstanding shares of Common Stock. Except as otherwise noted, this information
is as of February 28, 1995 and each such person has sole voting and investment
power with respect to the shares set forth.
<TABLE>
<CAPTION>
Amount
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
------------------- ------------- --------
<S> <C> <C>
Laurence A. Tisch(1) ..................... 9,449,956 16.00%
667 Madison Avenue
New York, N.Y. 10021-8087
Preston R. Tisch(1) ...................... 9,449,956 16.00%
667 Madison Avenue
New York, N.Y. 10021-8087
FMR Corp. ("FMR")(2) ..................... 3,520,400 5.97%
82 Devonshire Street
Boston, MA 02109
The Equitable Companies Incorporated
("Equitable")(3) ........................ 3,456,510 5.80%
787 Seventh Avenue
New York, N.Y. 10019
</TABLE>
(1) Laurence A. Tisch and Preston R. Tisch are each a Co-Chairman of the Board
and Co-Chief Executive Officer of the Company. Laurence A. Tisch and Preston R.
Tisch are brothers.
(2) This information is as of December 31, 1994 and is based on a Schedule 13G
report filed by FMR. According to the report Fidelity Management & Research
Company, a subsidiary of FMR, acts as investment adviser to several investment
companies and as such has sole dispositive power with respect to 3,511,100
shares. Another subsidiary of FMR has sole dispositive power with respect to
9,300 shares and sole voting power with respect to 8,500 shares.
(3) This information is as of December 31, 1994 and is based on a Schedule 13G
report filed by Equitable. According to the report the shares were acquired for
investment purposes and may be deemed to be beneficially owned by certain
subsidiaries of Equitable. Equitable states in such report that it may be deemed
to have sole voting power with respect to 3,279,090 shares, shared voting with
respect to 154,030 shares, and sole dispositive power with respect to 3,456,510
shares. The report states that it has been filed jointly on behalf of AXA, and
five French mutual insurance companies, as a group, as parent holding companies.
2
Director and Officer Holdings
The following table sets forth certain information as to the shares of Common
Stock beneficially owned by each director and nominee, each executive officer
named in the Summary Compensation Table, below, and by all executive officers
and directors of the Company as a group at February 28, 1995, based on data
furnished by them.
<TABLE>
<CAPTION>
Amount
Beneficially Percent
Name Owned(1) of Class
---- ----------- --------
<S> <C> <C>
Charles B. Benenson ........................... 77,775(2) *
John Brademas ................................. 555(3) *
Bernard Myerson ............................... 15,750(4) *
Edward J. Noha ................................ 750(5) *
Lester Pollack ................................ 1,944(6) *
Gloria R. Scott ............................... 0
Andrew H. Tisch ............................... 1,000(7) *
James S. Tisch ................................ 40,000(8) *
Jonathan M. Tisch ............................. 127,510(9) *
Laurence A. Tisch ............................. 9,449,956 16.0%
Preston R. Tisch .............................. 9,449,956 16.0%
All executive officers and directors as a group
(23 persons including those listed above) .... 19,176,022 32.5%
</TABLE>
*Represents less than 1% of the outstanding shares of Common Stock.
(1) Except as otherwise indicated the persons listed as beneficial owners of
the shares have sole voting and investment power with respect to such shares.
(2) These shares are owned by a partnership in which a revocable trust created
by Mr. Benenson has a 75% interest and of which Mr. Benenson is general manager.
In addition, 35,100 shares of Common Stock and 10,000 shares of common stock of
CNA Financial Corporation ("CNA"), an 84%-owned subsidiary of the Company, are
held by a charitable foundation. Mr. Benenson has shared voting and investment
power with respect to the Common Stock and CNA common stock owned by such
partnership and foundation.
(3) In addition, Mr. Brademas owns 78 shares of CNA common stock.
(4) In addition, Mr. Myerson's wife owns 1,250 shares of Common Stock as to
which Mr. Myerson disclaims any beneficial interest.
(5) In addition, Mr. Noha owns beneficially 450 shares of CNA common stock.
(6) In addition, 5,342 shares of Common Stock are held by a charitable
foundation, as to which Mr. Pollack has shared voting and investment power.
(7) In addition, 186 shares of Common Stock are owned by Mr. Tisch's son, as
to which Mr. Tisch disclaims any beneficial interest and 30,000 shares of Common
Stock are held by a charitable foundation as to which Mr. Tisch has shared
voting and investment power.
(8) In addition, 29,000 shares of Common Stock are held by a charitable
foundation as to which Mr. Tisch has shared voting and investment power.
(9) In addition, 40,000 shares of Common Stock are held by a charitable
foundation as to which Mr. Tisch has shared voting and investment power.
3
ELECTION OF DIRECTORS
(Proposal No. 1)
Pursuant to the by-laws of the Company, the number of directors constituting
the full Board of Directors has been fixed by the Board at ten. Accordingly,
action will be taken at the meeting to elect a Board of ten directors to serve
until the next Annual Meeting of Shareholders and until their respective
successors shall be duly elected and shall qualify. It is the intention of the
persons named in the accompanying form of proxy, unless shareholders otherwise
specify by their proxies, to vote for the election of the nominees named below,
each of whom is now a director. The Board of Directors has no reason to believe
that any of the persons named will be unable or unwilling to serve as a
director. Should any of the nominees be unable or unwilling to serve, it is
intended that proxies will be voted for the election of a substitute nominee or
nominees selected by the Board of Directors.
