SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2) )
Presidential Life Corporation
(Name of Registrant as Specified In Its Charter)
Presidential Life Corporation
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 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: (1)
4) Proposed maximum aggregate value of transaction:
(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
5) Total fee paid:
[X ] 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 date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
PRESIDENTIAL LIFE CORPORATION
69 Lydecker Street
Nyack, New York 10960
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 29, 1996
The Annual Meeting of Shareholders (the "Annual Meeting") of
Presidential Life Corporation (the "Company") will be held at the offices of
Presidential Life Insurance Company, 69 Lydecker Street, Nyack, New York 10960,
at 9:30 a.m., local time, on Wednesday, May 29, 1996, for the following
purposes:
1. To elect five (5) directors, each for a term of one year and until
their respective successors are duly elected and qualified;
2. To consider and act upon a proposal to adopt the 1996 Stock
Incentive Plan and the rules relating thereto; and
3. To consider and act upon a proposal to ratify the Board of
Directors' selection of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending
December 31, 1996; and
4. To transact such other business as properly may come before the
Annual Meeting or any postponement or adjournment or adjournments
thereof.
The Board of Directors of the Company has fixed the close of business
on April 17, 1996 as the record date for determining shareholders entitled to
notice of, and to vote at, the Annual Meeting. It is expected that this
Notice of Annual Meeting of Shareholders and the accompanying proxy materials
will be mailed or delivered to shareholders commencing on or about
April 24, 1996.
Regardless of whether you expect to attend the Annual Meeting in
person, you are requested to complete, date and sign the enclosed proxy card
and return it at your earliest convenience to the Company in the enclosed
envelope. No postage need be affixed if the envelope is mailed in the
United States. If you attend the meeting in person, you may revoke your
proxy and vote your shares in person.
By order of the Board of Directors
DONNA MONACELLI, Secretary
April 24, 1996
PLEASE READ THE ATTACHED PROXY STATEMENT CAREFULLY AND SIGN AND RETURN
YOUR PROXY CARD PROMPTLY. YOUR VOTE IS VERY IMPORTANT, REGARDLESS OF THE
NUMBER OF SHARES THAT YOU OWN.
PRESIDENTIAL LIFE CORPORATION
69 Lydecker Street
Nyack, New York 10960
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors (the "Board
of Directors") of Presidential Life Corporation, a Delaware corporation
(the "Company"), in connection with the annual meeting of the Company's
shareholders to be held at the offices of Presidential Life Insurance
Company ("Insurance Company"), 69 Lydecker Street, Nyack,
New York 10960, at 9:30 a.m., local time, on Wednesday, May 29, 1996,
or any postponement or adjournment or adjournments thereof (the
"Annual Meeting"). The Company's principal executive offices are located
at 69 Lydecker Street, Nyack, New York 10960. The Company's telephone
number at that address is (914) 358-2300.
GENERAL INFORMATION
The Company's common stock, par value $0.01 per share (the "Common
Stock"), is the only class of security that is entitled to vote at the Annual
Meeting. The Board of Directors has fixed April 17, 1996 as the record
date (the "Record Date") for determining
those shareholders entitled to notice of, and to vote at, the Annual Meeting.
On April 5, 1996 there were 33,319,343 shares of Common Stock outstanding.
It is expected that this Proxy Statement, the attached Notice of Annual
Meeting of Shareholders, the accompanying form of proxy and the Company's
Annual Report for the fiscal year ended December 31, 1995 (the
"Annual Report") will first be mailed or delivered to shareholders
commencing on or about April 24, 1996.
Each share of Common Stock entitles the holder to one vote on each matter
to come before the Annual Meeting. The Company's Certificate of Incorporation
does not authorize cumulative voting. A quorum of the shareholders is
required at the Annual Meeting for the shareholders to take action
effectively with respect to the proposals described in this Proxy Statement
or to transact effectively any other business at the Annual Meeting. A
quorum of the shareholders will be present at the Annual Meeting if the
holders of at least a majority of the outstanding shares of the Common Stock
are present either in person or by proxy. Therefore, shareholders are urged
to complete and return the enclosed proxy card whether or not they are
planning to attend the Annual Meeting.
If voting by proxy with respect to the election of directors, shareholders
may vote in favor of all nominees, withhold their votes as to all nominees
or withhold their votes as to specific nominees. With respect to each other
proposal that comes before the shareholders at the Annual Meeting,
shareholders may vote FOR the proposal, vote AGAINST
the proposal or ABSTAIN from voting with respect to the proposal. Assuming
a quorum is present: (i) the affirmative vote by the holders of a plurality
of the shares of Common Stock represented at the Annual Meeting and entitled
to vote will be required to act with respect to the election of directors;
and (ii) the affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting and entitled to vote will be
required to act on all other proposals that come before the Annual Meeting.
Abstentions and broker non-votes will be included in the determination of
the number of shares of Common Stock present at the meeting for quorum
purposes. Abstentions and broker non-votes
will not be counted, however, in the tabulations of votes cast on proposals
presented to shareholders.
A proxy, in the accompanying form, which is properly executed, duly
returned to the Company and not revoked will be voted in accordance with
the instructions contained thereon. If no specific instructions are
indicated on the proxy, (a) the shares represented thereby will be voted
FOR: (i) the election of the persons nominated herein as directors;
(ii) the adoption of the 1996 Stock Incentive Plan; and (iii) the
ratification of the Board of Directors' selection of
Deloitte & Touche LLP as the Company's independent auditors for the fiscal
year ending December 31, 1996; and (b) the
proxy will authorize the shares represented thereby to be voted upon such
other business as properly may come before the Annual Meeting, as determined,
with respect to any such event, by the persons named in the accompanying
form of proxy in accordance with their best judgment.
