<PAGE>
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
[X] Definitive Proxy Statement Rule 14a-6(e)(2))
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
OVERSEAS PARTNERS, LTD.
------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No Filing Fee Required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
--------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
--------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
--------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
OVERSEAS PARTNERS LTD.
CRAIG APPIN HOUSE, WESLEY STREET
HAMILTON HM GX, BERMUDA
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
MAY 28, 1997
To Our Shareowners:
The Annual Meeting of Shareowners of Overseas Partners Ltd. ("Overseas" or
the "Company"), a Bermuda Company, will be held at the Hamilton Princess
Hotel, Hamilton, Bermuda, on May 28, 1997, at 9:00 A.M., for the following
purposes:
1. To elect a Board of Directors;
2. To appoint Deloitte & Touche, Chartered Accountants, as auditors for
Overseas for the year ending December 31, 1997; and
3. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on March 31, 1997 as
the record date for the determination of shareowners entitled to notice of and
to vote at the meeting.
By order of the Board of Directors.
Thomas E. Butler
Secretary
Hamilton, Bermuda
April 18, 1997
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THE MEETING, KINDLY SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED STAMPED
ENVELOPE. IF YOUR SHARES ARE HELD IN CUSTODY BY FIRST UNION NATIONAL BANK,
FORMERLY FIRST FIDELITY BANK, KINDLY SIGN AND RETURN THE ENCLOSED LETTER OF
INSTRUCTION, OR FOLLOW THE DIRECTIONS HEREIN FOR OBTAINING A PROXY, TO ASSURE
THAT YOUR SHARES ARE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS.
<PAGE>
OVERSEAS PARTNERS LTD.
CRAIG APPIN HOUSE, WESLEY STREET APRIL 18, 1997
HAMILTON HM GX, BERMUDA
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors ("Board") of
Overseas Partners Ltd., a Bermuda Company ("Overseas"), for the Annual Meeting
of Shareowners to be held on May 28, 1997, and is being mailed with this Proxy
Statement to shareowners on or about April 18, 1997. The person giving the
proxy has the right to revoke it at any time before it is voted by giving
written notice of revocation to the Secretary of Overseas, by submitting a
subsequent proxy or by voting in person at the meeting. The expense of proxy
solicitation will be paid by Overseas. In addition to solicitation by mail,
proxies may be personally solicited at the direction of Overseas' officers,
for which no additional expense is anticipated.
Overseas had 132,000,000 shares of Common Stock, $.10 par value ("Common
Stock" or "Overseas Common Stock"), outstanding and entitled to vote at the
close of business on March 31, 1997. These shares are the only securities of
Overseas entitled to be voted at the meeting. Each share of Common Stock is
entitled to one vote, except that under Overseas' Bye-laws the voting rights
of any shareowner or shareowners acting as a group (other than certain
shareowners set forth in Overseas' Bye-laws) who beneficially own more than 10
percent of the voting stock would be scaled back so that such shareowners
would be entitled to cast only one one-hundredth of a vote with respect to
each share owned in excess of 10 percent. Only shareowners of record at the
close of business on March 31, 1997 will be entitled to vote.
It is intended that all shares of Common Stock represented by proxies
properly executed in the accompanying form, unless otherwise specified
thereon, will be voted FOR the election of the persons nominated by the Board
to be directors and FOR the appointment of Deloitte & Touche as auditors.
Saul & Co., nominee for First Union National Bank, P.O. Box 41784,
Philadelphia, PA 19101-1784 is the record owner of 98,684,261 shares,
constituting 74.76% of the outstanding Overseas Common Stock as of March 31,
1997. Such shares are held by First Union as custodian for shareowners who
have not elected to have their shares distributed to them. First Union will
forward this notice of meeting and proxy statement to the beneficial owners of
the shares so held.
Owners of Common Stock held by First Union National Bank ("First Union") as
custodian may direct the voting of their shares by executing and returning to
First Union before May 21, 1997, the Letter of Instruction which they receive
along with this notice of meeting and proxy statement. An owner of shares who
wishes to vote his or her shares in person at the meeting may request First
Union to issue a proxy to him or her for the number of shares held for his or
her account. Such request must be received by First Union prior to May 21,
1997. Shares for which no instructions or requests for proxies are timely
received will be voted by First Union. First Union has advised Overseas that
it intends to vote such shares FOR the election of the persons nominated by
the Board to be directors and FOR the appointment of auditors.
As used in this Proxy Statement, "dollars" and "$" refer to United States
dollars.
<PAGE>
ELECTION OF DIRECTORS
NOMINEES FOR ELECTION AS DIRECTORS
A Board of six directors will be elected at the Annual Meeting. All of the
current directors have been nominated for re-election by the Board. The
directors elected at the Annual Meeting will serve until the next Annual
Meeting and until the election and qualification of their successors, or until
their appointment is terminated in accordance with Overseas' Bye-laws.