Set forth below is the name, age, principal occupation during the past five
years and other information concerning each nominee.
Charles B. Benenson, 82 - Officer and Director, Benenson Realty Company (real
estate investments). Mr. Benenson has been a director of the Company since 1960
and is a member of the Audit Review Committee.
John Brademas, 68 - President Emeritus since 1992 and, prior thereto,
President of New York University. Mr. Brademas is also a director of Scholastic,
Inc., Texaco Inc. and NYNEX, Inc. Mr. Brademas has been a director of the
Company since 1982.
Bernard Myerson, 77 - Chairman Emeritus of Sony Theatre Management
Corporation. Mr. Myerson has been a director of the Company since 1963 and is a
member of the Executive Committee.
Edward J. Noha, 67 - Chairman of the Board of Directors of CNA since 1992.
Prior thereto, Mr. Noha had been Chairman and Chief Executive Officer of the CNA
Insurance Companies. Mr. Noha is also a director of Eagle Financial Corp. Mr.
Noha has been a director of the Company since 1975.
Gloria R. Scott, 56 - President, Bennett College, Greensboro, North Carolina.
Dr. Scott has been a director of the Company since 1990.
Andrew H. Tisch, 45 - Chairman of the Board and Chief Executive Officer of
Lorillard Tobacco Company ("Lorillard"), a wholly owned subsidiary of the
Company. Mr. Tisch is a director of Bulova Corporation ("Bulova"), a 97% owned
subsidiary of the Company, and Zale Corporation. Mr. Tisch has been a director
of the Company since 1985 and is a member of the Management Committee.
James S. Tisch, 42 - President and Chief Operating Officer of the Company
since 1994. Prior thereto he had been Executive Vice President. He is also a
director of CNA and Champion International Corporation. Mr. Tisch has been a
director of the Company since 1986 and is a member of the Management Committee.
Jonathan M. Tisch, 41 - President and Chief Executive Officer of Loews Hotels.
He has been a director of the Company since 1986 and is a member of the
Management Committee. Mr. Tisch is also a director of Individual Investor Group,
Inc.
Laurence A. Tisch, 72 - Co-Chairman of the Board and Co-Chief Executive
Officer of the Company. Prior to 1994, Mr. Tisch had been the Chairman of the
Board and Co-Chief Executive Officer of the Company. Mr. Tisch is also Chief
Executive Officer of CNA and a director of CNA and Bulova. In addition, he
serves as Chairman, President and Chief Executive Officer and a director of CBS
Inc. ("CBS"), approximately 18% of the common stock of which is owned by the
Company, and as a director of Automatic
4
Data Processing, Inc., Petrie Stores Corporation and Federated Department
Stores, Inc. He has been a director of the Company since 1959 and is a member of
the Executive and Finance Committees.
Preston R. Tisch, 68 - Co-Chairman of the Board and Co-Chief Executive Officer
of the Company. Prior to 1994, Mr. Tisch had been President and Co-Chief
Executive Officer of the Company. Mr. Tisch served as Postmaster General of the
United States from August 15, 1986 to February 26, 1988. Prior thereto he had
served as President and Chief Operating Officer of the Company since 1969 and as
a director of the Company since 1960. He was re-elected a director of the
Company in March 1988 and is Chairman of the Executive Committee. He is a
director of Bulova, CNA, CBS, Hasbro, Inc. and Rite Aid Corporation.
Committees
The Company has an Audit Review Committee, a Finance Committee, a Management
Committee and an Executive Committee. The Company has no nominating committee or
compensation committee. The functions of the Audit Review Committee include
recommendation to the Board of Directors with respect to the engagement of the
Company's independent certified public accountants, review of the scope and
effectuation of the audit engagement and of the Company's internal audit
procedures, approval of each service performed by the independent accountants,
and review of the Company's internal accounting controls.
Attendance at Meetings
During 1994 there were eight meetings of the Board of Directors and one
meeting of the Audit Review Committee. The Audit Review Committee consists of
Messrs. Charles B. Benenson and Lester Pollack, each of whom presently serves as
a director of the Company. Each director of the Company, with the exception of
Messrs. Brademas, Myerson and Pollack, attended not less than 75% of the total
number of meetings of the Board of Directors and committees of the Board on
which such director serves.
Director Compensation
Each director who is not an employee of the Company is paid an annual retainer
of $20,000 for serving as a director. In addition, members of the Audit Review
Committee are paid $500 for each meeting attended.
Pursuant to a Continuing Service Agreement with CNA expiring on September 30,
2002, Mr. Noha serves as Chairman of the Board of Directors of CNA and provides
consulting and other specified services to CNA. Under this Agreement Mr. Noha
(or his estate in the event of his death) is paid a fee at the rate of
$1,570,000 per annum, reduced by his CNA retirement benefits.