Each member of the Board of Directors has indicated that he intends to
vote FOR: (i) the election of the persons nominated herein as directors;
(ii) the adoption of the 1996 Stock Incentive Plan; and (iii) the
ratification of the Board of Director's selection of Deloitte & Touche LLP
as the Company's independent auditors for the fiscal year ending
December 31, 1996.
If a quorum is not present at the time that the Annual Meeting is
convened, or if for any other reason the Board of Directors believes that
additional time should be allowed for the solicitation of proxies, the
Company may postpone or adjourn the Annual Meeting with or without a vote of
the shareholders. If the Company proposes to postpone or adjourn the Annual
Meeting by a vote of the shareholders, the persons named in the accompanying
form of proxy will vote all shares of Common Stock for which they have voting
authority in favor of such postponement or adjournment, as the case may be.
Each proxy granted may be revoked by the person granting it at any time:
(i) by giving written notice to such effect to the Secretary of the Company;
(ii) by execution and delivery of a proxy bearing a later date or; (iii) by
attendance and voting in person at the Annual Meeting; except as to any
matter upon which, prior to such revocation, a vote shall have been cast at
the Annual Meeting pursuant to the authority conferred by such proxy. The
mere presence at the Annual Meeting of a person appointing a proxy does
not revoke the appointment.
The Company will bear the cost of the Annual Meeting and the cost of
soliciting these proxies, including the cost of preparing, printing, handling
and mailing the proxy materials. The Company will request brokerage houses,
banking institutions and other custodians, nominees and fiduciaries to
forward the proxy materials to beneficial owners of the shares of Common
Stock and will reimburse them for their reasonable expenses
incurred in connection therewith.
In addition to solicitation by mail, certain officers, directors, regular
employees and other representatives of the Company may solicit proxies by
telephone, facsimile, in person or otherwise. These persons will receive no
extra compensation for such services.
No person is authorized to give any information or to make any
representation not contained in this Proxy Statement, and, if given or made,
such information or representation should not be relied upon as having been
authorized. This Proxy Statement does not constitute the solicitation of a
proxy from any person in any jurisdiction with
respect to whom it is unlawful to make such proxy solicitation in such
jurisdiction. The delivery of this Proxy Statement shall not, under any
circumstances, imply that there has not been any change in the information
set forth herein since the date of this Proxy Statement.
<TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides information as of March 15, 1996 as to the
ownership of Common Stock by: (i) each person known by the Company to be the
beneficial owner of five percent or more of the Common Stock; (ii) each
director and nominee for election as a director of the Company; (iii) each
of the Company's executive officers; and (iv) all directors, nominees for
election as director and executive officers of the Company as a group:
Number of Shares Percent of
of Common Stock Common Stock
Five Percent Shareholders Beneficially Owned<F1><F2> Beneficially Owned<F1>
<S> <C> <C>
Herbert Kurz<F3><F4> 8,172,999 24.5%
Heartland Advisors, Inc.<F8> 2,025,400 6.1%
Directors (including nominees),
Executive Officers and all
Directors (including
nominees) and Executive Officers
as a Group
Peter A. Cohen 190,000 <F6>
Jules Kroll<F5> 390,199 1.2%
Herbert Kurz<F4> 8,172,999 24.5%
Lawrence Rivkin<F7> 90,080 <F6>
Morton B. Silberman 31,200 <F6>
Shirley P. Jordan 56,334 <F6>
Michael V. Oporto 7,250 <F6>
All Directors (including nominees)
and Executive Officers as a group
(seven persons)<F4><F5><F7> 8,938,062 26.8%
<FN>
<F1> Certain of the shares shown in this table are shares as to which the
persons named in this table have the right to acquire beneficial
ownership, as specified in Rule 13d-3(d)(1) promulgated under the Securities
and Exchange Act of 1934, as amended (the "Exchange Act").
<F2> Unless otherwise indicated, the persons or entities identified in this
table have sole voting and investment power with respect to all shares
shown as beneficially held by them, subject to community property laws where
applicable.
<F3> The address for Mr. Kurz is c/o Presidential Life Corporation, 69 Lydecker
Street, Nyack, New York 10960.
<F4> Excludes 108,864 shares of Common Stock beneficially held by Mr. Kurz's
wife. Mr. Kurz disclaims beneficial ownership of the shares held by his wife.
<F5> Includes 1,000 shares of Common Stock held by each of Mr. Kroll's four
children (an aggregate of 4,000 shares).
<F6> Less than one percent.
<F7> Excludes 2,500 shares of Common Stock beneficially held by Mr. Rivkin's
wife. Mr. Rivkin disclaims beneficial ownership of the shares held by
his wife.
<F8> The address for Heartland Advisors, Inc. ("Heartland") is 790 North
Milwaukee Street, Milwaukee, Wisconsin 53202. Information as to holdings
of Heartland is based upon the Schedule 13G filed with the Securities
and Exchange Commission on February 9, 1996. This schedule indicates
that as of February 9, 1996, Heartland owned 1,980,400 of such shares with
sole voting power and 2,025,400 with sole dispositive power.
</FN>
</TABLE>
<TABLE>
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information regarding the
Company's directors, executive officers and nominees for election to the Board
of Directors.
