<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
OVERSEAS PARTNERS LTD.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
OVERSEAS PARTNERS LTD.
MINTFLOWER PLACE
8 PAR-LA-VILLE ROAD
HAMILTON HM GX, BERMUDA
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
AUGUST 12, 1998
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 August 12, 1998, at 9:00 A.M., for the following
purposes:
1. To elect a Board of Directors;
2. To amend Bye-law 40 pertaining to the purchase price to be paid by
the Company for its shares;
3. To appoint Deloitte & Touche, Chartered Accountants, as auditors for
Overseas for the year ending December 31, 1998; and
4. To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on May 31, 1998 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
July 10, 1998
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,
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.
MINTFLOWER PLACE
8 PAR-LA-VILLE ROAD JULY 10, 1998
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 August 12, 1998, and is being mailed with this
Proxy Statement to shareowners on or about July 10, 1998. 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 127,000,000 shares of Common Stock, $.10 par value ("Common
Stock" or "Overseas Common Stock"), outstanding and entitled to vote at the
close of business on May 31, 1998. 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 May 31, 1998 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, FOR the Bye-law amendment and FOR the appointment of Deloitte
& Touche as auditors.
Saul & Co., nominee for First Union National Bank ("First Union"), P.O. Box
41784, Philadelphia, PA 19101-1784 is the record owner of 95,894,354 shares,
constituting 75.51% of the outstanding Overseas Common Stock as of May 31,
1998. 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 as custodian may direct the
voting of their shares by executing and returning to First Union before August
5, 1998, 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 August 5, 1998. 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, FOR the Bye-law amendment 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.
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BRUCE M. BARONE Age 49 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
[PHOTO APPEARS since its incorporation in 1983. He became an employee of
HERE] Overseas on January 1, 1995. Previously, he held various
senior positions at 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. Bruce is a member of the Board of
Governors of the Council Partners Charitable Trust, a Bermuda
charity focusing on the reduction of substance abuse.
- -------------------------------------------------------------------------------
ROBERT J. CLANIN Age 54 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
[PHOTO APPEARS since 1994 and a director of UPS since 1996. Bob joined UPS
HERE] in 1971. In 1979 he was named Wisconsin District Controller
and Southwest Region Controller in 1987. In 1989 he became
Treasury Manager and then Finance Manager prior to assuming
his present responsibilities.
- -------------------------------------------------------------------------------
2
<PAGE>
JOSEPH M. PYNE Age 50 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
[PHOTO APPEARS President -- U.S. Marketing at UPS. He began his UPS career
HERE] 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.
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CYRIL E. RANCE Age 63 Director since 1995
Cyril was President and Chief Executive Officer of a large
Bermuda insurer until his retirement in 1990. He has more
[PHOTO APPEARS than 40 years experience in all aspects of the insurance
HERE] industry. He also has had a long and varied career in civic
and government service. He is a director of Exel Limited, an
insurance holding company, and of several exempt companies
registered in Bermuda.
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EDWIN H. REITMAN Age 55 Director since 1991
Ed became non-executive Chairman of the Board of Directors
in 1995. Previously, he served as President and Chief
Executive Officer since 1991. He has been Vice President--
[PHOTO APPEARS Corporate Marketing for UPS since May 1997. Previously, he
HERE] was President of UPS Europe since April 1995. In that
capacity, he had overall responsibility for UPS's operations
in Europe, Africa and the Middle East. Ed was Manager of the
UPS Legal Department from 1989 until 1995.
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WALTER A. SCOTT Age 61 Director since 1995
Prior to his retirement in September 1994, Walter served as
Chairman, President and Chief Executive Officer of ACE Ltd.,
an insurer based in Bermuda. He has served as a director of
ACE since 1989 and as a consultant to the Company after his
[PHOTO APPEARS retirement until September 1996. Prior to 1989, Walter served
HERE] in various senior positions with Primerica Corporation (now
Traveler's Corporation), a major publicly owned diversified
financial services company. He is also a director of Annuity
and Life Re Holdings Ltd.
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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 MAY 31, 1998(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
Mintflower Place
8 Par-La-Ville Road
Hamilton HM GX, Bermuda... 29,235 0 29,235 (.02%)
Thomas E. Butler
Mintflower Place
8 Par-La-Ville Road
Hamilton HM GX, Bermuda... 15,078 0 15,078 (.01%)
Robert J. Clanin
55 Glenlake Parkway, NE
Atlanta, GA 30328......... 37,216 5,645,847(a)(b) 5,683,063 (4.47%)
Joseph M. Pyne
55 Glenlake Parkway, NE
Atlanta, GA 30328......... 20,609 0 20,609 (.02%)
Cyril E. Rance
Blue Anchorage
Point Shares
Pembroke HM 05, Bermuda... 1,000 0 1,000 (.00%)
Edwin H. Reitman
55 Glenlake Parkway, NE
Atlanta, GA 30328......... 33,879 0 33,879 (.03%)
Leopold A. Schmidt
Mintflower Place
8 Par-La-Ville Road
Hamilton HM GX, Bermuda... 29,603 0 29,603 (.02%)
Walter A. Scott
c/o Ace Limited
The Ace Building
Woodbourne Avenue
Hamilton HM 08, Bermuda... 1,000 0 1,000 (.00%)
All directors and executive
officers as a group (8)
(including the above)..... 167,620 5,645,847(4) 5,813,467 (4.58%)
</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 27,871 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) 5,308,685 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 85,000 holders of Common Stock as of May 31, 1998.
