<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
CHANDLER INSURANCE COMPANY, LTD.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
-----------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
</TABLE>
Payment of Filing Fee (Check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No 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:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[LOGO]
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of
Chandler Insurance Company, Ltd., a Cayman Islands corporation (the "Company"),
to be held at 10:00 a.m. local time, on Monday, June 5, 2000, at the Marriott
Hotel, in Grand Cayman, Cayman Islands. A Notice of Annual Meeting, Proxy
Statement and form of proxy card are enclosed. A copy of the Company's 1999
Annual Report is also enclosed. At this meeting you will be asked to:
(i) Elect eight directors to serve until the next annual meeting of
shareholders to be held in 2001;
(ii) Approve the Company's Directors Stock Option and Stock Grant Plan,
which authorizes up to 260,000 Common Shares of the Company to be
issued upon stock grants and exercises of options granted under that
plan; and
(iii) Transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
It is important that your shares be represented at the meeting. Whether or
not you expect to attend the meeting in person, please sign and date the
enclosed proxy card and return it in the enclosed envelope at your earliest
convenience.
Very truly yours,
/s/ W. Brent LaGere
W. Brent LaGere
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
May 2, 2000
<PAGE>
CHANDLER INSURANCE COMPANY, LTD.
ANDERSON SQUARE, FIFTH FLOOR
GRAND CAYMAN, CAYMAN ISLANDS
------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 5, 2000
------------------------
The Annual Meeting of Shareholders of Chandler Insurance Company, Ltd., a
Cayman Islands corporation (the "Company"), will be held at the Marriott Hotel
in Grand Cayman, Cayman Islands, on Monday, June 5, 2000 at 10:00 a.m. local
time, for the following purposes:
1. To elect eight directors to serve until the next annual meeting of
shareholders;
2. To approve the Company's Directors Stock Option and Stock Grant Plan,
which authorizes up to 260,000 Common Shares of the Company to be issued
upon stock grants and exercises of options granted under that plan; and
3. To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on April 24, 2000 are
entitled to notice of, and to vote at, the meeting or any adjournments or
postponements thereof. A list of shareholders entitled to vote at the meeting
will be available at the meeting for examination by any shareholder and at least
10 days prior to the meeting at the office of the Secretary of the Company at
the address listed above.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, PLEASE DATE, EXECUTE AND
PROMPTLY RETURN THE ENCLOSED PROXY CARD TO THE COMPANY IN THE ENCLOSED ADDRESSED
AND STAMPED ENVELOPE. You may revoke the proxy at any time before the proxy is
exercised by delivering written notice of revocation to the Secretary of the
Company, by delivering a subsequently dated proxy card or by attending the
meeting, withdrawing the proxy and voting in person.
By Order of the Board of Directors,
/s/ W. Brent LaGere
W. Brent LaGere
CHAIRMAN OF THE BOARD,
PRESIDENT AND CHIEF EXECUTIVE OFFICER
May 2, 2000
<PAGE>
CHANDLER INSURANCE COMPANY, LTD.
ANDERSON SQUARE, FIFTH FLOOR
GRAND CAYMAN, CAYMAN ISLANDS
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 5, 2000
------------------------
This Proxy Statement is furnished to shareholders of Chandler Insurance
Company, Ltd., a Cayman Islands corporation (the "Company"), in connection with
the solicitation of proxies to be used at the Annual Meeting of Shareholders of
the Company to be held on June 5, 2000 (the "Annual Meeting"). Shares
represented by proxy cards in the form enclosed will be voted at the Annual
Meeting if the proxy card is properly executed, returned to the Company before
the Annual Meeting and not revoked. Any shareholder giving a proxy on the
enclosed form may revoke it at any time before it is voted by delivering written
notice of revocation to the Secretary of the Company, by delivering a
subsequently dated proxy card or by attending the Annual Meeting, withdrawing
the proxy and voting in person. Your attendance at the meeting will not
constitute automatic revocation of the proxy. This Proxy Statement and the
enclosed proxy card form are first being sent to shareholders on or about
May 2, 2000.
ACTION TO BE TAKEN AT MEETING
When shareholders have appropriately specified how their proxies should be
voted, the shares represented by proxy cards will be voted accordingly. Unless
the shareholder otherwise specifies therein, the shares represented by his proxy
card will be voted (i) FOR the election as directors of the eight nominees
listed under "Election of Directors", (ii) FOR the approval of the Company's
Directors Stock Option and Stock Grant Plan (the "Directors' Plan") which
provides that up to 260,000 Common Shares of the Company may be issued upon
exercise of options and stock grants under that plan and (iii) at the discretion
of the proxy holders, either FOR or AGAINST any other matter or business that
may properly come before the meeting. The Board of Directors of the Company (the
"Board") does not know of any such other matter or business.
PERSONS MAKING THE SOLICITATION
The accompanying proxy is being solicited by the Board. The cost of
soliciting your proxy will be borne entirely by the Company and no other person
or persons will bear such costs either directly or indirectly. In addition to
the use of the mails, proxies may be solicited by personal interview, telephone
and telegram by directors and regular officers and employees of the Company and
its subsidiaries. Arrangements may also be made with brokerage houses and other
custodians, nominees, and fiduciaries to forward solicitation material to the
beneficial owners of common shares held of record by such persons, and the
Company may reimburse them for reasonable out-of-pocket expenses they incur in
connection with forwarding the solicitation material.
OUTSTANDING CAPITAL STOCK
The record date for shareholders entitled to notice of, and to vote at, the
Annual Meeting is April 24, 2000. At the close of business on that date the
Company had 3,283,333 Common Shares, $1.67 par value per share ("Common
Shares"), issued and outstanding and entitled to be voted at the Annual Meeting.
Because they are not entitled to be voted at the Annual Meeting, as described
below, 1,144,700 shares held by CenTra, Inc. and its affiliates are not included
in this number.
The Company has never declared or paid a cash dividend on the Common Shares
and does not contemplate doing so in the foreseeable future.
<PAGE>
The following table sets forth, as of February 29, 2000, the number of
shares of Common Stock beneficially owed by (i) each director and each nominee
for director, (i) the Company's Chairman and Chief Executive Officer and each of
the Company's four other most highly compensated executive officers for services
rendered for the fiscal year ended December 31, 1999 (collectively, the "Named
Executives") and (iii) all current directors and executive officers as a group:
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------------------
NAME OF DIRECTOR OR EXECUTIVE OFFICER NUMBER OF SHARES(1) PERCENT(2)
- ------------------------------------- ------------------- ----------
<S> <C> <C>
W. Brent LaGere............................................. 476,965(3) 10.8%
Brenda B. Watson............................................ 53,566 1.2%
Richard L. Evans............................................ 59,522 1.3%
Paul A. Maestri............................................. 20,000(4) *
James M. Jacoby............................................. --(5) --
Robert L. Rice.............................................. 20,000(4) *
Mark T. Paden............................................... 28,810 *
Larry A. Davis.............................................. --(5) --
W. Scott Martin............................................. 31,500 *
Steven R. Butler............................................ 3,200 *
All directors and officers as a group (11 persons).......... 696,078 15.7%
</TABLE>
- ------------------------
* Less than 1%
(1) Except as otherwise indicated, each person has the sole power to vote and
dispose of all shares, and the sole power to exercise any options listed
opposite his or her name.
(2) These percentages are computed based on 4,428,033 shares of common stock
outstanding including 1,142,625 common shares ordered to be rescinded
through litigation. References to the number or percentage of the Company's
common shares that a person owns do not reflect common shares issuable under
outstanding options, if any.
(3) Includes (i) 348,390 common shares owned by the W. Brent LaGere Irrevocable
Trust and (ii) 45,000 common shares owned by W&L Holding Corp. ("W&L
Holding"), a corporation 49% of which is owned by the W. Brent LaGere
Irrevocable Trust. Mr. LaGere disclaims beneficial ownership of the shares
held by W&L Holding and the trust. The power to vote and dispose of the
shares held by W&L Holding is shared with Benjamin T. Walkingstick, who also
owns 49% of W&L Holding. The business address of Mr. LaGere is 1010 Manvel
Avenue, Chandler, Oklahoma, 74834.
(4) These totals do not include 33,000 common shares issuable under outstanding
options the exercisability of which is subject to approval by the Company's
shareholders.
(5) These totals do not include 3,000 shares issuable under outstanding options
the exercisability of which is subject to approval by the Company's
shareholders.
SHAREHOLDERS HOLDING OVER FIVE PERCENT
Listed below are persons, other than those listed previously, who are known
by the Company to own beneficially more than 5% of the Company's common shares
as of February 29, 2000. Except as otherwise
2
<PAGE>
indicated, each of the persons named below has sole voting and investment power
with respect to the common shares beneficially owned.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
--------------------------------
NAME AND ADDRESS OF SHAREHOLDER NUMBER OF SHARES(1) PERCENT(2)
- ------------------------------- ------------------- ----------
<S> <C> <C>
CenTra Group (CenTra, Ammex, and ........................... 1,144,700(3) 25.9%
Messrs. M.J. Moroun, Lech and Harned, Agnes A.