Name Age Position held with the Company
<S> <C> <S>
Herbert Kurz 76 Director and President of the
Company and Chairman of the Board
of Directors and President of the
Insurance Company
Shirley P. Jordan 61 Executive Vice President and Chief
Investment Officer of the
Insurance Company
Michael V. Oporto 36 Chief Financial Officer and
Treasurer of the Insurance Company
Peter A. Cohen<F1> 49 Director
Jules Kroll<F1> 55 Director
Lawrence Rivkin<F1> 74 Director
Morton B. Silberman 73 Director
<FN>
<F1> Member of Audit Committee
</FN>
</TABLE>
Directors of the Company are elected annually to serve until the next
annual meeting of shareholders and until their successors have been duly
elected and qualified. Executive officers are appointed by, and serve at the
discretion of, the Board of Directors for a term beginning after the first
regular meeting of the Board of Directors following the annual meeting of
shareholders and until their respective successors are duly appointed and
qualified.
During the fiscal year ended December 31, 1995, there were seven meetings
of the Board of Directors. During the fiscal year ended December 31, 1995,
each director attended at least 75% of the aggregate of all meetings of the
Board of Directors held during the period that he served as a director,
except Mr. Kroll.
The Company's Board of Directors has an Audit Committee (the "Audit
Committee"), the members of which are to be appointed by the Board of Directors
for a term beginning after the first regular meeting of the Board of
Directors following the annual meeting of shareholders and until their
respective successors are duly appointed and qualified. The
Audit Committee is to recommend to the Board of Directors the auditing firm
to be selected each year as independent auditors of the Company's financial
statements and to perform services related to the completion of such audit.
The Audit Committee also has responsibility for: (i) reviewing the scope
and results of the audit with the independent auditors; (ii) reviewing the
Company's financial condition and results of operations with management and
the independent auditors; (iii) considering the adequacy of the Company's
internal accounting and control procedures; and (iv) reviewing any non-audit
services and special engagements to be performed by the independent auditors
and considering the effect of such performance on the auditors' independence.
During the fiscal year ended December 31, 1995, there were two meetings of
the Audit Committee.
The Company does not have a standing nominating committee or compensation
committee. However, if the 1996 Stock Incentive Plan is adopted by the
shareholders of the Company at the Annual Meeting, a compensation committee of
the Board of Directors will be created to provide for awards to employees
pursuant to the terms of the plan.
Certain information regarding the business experience and other
directorships of each of the persons named in the table on the preceding
page of this Proxy Statement is as follows:
Herbert Kurz has been a director of the Company since February 24, 1969.
Mr. Kurz also has served as President of the Company and Chairman of the board
of directors of the Insurance Company, the wholly-owned subsidiary of the
Company through which the Company conducts its insurance and annuity business,
for more than the past five years. Since February 22, 1995, Mr. Kurz has
served as President of the Insurance Company.
Shirley P. Jordan has served as Executive Vice President of the Insurance
Company since 1994 and as Chief Investment Officer for the Insurance Company
since June, 1988. For the six years prior to that Ms. Jordan served as Senior
Vice President of the Insurance Company. Ms. Jordan currently serves as a
director of the Insurance Company.
Michael V. Oporto has served as Chief Financial Officer of the Insurance
Company since May 4, 1993 and as Treasurer of the Insurance Company since
1994. Prior to that, Mr. Oporto served as a senior audit manager for Deloitte
& Touche LLP for more than the past five years. Mr. Oporto currently serves
as a director of the Insurance Company.
Peter A. Cohen has been a director of the Company since May 27, 1992. Mr.
Cohen currently is the owner of Ramius Capital Corporation, a private
investment firm, and is a partner in Palladin Partners, a private investment
management firm. From November, 1992 until May, 1994, Mr. Cohen was Vice
Chairman and a director of Republic New York Corporation ("Republic"), as well
as a member of its management executive committee. Mr. Cohen was
also the Chairman of Republic's wholly-owned subsidiary, Republic New York
Securities Corporation. Commencing in February, 1990 and prior to his
joining Republic in November, 1992, Mr. Cohen was a private investor and an
advisor to several industrial and financial companies. From March, 1984
until February, 1990, Mr. Cohen was Chairman of the board of directors and
Chief Executive Officer of Shearson Lehman Hutton Inc., a subsidiary of
American Express Company. In addition to serving on the Board of Directors
of the Company, Mr. Cohen serves as a director of 21' International Holdings
Inc., Olivetti SpA, Andover Togs Inc., Avalon Properties Inc. and is a
trustee of Mt. Sinai Hospital, the Ohio State University Foundation and
New York Holocaust Commission.
Jules Kroll has been a director of the Company since November 30, 1988.
Mr. Kroll has been Chairman of Kroll Associates, Inc., a private
investigative services company, since 1991. Prior to that he was President
and Chief Executive Officer of Kroll Associates, Inc. for more than the
past five years.
Lawrence Rivkin has been a director of the Company since May 25, 1988. Mr.
Rivkin has been a partner in the law firm of Goldfarb & Fleece for more than
the past five years.
Morton B. Silberman has been a director of the Company since May 27,
1987. Mr. Silberman has served as counsel to the law firm of Clark, Gagliardi
and Miller for more than the past five years.
There are no family relationships between any director, executive officer,
or person nominated or chosen by the Company to become a director or executive
officer.
Certain Relationships and Related Transactions
Relationship with Pensions for Business
Jacques Sartisky, a director of the Company until his death on December 16,
1995, was the President and principal owner of Pensions for Business, Inc., a
life insurance agency. For the fiscal years ended December 31, 1995, 1994, and
1993, approximately 11.5%, 13.0%, and 18.2% of the Company's total insurance
revenues were attributable to sales through Pensions for Business, Inc. For
the fiscal years ended December 31, 1995, 1994, and 1993, aggregate commissions
and other remuneration to Pensions for Business, Inc. were approximately
$181,011, $289,305, and $452,570, respectively. Management believes that
the Company's transactions with Pensions for Business, Inc. were made on
terms at least as fair to the Company as could be obtained from unaffiliated
third parties. Compensation of agents is strictly regulated by the New
York State Department of Insurance.