5
EXECUTIVE COMPENSATION
The following table sets forth information for the years indicated regarding
the compensation of the co-chief executive officers and each of the other three
most highly compensated executive officers of the Company as of December 31,
1994, for services in all capacities to the Company and its subsidiaries.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------
Name and Other Annual All Other
Principal Position Year Salary(1) Compensation Compensation
- ------------------ ---- ------ ------------ ------------
<S> <C> <C> <C> <C>
L.A. Tisch 1994 $ 601,660 $47,929(3)
Co-Chairman of the 1993 570,296 43,058
Board and Co-Chief 1992 356,257 41,572
Executive Officer(2)
P.R. Tisch 1994 1,555,448 $381,163(4) 47,929(5)
Co-Chairman of the 1993 1,517,296 380,810 43,058
Board and Co-Chief 1992 1,303,258 388,743 41,572
Executive Officer
J.S. Tisch 1994 697,443 29,622(6)
President and Chief 1993 552,527 24,447
Operating Officer 1992 505,873 23,953
A.H. Tisch 1994 696,500 4,825(7)
Chairman of the Board 1993 551,527 3,701
and Chief Executive 1992 504,873 3,108
Officer of Lorillard
J.M. Tisch 1994 696,432 3,622(7)
President and Chief 1993 551,527 2,946
Executive Officer of 1992 504,873 2,451
Loews Hotels
</TABLE>
(1) Salary includes payments to the named individual based on benefit choices
under the Company's flexible benefits plan.
(2) Mr. Tisch's salary has been reduced for so long as he is devoting a
principal amount of his time to CBS. See "Employment Agreements" below. Mr.
Tisch received from CBS a salary of $1,000,000 and deferred salary and bonus
aggregating $986,630 for 1994, and salary and bonus of $1,025,065 and $900,000,
respectively, for 1993, and $973,012 and $600,000, respectively, for 1992.
(3) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan aggregating
$21,929, $21,558, and $20,072 for 1994, 1993 and 1992, respectively. Also
includes director's fees paid by CNA amounting to $26,000 for 1994 and $21,500
for each of 1993 and 1992.
6
(4) Represents the incremental cost of personal benefits provided by the
Company, including $325,000, $315,000 and $315,000 respectively, for 1994, 1993
and 1992 for the use by Mr. Tisch of an apartment at a Company operated hotel in
New York City for the convenience of the Company and its Hotel Division.
(5) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan aggregating
$21,929, $21,558 and $20,072 for 1994, 1993 and 1992, respectively. Also
includes director's fees paid by CNA amounting to $26,000 for 1994 and $21,500
for each of 1993 and 1992.
(6) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan aggregating
$3,622, $2,946 and $2,451 for 1994, 1993 and 1992, respectively. Also includes
director's fees paid by CNA amounting to $26,000 for 1994 and $21,500 for each
of 1993 and 1992.
(7) Represents the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan.
Employment Agreements
An employment agreement with Laurence A. Tisch was amended in 1994 to expire
October 31, 1996. The amended agreement provides for remuneration at the rate of
$1,750,000 per annum, subject to such increases as the Board of Directors may
from time to time determine in its sole discretion. The agreement also provides
for a reduction of such remuneration to an annual rate of $750,000 for so long
as Mr. Tisch is devoting a principal amount of his time to CBS. Mr. Tisch has
served as President and Chief Executive Officer of CBS since January 1987 and
receives related CBS employee benefits. Mr. Tisch's employment agreement with
the Company also provides for the payment of supplemental retirement benefits in
an amount equal to the excess, if any, of (i) the retirement benefits payable
under the Company's Retirement Plan without giving effect to benefit limitations
imposed by the Plan and the Internal Revenue Code, over (ii) retirement benefits
actually paid under the Plan as limited by such provisions. These supplemental
benefits are equivalent to the benefits provided under the Benefits Equalization
Plan (see "Pension Plan," below). The reduction in Mr. Tisch's remuneration from
the Company is not considered for purposes of determining his supplemental
retirement and other salary related benefits; however, the supplemental
retirement benefits will be reduced by any retirement benefits actually paid to
Mr. Tisch under the retirement plans of CBS.
An employment agreement with Preston R. Tisch was amended in 1994 to expire
October 31, 1996. The amended agreement provides for remuneration at the rate of
$1,750,000 per annum, subject to such increases as the Board of Directors may
from time to time determine in its sole discretion. The agreement also provides
for the payment of supplemental retirement benefits in an amount equal to the
excess, if any, of (i) the retirement benefits payable under the Company's
Retirement Plan without giving effect to benefit limitations imposed by the Plan
and the Internal Revenue Code, over (ii) retirement benefits actually paid under
the Plan as limited by such provisions. These supplemental benefits are
equivalent to the benefits provided under the Benefits Equalization Plan (see
"Pension Plan," below). Retirement benefits payable to Mr. Tisch under the Plan
will be adjusted pursuant to the Plan to account for retirement benefits paid to
him when he retired from the Company to serve as Postmaster General of the
United States.
Pension Plan
The Company provides a funded, tax qualified, non-contributory retirement plan
for salaried employees, including executive officers (the "Retirement Plan") and
an unfunded, non-qualified, non-contributory Benefits Equalization Plan (the
"Benefits Equalization Plan") which provides for the accrual and payment of
benefits which are not available under tax qualified plans such as the
Retirement Plan. The following description of the Retirement Plan gives effect
to benefits provided under the Benefits Equalization Plan.