Moroun and Matthew T. Moroun)
12225 Stephens Road, Warren, Michigan 48089
Benjamin T. Walkingstick ................................... 400,029(4) 9.0%
1001 Manvel Avenue, Chandler, Oklahoma 74834
Marvel List, Trustee of the W. Brent LaGere ................ 398,077 9.0%
Irrevocable Trust
420 Bennett Boulevard, Chandler, Oklahoma 74834
</TABLE>
- ------------------------
(1) Except as otherwise indicated, each person or group has the sole power to
vote and dispose of all shares and the sole power to exercise any options
listed opposite his or her name.
(2) These percentages are computed based on 4,428,033 shares of common stock
outstanding including 1,142,625 common shares ordered to be rescinded
through litigation.
(3) The beneficial ownership set forth above includes: (i) 842,625 common shares
owned by CenTra; (ii) 275,000 common shares owned by Ammex, Inc. ("Ammex");
(iii) 25,000 common shares owned by DuraRock Underwriters, Ltd.
("DuraRock"), which is owned by Matthew T. Moroun, M.J. Moroun's son;
(iv) 250 common shares held by Mr. Harned; (v) 200 common shares held by
Mr. Lech; and (vi) 1,625 common shares owned by Agnes A. Moroun, M.J.
Moroun's sister.
The Company includes the ownership of Messrs. Harned and Lech and Agnes A.
Moroun in the beneficial ownership of the CenTra Group because of their
present or former employment and other relationships with CenTra and M.J.
Moroun and their involvement in CenTra's attempts to take control of the
Company. See "Possible Change of Control" and "Other Matters Regarding
Beneficial Ownership" regarding the Company's assumptions about beneficial
ownership and the presence of certain restrictions on the voting and
disposition of the common shares beneficially owned by Messrs. M.J. Moroun,
Harned, Lech, Agnes A. Moroun and Matthew T. Moroun.
The business address of CenTra and Messrs. Moroun and Harned is 12225
Stephens Road, Warren, Michigan 48089. The business address of Mr. Lech is
5301 Lauren Court, Bloomfield Hills, Michigan 48302-2941.
(4) Includes 45,000 common shares owned by W&L Holding, a corporation 49% of
which is owned by Mr. Walkingstick. The power to vote and dispose of the
shares held by W&L Holding is shared with the W. Brent LaGere Irrevocable
Trust, which also owns 49% of W&L Holding.
INSURANCE REGULATION CONCERNING CHANGE OR ACQUISITION OF CONTROL
The Company's subsidiary, National American Insurance Company ("NAICO") is a
domestic property and casualty insurance company organized under the insurance
laws of Nebraska (the "Insurance Code"). The Insurance Code provides that the
acquisition or change of "control" of a domestic insurer or of any person that
controls a domestic insurer cannot be consummated without the prior approval of
the Nebraska Department of Insurance. A person seeking to acquire control,
directly or indirectly, of a domestic insurance company or of any person
controlling a domestic insurance company must generally file with the relevant
insurance regulatory authority an application for change of control containing
certain information required by statute and published regulations and provide a
copy of such to the domestic
3
<PAGE>
insurer. In Nebraska, control is generally presumed to exist if any person,
directly or indirectly, owns, controls, holds with the power to vote or holds
proxies representing 10% or more of the voting securities of the insurance
company or of any other person or entity controlling the insurance company. The
10% presumption is not conclusive and control may be found to exist at less than
10%.
In addition, many state insurance regulatory laws contain provisions that
require pre-notification to state agencies of a change in control of a
non-domestic insurance company admitted in that state. While such
pre-notification statues do not authorize the state agency to disapprove the
change of control, such statues do authorize issuance of a cease and desist
order with respect to the non-domestic insurer if certain conditions exist such
as undue market concentration.
Any future transactions that would constitute a change in control of the
Company would also generally require prior approval by the Nebraska Department
of Insurance and would require pre-acquisition notification in those states
which have adopted pre-acquisition notification provisions and in which the
insurers are admitted. Because such requirements are primarily for the benefit
of policyholders, they may deter, delay or prevent certain transactions that
could be advantageous to the shareholders or creditors of the Company.
OTHER MATTERS REGARDING BENEFICIAL OWNERSHIP
For purposes of this Proxy Statement, unless otherwise indicated, the
Company has assumed that the following persons are affiliates: an entity's
executive officers and directors or its managing partners, persons holding more
than 10% of an entity, and those persons who are controlling, controlled by, or
under common control with such officers, directors, managing partners, or
shareholders.
Statements of percentages of ownership are made based upon pertinent
reporting requirements and guidelines specifically applicable to this Proxy
Statement. Determination of voting power under the Company's Articles of
Association or applicable insurance holding company laws may be at variance with
the above stated percentages.
As to the beneficial ownership of its common shares, the Company has assumed
that beneficial ownership (voting and investment power) is shared among CenTra,
Can-Am Investments, Ltd. ("Can-Am"), Ammex, and Messrs, M.J. Moroun, Harned,
Lech, Agnes A. Moroun and Matthew T. Moroun. CenTra, Can-Am, Ammex and M.J.
Moroun have filed a Schedule 13D acknowledging that they compose a group formed
to affect the management practices and policies of the Company. M. J. Moroun has
represented that he is the controlling shareholder, Chairman and President of
CenTra and Ammex. Mr. Lech was, until June 2, 1995, a director and executive
officer of CenTra and continues to receive regular periodic payments from
CenTra. Mr. Harned is an executive officer of CenTra. Messrs. Harned and Lech
are executive officers and directors of Can-Am. Correspondence provided to the
Company and an amendment to the Schedule 13D described above indicate that M.J.
Moroun is the owner of all of the outstanding voting stock of Can-Am. The
Company includes the ownership of Messrs. Harned, Lech, Agnes A. Moroun and
Matthew T. Moroun in the beneficial ownership of the CenTra Group because of
their present or former employment and other relationships with CenTra and M.J.
Moroun and their involvement in CenTra's attempts to take control of the
Company. Each member of the group disclaims beneficial ownership or control of
the common shares held by any other group member. They presumably would disclaim
shared beneficial ownership with either Messrs. Harned or Lech.
CenTra and its affiliates face certain restrictions in the voting or
disposition of their common shares. By resolution dated August 19, 1992, the
Company restricted the voting of common shares held by CenTra and its
affiliates, including Can-Am. In addition, voting of these shares in a manner
which would constitute a direct or indirect exercise of control over NAICO is
restricted by Nebraska law. The United States District Court for the District of
Nebraska ("Nebraska Court") has assumed jurisdiction over all shares owned or
controlled by M.J. Moroun and/or his affiliates. Accordingly, shares owned by
CenTra and its affiliates will not be entitled to be voted at the Annual
Meeting.
4
<PAGE>
During December 1999, the Company acquired 1,989,200 shares of its own stock
in exchange for payment of $15,204,758 to CenTra and its affiliates pursuant to
a divestiture plan proposed by NAICO and approved by the Nebraska Court. All
shares were canceled upon their return to the Company. The Nebraska Court had
ordered CenTra to divest all shares of the Company owned or controlled by it or
its affiliates. An additional share block owned by CenTra and affiliates
consists of 1,142,625 shares which will be divested following a ruling on
CenTra's appeal of a judgment entered by an Oklahoma Federal Court in
April 1997. That judgment requires CenTra to transfer the shares to the Company
in exchange for payment of $6,882,500. Following the conclusion of the appeal,
the Nebraska Court will determine the method of divestiture of these shares. The
appellate court heard oral arguments on November 15, 1999. The Company cannot
predict when the appellate court will rule on the appeal.
During December 1999, Chandler Insurance Management, Ltd. ("CIM"), a wholly
owned subsidiary of the Company, transferred the 524,475 shares of the Company's
common stock that it owned to the Company. The shares were canceled by the
Company.
POSSIBLE CHANGE IN CONTROL
Until July 1992, CenTra and its affiliates held 22.7% of the Company's
common shares. In July 1992, M.J. Moroun attempted to obtain control of the
Company and acquired or contracted to acquire in open market and private
purchases 26.5% of the Company's common stock (which was later transferred to
Can-Am), bringing the total beneficial stock ownership of CenTra and its
affiliates to 49.2% as of July 1992. To further their purposes, CenTra or its
affiliates or both initiated litigation in Oklahoma, Arkansas, Michigan, and an
administrative proceeding in Nebraska, the domicile of NAICO.