MEETINGS OF THE BOARD OF DIRECTORS
The Overseas Board of Directors held four meetings during 1997. Each
director attended all of the meetings of the Board of Directors during 1997.
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
did not hold any meetings during 1997.
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 1997 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 1997.
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 1997.
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 1999 annual meeting if they are
received by the Secretary not later than , 1999. The Nominating Committee
met once in 1997.
The Underwriting Committee performs an oversight role of the Company's
underwriting activities. It assists in the development of underwriting
standards and helps identify lines of reinsurance which may be appropriate for
the Company. The Committee reviews major new and renewing reinsurance programs
and the financial performance of existing programs. The members of the
Committee are Messrs. Barone, Rance and Scott, with Mr. Barone as Chairman.
The Underwriting Committee met four times in 1997.
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, but does not place great weight on such data. The 1997 compensation of
Overseas' executive officers was less than the median compensation levels at
the 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, ability to work with others, performance against budget and prior
year compensation. The Committee stresses collaborative working relationships
and does not use objective corporate performance standards in determining the
salaries and bonuses of individual executive officers, including the CEO.
Awards under the Stock Appreciation Rights Plan are long-term awards
intended to promote growth in shareowner value and 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 that
have relocated 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 the cash compensation paid or to be paid by
Overseas or any of its subsidiaries, as well as certain other compensation
paid in 1997, 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
OTHER APPRECIATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION (1) RIGHTS
- --------------------------- ---- -------- ------- ---------------- ------------ ---
<S> <C> <C> <C> <C> <C> <C>
Bruce M. Barone......... 1997 $243,750 $71,740 $234,035 13,870
President and Chief
Executive Officer 1996 $212,500 $57,300 $ 54,001 13,267
1995 $179,500 $44,200 -0- 5,794
Thomas E. Butler........ 1997 $126,250 $40,512 $132,851 3,832
Vice President and
Secretary (2) 1996 $120,000 $34,762 -0- 3,996
1995 $113,750 $29,750 -0- 4,056
Leopold A. Schmidt...... 1997 $131,250 $37,980 $165,675 3,938
Vice President and
Treasurer (2) 1996 $112,500 $30,560 $ 27,905 3,747
1995 $100,000 $23,460 -0- 3,566
</TABLE>
- --------
(1) Other compensation consists of cost of living allowances and reimbursement
of additional U.S. income taxes paid as a result of the foreign
assignment. 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.
(2) 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 grants of Stock
Appreciation Rights to the Named Executive Officers in 1997:
<TABLE>
<CAPTION>
POTENTIAL REALIZED
VALUE AT
ASSUMED RATES
OF OPL STOCK
% OF TOTAL APPRECIATION
RIGHTS FOR RIGHTS TERM
RIGHTS GRANTED TO APPRECIATION EXPIRATION -------------------
NAME GRANTED EMPLOYEES BASE (1) DATE (2) 5% 10%
- ---- ------- ---------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bruce M. Barone......... 13,870 52% $14.24 9/30/02 $ 42,564 $ 91,664
Thomas E. Butler........ 3,832 14% $14.24 9/30/02 $ 11,760 $ 25,325
Leopold A. Schmidt...... 3,938 15% $14.24 9/30/02 $ 12,085 $ 26,025
</TABLE>
- -----------
(1) Represents the price of Overseas Common Stock on the date of grant.
(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 date of OPL's Annual Report on Form 10-K for the prior year.
8
<PAGE>
STOCK APPRECIATION RIGHTS EXERCISES AND HOLDINGS
The following table sets forth information concerning Stock Appreciation
Rights exercised in 1997 by the Named Executive Officers and the value of
their unexercised Rights on December 31, 1997.