The Board has no reason to anticipate that any nominee will decline or be
unable to serve. In case any nominee does decline or is unable to serve,
proxies may be voted for the election of a substitute nominee or the Board may
elect to reduce the number of directors to be elected at the Annual Meeting
and to fill any resulting vacancies on the Board subsequent to the Annual
Meeting. Under Bermuda law, a quorum of directors must ordinarily be resident
in Bermuda. Overseas' Bye-laws provide that two directors shall constitute a
quorum.
Set forth below is certain biographical information concerning each of the
nominees for election as director.
- -------------------------------------------------------------------------------
BRUCE M. BARONE Age 48 Director since 1995
Bruce has been President and Chief Executive Officer of
Overseas since December 20, 1995. Previously, he served as
Senior Vice President and Chief Operating Officer since 1991,
and as Vice President and member of the Executive Committee
since before 1990. Bruce has been associated with Overseas
since its incorporation in 1983. He became an employee of
Overseas on January 1, 1995. Previously, he was Vice
President--Financial Planning of United Parcel Service of
America, Inc. ("UPS") since before 1990. He holds an MBA from
the Graduate School of Business of Columbia University and is
a Certified Public Accountant.
LOGO
- -------------------------------------------------------------------------------
ROBERT J. CLANIN Age 53 Director since 1994
Prior to becoming a director, Bob served as Vice President
of Overseas from June 1990 to August 1994. He has been Senior
Vice President, Treasurer and Chief Financial Officer of UPS
since 1994. Previously, he was Finance Manager of UPS from
November 1990 and Treasury Manager of UPS since May 1989. He
is also a director of UPS.
LOGO
- -------------------------------------------------------------------------------
2
<PAGE>
JOSEPH M. PYNE Age 49 Director since 1995
Joe is Senior Vice President -- Corporate Marketing for
UPS. In this capacity, he directs UPS's worldwide marketing
efforts in the U.S. and in more than 200 countries and
territories served by UPS. Previously, he has served as Vice
President -- U.S. Marketing at UPS. He began his UPS career
in 1969 and was promoted to North Central region Business
Development Manager in 1984. In 1989 he became National
Marketing Planning Manager, and later he headed Marketing for
U.S. ground and air delivery services.
LOGO
- -------------------------------------------------------------------------------
CYRIL E. RANCE Age 62 Director since 1995
Cyril was President and Chief Executive Officer of a large
Bermuda insurer until his retirement in 1990. He has more
than 40 years experience in all aspects of the insurance
industry. He also has had a long and varied career in civic
and government service, including 10 years as a member of the
Bermuda Parliament. He is a director of Exel Limited, an
insurance holding company, and of several exempt companies
registered in Bermuda.
LOGO
- -------------------------------------------------------------------------------
EDWIN H. REITMAN Age 54 Director since 1991
Ed became non-executive Chairman of the Board of Directors
on December 20, 1995. Previously, he served as President and
Chief Executive Officer since 1991. Ed has been President of
UPS Europe since April 1995. In that capacity, he has overall
responsibility for UPS's operations in Europe, Africa and the
Middle East. Prior to his present assignment, Ed was Manager
of the UPS Legal Department since 1989.
LOGO
- -------------------------------------------------------------------------------
WALTER A. SCOTT Age 59 Director since 1995
Prior to his retirement in September 1994, Walter served as
Chairman, President and Chief Executive Officer of ACE Ltd.,
an excess casualty insurer based in Bermuda. He has served as
a director of ACE since 1989 and as a consultant to the
Company after his retirement until September 1996. Prior to
1989, Walter served in various senior positions with
Primerica Corporation, a diversified financial services
company.
LOGO
- -------------------------------------------------------------------------------
3
<PAGE>
STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Set forth below is information relating to the beneficial ownership of
Overseas Common Stock by (i) each person known to Overseas to own more than
five percent of the outstanding shares, (ii) each nominee and director, (iii)
the Chief Executive Officer and (iv) all directors and executive officers as a
group:
<TABLE>
<CAPTION>
COMMON STOCK HELD AS OF MARCH 31, 1997(1)
--------------------------------------------------
ADDITIONAL SHARES
IN WHICH THE
DIRECTOR OR
SHARES NOMINEE
BENEFICIALLY HAS, OR
OWNED, PARTICIPATES IN,
DIRECTLY OR THE VOTING OR
BY FAMILY INVESTMENT TOTAL SHARES AND
NAME MEMBERS(2) POWER(3) PERCENT OF CLASS
---- ------------ ----------------- -----------------
<S> <C> <C> <C>
Bruce M. Barone
Craig Appin House
Wesley Street
Hamilton HM GX, Bermuda... 28,499 0 28,499 (.02%)
Robert J. Clanin
55 Glenlake Parkway, NE
Atlanta, GA 30328......... 26,967 5,627,429(a)(b) 5,654,396 (4.28%)
Joseph M. Pyne
55 Glenlake Parkway, NE
Atlanta, GA 30328......... 19,326 0 19,326 (.01%)
Cyril E. Rance
Blue Anchorage
Point Shares
Pembroke HM 05, Bermuda... 500 0 500 (.00%)
Edwin H. Reitman
Avenue Ariane 5
B-1200 Brussels
Belgium................... 32,347 0 32,347 (.02%)
Walter A. Scott
c/o Ace Limited
The Ace Building
Woodbourne Avenue
Hamilton HM 08, Bermuda... 500 0 500 (.00%)
All directors and executive
officers as a group (8)
(including the above)..... 151,857 5,627,429(4) 5,779,286 (4.38%)
</TABLE>
4
<PAGE>
- -----------
(1) These holdings are reported in accordance with regulations of the
Securities and Exchange Commission ("SEC") requiring the disclosure of
shares as to which directors and officers hold voting or disposition
power, notwithstanding the fact that they are held in a fiduciary, rather
than a personal, capacity and that the power is shared among a number of
fiduciaries including, in several cases, corporate trustees, directors or
other persons who are neither officers nor directors of Overseas.