In response to the threats posed by CenTra and its affiliates, the Company
and its subsidiaries vigorously asserted defenses and counterclaims where
appropriate in the litigation and successfully opposed the Form A application of
CenTra and its affiliates in the administrative hearings before the Nebraska
Department of Insurance (the "Department"). The Form A application sought the
Department's approval of M.J. Moroun's share purchases and attempted assertion
of control. The ruling of the Department and a state district court were
affirmed by the Nebraska Supreme Court on December 1, 1995. By resolution dated
August 19, 1992, the Company has restricted the voting of common shares held by
CenTra and its affiliates. A U.S. District Court Judge for the Nebraska Court
ordered the divestiture of all CenTra shares and CenTra delivered the shares to
the registry of the Court. The Nebraska Court adopted a divestiture plan
proposed by NAICO ("NAICO Plan"). The NAICO Plan includes a proposal whereby the
Company would acquire and cancel the stock of the Company owned or acquired by
the CenTra Group. The NAICO Plan has been partially implemented resulting in the
Company acquiring 1,989,200 shares of its own stock in exchange for payment of
$15,204,758. 1,142,625 shares remain with the Nebraska Court subject to
divestiture following the conclusion of an appeal of a judgment regarding those
shares in another court.
QUORUM AND VOTING
The presence, in person or by proxy, of the holders of a majority of the
Common Shares issued and outstanding and entitled to be voted as of the record
date is necessary to constitute a quorum at the Annual Meeting. Each votable
Common Share is entitled to one vote. Abstentions will be included in vote
totals and, as such, will have the same effect as a negative vote on each
proposal other than the election of directors. Broker non-votes (i.e., shares
held by brokers or nominees as to which they have no discretionary power to vote
on a particular matter and have received no instructions from the beneficial
owners or persons entitled to vote thereon), if any, will not be included in
vote totals and, as such, will have no effect on any proposal. Cumulative voting
is prohibited in the election of directors.
5
<PAGE>
PROPOSAL ONE:
ELECTION OF DIRECTORS
Eight directors are to be elected at the Annual Meeting for a term expiring
at the next annual meeting of shareholders or until their respective successors
are duly elected and qualified. To be elected a director, each nominee must
receive a majority of the votes cast by the shareholders of the Company present
in person or by proxy and entitled to vote at the Annual Meeting or any
adjournment thereof at which a quorum is present. Shareholders are not permitted
to cumulatively vote their shares in connection with the election of directors.
Each nominee has expressed his or her intention to serve the entire term for
which election is sought. Should any nominee become unable or unwilling to
accept election or serve as a director, the proxy holders may vote the proxies
for the election in that nominee's place of any other person the Board may
recommend.
Set forth below is certain information concerning the persons nominated for
election as directors of the Company.
W. BRENT LAGERE
W. Brent LaGere, 54, has been Chairman of the Board of the Company since
September 1983, Chief Executive Officer since March 1986 and President since
May 1997. Since October 1988 he has served in officer and director capacities
for various subsidiaries of the Company pursuant to an employment contract with
Chandler (U.S.A.), Inc. ("Chandler USA"). Since 1971 he has served in various
capacities with one of the Company's wholly owned subsidiaries, LaGere &
Walkingstick Insurance Agency, Inc. ("L&W"), an independent insurance agency
based in Chandler, Oklahoma.
MARK T. PADEN
Mark T. Paden, 43, has served as Executive Vice President of the Company
since May 1998, was Vice President--Finance of the Company from August 1987
through May 1998 and has been a director since May 1992. Since February 1987,
Mr. Paden has been an employee of L&W and/or Chandler USA. In May 1998,
Mr. Paden was elected Executive Vice President and Chief Operating Officer for
Chandler USA, NAICO, and L&W. Mr. Paden has served as Chief Financial Officer of
NAICO since January 1988 and of L&W since May 1987, and also served as Vice
President--Finance of NAICO from January 1988 through May 1998 and of L&W from
May 1987 through May 1998. Mr. Paden has also been a director of Chandler USA
since July 1988, NAICO since November 1992 and L&W since October 1992.
BRENDA B. WATSON
Brenda B. Watson, 59, has been Executive Vice President of the Company since
October 1988, was a Vice President of the Company for three years prior thereto,
and has been a director of the Company since September 1985. Since
October 1988, she has served in officer and director capacities for various
subsidiaries of the Company pursuant to an employment contract with Chandler
USA.
RICHARD L. EVANS
Richard L. Evans, 53, has been a director of the Company since
September 1983. He has been a Vice President of the Company since August 1986,
and since May 1989, he has been an employee of Chandler USA. Mr. Evans has
served L&W since 1979 in various capacities. Mr. Evans has also been a director
of Chandler USA since May 1990.
JAMES M. JACOBY
James M. Jacoby, 65, has been a director since October 1993. He has been a
director of NAICO since August 1990. He has been an insurance agent for more
than five years and was formerly employed by
6
<PAGE>
NAICO from June 1990 to March 1991. Mr. Jacoby retired in September 1994 from
Alexander and Alexander, Inc. where he was a Vice President with the Omaha,
Nebraska office, and is currently employed by Constructor's Bonding & Insurance
in Omaha, Nebraska where he is involved in servicing insurance accounts.
PAUL A. MAESTRI
Paul A. Maestri, 69, has been a director of the Company since October 1985.
Since February 1990 Mr. Maestri has engaged in personal investment activities.
From 1980 to February 1990 Mr. Maestri was a director and the President and
Chief Executive Officer of P.A.M. Transport, Inc. He has also been a director of
L&W since December 1993, NAICO since May 1997 and CIM since May 1998.
ROBERT L. RICE
Robert L. Rice, 65, has been in private practice as a certified public
accountant for more than five years and a director of the Company since
May 1987. Mr. Rice has also been a director of Chandler USA since June 1993, L&W
since May 1997 and CIM since May 1998.
W. SCOTT MARTIN
W. Scott Martin, 49, was appointed to serve as a director at the Company's
November 10, 1999 board meeting, subject to his qualification and acceptance by
the Cayman Islands Monetary Authority which was received on January 17, 2000.
Mr. Martin has been President of the Tulsa Loan Production Office with First
Bank & Trust Company in Wagoner, Oklahoma since 1994. Mr. Martin also serves as
a director of First Bank & Trust in Wagoner, Oklahoma, First Bank of Chandler in
Chandler, Oklahoma, First National Bank in Burkburnett, Texas and The Bank of
Union in Union City, Oklahoma.
DIRECTOR COMPENSATION
Messrs. Jacoby, Maestri, Rice, Davis and Martin--the Company's outside
directors--receive an annual retainer of $6,000 and $1,000 for each meeting.
These outside directors are compensated at the rate of $1,000 per day for time
spent on board-related activities. During 1999, Messrs. Maestri, Jacoby and
Davis received total director compensation from the Company and its subsidiaries
of $30,750, $29,500 and $25,500, respectively, including compensation for time
spent in connection with certain litigation.
During the second quarter of 1998, the Company's directors approved the
Directors' Plan. The Directors' Plan provides that the non-employee directors of
the Company, other than Norman Harned, Ronald Lech and M.J. Moroun, are eligible
for grants of stock options and stock grants in accordance with the terms of the
Directors' Plan. Messrs. Harned, Lech and Moroun resigned as directors of the
Company during November 1999. Options and stock grants may not be granted under
the plan for more than 260,000 shares of common stock of the Company, but this
number may be adjusted to reflect, if deemed appropriate by the board of
directors, any stock dividend, stock split, share combination, recapitalization
or the like, of or by the Company. The exercise price of the stock options shall
generally be equal to the average closing price of common stock of the Company
for the 30 calendar days preceding the date the options are granted. The option
period begins on the effective date of the option grant and terminates on the
tenth anniversary of that date.
The aggregate number of shares of stock awarded to an eligible director as a
stock grant shall total 20,000 shares of common stock of the Company. The award
shall be divided into two equal installments. The first installment of 10,000
shares shall automatically be awarded as of the first regular board meeting
after an eligible director completes ten continuous years of service on the
board. The second installment of 10,000 shares will automatically be awarded as
of the first anniversary of the initial stock grant, regardless of whether the
director is still a member of the board. During the second quarter of 1998, a
total of 40,000 shares valued at $250,000 were awarded to two directors, and
this amount is included in general and
7
<PAGE>
administrative expenses in the Company's consolidated statements of operations.
During the third quarter of 1998, the Company issued 20,000 of the 40,000 shares
to the two directors as required under the plan from the Company's stock then
held by a subsidiary. During the second quarter of 1999, the Company issued the
remaining 20,000 shares to the two directors from the Company's stock then held
by a subsidiary. The difference between the average reacquisition cost of the
shares issued and the share price at the date of the stock grant was credited to
paid-in surplus.
Each eligible director shall automatically be granted options to purchase
1,500 shares of common stock of the Company as of the first regular board
meeting in each year the director serves on the board. Each eligible director
shall also automatically be granted options to purchase 30,000 shares of common
stock of the Company effective as of the first regular board meeting after the
director completes ten continuous years of service on the board. During the
second quarter of 1998, options for 66,000 shares were awarded with an exercise
price of $5.92 per share, which resulted in approximately $22,000 of
compensation expense which is included in general and administrative expenses in
the Company's consolidated statements of operations. During the first quarter of
1999, options for 6,000 shares were awarded with an exercise price of $8.06 per
share. As the exercise price of the options exceeded the market value at the
date of grant, the Company did not recognize any compensation expense for the
options issued in 1999. As of December 31, 1999, options for 72,000 shares were
outstanding. The options require shareholder approval prior to being exercised.