Purchases of Annuity Contracts and Life Insurance Policies
From time to time in the ordinary course of business, certain of the
Company's directors and executive officers have purchased, and may in the
future purchase, annuity contracts or life insurance policies from the
Insurance Company. Such transactions in the past have been, and will in the
future be, on terms no less favorable to the Insurance Company than those
that could be obtained from unaffiliated third parties.
In that regard, since January 1, 1993, directors and executive officers, have
engaged in the following transactions with the Insurance Company: Herbert Kurz,
the President and a director of the Company, purchased annuity contracts for
$500,000, $100,000 and $1,075,000 during the fiscal years ended December 31,
1995, 1994 and 1993, respectively. Jacques Sartisky, formerly a director of
the Company, purchased annuity contracts for approximately $25,000 and $56,400
during the years ended December 31, 1994 and 1993, respectively. Mr.
Sartisky did not purchase any annuity contracts during the year ended
December 31, 1995.
COMPENSATION OF DIRECTORS AND
EXECUTIVE OFFICERS
Director Compensation
Directors of the Company who are paid employees of the Company or the
Insurance Company, do not receive additional compensation in their capacities
as directors. In fiscal 1995, directors of the Company who were not officers
or employees of the Company (collectively, the "Non-Employee Directors")
received an annual retainer of $7,500, a fee of $500 for each Board of
Directors meeting attended, a fee of $1,500 for each special meeting
attended and a fee of $500 for each meeting of a Committee of the Board of
Directors attended. In addition, Non-Employee Directors were reimbursed for
any of their travel expenses to and from such meetings.
Executive Compensation
The following table sets forth, for the Company's last three fiscal years,
the annual and long-term compensation of those persons who were, at
December 31, 1995, (i) the President (who is the individual acting in the
capacity as the Company's chief executive officer) and (ii) the other two
most highly compensated executive officers of the Company (the "Executive
Officers"). Michael V. Oporto was employed as Chief Financial Officer
effective May 4, 1993. Had he been employed for the full year of 1993,
information regarding his compensation would have been included in the
Summary Compensation Table for such year. Information regarding options
granted in connection with his employment appears in the two option tables.
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
Name and All Other
Principal Fiscal Salary($) Bonus($) Options(#) Compensation<F1>
Position Year
<S> <C> <C> <C> <C> <C>
Herbert Kurz 1995 $525,300 $1,053 -0- $73,647
President 1994 525,300 2,010 -0- 60,154
1993 525,300 -0- -0- 60,993
Shirley P. Jordan 1995 278,418 1,053 -0- 1,933
Executive Vice
President of 1994 272,650 2,010 -0- 1,834
the Insurance 1993 262,650 -0- -0- 1,950
Company
Michael V. Oporto 1995 136,615 1,053 -0- 955
Treasurer of the 1994 132,000 -0- -0- 887
Insurance Company
<FN>
<F1> All Other Compensation represents the Company's payment of premiums
with respect to term life insurance policies for the Executive
Officers plus, in respect to Mr. Kurz, directors fees of $9,500 in
1995 and $8,500 in 1994.
</FN>
</TABLE>
<TABLE>
OPTION TABLES
Options/SAR Grants in Last Fiscal Year
The following table sets forth certain information concerning options/SARs
granted during 1995 to the named executives:
Individual Grants
Potential
Realizable
% of Total Value at Assumed
Number of Options/SARs Annual Rates
Securities Granted to of Stock Price
Underlying Employees Exercise or Expir- Appreciation
Options/SARs in Fiscal Base Price ation for Option Term
Name Granted Year ($/Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Herbert Kurz 0 0.00% 0.00 0 0 0
Shirley P. Jordan 0 0.00% 0.00 0 0 0
Michael V. Oporto 0 0.00% 0.00 0 0 0
</TABLE>
<TABLE>
Aggregated Options/SAR Exercises in Last Fiscal Year and Fiscal Year-End
Options/SAR Values
The following table summarizes options and SARs exercised during 1995 and
presents the value of unexercised options and SARs held by the named executives
at fiscal year-end:
Number of
Securities
Underlying
Unexercised In-the-Money
Options/SARs Options/SARs
At Fiscal at Fiscal
Shares Year-End (#) Year-End ($)
Acquired Value Exercisable (E)/ Exercisable (E)
on Exercise Realized Unexercisable(U) Unexercisable (U)<F1>
Name (#) ($)
<S> <C> <C> <C> <C>
Herbert Kurz 0 0 0 0
Shirley P. Jordan 0 0 46,334 (E) $231,670 (E)
Shirley P. Jordan 0 0 11,333 (U) 56,665 (U)
Michael V. Oporto 0 0 2,500 (E) 6,563 (E)
Michael V. Oporto 0 0 2,500 (U) 6,563 (U)
<FN>
<F1> Represents the difference between the exercise price of the options and
$9.875, which represents the closing price of the Company's Common Stock on
December 29, 1995.
</FN>
</TABLE>
<TABLE>
PENSION PLAN TABLE
The following table shows the estimated annual retirement benefits
payable to participants, including the Executive Officers, in the earnings and
years-of-credit classifications indicated, under the Company's retirement plan,
which covers all salaried employees who have attained the age of 21 and
completed at least one year of service. The table assumes that benefits will
be paid based on an immediate annuity and are not subject to any deduction for
Social Security or other offset amounts.