(2) The amounts shown in this column include an aggregate of 26,371 shares
owned by or held in trust for members of the families of Messrs. Barone,
Butler, Clanin, and Schmidt as to which they disclaim all beneficial
ownership.
(3) Neither the directors, nominees, other officers nor members of their
families, have any ownership rights in the shares listed in this column.
Of the shares (a) 5,290,267 shares are owned by a charitable foundation on
whose Board of Trustees Mr. Clanin and other persons serve and (b) 337,162
shares are held by a charitable foundation of which Mr. Clanin and other
persons are trustees. See note 4 below.
(4) This number reflects the total number of shares held in a fiduciary
capacity after adjustment to eliminate duplications.
There were approximately 78,560 holders of Common Stock as of March 31,
1997.
MEETINGS OF THE BOARD OF DIRECTORS
The Overseas Board of Directors held four meetings during 1996. Each
director attended all of the meetings of the Board of Directors during 1996.
COMMITTEES OF THE BOARD OF DIRECTORS
The Overseas Board of Directors has an Executive Committee, an Audit
Committee, a Compensation Committee, a Nominating Committee and an
Underwriting Committee.
Messrs. Barone, Clanin and Reitman, each of whom is an officer and/or
director of Overseas, presently constitute the Executive Committee of the
Board. Mr. Clanin is Chairman of the Executive Committee. This Committee has
been authorized by the Board of Directors of Overseas to exercise all of the
powers of the Board except those acts
5
<PAGE>
which by law must be performed by the Board itself. The Executive Committee
held five meetings during 1996. Messrs. Clanin and Reitman attended less than
75% of the meetings of the Executive Committee during 1996.
Messrs. Pyne, Clanin and Rance, with Mr. Pyne as Chairman constitute the
members of the Audit Committee. The Audit Committee meets with management to
consider the adequacy of the internal controls and the objectivity of
financial reporting. The Audit Committee also meets with the independent
auditors and with appropriate financial personnel and internal auditors of the
Company regarding these matters. The Audit Committee recommends to the Board
the appointment of the independent auditors. Both the internal auditors and
the independent auditors periodically meet with the Audit Committee and have
unrestricted access to the Audit Committee. During 1996 the Chief Executive
Officer periodically sat as an ex officio member of this Committee but did not
participate in discussions on audit matters or in private sessions with
internal or external audit personnel. The Audit Committee met twice in 1996.
Messrs. Clanin, Reitman and Scott, with Mr. Clanin as Chairman, constitute
the members of the Compensation Committee. The Compensation Committee is
responsible: (i) to recommend to the Board of Directors the appropriate
compensation of outside directors; (ii) to determine the compensation of the
Chief Executive Officer; and (iii) to approve the compensation of the other
officers of Overseas and its subsidiaries upon recommendation of the Chief
Executive Officer. The Compensation Committee met two times in 1996.
Messrs. Clanin, Reitman and Scott, with Mr. Reitman as Chairman, constitute
the members of the Nominating Committee. This Committee is responsible for the
recommendation of director nominees to the Board of Directors and will
consider nominees recommended by shareowners. Shareowners may submit their
recommendations in writing to the attention of the Secretary of Overseas. The
Committee will consider nominations for the 1998 annual meeting if they are
received by the Secretary not later than January 16, 1998. The Nominating
Committee met two times in 1996.
The Underwriting Committee assists in the development of underwriting
standards and strategy for "Other Reinsurance" appropriate for Overseas;
evaluates all new and renewing reinsurance programs and recommends their
approval to the Board of Directors; and reviews each reinsurance program's
expected results and past performance. The members of the Committee are
Messrs. Barone, Rance and Scott, with Mr. Barone as Chairman. The Underwriting
Committee met four times in 1996.
COMPENSATION OF DIRECTORS
Directors who are employees of Overseas receive no additional compensation
for their service as directors or as members of committees appointed by the
Board of Directors. Other directors receive an annual fee of $40,000. Members
of the Audit, Compensation, Nominating and Underwriting Committees who are not
employees of Overseas receive an additional fee of $1,250 for each Committee
meeting they attend.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS AND OTHER INFORMATION
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors has furnished the
following report on Executive Compensation:
The Compensation Committee of the Board of Directors has responsibility for
determining the compensation of the Chief Executive Officer and for approving
the compensation of the other officers of Overseas and its subsidiaries upon
recommendation of the CEO. Overall compensation currently includes salary,
bonus and stock appreciation rights. The Committee also determines cost of
living allowances paid to executive officers resident in Bermuda. The
Committee is assisted in carrying out its responsibility by Overseas
management and by outside consultants.