See Proposal Two herein.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THESE NOMINEES.
8
<PAGE>
BOARD MEETINGS, COMMITTEES AND ATTENDANCE
The Board met five times during the fiscal year ended December 31, 1999.
Each incumbent director attended at least 75% of the meetings of the Board and
all committees of the Board on which he served. The Board currently has
appointed six committees, the Executive Committee, the Audit Committee, the
Option and Compensation Committee, the Investment Committee, the Independent
Defense Committee and the Special Litigation Committee. All meetings of the
Board and its committees were held outside the United States.
EXECUTIVE COMMITTEE
The Executive Committee is composed of Messrs. LaGere, Paden, Rice, Maestri
and Ms. Watson, with Mr. LaGere serving as Chairman. The Executive Committee has
the authority, between meetings of the Board, to take all actions with respect
to the management of the Company's business that require action by the Board,
except with respect to certain specified matters that by law must be approved by
the entire Board. The Executive Committee met twice during the fiscal year ended
December 31, 1999.
AUDIT COMMITTEE
The Audit Committee is composed of Messrs. Jacoby, Maestri and Rice, with
Mr. Rice serving as Chairman. The Audit Committee is required to meet no less
than annually with the Chief Financial Officer and the Director of Internal
Audit and with the Company's independent auditors to review and discuss the
annual report of the auditor and the auditor's observations and suggestions with
regard to the accounting and control policies, procedures and organization of
the Company. The Audit Committee met one time during the fiscal year ended
December 31, 1999. Messrs. Jacoby, Maestri and Rice also serve as members of the
Chandler USA Audit Committee, which met seven times during 1999.
The Audit Committee is responsible for (1) evaluating and making
recommendations regarding the selection of the Company's independent auditor and
reviewing and making recommendations regarding all significant fees for audit,
audit-related and non-audit services provided by the Company's independent
auditors; (2) requiring the independent auditor to submit a formal written
statement delineating all relationships between the auditor and the Company,
taking appropriate action to ensure the independence of the outside auditor and
continually monitor this independence; (3) the review of the audit plan with the
independent auditor prior to the audit and to determine that the scope of the
independent auditor's examination is not inappropriately restricted and that
full cooperation is provided by management. In addition, the Audit Committee
shall (i) receive and review any certification, report or opinion which the
independent auditor proposes to render in connection with the financial
statements prior to the publication or general release thereof; (ii) review
interim and annual financial statements and press releases relating thereto
prior to the publication or general release thereof; (iii) review the general
accounting and reporting practices applied in preparing the Company's financial
statements and conducting financial audits; (iv) require the independent auditor
to discuss with the Audit Committee the Company's accounting practices as
applied in its financial reporting; (v) review the internal audit plans and
activities with the Director of Internal Audit for Chandler USA; (vi) consult
with and supervise the Director of Internal Audit (who shall report
administratively to the General Counsel to Chandler USA and functionally to the
Audit Committee). Further, the Audit Committee shall review the adequacy of the
Company's system of internal controls and determine that the independent
auditors are satisfied with the effectiveness of these controls. The Audit
Committee shall require the independent auditor to conduct a SAS 71 (as amended,
supplemented or superseded) Interim Financial Review and report to the Audit
Committee prior to the Company's filing of a Form 10-Q. The Audit Committee, or
a member of the Audit Committee, and a representative of the Company's
management, shall discuss with the auditor the matters described in AU
Section 380, "COMMUNICATION WITH THE AUDIT COMMITTEE" (as amended, supplemented
or superseded), prior to the filing of a Form 10-K or any other public
announcement of financial results.
9
<PAGE>
The Audit Committee shall review and reassess the adequacy of its charter on
an annual basis. The Audit Committee shall coordinate and review the audit
activities of the audit committee of Chandler USA.
The Audit Committee adopted a revised formal written charter in
November 1999 and the Audit Committee has satisfied the responsibilities of its
charter, as stated above.
OPTION AND COMPENSATION COMMITTEE
The Option and Compensation Committee is composed of Messrs. Jacoby, Maestri
and Rice, with Mr. Jacoby serving as Chairman. The Option and Compensation
Committee is responsible for the review of compensation and periodic reporting
to the Board concerning compliance by the Company's United States subsidiaries
with the guidelines for personnel and compensation matters and operating
authorities. The Compensation Committee met one time during the fiscal year
ended December 31, 1999. Messrs. Jacoby, Maestri and Rice also serve as members
of the Chandler USA Compensation Committee, which met three times during 1999.
INVESTMENT COMMITTEE
The Investment Committee is composed of Messrs. LaGere, Paden and Rice, with
Mr. LaGere serving as Chairman. The Investment Committee periodically reviews
the investment of surplus funds of the Company, approves fee estimates for
investment advisory services and brokerage services, and reviews and approves
the scope of investment and brokerage services provided to the Company. The
committee held no meetings during 1999.
INDEPENDENT DEFENSE COMMITTEE
The Independent Defense Committee is composed of Ms. Watson and
Messrs. Evans, LaGere, Paden, Rice, Maestri and Jacoby. The committee was formed
in 1992 in connection with the litigation involving the CenTra Group. The
committee has not disbanded, but held no meetings during 1999.
SPECIAL LITIGATION COMMITTEE
The Special Litigation Committee is composed of Messrs. Jacoby, Maestri and
Davis. The Special Litigation Committee has the authority to make any and all
decisions and take any and all actions deemed by the committee to be in the best
interests of the Company, its policyholders and shareholders and to deal in all
respects with the verdicts and judgment thereon relating to litigation adverse
to the Company brought by the CenTra Group. The Special Litigation Committee met
four times during 1999.
10
<PAGE>
MANAGEMENT
EXECUTIVE OFFICERS AND DIRECTORS
The executive officers and directors of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- -------- --------------------------------------------------------
<S> <C> <C>
W. Brent LaGere...................... 54 Chairman of the Board, Chief Executive Officer,
President, Executive Committee Chairman, Investment
Committee Chairman and Director.
Mark T. Paden........................ 43 Executive Vice President, Chief Financial Officer,
Executive Committee Member, Investment Committee Member
and Director.
Brenda B. Watson..................... 59 Executive Vice President, Executive Committee Member and
Director.
Richard L. Evans..................... 53 Vice President and Director.
Steven R. Butler..................... 42 Vice President--Administration.
Mark C. Hart......................... 44 Vice President--Accounting and Treasurer.
James M. Jacoby...................... 65 Audit Committee Member, Option and Compensation
Committee Chairman and Director.
Paul A. Maestri...................... 69 Executive Committee Member, Audit Committee Member,
Option and Compensation Committee Member and Director.
Robert L. Rice....................... 65 Audit Committee Chairman, Executive Committee Member,
Investment Committee Member, Option and Compensation
Committee Member and Director.
Larry A. Davis....................... 58 Director.
W. Scott Martin...................... 49 Director.
</TABLE>
Information concerning the business experiences of Messrs. LaGere, Paden,
Evans, Jacoby, Maestri, Rice, Martin and Ms. Watson is provided under the
section entitled "Election of Directors."
STEVEN R. BUTLER
Steven R. Butler has served as Vice President-Administration of the Company
since January 1987, and also serves as a director, the President and Treasurer
of the Company's wholly owned subsidiary Chandler Insurance Management
(Barbados), Ltd. ("CIM Barbados"). He is also a director and the Financial
Director of CIM, and is a director and serves as President of Chandler Insurance
(Barbados), Ltd. ("CIB"), a Barbados company and wholly owned subsidiary of the
Company. The Company began handling its own and CIB's operations and
administrative affairs through CIM and CIM Barbados, respectively, in 1990. From
1984 through 1989, Mr. Butler served as Financial Director of Insurance
Management Services, Ltd. and, beginning in 1988, of its affiliate Insurance
Risk Management Services, Ltd., which performed substantially all of the
administrative management functions of the Company and CIB, respectively,
through March 1990.
MARK C. HART
Mark C. Hart has served as Vice President--Accounting and Treasurer of the
Company since May 1998. Since May 1988, Mr. Hart has been an employee of NAICO
and/or Chandler USA. In
11
<PAGE>
May 1998, Mr. Hart was elected Vice President--Finance and Treasurer of Chandler
USA, NAICO and L&W. Mr. Hart has been a Vice President of Chandler USA since
March 1994.