Benefits for Years of Credited Service Indicated
Remuneration 15 20 25 30 35
<C> <C> <C> <C> <C> <C>
$125,000 37,875 50,500 63,125 75,750 83,325
$150,000 45,450 60,600 75,750 90,900 99,990
$175,000 45,450 60,600 75,750 90,900 99,990
$200,000 45,450 60,600 75,750 90,900 99,990
$225,000 45,450 60,600 75,750 90,900 99,990
$250,000 45,450 60,600 75,750 90,900 99,990
$300,000 45,450 60,600 75,750 90,900 99,990
$400,000 45,450 60,600 75,750 90,900 99,990
$450,000 45,450 60,600 75,750 90,900 99,990
$500,000 45,450 60,600 75,750 90,900 99,990
</TABLE>
Covered compensation includes all taxable compensation (excluding
bonuses and commissions), subject to the maximum benefit limitations set forth
in Sections 415 and 401(a)(17) of the Internal Revenue Code of 1986, as amended
(the "Code"). The calculation of retirement benefits under the plan is 66-2/3%
of the average monthly compensation reduced 1/33 for years of service less
than 33. Average monthly compensation is calculated based upon the five
consecutive years which produce the highest monthly average unless an
employee's years of service is less than five, in which case, average monthly
compensation is based on the actual consecutive years of service.
The credited years of service for Ms. Jordan and Mr. Oporto, as of
March 1, 1996 are 9 and 2, respectively. Mr. Kurz's participation in the plan
terminated as of the end of fiscal year 1990 and he received a distribution of
his accrued benefit under the plan of $1,108,465 (reflecting 25 years of
service) on April 9, 1991.
Board of Directors' Report on Executive Compensation
Decisions with respect to compensation of the Executive Officers are
made by the entire Board of Directors. If the 1996 Stock Incentive Plan is
adopted by the shareholders of the Company at the Annual Meeting, decisions
with respect to the granting of awards pursuant to the 1996 Stock Incentive
Plan will be made by the Compensation Committee of the Board of Directors,
which will be created by the Board of Directors for this purpose.
Set forth below is a report of the Board of Directors which addresses
the Company's compensation policies for fiscal 1995 as they apply to the
Company's executives, including the Executive Officers.
Overview and Philosophy
The Company maintains a philosophy that executive compensation levels
should be competitive and consistent with life insurance and annuity industry
standards to enable the Company to attract and retain qualified executives
ho are critical to the Company's success. The Company believes that such
compensation also should be meaningfully related to both an individual's job
performance, as measured by the achievement of qualitative objectives, and the
performance of the Company, as measured by its profitability, the value created
for shareholders and the realization of the Company's short- and long-term
strategic goals. Qualitative objectives considered by the Company include the
individual executive officer's (1) contribution to the Company's performance,
(2) responsibilities, (3) revenue and cost containment initiatives, (4) time
commitment and (5) the President's views concerning such executive's
performance. The Company considers all such measurement factors, equally
weighted, in its annual salary reviews. The Company's compensation policies
are designed to attract and retain talented managers and motivate such
managers to enhance the Company's performance, thereby
building value into the Company's core insurance and annuity businesses.
Base Salaries
The Company's general approach to compensating executive officers is
to pay cash salaries competitive with industry standards based upon the
individual's experience and past and potential contribution to the success of
the Company. In determining industry standards, the Company compares
compensation levels paid by a self-selected group of life insurance and
annuity companies (two of which are included in the Standard & Poor's Life
Insurance Index) that compete in the Company's primary lines of business.
Such compensation information is obtained from various publicly available
sources. Generally, management believes that the Company's compensation
levels are slightly below those in the self-selected group of life insurance
and annuity companies, however the Companybelieves that they are competitive.
In addition, the Company believes that compensation should be
meaningfully related to the value created by individual executive officers
for the shareholders. Accordingly, the Board of Directors considers the
quality of an individual executive's contribution to the Company's overall
profitability and success, as measured by its net income, statutory
capital and surplus, cash flow and the overall growth in the value of the
Company, in determining the executive's salary. The Board of Directors
reviews on an annual basis the salaries of its executive officers in light
of the foregoing factors. In fiscal 1995, salary increases were granted
to executive officers based on the foregoing factors.
Other Compensation
The Company believes that stock ownership by key employees provides
valuable performance incentives and is beneficial in aligning management and
shareholder interests. During fiscal 1996, the Company may consider the
grant of stock-based incentive compensation, pursuant to the 1996 Stock
Incentive Plan, if the Plan is approved by shareholders at the 1996 Annual
Meeting, in order to promote profitability and shareholder value. The
Company also may consider, to the extent warranted by the Company's
performance at the end of the year, the grant of incentive bonuses. In
fiscal 1995, the Company awarded incentive bonuses in the aggregate amount
of $100,000 based on the Company's net statutory income.
Such bonuses were paid in equal amounts to all salaried employees (employed
for at least one year), including the Executive Officers.
Compensation of Herbert Kurz, Chairman and President
Compensation of Herbert Kurz, Chairman and President of the Company and
the Insurance Company, is established using substantially the same criteria that
were used to determine compensation levels for other executive officers,
discussed at the beginning of this report. There was no salary increase in
fiscal 1995.
Section 162(m) of the Internal Revenue Code
The new Section 162(m) of the Code limits a company's ability to take
a deduction for federal tax purposes for certain compensation paid to its
executives. The Company concurrently expects that all compensation payable to
executive officers during 1995 will be deductible by the Company for federal
income tax purposes. The Company's policy with respect to compensation to be
paid to executive officers is to structure compensation payments to executive
officers so as to be deductible under Section 162(m).
Benefits
The Company provides medical, life insurance and pension benefits to
the Executive Officers that generally are available to all Company employees.