7
The Retirement Plan provides for pensions upon retirement based upon average
final compensation (i.e., the highest average annual salary during any period of
five consecutive years of the ten years immediately preceding retirement) and
years of credited service with the Company. Compensation under the Retirement
Plan consists of salary paid by the Company and its subsidiaries included under
the heading "Salary" in the Summary Compensation Table above. Pension benefits
are not subject to reduction for Social Security benefits or other amounts. The
following table shows estimated annual benefits upon retirement under the
Retirement Plan for various average compensation and credited service, based
upon normal retirement in 1995 and a straight life annuity form of pension.
Other forms of pension payment are also available under the Retirement Plan.
<TABLE>
<CAPTION>
PENSION PLAN TABLE
Average Final Estimated Annual Pension for
Compensation Representative Years of Credited Service
- ------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10 15 20 25 30 35
-- -- -- -- -- --
$ 400,000 $ 48,000 $ 75,200 $107,200 $139,200 $171,200 $ 203,200
600,000 72,000 112,800 160,800 208,800 256,800 304,800
800,000 96,000 150,400 214,400 278,400 342,400 406,400
1,000,000 120,000 188,000 268,000 348,000 428,000 508,000
1,200,000 144,000 225,600 321,600 417,600 513,600 609,600
1,400,000 168,000 263,200 375,200 487,200 599,200 711,200
1,600,000 192,000 300,800 428,800 556,800 684,800 812,800
1,800,000 216,000 338,400 482,400 626,400 770,400 914,400
2,000,000 240,000 376,000 536,000 696,000 856,000 1,016,000
</TABLE>
The years of credited service of Messrs. A.H. Tisch, J.M. Tisch, J.S. Tisch,
L.A. Tisch and P.R. Tisch are seventeen, fifteen, seventeen, thirty-four and
thirty-two, respectively.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
General
The Company's policy regarding executive compensation has been adopted by the
Board of Directors. The Board of Directors has no compensation committee. The
members of the Audit Review Committee have from time to time acted as a special
compensation committee for purposes of recommendation to the Board of Directors
with respect to the Company's Co-Chief Executive Officers. See "Co-Chief
Executive Officers," below. The Company's executive compensation consists
solely of base annual salary. There is no bonus, stock option or long-term
incentive program. Executive officers participate, along with other salaried
employees, in the Company's Employees Savings Plan and Retirement Plan.
The overall objective of the Company's executive compensation policy is to
attract and motivate a high level of performance by the Company's executive
officers. To accomplish this objective, compensation levels are based upon an
evaluation of the individual's performance and cash salaries paid to executives
in similar positions by companies with comparable revenues. In determining
comparable salaries the Company participates in and analyzes two management
compensation surveys. These surveys have been selected primarily because of the
broad range of companies of various sizes included in them, the manner in which
the information is presented and, with respect to one such survey, the
consistency of the data presented. One survey includes two of the ten companies
included in the Standard & Poors Financial
8
Miscellaneous Index and the other survey includes one of the companies included
in that index (see "Stock Price Performance Graph" below). In most cases, the
Company seeks to maintain compensation levels for executive officers (as well as
salaried employees generally) between the 50th and 75th percentiles of cash
compensation paid by companies with comparable revenues. However, as a result of
evaluation of job performance as well as length of service, the compensation
levels of a majority of the Company's executive officers fall above these
parameters.
Co-Chief Executive Officers
The compensation of the Company's Co-Chief Executive Officers has been
established pursuant to employment agreements negotiated between the Company and
the Co-Chief Executive Officers. These agreements were most recently amended in
October 1994. The amended agreements increased basic compensation for each of
Mr. L.A. Tisch and Mr. P.R. Tisch to $1,750,000 per annum, an increase of
$250,000 per annum over the rate in effect for the prior two years, and extended
the term of each agreement for an additional two years. With respect to Mr. L.A.
Tisch, the amended agreement increased to $750,000 per annum (from $550,000 per
annum in effect for the prior two years) the reduced rate of salary paid to Mr.
L.A. Tisch for so long as he is devoting a principal amount of his time to CBS.
See "Employment Agreements" above. These amendments were approved by the Board
of Directors based upon the recommendation of Messrs. Charles B. Benenson and
Lester Pollack, who had been appointed by the Board of Directors to act as a
special compensation committee. In connection with the approval of the
amendments to the employment agreements with the Co-Chief Executive Officers the
special compensation committee and the Board of Directors recognized the fact
that the compensation of the Co-Chief Executive Officers had last been
increased in October 1992. The increase granted in 1994 represented an annual
increase of approximately 8%. Neither the special compensation committee nor the
Board of Directors applied any specific qualitative or quantitative formula or
relationship in approving the compensation levels provided in the amended
employment agreements. Each such employment agreement also provides for
increases in remuneration as the Board of Directors may from time to time
determine in its sole discretion, although no action has been taken or requested
in relation to this provision since execution of the amended agreements in
October 1994.