AGGREGATED STOCK APPRECIATION RIGHTS EXERCISED IN 1997 AND YEAR-END RIGHTS
VALUE
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
RIGHTS AT 12/31/97 RIGHTS AT 12/31/97
CASH REALIZED ------------------------- -------------------------
NAME UPON EXERCISE EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Bruce M. Barone......... $67,721 -0- 46,170 -0- $263,948
Thomas E. Butler........ $43,394 -0- 20,528 -0- $136,504
Leopold A. Schmidt...... $17,450 -0- 15,651 -0- $ 93,328
</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 Officer, under Overseas' Retirement Plan and Coordinating
Benefit Plan (the "Plans") at age 65 who are also entitled to receive $15,912
per year (maximum currently payable) in primary Social Security benefits:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS (AS OF 12/31/97)
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............... $ 21,022 $ 28,029 $ 35,027 $ 42,044
$125,000............... $ 27,272 $ 36,363 $ 45,453 $ 54,544
$150,000............... $ 33,522 $ 44,696 $ 55,870 $ 67,044
$175,000............... $ 39,772 $ 53,029 $ 66,287 $ 79,544
$200,000............... $ 46,022 $ 61,363 $ 76,703 $ 92,044
$250,000............... $ 58,522 $ 78,029 $ 97,537 $117,044
$300,000............... $ 71,022 $ 94,696 $118,370 $142,044
$350,000............... $ 83,522 $111,363 $139,203 $167,044
$400,000............... $ 96,022 $128,029 $160,037 $192,044
$450,000............... $108,522 $144,696 $180,870 $217,044
$500,000............... $121,022 $161,363 $201,703 $242,044
</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 $125,000 would be paid pursuant to Overseas'
Coordinating Benefit Plan.
(3) For 1997, no more than $160,000 (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 was as follows: Barone--24 years, Butler--30 years and
Schmidt--29 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 1997. 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
Listed below is certain information relating to the executive officers of
OPL.
<TABLE>
<CAPTION>
NAME AGE OFFICERS
---- --- --------
<S> <C> <C>
Bruce M. Barone.................... 49 President and Chief Executive Officer
Thomas E. Butler................... 53 Vice President and Secretary
Leopold A. Schmidt................. 54 Vice President and Treasurer
</TABLE>
For biographical information on Mr. Barone, see above section on
"Directors".
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") since 1995 as well as a
director. Prior to his Overseas service, Mr. Butler was a member of the UPS
Legal Department since before 1990.
Mr. Schmidt serves as Vice President--Finance and Treasurer of Overseas. 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 of cumulative total
shareowner returns for Overseas, the Standard & Poor's 500 Index (the "S&P
500") and the Standard & 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, 1992 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)
[GRAPH APPEARS HERE]
COMPANY Dec-92 Dec-93 Dec-94 Dec-95 Dec-96 Dec-97
-------------- ------ ------ ------ ------ ------ ------
Overseas 100.00 125.00 147.15 187.67 233.97 294.10
S&P 500 100.00 109.92 111.34 152.65 187.28 249.28
S&P Multi-Line 100.00 111.82 118.04 173.11 209.34 327.23
(IN DOLLARS)
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 well as to underwrite other 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, 1997 to December 31, 1997 were $367 million or
approximately 32% of Overseas' 1997 revenues, a reduction of 13% over 1996.
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 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 (the "Facility Lease").
In December 1989, OPCC acquired from UPS its rights to purchase from the
Boeing Company five 757 Aircraft (the "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 (the "Aircraft Lease").
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OPL Funding Corp. ("OPL Funding"), a wholly owned subsidiary of OPCC, issued
bonds (the "Bonds;") to finance the acquisition of the Facility and the
Aircraft.
UPS uses the Facility as a data processing, telecommunications and
operations center. Facility Lease payments have a fixed and variable
component. The fixed component provides for aggregate lease payments of
approximately $212.3 million over the initial term of the Facility Lease. The
variable component is based on the number of customer accounts maintained by
UPS.
OPCC has irrevocably assigned the right to receive the fixed component of
rentals on the Facility Lease to OPL Funding. OPL Funding pledged its interest
in these payments to secure the Bonds. UPS's obligation to pay the fixed
rentals to OPL Funding is absolute and unconditional during the initial term
of the Facility 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 used to acquire the Facility. 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 the Facility Lease, UPS may purchase 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.
On May 15, 1998 UPS exercised an option in the Aircraft Lease to purchase
from OPCC all five aircraft for $ (the "Purchase Price"). $ of the
Purchase Price, an amount sufficient to defease all interest payments on the
Bonds used to finance the acquisition of the Aircraft, was paid to the Trustee
under the Bond Indenture to be held by the Trustee and used to pay the
interest on these Bonds. $ of the Purchase Price was paid to the Trustee to
be held as collateral for the Bonds. $ , the remaining portion of the
Purchase Price, was paid to OPCC.
In 1997, 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 9.7% of Overseas' operating revenues are derived directly from
business with UPS and its subsidiaries, and approximately 90.3% is derived
from business with other entities.
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.
AMENDMENT TO BYE-LAW 40
The Board of Directors has approved and set for shareowner vote a proposal
to amend Bye-law 40 of Overseas' Bye-laws pertaining to the purchase price
paid by the Company for its shares.