Incorporation by Reference
The Board of Directors' Report on Executive Compensation shall not:
(i) be deemed incorporated by reference by any general statement incorporating
this Proxy Statement by reference into any filing under the Securities Act of
1933, as amended (the "Securities Act"), or under the Exchange Act, except to
the extent that the Company specifically incorporates this information by
reference; and (ii) otherwise be deemed filed under either the Securities Act
or the Exchange Act or subject to Regulations 14A or 14C promulgated under the
Exchange Act or the liabilities of Section 18 of the Exchange Act.
Compensation Committee Interlocks and Insider Participation
Matters concerning executive compensation in fiscal 1995 were
considered by the entire Board of Directors. Herbert Kurz participated in
deliberations of the Board of Directors during the last fiscal year concerning
executive officer compensation, but he abstained from discussions of his own
compensation.
Comparative Performance by the Company
The SEC requires the Company to present a graph comparing the
cumulative total shareholder return on its Common Stock with the cumulative
total shareholder return of: (i) a broad equity market index; and (ii) a
published industry index or peer group. The following graph compares the
Common Stock with: (i) the S&P 500 Index; and (ii) the S&P Life Insurance
Index and assumes an investment of $100 on December 31, 1990 in each of the
Common Stock, the stocks comprising the S&P 500 Index and the stocks
comprising the S&P Life Insurance Index, assuming the reinvestment of
dividends.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE RETURN AMONG
PRESIDENTIAL LIFE CORPORATION, S&P 500 INDEX AND S&P LIFE INSURANCE INDEX
Measurement Period Presidential Life S&P S&P Life
(Fiscal Year Covered) Corporation 500 Index Insurance Index
<S> <C> <C> <C>
Measurement Pt-12/31/90 $100 $100 $100
FYE 12/31/91 132.53 130.47 144.14
FYE 12/31/92 209.87 140.41 193.41
FYE 12/31/93 275.46 154.57 195.92
FYE 12/31/94 165.41 156.61 162.50
FYE 12/31/95 314.73 215.46 233.35
</TABLE>
The preceding graph shall not: (i) be deemed incorporated by reference
by any general statement incorporating this Proxy Statement by reference into
any filing under the Securities Act or the Exchange Act, except to the extent
that the Company specifically incorporates this information by reference; and
(ii) otherwise be deemed filed under either the Securities Act or the Exchange
Act or subject to Regulations 14A or 14C promulgated under the Exchange Act or
the liabilities of Section 18 of the Exchange Act.
PROPOSALS TO BE ACTED UPON AT THE ANNUAL MEETING
ELECTION OF DIRECTORS
(Proposal 1 on the Proxy Card)
Nominees
The Amended and Restated By-Laws provide that the Board of Directors
is to consist of not less than five and not more than 19 members, with the
actual number to be set from time to time by a majority of the Board of
Directors. The Board of Directors has fixed the number of directors at five.
At the Annual Meeting, five (5) persons will be elected to the Board
of Directors to serve until the next annual meeting and until their respective
successors are duly elected and qualified. The persons named in the
accompanying form of proxy, unless otherwise instructed, intend to vote the
shares of Common Stock covered by valid proxies FOR the election of the five
(5) persons named below, each of whom has been nominated by the Board of
Directors for election to the Board of Directors. The five (5) nominees named
below are presently serving as directors of the Company and were elected by
the shareholders of the Company. Proxies cannot be voted for a greater number
of persons than the number of nominees. Information concerning each of the
nominees is set forth in this Proxy Statement under the heading "Directors
and Executive Officers." Each of the nominees has indicated that he is able
and willing to serve as a director. In the event that any of such persons
is unable or unwilling to continue to be available for election, the persons
named in the accompanying form of proxy will have discretionary power to both
vote for a substitute and to vote or withhold their vote for any additional
nominees named by shareholders. There are no circumstances presently known
to the Board of Directors which would render any of
the following persons unavailable or unwilling to continue to serve as a
director, if elected. The election of directors requires the affirmative
vote by the holders of a plurality of the shares of Common Stock represented
at the Annual Meeting and entitled to vote.
Nominees to the Board of Directors
Peter A. Cohen
Jules Kroll
Herbert Kurz
Lawrence Rivkin
Morton B. Silberman
The Board of Directors recommends a vote FOR the election of the above-named
nominees.
APPROVAL OF PROPOSED 1996 STOCK INCENTIVE PLAN
(Proposal 2 on the Proxy Card)
On February 28, 1996, the Board of Directors adopted, subject to approval
by the shareholders of the Company, the 1996 Stock Incentive Plan (the "1996
Plan"). Assuming a quorum is present, the affirmative vote by
the holders of a majority of shares represented at the Annual Meeting will be
required to ratify the 1996 Plan.
The 1996 Plan is substantially similar to the 1984 Stock Option Plan
(the "1984 Plan") which was approved by the shareholders of the Company at
the 1984 Annual Meeting of Shareholders and expired on May 30,
1994. The material differences between the two Plans are described below.
Certain of the changes in the 1996 Plan are intended to satisfy specific
requirements of Section 162(m) of the Code (discussed below) for grants of
stock options, warrants and stock appreciation rights, and Rule 16b-3 under
the Exchange Act. The 1996 Plan, like the 1984
Plan, is designed to provide long-term incentives and rewards to employees of
the Company and its Affiliates (as defined below), to assist the Company
in attracting and retaining employees with experience and/or ability on a basis
competitive with industry practices and to associate the interest of such
employees with those of the shareholders of the Company. As of February 29,
1996, the Company and its Affiliates had approximately 100 employees. All
employees shall be eligible to participate in the 1996 Plan.