Under an amendment to the Internal Revenue Code which became effective in
1994, compensation in excess of $1,000,000 per year to certain executive
officers of public companies may not be taken as a tax deduction unless that
compensation is paid pursuant to a performance based plan meeting requirements
established under the tax code. The compensation payable under the amended
employment agreements with the Company's Co-Chief Executive Officers, discussed
above, could, in the case of Mr. L.A. Tisch, and will, in the case of Mr. P. R.
Tisch, exceed the tax code deductibility limit. The Board of Directors believes
that a formula derived compensation plan would not be practicable in relation to
the Company's Co-Chief Executive Officers and, accordingly, no such plan has
been adopted.
By the Board of Directors: Charles B. Benenson Andrew H. Tisch
John Brademas James S. Tisch
Bernard Myerson Jonathan M. Tisch
Edward J. Noha Laurence A. Tisch
Lester Pollack Preston R. Tisch
Gloria R. Scott
9
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. A.H. Tisch, J.M. Tisch, J.S. Tisch, L.A. Tisch, and P.R. Tisch, each
of whom are directors of the Company, also serve as officers of the Company or
its subsidiaries. In addition, Messrs. B. Myerson, E.J. Noha and L. Pollack,
each of whom are directors, have formerly served as officers of the Company or
its subsidiaries. Messrs. P.R. Tisch and L.A. Tisch also serve as directors of
CBS, of which Mr. L.A. Tisch is also an executive officer.
CERTAIN TRANSACTIONS
Messrs. L.A. Tisch and P.R. Tisch and their affiliates reimbursed to the
Company approximately $2,553,000 in the aggregate for the utilization by them of
the services of certain employees and facilities of the Company during 1994. In
addition, during 1994 Mr. P. R. Tisch expended approximately $970,000 for all of
the capital improvements provided during 1994 to an apartment for his use at a
Company operated hotel in New York City for the convenience of the Company and
its Hotel Division.
Subsidiaries of the Company, primarily insurance subsidiaries of CNA, have
made expenditures for advertising on CBS owned and affiliated broadcast
stations, at customary rates. During 1994 such expenditures amounted to
approximately $2,909,550. It is anticipated that such transactions will occur
in the future.
During 1994 insurance subsidiaries of CNA provided CBS with certain property
and casualty insurance and surety bonds, for which CBS paid premiums at
customary rates amounting to approximately $258,000. In addition, during 1994
insurance subsidiaries of CNA provided CBS with group life insurance for active
employees and retirees for which CBS paid premiums (a portion of which is
represented by employee contributions) aggregating approximately $3,542,000,
group long term disability insurance the premiums for which, aggregating
approximately $498,000, are paid by participating employees, and group long
term care insurance the premiums for which, aggregating approximately $275,000,
are paid by participating employees. In addition, CBS has agreed to reimburse
the Company for certain consulting services with respect to real estate matters
provided and to be provided to CBS by the Company's personnel. Approximately
$20,000 has been accrued for reimbursement relating to services provided in
1994.
Mr. Pollack is a general partner of Lazard Freres & Co. ("Lazard"). In
addition, he is a director of Continental Cablevision, Inc., Kaufman & Broad
Home Corporation, Polaroid Corporation, Parlex Corporation, Sphere Drake
Holdings Limited, SunAmerica Inc. and Tidewater Inc. In the ordinary course of
business the Company and certain of its subsidiaries have from time to time
engaged in securities transactions with Lazard. During 1994 CNA and its
subsidiaries paid approximately $18,000 in brokerage commissions to Lazard and
engaged in various principal and other securities transactions with Lazard
involving securities valued at approximately $8,816,000 in the aggregate.
Similar transactions may be expected to occur in the future. In addition, during
1994 the Company and its subsidiaries, including CNA and its subsidiaries, in
the ordinary course of business paid approximately $60,000 to Mentor Securities,
Inc. ("Mentor") as brokerage commissions. Daniel R. Tisch, a son of Laurence A.
Tisch, is a principal shareholder, officer and director of such firm. Similar
transactions with Mentor may be expected to occur in the future.
See "Compensation Committees Interlocks and Insider Participation" above, for
information with respect to relationships between certain members of the Board
of Directors and the Company.
10
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the total annual return of the Company's Common
Stock, the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the
Standard & Poor's Financial Miscellaneous Stock Index ("S&P Financial
Miscellaneous") for the five years ended December 31, 1994. The graph assumes
that the value of the investment in the Company's Common Stock and each Index
was $100 on December 31, 1989 and that all dividends were reinvested.
<TABLE>
<CAPTION>
S & P
Measurement Period Loews S & P 500 Financial
(Fiscal Year Covered) Corporation Index Miscellaneous
--------------------- ----------- --------- -------------
<S> <C> <C> <C>
Measurement Point - December 31, 1989 $100.00 $100.00 $100.00
Fiscal Year Ended December 31, 1990 79.76 96.89 80.59
Fiscal Year Ended December 31, 1991 89.87 126.42 127.85
Fiscal Year Ended December 31, 1992 99.46 136.05 150.35
Fiscal Year Ended December 31, 1993 77.81 149.76 179.62
Fiscal Year Ended December 31, 1994 73.49 151.74 173.18
</TABLE>
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
A report under Section 16 of the Securities Exchange Act of 1934, in relation
to a gift of Common Stock in January 1993, was not filed in a timely manner by
Robert J. Hausman, an officer of the Company.