Currently, Bye-law 40(13) provides that the price Overseas pays for its
stock is the net book value per share as determined from the Company's most
recent audited balance sheet as reported in its annual report to Members or
otherwise generally made available. Overseas has the right to purchase its
shares from shareowners in a number of circumstances as specifically
identified in Bye-laws 40, 40A and 40B. (See Exhibit "A".)
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The Board believes that net book value continues to be a fair price for the
Company's shares. However, the Board believes it should have authority to act
on behalf of shareowners to establish a different value if the Board believes
it is appropriate to do so.
Book value measures the historic value of a business and is closely tied to
accounting rules. It does not take into consideration future earnings and
prospects or the value of the business as an ongoing concern. Under the
present Bye-law, the Board does not have the flexibility to consider
alternative valuation methods. The proposed amendment would allow the Board to
establish a different purchase price for Overseas shares if the Board believes
book value is no longer the true value to the Company's shares. (See Exhibit
"B".)
Since amendment of Bye-law 40(13) requires a shareowner vote and approval of
the amendment by 80% of outstanding shares, the Board has decided to seek
shareowner approval at the 1998 Annual Meeting.
The Board recommends that shareowners vote FOR the amendment of Bye-law 40.
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board 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, 1998 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.
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, the appointment of auditors will be decided by a
simple majority of 50% plus one of the votes cast. Approval of the Bye-law
amendment requires the affirmative vote of 80% of outstanding shares. 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,
the amendment to the Bye-laws 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 1999 Annual Meeting, such proposals must be received
by the Secretary of Overseas not later than February 8, 1999.
A COPY OF THE 1997 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., MINTFLOWER PLACE, 8 PAR-LA-VILLE
ROAD, HAMILTON HM GX, BERMUDA.
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EXHIBIT A
BYE-LAWS 40, 40A AND 40B
TRANSFER OF SHARES
40. The instrument of transfer shall be in the form or as near thereto as
circumstances permit of Form "A" in the Schedule hereto. The transferor shall
be deemed to remain the holder of each share until the same has been
transferred to the transferee in the Register of Members. The following
conditions shall apply to the transfer of shares:
(1) No shares in the Company entitled to vote generally in the election of
directors ("voting shares"), or an interest in said shares, shall be
transferred to any person, firm or corporation, unless said shares shall
have been offered for sale, as provided in this Bye-law, to the Company, or
any corporation or corporations which shall succeed the Company by way of
consolidation, merger, reorganisation or otherwise. (For exceptions
relating to bona fide gifts, inheritance and certain other transfers see
paragraph (8)).
(2) A member who in good faith desires to transfer to a transferee, other
than the Company, all or any of his voting shares in the Company shall
deliver to the treasurer of the Company at its principal place of business
as designated by the Company, written notice of his intention to make such
transfer, stating the number of voting shares to be transferred, the name
and address of the proposed transferee and the price and terms upon which
such shares will be transferred. Such notice shall also bear a statement
signed by the proposed transferee representing that the information therein
set forth is true and correct.
(3) For a period of thirty days after receipt of such notice of intention
by the treasurer of the Company, the Company shall have the exclusive
option to purchase all, or a part, of said voting shares at the price and
on the terms set forth in this Bye-law. The Company shall exercise its
option to purchase any such voting shares by mailing, registered or
certified mail, postage prepaid, prior to the expiration of the thirty-day
period, to the Member at his last known address, written notice by the
Company, signed by the treasurer or an assistant treasurer of the Company
of the decision by the Company to exercise its option. The Company shall be
free to transfer shares of the Company without compliance with this Bye-
law, but any transferee shall transfer shares so obtained from the Company
only in accordance with this Bye-law.
(4) If the Company shall fail to exercise its option as set forth above
with respect to all voting shares set forth in the Member's notice of
intention, or if the Company shall by a writing, signed by its treasurer or
assistant treasurer, elect either not to exercise such option or to waive
such option prior to receipt of formal notice of a proposed transfer, then
the Member may, within a period of twenty days after either the expiration
of the thirty-day period of the Company option or the execution of written
election or waiver by the treasurer or assistant treasurer of the Company,
as the case may be, sell pursuant to the notice of intention given by him
or the written waiver, as the case may be, all, but not a part, of the
shares, therein described which the Company elected not to purchase
pursuant to its option as above set forth, for the price and on the terms
therein described.
(5) If the Company fails to exercise, elects not to exercise, or waives
its options hereunder with respect to all voting shares set forth in the
Member's notice of intention, and the transfer of any such shares as
proposed is made within such twenty-day period provided for such transfer,
the transferee shall thereafter hold said shares subject to all the
restrictions herein provided. If the Company fails to exercise, elects not
to exercise, or waives its option hereunder with respect to all voting
shares set forth in the Member's notice of intention, and the
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proposed transfer by the Member, whether to the same or to a different
proposed transferee or whether on the same or different terms, may be made
until and unless the procedure hereinabove set forth has been again
followed.