In determining appropriate compensation levels, the Committee reviews data
received from a consultant concerning compensation for comparable positions at
reinsurance and real estate investment companies in Bermuda and the United
States. The 1996 compensation of Overseas' executive officers was less than
the 20th percentile of companies studied. Companies studied are not limited to
those in the Standard & Poor's 500 Index and the Standard & Poor's Multi-Line
Insurance Companies Index used in the performance charts following this
report.
All elements of the current compensation package are payable in cash. With
respect to the salaries and bonuses of the CEO and other executive officers,
the Committee does not employ formulas but instead exercises its judgment
based on considerations including overall responsibilities, experience and
ability, individual performance and past compensation. Objective corporate
performance standards are not used in determining the salaries and bonuses of
executive officers, including the CEO.
Awards under the Stock Appreciation Rights Plan are long-term awards
intended to promote continuity of employment. The number of performance units
comprising each award is determined by a formula based on the salary of the
recipient at the time of grant. The amount received upon exercise of the award
depends on the performance of Overseas Common Stock over the five-year period
between grant and exercise.
Cost of living allowances are intended to permit executive officers who
relocate to Bermuda from the United States to maintain a comparable standard
of living.
The Compensation Committee
Robert J. Clanin, Chairman
Edwin H. Reitman
Walter A. Scott
7
<PAGE>
The following table shows cash compensation paid or to be paid by Overseas
or any of its subsidiaries in 1996 and 1995 to its Named Executive Officers in
all capacities in which they served:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION
---------------------------------------- STOCK
NAME AND PRINCIPAL OTHER APPRECIATION
POSITION YEAR(1) SALARY BONUS COMPENSATION(2) RIGHTS
- ------------------ ------- -------- ------- --------------- ------------
<S> <C> <C> <C> <C> <C>
Bruce M. Barone..........
President and Chief 1996 $212,500 $57,300 $54,001 13,267
Executive Officer 1995 $179,500 $44,200 -0- 5,794
Thomas E. Butler.........
Vice President and 1996 $120,000 $34,762 -0- 3,996
Secretary(3) 1995 $113,750 $29,750 -0- 4,056
Leopold A. Schmidt.......
Vice President and 1996 $112,500 $30,560 $27,906 3,747
Treasurer(3) 1995 $100,000 $23,460 -0- 3,566
</TABLE>
- -----------
(1) Messrs. Barone, Butler and Schmidt began their employment with Overseas
and its subsidiaries on January 1, 1995.
(2) Other compensation consists of cost of living allowances paid to executive
officers relocated to Bermuda. These allowances are intended to permit
such executives to maintain comparable living standards. Messrs. Barone
and Schmidt became Bermuda residents in September and November of 1996,
respectively. Mr. Butler became a Bermuda resident in January 1997.
(3) Messrs. Butler and Schmidt were designated Executive Officers of Overseas
on March 14, 1996.
STOCK APPRECIATION RIGHTS -- GRANTS
The following table sets forth information concerning stock appreciation
rights granted to the Executive Officers in 1996 and 1995:
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT
% OF TOTAL ASSUMED RATES
RIGHTS OF OPL STOCK
RIGHTS GRANTED APPRECIATION EXPIRATION APPRECIATION
NAME YEAR GRANTED TO EMPLOYEES BASE(1) DATE(2) FOR RIGHTS TERM
- ---- ---- ------- ------------ ------------ ---------- -------------------
5% 10%
--------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Bruce M. Barone......... 1996 13,267 51% $12.00 9/30/01 $44,046 $97,247
1995 5,794 31% $ 9,88 9/30/00 $15,817 $34,938
Thomas E. Butler........ 1996 3,996 15% $12.00 9/30/01 $13,267 $29,291
1995 4,056 22% $ 9.88 9/30/00 $11,073 $24,458
Leopold A. Schmidt...... 1996 3,747 14% $12.00 9/30/01 $12,440 $27,466
1995 3,566 19% $ 9.88 9/30/00 $ 9,735 $21,503
</TABLE>
- -----------
(1) Represents the price of Overseas Common Stock on the date of grant On
November 20, 1996, the Overseas Board of Directors amended the Overseas
Stock Appreciation Rights Plan and all outstanding awards thereunder to
change the Reference Company Stock from United Parcel Service of America,
Inc. Common Stock to Overseas Common Stock. At the same time, the number
of Rights applicable to each award was reduced so that the value realized
upon exercise of the Rights would remain approximately the same.
(2) Generally, Rights may not be exercised until the expiration of five years
from the date of grant and then only during a 30-day period following the
mailing of OPL's Annual Report on Form 10-K for the prior year.