Description of the 1996 Plan
The following summary description of the 1996 Plan is qualified in its
entirety by reference to the full text of the 1996 Plan, which is set
forth as Appendix A to this Proxy Statement.
If approved by the shareholders of the Company, the 1996 Plan will allow
the Compensation Committee (or such other committee of the Board of
Directors as may be directed by the Board of Directors) (the "Committee")
to provide for awards to employees of the Company and its Affiliates from time
to time, in its sole discretion, of stock options (including incentive
stock options qualifying under Section 422 of the Code and non-qualified stock
options which do not so qualify), stock appreciation rights (including
free-standing, tandem and limited stock appreciation rights) ("SARs"),
warrants, dividend equivalents, stock awards, restricted stock, phantom stock,
performance shares or other securities or rights that the Committee
determines to be consistent with the objectives and limitations of the
1996 Plan. All employees of the Company or any of its Affiliates are eligible
to participate in the 1996 Plan. For purposes of the 1996 Plan, "Affiliate"
shall mean any entity, as may from time to time be designated by the Committee,
that is a subsidiary corporation of the Company (within the meaning of Section
424 of the Code), and any other entity directly or indirectly controlling or
controlled by or under common control with the Company. For purposes of this
definition, "control" means the power to direct the management and policies
of such entity whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meaning correlative to the foregoing. The 1996 Plan will expire, unless
earlier terminated, on June 1, 2006.
An aggregate of 1,000,000 shares of Common Stock will be subject to the
1996 Plan. Shares of Common Stock subject to grants that terminate
unexercised will be available for future grants. The 1996 Plan establishes
100,000 shares as a maximum number of shares subject to awards of stock
options, warrants and SARs, both individually and in the aggregate, that
may be granted during any period of five consecutive calendar years to any
one individual. The 1996 Plan also establishes 100,000 shares of Common Stock
as the maximum number of shares subject to awards of stock, restricted stock,
phantom stock, performance shares or other forms of award conveying a
similar economic benefit (but excluding options, warrants and SARs) that
may be granted during any period of five consecutive calendar years to any
one individual and establishes 1,000,000 shares as the total number of
shares subject to such awards that may be awarded to all
participants during any period of five consecutive calendar years under the
1996 Plan, in each such case on an individual and aggregate basis with
respect to each type of award. On March 15, 1996, the last reported sales
price for the shares of Common Stock on the Nasdaq National Market System
was $9.
The exercise price of any stock option is determined by the Committee
at the time the option is awarded, but under the rules adopted with respect to
the 1996 Plan, the option price may not be less than 100% of the fair market
value of the Common Stock on the date the option is granted. The 1996 Plan
and the 1984 Plan provide that the Committee may, with the consent of the
affected participant, reprice options previously granted thereunder by amending
the terms of any stock option agreement evidencing such options to reestablish
the exercise price for shares remaining subject to such agreement at a price
not less than 100% of the fair market value of the Common Stock on the
effective date of the amendment. The 1996 Plan also provides, as did the
expired 1984 Plan, that the Committee may effectively reprice options
previously granted thereunder or under any other stock option, stock
incentive or incentive compensation plan of the Company by granting options
under the 1996 Plan in substitution for options previously granted.
Subject to limitations that may be imposed by the Committee under the
1996 Plan and the 1984 Plan, the option price payable upon exercise of options,
must be paid in cash or by the surrender, at the fair market value on the date
on which the option is exercised, of shares of Common Stock, or by any
combination of cash and such shares. The purchase price for shares
purchased upon exercise of non-qualified options may also be paid in any
other manner approved by the Committee, including, without limitation, by
delivery to the Company of (A) a cash amount of not less than the par value
of the Common Stock multiplied by the number of shares in respect of which
the option is being exercised, and (B) a binding, joint and several
obligation of the employee participant and a financial
institution or broker approved by the Committee to pay the balance of the
exercise price upon such terms and conditions as may be specified from time to
time by the Committee.
Unless otherwise approved by the Committee, an option may not be
exercised during the first twelve months after the date of grant. After such
twelve-month period, unless otherwise approved by the Committee, an option
may not become exercisable as to more than 20% of the shares granted in the
option, and after the expiration of each of the second, third, fourth and
fifth years from the date of grant, the option may not become exercisable as
to more than an additional 20% per year of such shares.
Subject to earlier termination, as provided below, options granted
under the 1996 Plan and the 1984 Plan expire ten years after the date on which
the option is granted, unless the Committee provides for a shorter or longer
period. Except as provided in the 1996 Plan, or as otherwise may be provided
by the Committee, no option may be exercised unless the holder is then an
employee of the Company or one of its Affiliates. Unless the Committee
otherwise provides, the option of any participant whose employment has
terminated for any reason expires on the earlier of (a) the expiration
date of the option or (b) the expiration of a specified period after
termination of employment as determined by the Committee, provided that
such period may not be less than: (i) twelve months if employment ceased
due to permanent and total disability, (ii) eighteen months if employment
ceased at a time when the optionee is eligible to elect immediate
commencement of retirement benefits under a pension plan to which the
Company or any of its Affiliates has made contributions, (iii) eighteen
months if the participant died while employed by the Company or any of
its Affiliates or (iv) three months if employment ceased for any other
reason, except termination for cause. In the event an employee is
terminated for cause, as determined by the Committee in its sole
discretion, then, subject to the terms of the applicable stock option
agreement, any unexercised options shall terminate immediately.
In addition, specific limitations will apply to incentive stock options for
maximum term and maximum period of exercise following termination of
employment in order to comply with Section 422 of the Code.