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(Proposal No. 2)
Upon the recommendation of the Audit Review Committee of the Board of
Directors, none of whose members is an officer of the Company, the Board of
Directors of the Company has selected the firm of Deloitte & Touche LLP,
independent certified public accountants, as the principal independent auditors
of the Company for the year ending December 31, 1995, subject to ratification by
the shareholders. Deloitte & Touche LLP served as the Company's independent
auditor during 1994. If the appointment of the firm of Deloitte & Touche LLP is
not approved or if that firm shall decline to act or their employment is
otherwise discontinued, the Board of Directors will appoint other independent
auditors. Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting, at which time they will be available to respond to
appropriate questions from shareholders and be given an opportunity to make a
statement if they desire to do so.
11
SHAREHOLDER PROPOSALS
The Company has been advised that four shareholder proposals described below
will be presented at the Annual Meeting. For the reasons set forth below, the
Board of Directors recommends a vote against each proposal.
SHAREHOLDER PROPOSAL RELATING TO CUMULATIVE VOTING
(Proposal No. 3)
John J. Gilbert and Margaret R. Gilbert, 29 East 64th Street, New York, NY
10021-7043, owner of 50 shares and 97 shares, respectively, of Common Stock and
as co-trustees under the will of Lewis D. Gilbert, owner of 50 shares of Common
Stock, and John C. Henry, 5 East 93rd Street, New York, NY 10128, owner of
2,800 shares of Common Stock, have notified the Company in writing that they
intend to present the following resolution at the Annual Meeting for action by
the shareholders:
"RESOLVED: That the stockholders of Loews Corporation, assembled in
annual meeting in person and by proxy, hereby request the Board of Directors
to take the steps necessary to provide for cumulative voting in the election
of directors, which means each stockholder shall be entitled to as many
votes as shall equal the number of shares he or she owns multiplied by the
number of directors to be elected, and he or she may cast all of such votes
for a single candidate, or any two or more of them as he or she may see fit.
"REASONS: Continued very strong support along the lines we suggest were
shown at the last annual meeting when 26.1%, an increase over the previous
year, 1,094 owners of 12,546,577 shares, were cast in favor of this
proposal. The vote against included marked proxies.
"A law enacted in California provides that all state pension holdings and
state college funds, invested in shares must be voted in favor of cumulative
voting proposals, showing increasing recognition of the importance of this
democratic means of electing directors.
"The National Bank Act provides for cumulative voting. Unfortunately, in
many cases companies get around it by forming holding companies without
cumulative voting. Banking authorities have the right to question the
capability of directors to be on banking boards. Unfortunately, in many
cases authorities come in after and say the director or directors were not
qualified. We were delighted to see that the SEC has finally taken action
to prevent bad directors from being on the boards of public companies.
"We think cumulative voting is the answer to find new directors for
various committees. Additionally, some recommendations have been made to
carry out the Valdez 10 points. The 11th should be having cumulative voting
and ending stagger systems of electing directors, in our opinion.
"When Alaska became a state it took away cumulative voting over our
objections. The Valdez oil spill might have been prevented if environmental
directors were elected through cumulative voting. Also, the huge derivative
losses might have been prevented with cumulative voting.
"Many successful corporations have cumulative voting. For example, ennzoil
having cumulative voting defeated Texaco in that famous case. Another
example is Ingersoll-Rand, which has cumulative voting and won two awards.
In FORTUNE magazine it was ranked second in its industry as 'America's Most
Admired Corporations' and the WALL STREET TRANSCRIPT noted 'on almost any
criteria used to evaluate management, Ingersoll-Rand excels.' In 1994 they
raised their dividend. We believe that Loews should follow these examples.
12
"If you agree, please mark your proxy for this resolution; otherwise it is
automatically cast against it, unless you have marked to abstain."
The Board of Directors recommends a vote AGAINST Proposal No. 3.
This is the fifteenth submission since 1960 by the same proponents of this
proposal. Every time it has been soundly rejected by the shareholders.
The Board believes that the present system of voting for directors, in which
all directors are elected by a plurality of all of the votes cast, is the
fairest and most preferable method for selecting directors. The Board is
opposed to cumulative voting because cumulative voting could make it possible
for a special interest group, which may not represent the interests of all
shareholders, to elect one or more directors beholden only to that special
interest group. The aims of such special interest group may be adverse to those
of the Company and its shareholders as a whole and thus could impede the Board's
power to act on behalf of the Company and all of its shareholders. Accordingly,
the Board of Directors recommends a vote against this proposal.
SHAREHOLDER PROPOSAL RELATING TO ANNUAL MEETING LOCATION
(Proposal No. 4)
Evelyn Y. Davis, 2600 Virginia Avenue, N.W., Washington, D.C. 20037, owner of
61 shares of Common Stock, has notified the Company in writing that she intends
to present the following resolution at the Annual Meeting for action by the
shareholders:
"RESOLVED: That the stockholders of Loews recommend that the Board of
Directors take the necessary steps to rotate the annual meeting each year
between cities where there is a large concentration of shares and/or where
Loews and/or its business subsidiaries have locations.