8
<PAGE>
STOCK APPRECIATION RIGHTS EXERCISE AND HOLDINGS
The following table sets forth information concerning Stock Appreciation
Rights exercised in 1996 by the Named Executive Officers and the value of
their unexercised Rights on December 31, 1996:
AGGREGATED STOCK APPRECIATION RIGHTS EXERCISES IN 1996
AND YEAR-END RIGHTS VALUE
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
RIGHTS AT 12/31/96 RIGHTS AT 12/31/96
CASH REALIZED ------------------------- -------------------------
NAME UPON EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Bruce M. Barone......... $35,873 -0- 40,612 -0- $201,685
Thomas E. Butler........ $22,513 -0- 22,022 -0- $121,602
Leopold A. Schmidt...... $18,448 -0- 13,810 -0- $ 66,925
</TABLE>
RETIREMENT PLANS
The following table shows the estimated annual retirement benefit payable on
a single life only annuity basis to participating employees, including the
Named Executive Officers, under Overseas' Retirement Plan and Coordinating
Benefit Plan (the "Plans") at age 65 who are also entitled to receive $14,988
per year (maximum currently payable in primary Social Security benefits):
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS (AS OF 12/31/96)
FOR YEARS OF SERVICE(1)(2)(3)(4)
AVERAGE -------------------------------------------------------
REMUNERATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS
- ------------ ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
$ 100,000............. $ 21,253 $ 28,334 $ 35,424 $ 42,506
$ 125,000............. $ 27,503 $ 36,667 $ 45,842 $ 55,006
$ 150,000............. $ 33,753 $ 44,999 $ 57,509 $ 67,506
$ 175,000............. $ 40,003 $ 53,332 $ 66,677 $ 80,006
$ 200,000............. $ 46,253 $ 61,644 $ 77,094 $ 92,505
$ 250,000............. $ 58,752 $ 78,329 $ 97,927 $117,506
$ 300,000............. $ 71,253 $ 94,994 $118,764 $142,506
$ 350,000............. $ 83,753 $ 111,659 $139,599 $167,505
$ 400,000............. $ 96,252 $ 128,324 $160,434 $192,506
$ 450,000............. $108,753 $144,989 $181,269 $217,506
$ 500,000............. $121,253 $ 161,654 $202,104 $242,506
$ 600,000............. $146,253 $ 194,984 $243,774 $292,506
$ 700,000............. $171,253 $228,314 $285,444 $342,506
$ 800,000............. $196,253 $261,644 $327,114 $392,506
$ 900,000............. $221,253 $294,974 $368,784 $442,506
$1,000,000............. $246,253 $328,304 $410,454 $492,506
$1,100,000............. $271,253 $361,634 $452,124 $542,506
$1,200,000............. $296,253 $394,964 $493,794 $592,506
</TABLE>
- -----------
(1) Under the Overseas' Retirement Plan, participants receive credit for prior
service with UPS. In the case of participants with UPS deferred vested
benefits, Overseas is responsible for the difference between the amounts
shown above and the amounts such participants receive from UPS at
retirement.
(2) Amounts exceeding $120,000 would be paid pursuant to Overseas'
Coordinating Benefit Plan.
(3) For 1996, no more than $150,000 (which is adjusted from time to time by
the Internal Revenue Service) of cash compensation could be taken into
account in calculating benefits payable under OPCC Retirement Plan.
(4) Participants who elect payment forms with survivor options will receive
lesser monthly amounts than those shown in the above table.
9
<PAGE>
The compensation covered by the Plans whose benefits are summarized in the
table above includes salary plus bonus. The Covered Compensation for each
participant in the Plans is the average Covered Compensation of the
participant during the five highest consecutive years out of the last ten full
calendar years of service.
Estimated or actual credited years of service under the Plans to the Named
Executive Officers were as follows: Barone -- 22 years, Butler -- 30 years and
Schmidt -- 28 years.
The Plans permit participants with 25 or more years of benefit service to
retire as early as age 55 with no or only a limited reduction in the amount of
their monthly benefits.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Two members of the Compensation Committee of the Board of Directors of
Overseas were officers of Overseas prior to 1996. Robert J. Clanin served as
Vice President of Overseas from 1990 until 1994, and Edwin H. Reitman served
as President and Chief Executive Officer of Overseas from 1991 until 1995.
EXECUTIVE OFFICERS
Information concerning the executive officers of Overseas is set forth
below:
<TABLE>
<CAPTION>
NAME AGE OFFICE(S)
---- --- ---------
<S> <C> <C>
President and Chief Executive
Bruce M. Barone............................ 48 Officer
Thomas E. Butler........................... 52 Vice President and Secretary
Leopold A. Schmidt......................... 53 Vice President and Treasurer
</TABLE>
For biographical information concerning Mr. Barone, see "Election of
Directors" at page 2 hereof.
Mr. Butler serves as Vice President -- Law and Secretary of Overseas. Mr.
Butler has served as Vice President of Overseas since June 1990 and Secretary
of Overseas since August 1994. Mr. Butler also served as Vice President and
Secretary of Overseas Partners Capital Corp. (OPCC), an Overseas subsidiary,
since 1995 as well as director. Prior to his Overseas service, Mr. Butler was
a member of the UPS Legal Department since before 1990.