(6) The closing of any purchase by the Company pursuant to this Bye-law
shall take place at the principal place of business of the Company, at a
time agreed upon by the parties but no later than thirty days from the date
notice of the Company's intention to purchase is mailed to the Member. If
the Member fails to deliver the certificates or other evidence of the
Member's interest therein at the time of the closing of such sale, the
Company may deposit the purchase price in any bank or trust company in a
special account with instructions to pay the same to such Member upon
receipt of the certificates for the Company's voting shares duly endorsed.
From and after the date of such deposit, all rights and interest of such
Member, and all persons claiming by, through and under him, in and to such
shares shall cease, and he shall have no further rights or interest with
respect to such shares other than to receive the purchase price without
interest; and, if the Company shall record the transfer of such shares to
the Company, it shall cancel the Member's certificate or certificates on
its books.
(7)(a) Voting shares of the Company distributed by UPS as dividends upon
the Capital Stock of UPS, which shares of Capital Stock of UPS are or were
held in the UPS Managers Stock Trust ("Trust") for the account of a member
of such Trust, shall be subject to purchase by the Company, at the
Company's option, upon the termination, by death or otherwise, of the
Member's employment with Overseas, UPS or any of their respective
subsidiaries, or upon the termination of the Trust. If the Member
beneficially owns less than 500 shares of the Capital Stock of UPS in the
Trust, then for a period of three years from termination of the Member's
employment the company shall have the right to purchase all or part of the
voting shares of the Company described in this subparagraph (a) held by
such Member. If the Member beneficially owns 500 or more shares of UPS
Capital Stock in the Trust, then for a period of Thirteen years from the
termination of the Member's employment the Company shall have the right to
purchase a cumulative annual maximum of ten percent of the voting shares of
the Company described in this subparagraph (a) held by such Member. All
heirs, legatees and personal representatives who receive such shares of the
Company distributed as dividends as described in this subparagraph (a)
shall hold such shares subject to this subparagraph (a). If the Trust
terminates the Company shall have the right to purchase voting shares of
the Company described in this subparagraph (a) in accordance with
subparagraph (b) below.
(b) Voting shared of the Company distributed by UPS as dividends upon the
Capital Stock of UPS, which shares of Capital Stock of UPS are or were held
pursuant to the UPS Managers Stock Plan, shall be subject to purchase by
the Company when the Member serves notice of his desire to terminate the
option which allows UPS to purchase UPS Capital Stock distributed under UPS
Managers Stock Plan and held by such Member. The Company shall have the
exclusive option to purchase voting shares of this Company within sixty
days from receipt of such notice.
If the Member does not serve notice on the Company, then for three years
after the termination of such Member's employment the Company shall have
the option to purchase any or all of the voting shares of the Company
described in this subparagraph (b). If a member transfers voting shares of
the Company described in this subparagraph (b) to anyone other than the
Company, then the transferee of such Member shall hold such shares of the
Company subject to this subparagraph (b)~.
(c) Voting shares of the Company distributed as dividends upon the Capital
Stock of UPS, which shares of Capital Stock of UPS are held pursuant to the
UPS Stock Plan, shall be subject to purchase by the Company
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whenever the Member requests the Company to purchase such voting shares of
the Company. If the Member requests such purchase by the Company then the
Company is obligated to purchase annually ten percent of the voting shares
of the Company held by the Member until all of such shares are purchased by
the Company or the Member transfers such shares to a third party. If the
Member transfers such shares of the Company to a third party, the Company
shall have the option at any time to purchase any or all of the shares so
transferred for one year after the transfer.
(d) Voting shares of the Company distributed by UPS as dividends upon the
Capital Stock of UPS, which shares of Capital Stock of UPS are or were held
by the UPS Thrift Plan Trust or the UPS Retirement Trust, shall be subject
to purchase by the Company, at the Company's option, at any time within
three years of the transfer of the Company shares or voting shares of the
Company by the trustee of the UPS Thrift Plan Trust or the trustee of the
UPS Retirement Trust.
(e) Voting shares of the Company distributed by UPS as dividends upon the
Capital Stock of UPS, which shares of Capital Stock of UPS were issued
pursuant to any of the Agreements and Plans of Reorganization dated as of
December 4, 1979, between UPS on the one hand, and Parmac Corporation,
Nuparmac Corporation or Parco Managers Corporation, on the other, or as the
result of any stock dividend, stock split, recapitalization or other
similar event in respect of shares of the Company's Capital Stock shall be
subject to purchase by the Company, at the Company's option, at any time
after January 10, 1985, upon the Company giving the Member ninety days
prior notice of the Company's intent to purchase such shares. Any
transferee who receives voting shares of the company described in this
subparagraph (a) shall hold such shares subject to this subparagraph (e).