"REASONS: Many corporations such as I.T.T. USA, A.T.T., American Brands,
Arco, Xerox, IBM, Time Warner, Chrysler, General Motors, GE, American
Express and many, many others do rotate on a regular basis.
"Stockholders who for business or geographic reasons cannot attend the New
York meeting are nevertheless entitled to meet management and directors and
to pose questions at annual meetings if they so wish.
"Loews could meet in cities such as Los Angeles, Chicago, Miami,
Washington, D.C., Dallas, Richmond, Atlanta and other locations as well as
from time to time in New York City.
"Last year the owners of 1,778,668 shares, representing approximately 3.7%
of shares voting, voted FOR this proposal.
"If you AGREE, please mark your proxy FOR this proposal."
The Board of Directors recommends a vote AGAINST Proposal No. 4.
This proposal was overwhelmingly rejected by the shareholders last year, and
the Board of Directors recommends it be rejected again this year.
Under the Company's by-laws, the Board of Directors may designate the place
for the Annual Meeting of Shareholders at an appropriate location. The Board
believes that at the present time it is preferable to hold the annual meeting in
New York City, where the Company's executive offices are located. This
13
allows the Company's directors and personnel to attend and handle arrangements
for the meeting without having to take substantial time away from the
performance of their regular responsibilities. Changing the location of the
Annual Meeting has from time to time been considered, and may be considered
again. The Board believes, however, that adopting a formal program requiring
rotation of the Annual Meeting would be unduly restrictive. Accordingly, the
Board of Directors recommends a vote against this proposal.
SHAREHOLDER PROPOSAL RELATING TO TOBACCO AND INSURANCE
(Proposal No. 5)
The Congregation of the Sisters of Charity of the Incarnate Word, 6510
Lawndale, Houston, Texas 77223-0969, owner of 100 shares of Common Stock, has
notified the Company in writing that it intends to present the following
resolution at the Annual Meeting for action by the shareholders:
"WHEREAS cigarette smoking is the leading cause of death and diseases in
the United States, causing an estimated 430,000 deaths last year. 53,000
more died from effects of passive smoking;
"The Center for Disease Control estimated that $50 billion was spent in
1993 to treat diseases caused by smoking;
"Fires caused by smoking are the leading cause of death from residential
fires;
"Through its Lorillard Division, our Company manufactures, promotes and
advertises its cigarettes targeting African-Americans and low income
persons. Yet, through its CNA Division, our Company also insures persons
against disease, premature death, and property loss from cigarette-related
causes;
"Recognizing the health-hazards related to smoking as well as its lethal
power, our Company gives preferred rates to those it insures who do not
smoke;
"Such conflicting approaches to health by divisions of Loews leads many to
believe our Company's methods undermine health through the promotion of
cigarettes while giving preferential rates for insurance to those who are
cigarette-free;
"On the one hand, advertisements for our Newport brand of cigarettes imply
it make users 'Alive with Pleasure.' However, our ads in cigarette trade
publications have declared Newport to be 'Alive with Profit.' This may aptly
describe why we continue this apparent contradiction.
"RESOLVED that shareholders request a Special Report on Loews tobacco and
insurance businesses be presented to requesting shareholders by November 1,
1995. This Report, prepared at reasonable cost and omitting any proprietary
information, shall describe the following:
"1. The rationale between the apparent contradiction between advertising
and promoting cigarettes yet giving preferential insurance rates for persons
who do not smoke;
"2. A summary of any research done by our Company or CNA related to the
health hazards of smoking among the insured population of CNA;
"3. The annual estimated impact smoking has on our Company's insurance
payments for smoking-attributable deaths, diseases, or property loss between
1989 and 1994 compared with the annual estimated earnings our Company has
realized from its tobacco operations in the same period.
"The findings and conclusions of this Report shall be made available to
requesting shareholders by November 1, 1995.
14
"SUPPORTING STATEMENT: Our Company's insurance subsidiary insures health
and life. Yet another division manufactures products and generates the
majority of the Company's profits from a product which kills. We reward
people for not using cigarettes, yet we manufacture them. A vote for this
resolution will invite our Board and management to review this apparent
contradiction and provide a rationale, if possible, for it. Hopefully the
conclusions will make it evident that we cannot ethically continue in one or
the other businesses.
"If you agree, please vote 'yes' for this shareholder resolution."
The Board of Directors recommends a vote AGAINST Proposal No. 5.
This proposal is similar to proposals introduced at the last two shareholder
meetings which were overwhelmingly defeated by the shareholders. The Board of
Directors continues to believe that the adoption of this proposal would not be
in the interest of the Company or its shareholders. The information the
requested report seeks, assuming such information would be available, relates to
the ordinary business operations of the Company, including those of its 84%
owned subsidiary, CNA. In the opinion of the Board of Directors it is not an
appropriate subject for shareholder action, or more importantly, a public
report. Accordingly, the Board of Directors recommends a vote against this
proposal.