Mr. Schmidt has served as Vice President -- Finance of Overseas since
November 1994. He also served as Vice President and director of OPCC since
1994. Prior to Mr. Schmidt's Overseas duties, he was a member of the UPS
Financial Planning Department since before 1990.
The executive officers of Overseas serve at the pleasure of the Board of
Directors.
10
<PAGE>
PERFORMANCE GRAPH
The following graph shows a five year comparison, prepared in accordance
with the rules of the SEC, of cumulative total shareowner returns for
Overseas, the Standard & Poor's 500 Index (the "S&P 500") and the Standad &
Poor's Multi-Line Insurance Companies Index (the "S&P Multi-Line"). The
comparison of the cumulative total returns on investment (change in annual
stock price plus reinvested dividends) for each of the annual periods assumes
that $100 was invested on December 31, 1991 in each of Overseas, the S&P 500
and the S&P Multi-Line.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
(OVERSEAS, S&P 500, S&P MULTI-LINE)
LOGO
Overseas Common Stock is not listed on a securities exchange or traded in
the over-the-counter market. The current price of Overseas Common Stock at any
time during a year is equal to the book value of Overseas Common Stock on
December 31 of the prior year as reported in Overseas' Annual Report to
Shareowners. The current price of Overseas Common Stock is announced
approximately ten days after the end of the year. Because the date varied
during the years listed above, the performance graph assumes that the price
was announced on December 31.
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
COMMON RELATIONSHIPS WITH UPS
Overseas was incorporated under Bermuda law in June 1983 by UPS. On December
31, 1983, prior to commencing operations, Overseas was spun off when UPS paid
a special dividend to shareowners of one share of Common Stock for each share
of UPS Common Stock then outstanding, resulting in the distribution of
approximately 97% of the outstanding Common Stock.
Overseas was organized to reinsure shippers' risks relating to packages
carried by UPS as a common carrier as well as to underwrite life and other
property and casualty reinsurance for insureds unaffiliated with UPS. Since
commencing operations on January 1, 1984, Overseas' primary reinsurance
business has been reinsuring insurance issued by United States-based insurance
companies unaffiliated with UPS or Overseas. This reinsurance covers the risks
of loss or damage to shippers' packages carried by UPS's subsidiaries and
unaffiliated foreign common carriers whose declared value exceeds $100 or
equivalent in foreign currency. The reinsurance of excess value insurance does
not involve transactions conducted between UPS and Overseas. Various
subsidiaries of American International Group, Inc., (an insurance company
unaffiliated with Overseas or UPS) insure customer packages in return for
premiums paid by the customers. Overseas reinsures the primary insurers, whose
premium payments constitute Overseas' largest source of revenues and profits.
Reinsurance premiums earned by Overseas for reinsuring these risks from
January 1, 1996 to December 31, 1996 were approximately $380 million or over
45% of Overseas' 1996 revenues. Overseas' reinsurance business has also
included reinsurance of workers compensation insurance issued by another
unaffiliated United States-based insurance company covering risks of a UPS
subsidiary in the State of California.
Mr. Clanin, an Overseas director, is an executive officer and director of
UPS and Mr. Pyne, an Overseas director, is an executive officer of UPS. In
considering which risks related to UPS's business to reinsure, or which
leasing or other arrangements to enter into with UPS, directors and officers
of Overseas who are also directors and officers and shareowners of UPS must
consider the impact of their business decisions on each of the two companies.
Although prevailing market conditions are among the factors considered by them
in making such decisions, there can be no assurance that transactions relating
to the two companies will be on the most favorable terms that could be
obtained by either party in the open market. Overseas does not have any formal
conflict resolution procedures. Nevertheless, in connection with the
reinsurance by Overseas of risks related to the business of UPS, Overseas
believes that the rates charged by the primary insurers reinsured by Overseas
are competitive with those charged to shippers utilizing other carriers.
Additionally, in connection with major transactions in which UPS and Overseas
have been involved, primarily leasing transactions, Overseas has generally
obtained fairness or valuation opinions from one or more leading investment
banking firms or other organizations with significant expertise in the
evaluation of the interests involved.
LEASING TRANSACTIONS
Overseas business has included leasing certain aircraft and real property to
subsidiaries of UPS through Overseas Partners Capital Corp. ("OPCC"). OPCC is
a wholly owned subsidiary of Overseas and Overseas has guaranteed OPCC's
performance of the leasing arrangements described below. In December 1989,
OPCC acquired from UPS the Ramapo Ridge Facility (the "Facility"). Beginning
in July 1990, the Facility was leased to UPS for an initial term ending in
2019. UPS uses the Facility as a data processing, telecommunications and
operations center. Lease payments have fixed and variable components. The
fixed component provides for aggregate lease payments of approximately $212.3
million over the initial term of the lease. The variable component is based on
the number of customer accounts maintained by UPS.