(f) Voting shares of the Company distributed by UPS as dividends upon the
Book Value Shares issued pursuant to the 1981 Stock Option Plan shall be
subject to purchase by the Company, at the Company's option, at any time in
accordance with the provisions of subparagraph (a) of this paragraph (7).
(g) Voting shares of the Company issued as incentive awards to employees
of the Company or UPS, or any of their respective subsidiaries shall be
subject to purchase by the Company in the same manner and at the same times
as such shares would be subject to purchase if they had been issued as
dividends upon the Capital Stock of UPS held in the Trust pursuant to
subparagraph (a) of this paragraph 7.
(h) If a Member executes an Option Extension Agreement under the UPS
Managers Stock Trust or the UPS Managers Stock Plan then the Company shall
retain the right to purchase voting shares of the Company, held by such
Member, in accordance with subparagraphs (a) and (b), except that the
longer period of time stipulated in the duly executed Option Extension
Agreement shall apply.
(8) A transfer of voting shares, or interest therein, by way of a bona
fide gift or by way of inheritance, and a transfer of voting shares by the
Trustee of the UPS Managers Stock Trust to the member of such Trust for
whose account the Trustee has received such shares, shall not require a
prior offering to the Company as herein provided, but the donee, legatee or
other recipient thereof shall hold such shares subject to the restrictions
provided in this Bye-law. A transfer of voting shares, or interest therein,
by operation of law, which includes, but is not limited to, bankruptcy and
descent or distribution, shall not require a prior offering to the Company
as provided in this Bye-law, but the trustee, heir or other recipient
thereof shall hold said shares subject to the restrictions provided in this
Bye-law. A transfer of a security interest in voting shares of the Company,
whether by lien, pledge, mortgage, deposit or otherwise shall not require a
prior offering to the Company, but no purchaser at any sale, private or
judicial, upon foreclosure or execution shall become the owner of said
shares or have said shares registered in his name until he shall have first
offered said shares to the Company for purchase in accordance with this
Bye-law.
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(9) The restrictions upon the sale or transfer of voting shares of the
Company provided in this Bye-law shall apply to all voting shares in the
hands of all holders or owners, whether original Members or subsequent
purchasers or transferees, and whether acquired through the voluntary or
involuntary act of a Member or by operation of law, and whether part of the
first authorised issue or by any subsequent or increased issue.
(10) Any transfer in violation of this Bye-law shall be null and void and
of no force or effect whatsoever. No voting shares of the Company shall be
transferred on the books of the Company until the Member intending such
transfer shall have complied with the provisions of this Bye-law.
(11) A legend referring to the provisions of this Byelaw shall be printed,
stamped, written or endorsed upon each and every share certificate issued
after the effective date of this revised Bye-law 40(11) by the Company.
Such legend shall read as follows:
"The sale or other transfer of shares of the Company, or any interest
therein, as represented by this certificate, whether voluntary or
involuntary or by operation of law, is subject to a right to purchase by
the Company as more fully provided for in the Bye-laws of the Company.
The holder of this certificate is hereby put on notice that any transfer
or sale of the shares represented by this certificate in violation of
said right of purchase will be null and void and of no force or effect
whatsoever. Copies of the Bye-laws of the Company are available for
inspection during business hours at the Company's principal place of
business."
Any legend referring to the right of UPS to purchase the shares of the
Company, or any interest therein, appearing on share certificates issued
prior to the effective date of this revised Bye-law 40(11) shall be deemed,
from and after the effective date of this revised Bye-law 40(11), to refer
to the right of the Company to purchase the shares represented by such
share certificate pursuant to the provisions of this revised Bye-law 40.
(12) In addition to the legend described in paragraph (11) hereof, a
legend specifically referring to the provisions of paragraph (7) hereof
shall be printed, stamped, written or endorsed upon each and every share
certificate issued by the Company. Such legend shall read as follows:
"In addition to the right of purchase in connection with the sale or
transfer of the shares of the Company or any interest therein stated
above, the Company has the right to purchase the shares of the Company
represented by this certificate in certain circumstances. Any transferee
of these shares shall hold them subject to such rights. Copies of the
Bye-laws of the Company are available for inspection during business
hours at the Company's principal place of business."
Any legend referring to the right of UPS to purchase the shares of the
Company, or any interest therein, appearing on share certificates issued
prior to the effective date of this revised Bye-law 40(12) shall be deemed,
from and after the effective date of this revised Bye-law 40(12), to refer
to the right of the Company to purchase the shares represented by such
share certificate pursuant to the provisions of this revised Bye-law 40.