OTHER
The Company learned on November 9, 1999, that M.J. Moroun, Norman E. Harned
and Ronald W. Lech had resigned as directors of the Company. Messrs. Moroun and
Harned resigned effective November 2, 1999 and Mr. Lech resigned effective
November 8, 1999. All three resignations were formally accepted by the Company's
board of directors on November 10, 1999. Messrs. Moroun, Harned and Lech are
current or former directors and officers of CenTra, Inc. At its November 10,
1999 meeting, the Company's board of directors voted to reduce its total
membership from 11 to 9 and appointed W. Scott Martin to serve as a director,
subject to his qualification and acceptance by the Cayman Islands Monetary
Authority. On April 20, 2000, the Executive Committee of the Board of Directors
voted to reduce the Board membership from nine to eight, effective June 5, 2000.
In the civil proceeding CenTra, Inc. v. Chandler Insurance Company, Ltd.,
et. al, Case No. CIV-92-1301-M, in the U.S. District Court for the Western
District of Oklahoma, judgment was entered in favor of CenTra and against
Messrs. LaGere, Paden, Evans, Rice, Ms. Watson and two former directors in the
amount of $1.00 each, finding a violation of Section 10(b) of the Securities
Exchange Act of 1934 and a violation of Section 11(a) of the Securities Act of
1933 based upon a failure by the Company and certain of its officers and
directors to disclose the applicability of the Nebraska Insurance Holding
Company Act to purchasers of stock of the Company in a public offering. The
judgments are currently being appealed.
LEGAL PROCEEDINGS
The Company's Annual Report on Form 10-K for the year ended December 31,
1999 contains a description of the CenTra litigation.
12
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid or to be paid by the
Company or any of its subsidiaries as well as certain other compensation paid or
accrued, during the years indicated, to the Named Executives for such period in
all capacities in which they served.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1)
---------------------------------------------
OTHER ANNUAL ALL OTHER
SALARY BONUS COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(2) ($)(3) ($)(4)
- --------------------------- -------- -------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
W. Brent LaGere ............................... 1999 $404,228 $ -- N/A $38,349
Chairman of the Board, CEO and President of 1998 397,361 -- N/A 36,596
Chandler USA, NAICO and L&W 1997 389,340 -- N/A 37,471
Mark T. Paden ................................. 1999 231,188 -- N/A 5,000
Executive Vice President, COO & CFO of 1998 209,300 -- N/A 4,900
Chandler USA, NAICO and L&W 1997 178,637 -- N/A 4,975
Brenda B. Watson .............................. 1999 225,437 112,500 N/A 8,600
Executive Vice President of NAICO and L&W 1998 221,607 -- N/A 8,100
1997 216,882 -- N/A 8,475
Richard L. Evans .............................. 1999 224,735 -- N/A 6,400
Vice President--Claims of Chandler USA, 1998 218,190 -- N/A 6,200
NAICO and L&W 1997 211,873 -- N/A 6,275
Steven R. Butler .............................. 1999 137,252 16,419 N/A --
President of CIM and CIM Barbados 1998 133,252 16,272 N/A --
1997 127,514 12,850 N/A --
</TABLE>
- ------------------------
(1) Amounts shown include cash and non-cash compensation earned and received by
the Named Executives as well as amounts earned but deferred at their
election.
(2) All Named Executives are eligible to participate in bonus plans based upon
premium production and/or profitability. In addition, cash bonuses may be
granted to the Named Executives at the discretion of the Compensation
Committee, after consideration of the recommendation of the Company's Chief
Executive Officer.
(3) The Company provides various perquisites to certain employees including the
Named Executives. In each case, the value of the perquisites provided to
each Named Executive did not exceed ten percent of such Named Executive's
annual salary and bonus.
(4) The amounts shown under this column represent contributions by the Company's
U.S. subsidiaries to a 401(k) plan ($3,475 for each of the Named Executives
in 1997 and $3,600 in 1998 and 1999), and the premiums paid or to be paid by
the Company's U.S. subsidiaries under life insurance arrangements with the
Named Executives. A portion of the premiums ($24,300, $23,400 and $25,700 in
1997, 1998 and 1999, respectively) were paid under split dollar life
insurance plans. Under these plans, the Company's U.S. subsidiaries pay the
premiums for life insurance issued to the Named Executive. Repayment of the
premiums is secured by the death benefit or the cash surrender value of the
policy, if any, if the Named Executive cancels and surrenders the policy.
OPTIONS EXERCISED AND HOLDINGS
No options were granted to or exercised by the Named Executives during 1999
and there were no unexercised options held by the Named Executives as of
December 31, 1999.
13
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended December 31, 1999, the Option and Compensation
Committee of the Board of Directors of the Company consisted of Messrs. Jacoby,
Maestri and Rice. Each of Messrs. Jacoby, Maestri and Rice is a non-employee
director. From June 1990 to March 1991, Mr. Jacoby was a Vice President of
NAICO.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company has no employees, but the employees of its United States
("U.S.") based subsidiaries are employed by Chandler USA, and employees of its
non-U.S. based subsidiaries are employed by Chandler Insurance Management, Ltd.
(Cayman Islands) and Chandler Insurance Management (Barbados), Ltd. The
Compensation Committee of the Board of Directors of Chandler USA (the
"Compensation Committee") has furnished the following report on its executive
compensation program. The report describes the Compensation Committee's
compensation policies applicable to the Company's executive officers and
provides specific information regarding the compensation of the Company's Chief
Executive Officer.
OVERVIEW
The Compensation Committee, which consists of three non-employee directors,
approves compensation and benefit policies and programs for directors, executive
officers, and other employees, and reports its determinations to Chandler USA's
Board of Directors.
The executive compensation policy is to motivate executives and other
employees to enhance financial performance with reference to such specific
business objectives as the Company shall determine.
The Company's executive compensation consists of three primary components:
base salary, cash bonus and life insurance and 401(k) Plan, which in combination
address the objectives described above.
BASE SALARY. Base salary, the first element of executive compensation, is
intended to be competitive with that paid by comparable companies and is also
intended to reflect the Compensation Committee's consideration of an officer's
experience, business judgment and role in developing and implementing the
overall business strategy for the Company. The Compensation Committee reviews
the base salaries of all executive officers and determines adjustments to those
salaries based on the performance of each executive officer and the comparable
salaries of a group of peer companies.
CASH BONUS. During 1999, Chandler USA adopted an Executive Bonus Plan
("Bonus Plan"). The Bonus Plan provides for performance-based compensation to
the participating executives including the Chief Executive Officer, and is
intended to motivate the executives by providing them incentives to enhance the
growth and profitability of the Company and its affiliated companies. In
addition, cash bonuses are granted to the Company's executives at the discretion
of the Compensation Committee, after consideration of the recommendations of the
Company's Chief Executive Officer. Cash bonuses, when awarded, reflect the
executive's performance and the Company's results over the period considered by
the Compensation Committee.
Certain executives are also eligible to participate in bonus plans based
upon premium production and/or profitability.
LIFE INSURANCE AND 401(K) PLAN. Chandler USA provides split dollar life
insurance plans for certain executives. Under these plans, the Company's U.S.
subsidiaries pay the premiums for life insurance issued to the executive.
Repayment of the premiums is secured by the death benefit or the cash surrender
value of the policy, if any, if the executive cancels and surrenders the policy.
Chandler USA's 401(k) Plan also helps to enable it to attract and retain quality
executives by allowing participants to defer taxes on portions of their
compensation, as well as income from such amounts. Under the 401(k) Plan
participants may
14
<PAGE>
contribute up to 15% of compensation, not to exceed the statutory limitations
which for 1999 was $10,000. Chandler USA matches 50% of the first $2,000, 40% of
the next $3,000, 30% of the next $3,000 and 25% of the remaining employee
contributions up to a maximum employer contribution of $3,600 per employee per
year. In addition, Chandler USA may make additional annual contributions to the
401(k) Plan at its discretion. A participant's percentage ownership in amounts
contributed by Chandler USA increases over the participant's period of service,
so that a participant becomes fully vested after 5 years.
CEO COMPENSATION
Pursuant to an employment agreement with Mr. LaGere described below under
"Employment Agreements," the 1999 base salary for Mr. LaGere, the Company's
Chairman of the Board, Chief Executive Officer and President, was established at
not less than $250,000 per year, to be increased each year in an amount
proportionate to any increase from base year 1988 in the Consumer Price Index,
plus any additional amount deemed appropriate by the Board of Directors. In its
discretion, the Compensation Committee may also award bonuses to Mr. LaGere.
GENERAL
The Company currently has no policy with respect to the nondeductibility of
compensation paid to executives in excess of $1,000,000 because no executive of
the Company is currently compensated in excess of such level. Any amounts
awarded under Chandler USA's Bonus Plan shall not exceed the amount which would
cause the participant's total compensation to exceed the deductible limit.