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In December 1989, OPCC acquired from UPS for approximately $67.9 million its
rights to purchase from the Boeing Company five 757 aircraft which were then
being manufactured. The aircraft were delivered to OPCC in 1990 and are leased
to UPS for a term ending in 2012. Lease payments have fixed and variable
components. The fixed component provides for minimum aggregate lease payments
of approximately $376.5 million over the term of the lease. The variable
component is based on the number of flight hours recorded for the aircraft.
Rentals began in the fourth quarter of 1990.
OPCC has irrevocably assigned the right to receive the fixed component of
rentals on the Boeing 757 aircraft and Facility leases to its subsidiary, OPL
Funding Corp. ("OPL Funding"), a Delaware corporation. OPL Funding pledged its
interest in these payments to secure bonds issued to finance the acquisition
of the leased assets. UPS's obligation to pay the fixed rentals to OPL Funding
is absolute and unconditional during the initial term of each lease, and
continues after an early lease termination unless UPS pays to OPL Funding an
amount sufficient to defease the remaining interest payments on the bonds. In
the event that OPCC fails to pay certain income taxes, UPS is obligated to pay
additional rentals to provide for such taxes. OPCC is required to reimburse
UPS the amount of any such termination or tax payments.
At the conclusion of each of the leases, UPS may purchase the aircraft and
the Facility at fair market value. UPS has an option to purchase the land on
which the Facility is located, but not the buildings, from OPCC in 2050 for
approximately $63.7 million, subject to certain adjustments for increases in
the fair market value of the land. In 1996, OPCC and its subsidiary, OPL
Funding, received rental payments of approximately $43.3 million in the
aggregate from UPS pursuant to the leases described above.
Approximately 9.4% of Overseas' operating revenues are derived directly from
business with UPS and its subsidiaries, and approximately 90.6% is derived
from business with other entities.
In February 1995 and September 1996 Overseas purchased three million and one
million shares of its Common Stock from UPS for $29.6 million and $12 million,
respectively. These purchases were effected at the prices at which, at the
time of the transaction, UPS had the right to purchase such shares from
Overseas shareowners. See "ELECTION OF DIRECTORS -- Stock Ownership of Certain
Beneficial Owners and Management."
SECTION 16(A) FILINGS
Based solely on the review of the forms required by Section 16(a) of the
Securities Exchange Act of 1934 that have been received, Overseas believes
that all filing requirements applicable to its officers, directors and
beneficial owners of greater than 10% of its Common Stock have been complied
with.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors recommends, for appointment by the shareowners,
Deloitte & Touche, Chartered Accountants, as independent auditors, to audit
the consolidated financial statements of Overseas for the year ending December
31, 1997 and to prepare a report on such audit. A representative of Deloitte &
Touche will not be present at the annual meeting, but officers of Overseas
will be available to respond to appropriate questions by shareowners.
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VOTING REQUIREMENTS
Overseas' Bye-laws require that at any Annual Meeting of shareowners, two
shareowners present in person and representing in person or by proxy in excess
of 50% of the outstanding voting shares of Common Stock will constitute a
quorum for the Meeting. The Bye-laws further provide that any question brought
before the Meeting will be decided on a simple majority of the votes cast,
unless otherwise provided by The Companies Act of 1981 of Bermuda.
The election of Directors and the appointment of auditors will be decided by
a simple majority of 50% plus one of the votes cast. A vote withheld in the
election of directors will be counted as a vote against a nominee. An
abstention will have no effect on the outcome of the voting.
OTHER BUSINESS
The Board is not aware of any business other than the election of directors
and the appointment of auditors to be presented for action at the meeting.
However, should any other matter requiring a vote of the shareowners arise,
the proxies named in the accompanying proxy or Letter of Instruction, as the
case may be, will vote in accordance with their own best judgment.
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SHAREOWNER PROPOSALS
In order for proposals of shareowners to be considered for inclusion in the
proxy materials for the 1998 Annual Meeting, such proposals must be received
by the Secretary of Overseas not later than January 16, 1998.
A COPY OF THE 1996 ANNUAL REPORT ON FORM 10-K, INCLUDING FINANCIAL
STATEMENTS AND SCHEDULES THERETO, AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION, MAY BE OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO: THOMAS E.
BUTLER, SECRETARY, OVERSEAS PARTNERS LTD., CRAIG APPIN HOUSE, WESLEY STREET,
HAMILTON HM GX, BERMUDA.
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LOGO
OVERSEAS PARTNERS LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREOWNERS - MAY 28, 1997
The undersigned hereby appoints Bruce M. Barone, Robert J. Clanin and Edwin
H. Reitman, or any of them, with power of substitution, as attorneys and
proxies to vote all of the shares of stock standing in the name of the
undersigned as of March 31, 1997 at the annual meeting of shareowners of
OVERSEAS PARTNERS LTD ("Overseas" or the "Company"), to be held at the Hamilton
Princess Hotel, Hamilton, Bermuda, on May 28, 1997 at 9:00 A.M., and at any or
all adjournments thereof, the undersigned hereby instructs and authorizes said
attorneys to vote:
1. ELECTION OF DIRECTORS:
FOR ALL NOMINEES LISTED BELOW [_]
WITHHOLD AUTHORITY [_]
(except as marked to the contrary below)
to vote for all nominees listed
below
BRUCE M. BARONE, ROBERT J. CLANIN, JOSEPH M. PYNE, CYRIL E. RANCE, EDWIN H.