(13) The purchase price per share to be paid by the Company upon the
exercise of the options provided by this Bye-law shall be (i) the net book
value of each share as determined from the Company's most recent audited
balance sheet as reported in its annual report to Members, and mailed to
its members or otherwise generally made available as of the date of the
closing of such sale, or (ii) if the Board of Directors determines that net
book value no longer represents the true value of the shares, then such
price as the Board of Directors shall determine
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in good faith using such criteria as it deems appropriate. If purchased by
the Company pursuant to the right described in paragraph (3) of this Bye-
law, the purchase price per share shall be the lesser of: (a) such net book
value per share, or such price determined by the Board of Directors, if
applicable or (b) the price at which such shares are proposed to be sold as
set forth in paragraph (2) of this Bye-law 40. Net book value shall be
determined in accordance with generally accepted accounting principles as
applied in the United States of America. The aforementioned purchase price
shall be paid in United States dollars.
(14) Notwithstanding anything contained in the Bye-laws to the contrary,
any amendment to or deletion of this Bye-law 40 shall require the
affirmative vote of the holders of at least 80% of the voting power of all
outstanding shares of stock of the Company entitled to vote generally in
the election of Directors.
40A. Voting shares of the Company subscribed for (on or after the effective
date of these Amended and Restated Bye-laws) by a Member pursuant to stock
purchase plans maintained by the Company or UPS from time to time, and any
voting shares distributed by UPS or the Company as dividends on such shares or
in stock splits or reclassifications of the Company's voting shares and any
other securities or property delivered as a distribution on the Company's
voting shares (all of which are referred to collectively as "Resulting
Securities") shall be subject to purchase by the Company following the
retirement, death or other termination of employment of the Member with
Overseas, UPS or any of their respective Subsidiaries. If at the time of the
Member's retirement, death or other termination of employment with Overseas,
UPS or any of their respective Subsidiaries, the Member beneficially owns less
than 500 shares of the Capital Stock of UPS, then the Company may exercise its
right to repurchase all or a portion of the Company's voting shares and any
Resulting Securities at-any time within a period of three years following such
termination. If at the time of the Member's retirement, death or other
termination of employment with Overseas, UPS or any of their respective
Subsidiaries, the Member beneficially owns 500 or more shares of the Capital
Stock of UPS, then for a period of thirteen years from such termination the
Company may exercise its right to repurchase a cumulative annual amount of ten
percent of the Company's voting shares and any Resulting Securities. The
purchase price per share to be paid by the Company upon the exercise of the
foregoing right to purchase shall be that provided in Bye-law 40(13) hereof.
Any transferee of the Company's voting shares and any Resulting Securities
including, without limitation, purchasers, donees, heirs, legatees and
personal representatives and any subsequent transferee thereof, will acquire
and hold much voting shares and Resulting Securities subject to the rights of
the Company described in this Bye-law 40A.
Notwithstanding anything contained in these Bye-laws to the contrary, any
amendment to or deletion of this Bye-law 40A shall require the affirmative
vote of the holders of at least 80% of the voting power of all outstanding
shares of stock of the Company entitled to vote generally in the election of
Directors.
40B. Any and-all shares of the Company distributed on or after the effective
date of these Amended and Restated Bye-laws that for any reason are not
subject to the provisions of Bye-law 40 or Bye-law 40A shall be subject to
purchase by the Company, at the Company's option, following the retirement,
death or other termination of the Member's employment with Overseas, UPS, or
any of their respective subsidiaries. If, at the time of the Member's
retirement, death or other termination of employment with the Company, UPS, or
any of their respective subsidiaries, the Member beneficially owns less than
500 shares of the Capital Stock of the Company then for a period of three
years from such termination of the Member's employment the Company shall have
the right to purchase all or part of such voting shares of the Company held by
such Member. If, at the time of the Member's retirement, death or other
termination of employment with the Company, UPS, or any of their respective
subsidiaries, the Member beneficially
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owns 500 or more shares of the Capital Stock of the Company then for a period
of thirteen years from such termination of the Member's employment the Company
shall have the right to purchase a cumulative annual maximum of ten percent of
the voting shares of the Company held by such member. The purchase price per
share to be paid by the Company upon the exercise of the foregoing right to
purchase shall be that provided in Bye-law 40(13) hereof.
Any transferee of the Company's voting shares including, without limitation,
purchasers, donees, heirs, legatees and personal representatives and any
subsequent transferee thereof, will acquire and hold such voting shares and
Resulting Securities (as defined in Bye-law 40A) subject to the rights of the
Company described in this Bye-law.
Notwithstanding anything contained in the Bye-laws to the contrary, any
amendment to or deletion of this Bye-law 40B shall require the affirmative
vote of the holders of at least 80% of the voting power of all outstanding
shares of stock of the Company entitled to vote generally in the election of
Directors.