Compensation Committee:
James M. Jacoby
Paul A. Maestri
Robert L. Rice
In accordance with the rules and regulations of the Securities and Exchange
Commission, the foregoing report of the Compensation Committee and the
performance graph appearing below shall not be deemed to be "soliciting
material" or to be "filed" with the Securities and Exchange Commission or
subject to Regulations 14A or 14C of the Securities Exchange Act of 1934 (the
"Exchange Act") or to the liabilities of Section 18 of the Exchange Act and
shall not be deemed to be incorporated by reference into any filing under the
Securities Act of 1933 or the Exchange Act, notwithstanding any general
incorporation by reference of this Proxy Statement into any other filed
document.
15
<PAGE>
STOCK PERFORMANCE GRAPH
The following performance graph compares the cumulative total shareholder
return on the Company's Common Shares with: (i) the Center for Research in
Security Prices ("CRSP") Total Return Index for The Nasdaq Stock Market (U.S.
and Foreign companies) and (ii) the CRSP Total Return Industry Index for Nasdaq
Insurance Stocks (U.S. and Foreign companies) for the years 1995 through 1999.
The comparison assumes $100 was invested on December 31, 1994, in the Company's
Common Shares and in the CRSP indices. It also assumes reinvestment of
dividends. The CRSP Total Return Industry Index for Nasdaq Insurance Stocks
includes all insurance companies in The Nasdaq Stock Market within Standard
Industry Classification ("SIC") Major Group 633 (Fire, Marine and Casualty
Insurance).
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURNS
AMONG CHANDLER INSURANCE COMPANY, LTD., THE NASDAQ STOCK MARKET
AND NASDAQ INSURANCE STOCKS
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
CHANDLER INSURANCE COMPANY, LTD. NASDAQ STOCK MARKET (U.S. & FOREIGN) NASDAQ INSURANCE STOCKS (U.S. & FOREIGN)
<S> <C> <C> <C>
1994 $100.00 $100.00 $100.00
1995 $131.58 $140.36 $140.04
1996 $123.68 $171.85 $153.45
1997 $121.05 $209.84 $232.11
1998 $156.58 $290.64 $198.10
1999 $176.32 $545.46 $149.33
</TABLE>
The value of the investment in the Company's Common Shares and the CRSP
indices at December 31 are as follows:
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Chandler Insurance
Company, Ltd............... $100.00 $131.58 $123.68 $121.05 $156.58 $176.32
Nasdaq Stock Market (U.S. &
Foreign)................... $100.00 $140.36 $171.85 $209.84 $290.64 $545.46
Nasdaq Insurance Stocks
(U.S. & Foreign)........... $100.00 $140.04 $153.45 $232.11 $198.10 $149.33
</TABLE>
EMPLOYMENT AGREEMENTS
Chandler USA has an employment agreement with W. Brent LaGere, Chairman of
the Board and Chief Executive Officer of the Company and its subsidiaries. Under
this agreement, Mr. LaGere's base compensation is established at not less than
$250,000 per year, to be increased each year in an amount,
16
<PAGE>
proportionate to any increase from base year 1988 in the Consumer Price Index,
plus any additional amount deemed appropriate by the Board. In the event that
Mr. LaGere's employment is terminated without cause, as defined in the
agreement, he is entitled to receive his base compensation for the remainder of
the term of the agreement, but in no event for more than 60 months. The
agreement will terminate upon Mr. LaGere attaining age 70, unless earlier
terminated by Chandler USA for cause. In addition to his base compensation,
Mr. LaGere is eligible to receive certain benefits and to participate in certain
incentive bonus plans offered by Chandler USA and its subsidiaries.
Chandler USA has an employment agreement with Brenda B. Watson, a director
and executive officer of the Company and L&W, and an executive officer of NAICO.
Under this agreement, Ms. Watson's base compensation is established at not less
than $125,000 per year, to be increased each year in an amount, proportionate to
any increase from base year 1988 in the Consumer Price Index, plus any
additional amount deemed appropriate by the Board. The agreement terminates on
December 31, 2003, unless earlier terminated by Chandler USA for cause, as
defined in the agreement. In the event that Ms. Watson's employment is
terminated without cause, she is entitled to receive her base compensation
through the termination date. In addition to her base compensation, Ms. Watson
is eligible to receive certain benefits and to participate in certain incentive
bonus plans offered by Chandler USA and its subsidiaries.
Prior to May 1, 1997, Benjamin T. Walkingstick was an employee of
Chandler USA pursuant to an employment agreement dated October 28, 1988 (the
"Employment Agreement") and served as an executive officer and director of the
Company and certain of it subsidiaries. Effective May 1, 1997, Mr. Walkingstick
resigned these positions and ceased to be an employee of Chandler USA. He
continues to be a consultant to Chandler USA and its subsidiaries pursuant to
the Employment Agreement and continues to receive compensation based on an
annual rate of $323,291 under the Employment Agreement through October 2000 at
which time he reaches age 70.
PROPOSAL TWO:
ADOPT DIRECTORS STOCK OPTION AND STOCK GRANT PLAN
The following description of the Directors' Plan is only a summary; it does
not purport to be a complete or detailed description of all of the provisions of
the Plan. A copy of the Directors' Plan will be furnished by the Company to any
shareholder upon written request to the Secretary of the Company at the
Company's executive offices.
BACKGROUND AND SUMMARY OF TERMS OF DIRECTORS STOCK OPTION AND STOCK GRANT PLAN
The Company established a program of granting stock options and stock grants
to certain directors of the Company by having the Board adopt the Directors'
Plan effective as of March 8, 1998. The purpose of the Directors' Plan is to
provide certain directors of the Company with a proprietary interest in the
Company through the granting of stock options and stock grants which will
(a) increase the interest of the directors in the Company's welfare;
(b) furnish an incentive to the directors to continue their services for the
Company; and (c) provide a means through which the Company may attract able
persons to serve on the Board. The Directors' Plan is administered by the Board
or any committee of the Board appointed by the Board to administer the plan or
any portion of the plan.
Certain directors of the Company are to be granted options and stock grants
under the Plan, and upon such grant will become "Eligible Directors." The Board
has determined that the persons eligible for grants under the Directors' Plan
shall be the non-employee directors of the Company. As of the date of this Proxy
Statement, five non-employee directors of the Company are eligible to
participate in the Plan.
17
<PAGE>
The amount of benefits that will be received by or allocated to Eligible
Directors is as follows:
NEW PLAN BENEFITS
DIRECTORS STOCK OPTION AND STOCK GRANT PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE NUMBER OF UNITS
- ----------------- ------------ ---------------
<S> <C> <C>
STOCK GRANT
Robert L. Rice.................................... $155,000(1) 20,000
Paul A. Maestri................................... $155,000(1) 20,000
Non-Executive Director Group...................... $310,000(1) 40,000
STOCK OPTION
Robert L. Rice.................................... (2) 34,500
Paul A. Maestri................................... (2) 34,500
James M. Jacoby................................... (2) 4,500
Larry A. Davis.................................... (2) 4,500
W. Scott Martin................................... (2) 1,500
Non-Executive Director Group...................... (2) 79,500
</TABLE>
- ------------------------
(1) Based upon $7.75 per share, the closing sale price of the Common Stock, as
reported on The Nasdaq Stock Market, on April 25, 2000.
(2) The actual dollar value, if any, a person may realize will depend on the
excess of the per share price of the Common Stock over the per share
exercise price on the date the option is exercised. Options granted under
the Directors' Plan on March 4, 1998, March 10, 1999, and March 8, 2000 have
exercise prices of $5.92, $8.06, and $8.13 per share, respectively. Based
upon $7.75 per share, the closing sale price of the Common Stock as reported
by The Nasdaq Stock Market on April 25, 2000, the aggregate dollar value of
these options was $120,780.
Options and stock grants may not be granted under the Directors' Plan for
more than 260,000 Common Shares of the Company, but this number may be adjusted
to reflect, if deemed appropriate by the Board, any stock dividend, stock split,
share combination, recapitalization or the like, of or by the Company. Shares to
be optioned and sold or granted as stock grants may be made available from
either authorized but unissued Common Shares or Common Shares held by the
Company in its treasury or otherwise acquired. Shares that by reason of the
expiration of an option or otherwise are no longer subject to purchase pursuant
to an option granted under the Directors' Plan may be reoffered under the plan.
The period for all grants under the Directors' Plan will begin on the effective
date of the option grant and will terminate on the tenth anniversary of that
date. Full payment for shares purchased upon exercising an option shall be made
in cash or by check at the time of exercise, or on such other terms as are set
forth in the applicable option agreement. No shares may be issued until full
payment of the purchase price therefor has been made, and an Eligible Director
will have none of the rights of a shareholder until shares are issued to him.
All stock options and stock grants awarded under the Directors' Plan shall
vest immediately as of the date of grant. In no event may an option be exercised
or shares be issued pursuant to an option or a stock grant if any requisite
action, approval or consent of any governmental authority of any kind having
jurisdiction over the exercise of options shall not have been taken or secured.
Unless sooner terminated or extended by action of the Board, the Directors'
Plan will terminate on March 4, 2013. There will be no further stock option or
stock grants issued under the Plan after that date, but grants before that date
will continue to be effective in accordance with their terms.