SHAREHOLDER PROPOSAL RELATING TO SEPARATION OF TOBACCO BUSINESS
(Proposal No. 6)
Maryknoll Fathers and Brothers, P.O. Box 306, Maryknoll, NY 10545-0306, owner
of 100 shares of Common Stock, has notified the Company in writing that it
intends to present the following resolution at the Annual Meeting for action by
the shareholders:
"WHEREAS many institutional investors believe our Company would produce
more financial returns if our tobacco business would be separated from other
businesses:
"Some institutional investors have been uneasy about [cigarette
companies'] potential legal liability for the health problems of smokers,
and think that such problems have depressed the share price of tobacco
companies' stock (The New York Times 9/22/94);
"Increased litigation coming from states and private insurers indicate new
and ominous challenges that might undermine the value of the stock. The
stock value might be increased if the tobacco division(s) would be separated
from the other divisions;
"The day following Kmart Corporation's announcement that it would sell
majority stakes in three of its specialty businesses in August 1994, its
stock jumped over 2%;
"RESOLVED that shareholders ask management to take steps to accomplish a
separation of the Corporation's tobacco business from all its non-tobacco
businesses by January 1, 1996."
The Board of Directors recommends a vote AGAINST Proposal No. 6.
Lorillard Tobacco Company and its predecessors have been owned by the Company
for over 25 years. During this period, Lorillard has made an important
contribution to the Company's consolidated results of operations. The Board of
Directors believes that a separation of Lorillard from the Company's
consolidated group of businesses would not be in the best interest of the
Company and its shareholders, and could have adverse consequences. Accordingly,
the Board of Directors recommends a vote against this proposal.
15
OTHER MATTERS
The Company knows of no other matters to be brought before the meeting. If
other matters should properly come before the meeting, proxies will be voted on
such matters in accordance with the best judgment of the persons appointed by
the proxies.
The Company will bear all costs in connection with the solicitation of proxies
for the meeting. The Company intends to request brokerage houses, custodians,
nominees and others who hold stock in their names to solicit proxies from the
persons who own stock, and such brokerage houses, custodians, nominees and
others, will be reimbursed for their out-of-pocket expenses and reasonable
clerical expense. In addition to the use of the mails, solicitation may be made
by employees of the Company and its subsidiaries personally or by mail or
telephone.
Shareholder Proposals for the 1996 Annual Meeting
Shareholder proposals for the 1996 Annual Meeting must be received by the
Company at its principal executive offices set forth above not later than
November 24, 1995 in order to be included in the Company's proxy materials.
By order of the Board of Directors,
BARRY HIRSCH
Secretary
Dated: March 23, 1995
PLEASE COMPLETE, DATE, SIGN AND
RETURN YOUR PROXY PROMPTLY
16
LOEWS CORPORATION Proxy
- -------------------------------------------------------------------------------
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby constitutes and appoints Bernard Myerson, Roy E.
Posner and Barry Hirsch and each of them, each with full power of substitution,
true and lawful attorneys, agents and proxies with all the powers the
undersigned would possess if personally present, to vote all shares of Common
Stock of the undersigned in Loews Corporation at the Annual Meeting of
Shareholders to be held at the Chemical Corporate Headquarters Auditorium, Third
Floor, 270 Park Avenue at 48th Street, New York, New York, on May 9, 1995, at
11:00 A.M., New York City Time, and at any adjournments thereof, upon the
matters set forth in the Notice of Meeting and accompanying Proxy Statement and,
in their judgment and discretion, upon such other business as may properly come
before the meeting.
This Proxy when properly executed will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS, "FOR" PROPOSAL 2 AND "AGAINST" PROPOSALS 3, 4,
5 AND 6.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
<TABLE>
<S> <C>
[ X ] Please mark
your votes
like this
------------
COMMON
Item 1-ELECTION OF DIRECTORS WITHHELD
Nominees: C.B. Benenson, J. Brademas, FOR FOR ALL
B. Meyerson, E.J. Noha, FOR AGAINST ABSTAIN
G. R. Scott, A.H. Tisch, Item 3-SHAREHOLDER PROPOSAL CONCERNING
J.S. Tisch, J.M. Tisch, CUMULATIVE VOTING [ ] [ ] [ ]
L.A. Tisch and P.R. Tisch [ ] [ ]
Item 4-SHAREHOLDER PROPOSAL CONCERNING
WITHHELD FOR: (Write that nominee's ANNUAL MEETING LOCATION [ ] [ ] [ ]
name in the space provided below.)
Item 5-SHAREHOLDER PROPOSAL CONCERNING
TOBACCO AND INSURANCE [ ] [ ] [ ]
________________________________________________________
Item 2-RATIFY DELOITTE & FOR AGAINST ABSTAIN Item 6-SHAREHOLDER PROPOSAL CONCERNING
TOUCHE LLP AS SEPARATION OF TOBACCO BUSINESS [ ] [ ] [ ]
INDEPENDENT
ACCOUNTANTS [ ] [ ] [ ]
__________
|
| Please sign EXACTLY as name appears on
| this Proxy. When shares are held by joint
| tenants, both should sign. When signing
as attorney, executor, administrator,
trustee or guardian, please give full
title as such. Corporate and partnership
proxies should be signed by an authorized
person indicating the person's title.
Signature(s)____________________________________________________________________________ Date___________________________
</TABLE>