REITMAN AND WALTER A. SCOTT
INSTRUCTION: to withhold authority to vote for any individual nominee, write
that nominee's name in the space provided below.
- --------------------------------------------------------------------------------
2. FOR [_] AGAINST [_] ABSTAIN [_]
appointment of Deloitte & Touche, Chartered
Accountants, as auditors for Overseas for the year
ended December 31, 1997.
3. In their discretion upon such other matters as may properly come before the
meeting or any adjournement thereof.
This proxy when properly executed
will be voted in the manner
directed herein by the
undersigned shareowner. If no
direction is made, this proxy
will be voted FOR the Election of
Directors and FOR Proposals 2 and
3.
Dated this day of
, 1997.
__________________________________
SIGNATURE (sign exactly as name
appears hereon)
__________________________________
SIGNATURE OF CO-OWNER IF ANY
For joint accounts, all co-owners
must sign. Executors,
administrators, trustees, etc.
should so indicate when signing.
<PAGE>
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7 7 7 7 7 7 7 7 7 7 7 7 7 7 7 7
s FOLD AND DETACH HERE s
LETTER OF INSTRUCTION TO EXECUTE PROXY FOR ANNUAL MEETING OF SHAREOWNERS - MAY
28, 1997
OVERSEAS PARTNERS LTD.
THIS LETTER OF INSTRUCTION IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ATTN: MR. THOMAS A. O'CONNELL, VICE PRESIDENT
FIRST UNION NATIONAL
BANK
Corporate Trust
Operations
P.O. Box 41784
Philadelphia, PA
19101-1784
Dear Sir or Madam:
In connection with the annual meeting of shareowners of OVERSEAS PARTNERS
LTD. ("Overseas" or the "Company"), to be held at the Hamilton Princess Hotel,
Hamilton, Bermuda, on May 28, 1997 at 9:00 A.M., and at any or all
adjournments thereof, you are hereby instructed and directed to deliver a
proxy to Bruce M. Barone, Robert J. Clanin and Edwin H. Reitman, or any of
them, with power of substitution, instructing and authorizing them to vote all
shares which you are holding in custody for the undersigned as of March 31,
1997.
1. ELECTION OF DIRECTORS:
FOR ALL NOMINEES LISTED BELOW [_]
WITHHOLDING AUTHORITY [_]
(except as marked to the contrary below)
to vote for all nominees listed below
BRUCE M. BARONE, ROBERT J. CLANIN, JOSEPH M. PYNE, CYRIL E. RANCE, EDWIN H.
REITMAN AND WALTER A. SCOTT
INSTRUCTION: To withhold authority to vote for any individual nominees, write
that nominee's name in the space provided below.
- -------------------------------------------------------------------------------
2. FOR [_] AGAINST [_] ABSTAIN [_]
appointment of Deloitte & Touche, Chartered Accountants, as
auditors for Overseas for the year ended December 31, 1997.
3. In their discretion upon such other matters as may properly come before the
meeting or any adjournment thereof.
The shares of Overseas to which this Letter of Instruction relates shall be
voted in the manner directed herein by the undersigned when this Letter has
been properly executed. If no direction is made, such shares will be voted FOR
the Election of Directors and FOR Proposals 2 and 3.
Dated this day of , 1997.
______________________
____________________________________________________
SIGNATURE (sign exactly as name appears hereon)
SIGNATURE OF CO-OWNER IF ANY
For joint accounts, all co-owners must sign.
Executors, administrators, trustees, etc. should so
indicate when signing.
<PAGE>
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LOGO
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P.O. Box 41784
Philadelphia, PA 19101-1784
FIRST UNION NATIONAL BANK
March 11, 1997
To:Shareowners of Overseas Partners Ltd.
Whose Shares are Held in Custody by First union National Bank:
We have been advised that the annual meeting of shareowners of Overseas
Partners Ltd. ("Overseas" or the "Company") will be held at the Hamilton
Princess Hotel, Hamilton, Bermuda on May 28, 1997 at 9:00 A.M. A copy of the
notice of the meeting and proxy statement are enclosed.
Under the arrangements pursuant to which we hold shares of Overseas in
custody, we are to notify you of the time and place of the meeting and offer
to furnish you, and furnish if requested, a proxy permitting you to vote at
the meeting the number of shares of common stock of Overseas held by us for
you as at March 31, 1997. If you want such a proxy, we must receive your
request prior to May 21, 1997.
If you do not request a proxy, you may direct us to vote your stock by
dating, signing and returning the enclosed Letter of Instruction in the
enclosed addressed envelope, which requires no postage if mailed from within
the United States. Your shares will be voted in accordance with your Letter of
Instruction if it is received prior to May 21, 1997.
Shares for which we do not receive a timely request for a proxy or a Letter
of Instruction will be voted by us for the election of the directors and to
appoint auditors.
Very truly yours,
FIRST UNION NATIONAL BANK