18
<PAGE>
As of April 25, 2000, the total market value of all shares of Common Stock
subject to outstanding options was $616,125 (based upon the closing price of the
Common Stock of $7.75 per share as reported on The Nasdaq Stock Market on that
date).
ALLOTMENT OF OPTION SHARES. Except for grants to Eligible Directors in the
case of death or disability, or any capital adjustments as a result of a
reorganization, or as a result of the discontinuance of the Directors' Plan, all
as more clearly described in the plan, grants of options under the Directors'
Plan shall be as follows:
(a) Each Eligible Director, upon completion of ten continuous years of
service on the Board, shall automatically be granted an option, effective as
of the first regular Board meeting after an Eligible Director completes ten
continuous years of service on the Board, to purchase 30,000 Common Shares
of the Company. Each Eligible Director who has completed ten or more
continuous years of service on the Board as of March 4, 1998 automatically
was granted an option to purchase 30,000 Common Shares of the Company. For
all purposes of determining years of service on the Board under the Plan, an
Eligible Director will be given credit for service on the board of directors
of a subsidiary of the Company provided such service is prior and contiguous
to the Eligible Director's service on the Board.
(b) Each Eligible Director of the Company shall also automatically be
granted an option to purchase 1,500 Common Shares of the Company as of the
first regular Board meeting in each year the Eligible Director serves on the
Board. Each Eligible Director who was a member of the Board as of March 4,
1998 automatically was granted an option to purchase 1,500 Common Shares of
the Company.
(c) The grant of options shall be evidenced by option agreements
containing such terms and provisions as are approved by the Board but not
inconsistent with the plan.
ALLOTMENT OF STOCK GRANTS. Except for the award of stock grants to an
Eligible Director in the case of death or disability, or any capital adjustments
as a result of a reorganization, or as a result of the discontinuance of the
Directors' Plan, all as more clearly described in the Plan, stock grants under
the Plan, the aggregate number of Common Shares awarded to an Eligible Director
as a stock grant shall total 20,000 Common Shares of the Company. The award
shall be divided into two equal installments. The first installment of 10,000
shares shall automatically be awarded as of the first regular Board meeting
after an Eligible Director completes ten continuous years of service on the
Board. The second installment of 10,000 shares shall automatically be awarded as
of the first anniversary of the initial stock grant, regardless of whether the
Eligible Director is still a member of the Board. Each Eligible Director who has
completed ten or more continuous years of service on the Board as of March 4,
1998 was automatically awarded stock grants totaling 10,000 Common Shares of the
Company with the remaining stock grant totaling 10,000 Common Shares of the
Company to be automatically awarded as of the first anniversary of the initial
stock grant, regardless of whether the Eligible Director was still a member of
the Board.
EXERCISE PRICE OF STOCK OPTIONS. The price of the stock options shall be
equal to the average closing price of Common Shares of the Company for the 30
calendar days preceding:
(i) the date the Eligible Director completes ten continuous years of
service on the Board or March 4, 1998, whichever is later, for options to
purchase 30,000 Common Shares granted as a result of an Eligible Director
completing ten continuous years of service;
(ii) the date of the first regular Board meeting of each year, for
options to purchase 1,500 Common Shares granted as of the first regular
Board meeting in each year the Eligible Director serves on the Board;
(iii) the date of the Eligible Director's death or Disability, for
options and grants granted in the event an Eligible Director dies or suffers
a disability prior to completion of ten years of service on the
19
<PAGE>
Board, the options to purchase 3,000 Common Shares and the grants of 2,000
Common Shares for each year of the Eligible Directors continuous service on
the Board, including any partial year of service;
(iv) the date immediately preceding a corporate transaction described
in Section 12 of the Plan, for options to purchase 3,000 Common Shares and
grants of 2,000 Common Shares granted to an Eligible Director who has not
completed ten years of service for each year of his or her continuous
service on the Board, including any partial year of service, at the date of
such transaction; and
(v) the date of the decision by the Board to discontinue the Plan, for
grants to directors who have not completed ten years of service as of the
date the Plan is discontinued, options to purchase 3,000 Common Shares and
the grants of 2,000 Common Shares for each year of the Eligible Director's
continuous service on the Board, including any partial year of service as of
the date of the discontinuance of the Plan.
RIGHTS IN EVENT OF DEATH OR DISABILITY. If an Eligible Director dies or
suffers a Disability prior to completion of ten years of service on the Board
the Eligible Director or his estate will be granted 3,000 stock options and
2,000 stock grants for each year of the Eligible Director's continuous service
on the Board, including any partial year of service as of the date of death or
Disability. The options may be exercised at any time prior to the date of their
expiration by (i) the Eligible Director's estate or by the person who acquired
the right to exercise the option by bequest or inheritance or by reason of the
death of the Eligible Director in the event of the Eligible Director's death, or
(ii) the Eligible Director or his personal representative in the event of the
Eligible Director's Disability, subject to the other terms of the Plan and
applicable laws, rules and regulations. "Disability" means the physical or
mental incapacity of an Eligible Director which the Board considers will be of
long and continued duration and which will render the Eligible Director
incapable of performing services as a director on the Board.
CAPITAL ADJUSTMENTS AND REORGANIZATIONS. The number of Common Shares
covered by each outstanding option granted under the Plan and the option price
thereof, and the number of shares to be granted pursuant future grants due to
(i) an Eligible Director's completion of ten years of continuous service,
(ii) the annual grants to each director serving on the Board, (iii) an Eligible
Director's death or disability, (iv) a corporate reorganization described in the
Plan, and (v) discontinuance of the Plan, and the option price thereof, may be
adjusted to reflect, as deemed appropriate by the Board, any stock dividend,
stock split, share combination, exchange of shares, recapitalization, merger,
consolidation, separation, reorganization, liquidation or the like, of or by the
Company. The number of shares covered by any stock grant as a result of (i) an
Eligible Director's completion of ten years of continuous service (ii) death or
disability, (iii) a corporate transaction described in Section 12 of the
Directors' Plan, and (iv) discontinuance of the plan, may also be adjusted to
reflect, as deemed appropriate by the Board any stock dividend, stock split,
share combination, exchange of shares, recapitalization, merger, consolidation,
separation, reorganization, liquidation or the like, of or by the Company.
In the event the Company shall be a party to any merger, consolidation or
corporate reorganization, as the result of which the Company shall be the
surviving corporation, the rights and duties of the Eligible Directors and the
Company under the Directors' Plan shall not be affected in any manner. In the
event the Company shall sell all or substantially all of its assets or shall be
a party to any merger, consolidation or corporate reorganization, as the result
of which the Company shall not be the surviving corporation, or in the event any
other person or entity may make a tender or exchange offer for stock of the
Company whereby such other person or entity would own more than 20% of the
outstanding Common Shares of the Company (the surviving corporation, purchaser,
or tendering corporation being collectively referred to as the "purchaser", and
the transaction being collectively referred to as the "transaction"), then
immediately preceding any such transaction each Eligible Director who has not
completed ten years of service will be granted 3,000 stock options and 2,000
stock grants for each year of continuous service on the Board, including any
partial year of service as of the date of the transaction. The Eligible Director
may exercise
20
<PAGE>
any portion of his then outstanding option(s) as he may desire and deposit with
the Company the requisite cash to purchase in full and not in installments the
Common Stock thereby exercised. The Company shall, prior to the effective date
of the transaction, issue all Common Stock which was subject to options which
have been exercised or which was the subject of stock grants which have vested.
Common Stock thus issued shall be treated as issued stock for purposes of the
transaction.
NON-ASSIGNABILITY. Options and stock grants may not be transferred other
than by will or by the laws of descent and distribution. Except as otherwise
provided in the Plan, during an Eligible Director's lifetime, options granted to
an Eligible Director may be exercised only by the Eligible Director.
AMENDMENT OR DISCONTINUANCE. For purposes of the annual grant of options to
purchase 1,500 Common Shares, the Directors' Plan may be amended at any time by
the Board without approval of the shareholders of the Company. For purposes of
all other awards of stock options and stock grants, the Plan may be amended at
any time by the Board without approval of the shareholders of the Company;
however, any amendment which would adversely affect the rights of any existing
Eligible Director shall not be applied to such Eligible Director but shall only
be applied to new Eligible Directors who become members of the Board subsequent
to the effective date of the amendment.
The Directors' Plan may be discontinued at any time by the Board without
approval of the shareholders of the Company; provided, however, if the Plan is
discontinued, all Eligible Directors who have not completed ten years of service
as of the date the Plan is discontinued shall be granted 3,000 stock options and
2,000 stock grants for each year of the Eligible Director's continuous service
on the Board including any partial year of service as of the date of the
discontinuance of the Plan.