Bye-law 40 (other than Bye-law 40(13)), Bye-law 40A and Bye-law 40B set
forth herein became effective on August 7, 1996 (the "Effective Date") and
apply to all of the voting shares of the Company issued and outstanding on
such Effective Date and to any and all voting shares of the Company thereafter
issued. If for any reason the amendments to Bye-law 40 (other than Bye-law 40
(13)) made as of such Effective Date, or the additional provisions of Bye-law
40A and Bye-law 40) shall be determined by a final judicial decree to be
invalid or unenforceable, then the provisions of Bye-law 40 as in effect
immediately prior to the Effective Date shall be deemed to have been continued
in full force and effect from and after the Effective Date with respect, to
all voting shares of the Company issued prior to, on or after the Effective
Date.
Bye-law 40(13) set forth herein shall become effective on August 12 , 1998
(the "Bye-law 40(13) Effective Date") and shall apply to all of the voting
shares of the Company issued and outstanding on such Bye-law 40(13) Effective
Date and to any and all voting shares of the Company thereafter issued. If for
any reason the amendments to Bye-law 40(13) made as of such Bye-law 40(13)
Effective Date shall be determined by a final judicial decree to be invalid or
unenforceable, then the provisions of Bye-law 40(13) as in effect immediately
prior to the Bye-law 40(13) Effective Date shall be deemed to have been
continued in full force and effect from and after the Bye-law 40(13) Effective
Date with respect to all voting shares of the Company issued prior to, on or
after the Bye-law 40(13) Effective Date.
A-6
<PAGE>
EXHIBIT B
PROPOSED BYE-LAW 40(13)
TRANSFER OF SHARES
[40]
(13) The purchase price per share to be paid by the Company upon the exercise
of the options provided by this Bye-law shall be (i) the net book value of
each share as determined from the Company's most recent audited balance sheet
as reported in its annual report to Members, and mailed to its members or
otherwise generally made available as of the date of the closing of such sale,
or (ii) if the Board of Directors determines that net book value no longer
represents the true value of the shares, then such price as the Board of
Directors shall determine in good faith using such criteria as it deems
appropriate. If purchased by the Company pursuant to the right described in
paragraph (3) of this Bye-law, the purchase price per share shall be the
lesser of: (a) such net book value per share, or such price determined by the
Board of Directors, if applicable or (b) the price at which such shares are
proposed to be sold as set forth in paragraph (2) of this Bye-law 40. Net book
value shall be determined in accordance with generally accepted accounting
principles as applied in the United States of America. The aforementioned
purchase price shall be paid in United States dollars.
B-1
<PAGE>
LOGO
OVERSEAS PARTNERS LTD.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
PROXY FOR ANNUAL MEETING OF SHAREOWNERS - AUGUST 12, 1998
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 May 31, 1998 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 August 12, 1998 at 9:00 A.M., and at any or all
adjournments thereof, the undersigned hereby instructs and authorizes said
attorneys to vote:
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS: FOR ALL NOMINEES LISTED BELOW [_] WITHHOLD AUTHORITY [_]
</TABLE>
(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 [_] Bye-law amendment pertaining to the
purchase price to be paid by the Company
for its shares.
3. FOR [_] AGAINST [_] ABSTAIN [_] appointment of Deloitte & Touche, Chartered
Accountants, as auditors for Overseas for
the year ended December 31, 1998.
4. In their discretion upon such other matters as may properly come before the
meeting or any adjournment 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, 3
and 4.
Dated this day of
, 1998.
__________________________________
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>
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
LETTER OF INSTRUCTION TO EXECUTE PROXY FOR ANNUAL MEETING OF SHAREOWNERS -
AUGUST 12, 1998
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 August 12, 1998 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 May 31,
1998.
<TABLE>
<S> <C> <C>
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
</TABLE>
INSTRUCTION: To withhold authority to vote for any individual nominees, write
that nominee's name in the space provided below.
- -------------------------------------------------------------------------------
2. FOR [_] AGAINST [_] ABSTAIN [_] Bye-law amendment pertaining to the price to
be paid by the Company for its shares.
3. FOR [_] AGAINST [_] ABSTAIN [_] appointment of Deloitte & Touche, Chartered
Accountants, as auditors for Overseas for
the year ended December 31, 1998.
4. 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, 3 and 4.
Dated this day of , 1998.
______________________ ____________________________________________________
SIGNATURE (sign exactly SIGNATURE OF CO-OWNER IF ANY
as name appears hereon) For joint accounts, all co-owners must sign.
Executors, administrators, trustees, etc. should so
indicate when signing.
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
- --------------------------------------------------------------------------------
[LOGO OF OVERSEAS PARTNERS LTD. APPEARS HERE]
<PAGE>
P.O. Box 41784
Philadelphia, PA 19101-1784
FIRST UNION NATIONAL BANK
July 10, 1998
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 August 12, 1998 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 of May 31, 1998. If you want such a proxy, we must receive your request
prior to August 5, 1998.
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 August 5, 1998.
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, for the
Bye-law amendment and to appoint auditors.
Very truly yours,
FIRST UNION NATIONAL BANK