EFFECT OF PLAN. Neither the adoption of the Directors' Plan nor any action
of the Board shall be deemed to give any director any right to be granted an
option to purchase Common Shares or any other rights except as may be evidenced
by the stock option agreement, or any amendment thereto or stock certificate,
duly authorized by the Board and executed on behalf of the Company, and then
only to the extent and on the terms and conditions expressly set forth therein.
The Company has no obligation to register any stock or options granted hereunder
pursuant to federal or state securities laws.
UNITED STATES TAX CONSEQUENCES OF OPTIONS AND STOCK GRANTS
The following is a brief summary of the major United States tax consequences
to United States individuals that are expected to occur with respect to the
options and stock grants under the Directors' Plan. This discussion is intended
for the information of the stockholders considering how to vote at the Annual
Meeting and not as tax guidance to the Directors. The grant of an option will
create no tax consequences for the optionee. Upon exercise of an option, an
optionee will recognize compensation taxed to him as ordinary income to the
extent the fair market value of the acquired Common Stock on the date of
exercise of the option exceeds the aggregate exercise price paid for that Common
Stock. A Director who receives a grant of Common Stock will recognize
compensation income taxed as ordinary income equal to the fair market value of
such stock when received by the Director. Any gain or loss realized by an
optionee upon the subsequent disposition of the shares of Common Stock acquired
by either exercise of an option or stock grant generally is a capital gain or
loss. Because the Company is a Cayman Islands corporation that is not subject to
United States federal income taxes, there are no United States tax consequences
to the Company with respect to either the grant of options or the stock grant to
the Directors. The foregoing summary is based upon present United States federal
income tax laws and regulations and are subject to change if the tax laws and
regulations, or interpretations thereof, are changed.
21
<PAGE>
REQUIRED VOTE
The favorable vote of the holders of a majority of the outstanding Common
shares of the Company entitled to vote is required to approve the Directors'
Plan. Approval of the Directors' Plan is required under the rules of The Nasdaq
Stock Market.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE
DIRECTORS' PLAN.
RELATIONSHIP WITH INDEPENDENT AUDITORS
Deloitte & Touche served as the independent auditors of the Company for the
fiscal year ended December 31, 1999. A representative of Deloitte & Touche is
expected to be present at the Annual Meeting and will have the opportunity to
make a statement. The representative will be available to answer appropriate
shareholder questions.
TRANSACTIONS WITH DIRECTORS, OFFICERS AND AFFILIATES
Incorporated by reference to Item 13 of the Company's Annual Report on
Form 10-K for the year ended December 31, 1999.
SECTION 16 REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and officers, and persons who own more than 10% of a
registered class of the Company's equity securities, to file initial reports of
ownership and reports of changes in ownership with the Securities and Exchange
Commission (the "SEC") and The Nasdaq National Market. Such persons are required
by the SEC regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of Forms 3, 4 and 5, any amendments thereto
furnished to the Company pursuant to the rules of the SEC, or written
representations from certain reporting persons presented to the Company, all
such reports required to be filed by reporting persons have been filed in a
timely fashion during the fiscal year ended December 31, 1999.
SHAREHOLDERS' PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder
action at subsequent annual meetings of the Company consistent with the
Rule 14a-8 promulgated under the Securities Exchange Act of 1934, as amended.
For such proposals to be considered for inclusion in the Proxy Statement and
Proxy relating to the 2001 Annual Meeting of Shareholders, such proposals must
be received by the Secretary of the Company on or before January 5, 2001. With
respect to the 2000 Annual Meeting of Shareholders, the Company has received no
notifications that any shareholder proposal is intended to be raised from the
floor. Therefore, the proxy holders will be allowed to use their discretionary
voting authority if any such proposals are raised.
MISCELLANEOUS
The Board of Directors knows of no business other than that set forth above
to be transacted at the Annual Meeting. If other matters requiring a vote of the
shareholders arise, the persons designated as proxies will vote the Common
Shares represented by the proxies in accordance with their best judgment and
Rule 14a-4 under the Exchange Act.
The information contained in the Proxy Statement relating to the occupations
and security holdings of the directors and executive officers of the Company and
their transactions with the Company is based upon information received from the
individual directors and officers. All information relating to any beneficial
22
<PAGE>
owner of more than five percent of the Company's Common Shares is based upon
information contained in reports filed by such owner with the Securities and
Exchange Commission.
The Annual Report to Shareholders of the Company for the fiscal year ended
December 31, 1999, which includes financial statements and accompanies this
Proxy Statement, does not form any part of the materials for the solicitation of
proxies.
THE COMPANY HAS PROVIDED WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS
SOLICITED HEREBY A COPY OF THE COMPANY'S 1999 ANNUAL REPORT TO SHAREHOLDERS,
WHICH INCLUDES A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL
YEAR ENDED DECEMBER 31, 1999. EXHIBITS TO THE FORM 10-K ARE AVAILABLE UPON
REQUEST AT A REASONABLE CHARGE TO COVER THE COMPANY'S COST IN PROVIDING SUCH
EXHIBITS OR ON THE INTERNET AT HTTP://WWW.SEC.GOV. ADDITIONAL COPIES OF THE 1999
ANNUAL REPORT TO SHAREHOLDERS MAY BE OBTAINED WITHOUT CHARGE BY ANY PERSON WHOSE
PROXY IS SOLICITED HEREBY UPON WRITTEN REQUEST TO CORPORATE SECRETARY, CHANDLER
INSURANCE COMPANY, LTD., ANDERSON SQUARE, FIFTH FLOOR, GRAND CAYMAN, CAYMAN
ISLANDS.
By Order of the Board of Directors,
/s/ W. Brent LaGere
W. Brent LaGere
CHAIRMAN OF THE BOARD
May 2, 2000
23
<PAGE>
CHANDLER INSURANCE COMPANY, LTD.
The undersigned (i) acknowledges receipt of the Notice dated May 2,
2000, of the Annual Meeting of Shareholders of Chandler Insurance Company,
Ltd., a Cayman Islands corporation (the "Company"), to be held on June 5,
2000, at 10:00 a.m., local time, at the Marriott Hotel in Grand Cayman,
Cayman Islands, and the Proxy Statement in connection therewith; and (ii)
appoints W. Brent LaGere and Mark T. Paden, and each of them, the
undersigned's proxies with full power of substitution, for and in the name,
place and stead of the undersigned, to vote upon and act with respect to all
of the shares of Common Stock of the Company standing in the name of the
undersigned on April 24, 2000, or with respect to which the undersigned is
entitled to vote and act, at the meeting and at any postponements or
adjournments thereof, and the undersigned directs that this proxy be voted as
set forth on the reverse.
If more than one of the proxies named herein shall be present in
person or by substitute at the meeting or at any postponements or
adjournments thereof, both of the proxies so present and voting, either in
person or by substitute, shall exercise all of the powers hereby given.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2
AND 3.
(CONTINUED AND TO BE SIGNED ON THE REVERSE SIDE)
- -------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
<PAGE>
THE UNDERSIGNED HEREBY REVOKES ANY PROXY Please mark /X/
OR PROXIES HERETOFORE GIVEN TO VOTE UPON your votes as
OR ACT WITH RESPECT TO SUCH COMMON STOCK indicated in
AND HEREBY RATIFIES AND CONFIRMS ALL this example
THAT THE PROXIES, THEIR SUBSTITUTES, OR
ANY OF THEM MAY LAWFULLY DO BY VIRTUE
HEREOF.
1. Proposal to elect eight directors to serve until the next annual meeting of
shareholders or until their respective successors are elected and
qualified.
FOR all nominees WITHHOLD Nominees:
listed to the right AUTHORITY W. Brent LaGere,
(except as marked to vote for all nominees Mark T. Paden,
to the contrary) listed to the right Brenda B. Watson,
/ / / / Richard L. Evans,
James M. Jacoby,
Paul A. Maestri,
Robert L. Rice and
W. Scott Martin
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name on the line below.)
- ------------------------------------------------------------------------------
2. Proposal to approve the Company's Directors Stock Option and Stock Grant
Plan, which authorizes up to 260,000 Common Shares of the Company to be
issued upon stock grants and exercises of options granted under that Plan.
FOR AGAINST ABSTAIN
/ / / / / /
3. In the discretion of the proxies on any other matters that may properly
come before the meeting or any postponements or adjournments thereof.
FOR AGAINST ABSTAIN
/ / / / / /
Please date this proxy and sign
your name exactly as it appears
hereon. Where there is more than
one owner, each should sign. When
signing as an attorney,
administrator, executor, guardian
or trustee, please add your title
as such. If executed by a
corporation, the proxy should be
signed by a duly authorized
officer.
Please mark, sign, date and return
your proxy promptly in the enclosed
envelope whether or not you plan to
attend the Meeting. No postage is
required. You may nevertheless vote
in person if you do attend.
Dated: , 2000
---------------------
---------------------------------
Signature of Shareholder
----------------------------------
Signature of Shareholder
----------------------------------
Title, if applicable
- -------------------------------------------------------------------------------
^ FOLD AND DETACH HERE ^