Awards under the 1996 Plan are not transferable except in certain
circumstances including (i) transfers by will or the laws of descent and
distribution or (ii) subject to the prior approval of the Committee,
transfers to members of a participant's immediate family, charitable
institutions, trusts whose beneficiaries are members of a participant's
immediate family and/or charitable institutions, or to such other persons
or entities approved by the Committee, in each case subject to the condition
that the Committee be satisfied that such transfer is being made for tax
and/or estate planning purposes on a gratuitous or donative basis and
without consideration (other than nominal consideration) being
received therefor.
Administration
The 1996 Plan will be administered by the Committee, which will be so
constituted as to permit the 1996 Plan to comply with the disinterested
administration requirements of Rule 16b-3 under the Exchange Act and the
"outside director" requirement of Section 162(m) of the Code.
Under the 1996 Plan, the Committee has authority to determine, within
the limits of the express provisions set forth therein, the individuals to whom
awards will be granted, the type, size and terms of such awards, the date of
grant, the terms of vesting and the dates of exercisability and payment of
awards. The Committee has the ability to amend awards previously granted and
to determine the objectives and conditions for earning such awards.
The Committee also has the power to terminate or amend the 1996 Plan and
the rules in whole or in part, but no such action may be taken which would
adversely affect any rights or obligations with respect to any awards that
have been made thereunder. In addition, no amendment may be made to the
1996 Plan which (i) increases the maximum number of shares of stock subject
to the plan or the maximum awards that may be granted during any period
of five consecutive calendar years to any individual or (ii)
extends the maximum period during which awards may be granted, without the
approval of holders of at least a majority of the shares of Common Stock
present, or represented, and entitled to vote at a meeting of shareholders.
Except as provided above, the 1996 Plan may be amended by the Committee
without further shareholder approval, and no guidelines have been established
relating to the nature of the amendments that may be made without shareholder
approval. Amendments made without shareholder approval could increase the
costs to the Company under the 1996 Plan, although the amount of such costs
is not determinable. The Committee will have the power to adopt rules for
all types of awards under each Plan and to amend the rules established under
either Plan as long as the amendments are within the limits of the Plan.
The rules described above for stock options and SARs (which are not intended
to govern warrants) may be amended by the Committee to the same extent and
subject to the same limitations as described above for the 1996 Plan.
Certain Federal Income Tax Considerations
A participant receiving a non-qualified stock option under the 1996
Plan does not recognize taxable income on the date of grant of the option.
however, the participant must generally recognize ordinary income when a
non-qualified stock option is exercised in the amount of the difference
between the option exercise price and the fair market value of the Common
Stock on the date of exercise. If a holder of a non-qualified stock option
pays the exercise price, in full or in part, with previously acquired shares
of Common Stock, the holder will recognize ordinary income in the amount
by which the fair market value of the Common Stock received exceeds the
exercise price. However, no capital gain or loss is recognized upon the
delivery of such previously acquired shares of Common Stock to the Company.
A participant who is granted an incentive stock option would not
recognize taxable income either on the date of grant or on the date of
its timely exercise, although the exercise of an incentive stock option
would be an item of tax preference income potentially subject to the
alternative minimum tax. Upon disposition of the Common Stock acquired
upon exercise of an incentive stock option, capital gain or loss would
be recognized in an amount equal to the difference between the sales price
and the option exercise price, provided the participant has not disposed
of the Common Stock within two years of the date of grant and within one
year from the date of exercise. When a participant exercises
an incentive stock option, the Company would not generally be entitled
to a tax deduction. However, if the participant disposes of stock acquired
through exercise of such an option before meeting the required holding
period, the participant must generally recognize ordinary income in the
amount of the difference between the option exercise price and the fair
market value of the Common Stock on the date of exercise, and the Company
would be entitled to a deduction equal to the amount of ordinary income
recognized by the participant. If the holder of an incentive stock option
pays the exercise price, in full or in part, with previously acquired shares
of Common Stock, no capital gain or loss is recognized upon the surrender
of such shares.
The Company will not be entitled to a tax deduction upon the grant of
an option under the 1996 Plan. However, when a participant exercises a
non-qualified stock option, the Company will generally recognize a tax
deduction in the amount of the difference between the option exercise
price and the fair market value of the Common Stock on the date of exercise.
The payment by the participant to the Company of the exercise price has no
tax consequences to the Company.
Notwithstanding any of the foregoing discussion with respect to the
deductibility of compensation under the 1996 Plan, Section 162(m) of the Code
generally would render non-deductible to the Company taxable compensation in
excess of $1,000,000 paid in any calendar year to certain executive officers of
the Company unless such excess compensation is considered "performance-based"
under Section 162(m). The applicable conditions for a performance-based
compensation plan include, among others, a requirement that the shareholders
approve the material terms of the plan. Stock options, SARs and warrants
that may be granted to executive officers as contemplated by the 1996 Plan
are intended to qualify for the exemption for performance-based compensation
under Section 162(m). Other types of awards are not intended to be so
qualified. In light of the ambiguities in Section 162(m) and uncertainties
regarding its ultimate interpretation and application, no assurances can
be given that compensation awarded under the 1996 Plan, intended to be
exempt under Section 162(m), paid to any covered executive officer will in
fact be deductible if it should, together with other non-exempt compensation
paid to such executive officer, exceed $1,000,000.
The Board of Directors recommends a vote "FOR" approval of the 1996 Stock
Incentive Plan.
SELECTION OF INDEPENDENT AUDITORS
(Proposal 3 on the Proxy Card)
The Board of Directors, upon the recommendation of the Audit Committee,
has selected, subject to ratification by the shareholders of the Company at the
Annual Meeting, the firm of Deloitte & Touche LLP as the independent auditors
for the Company to audit the Company's financial statements for its fiscal
year ending December 31, 1996. Deloitte & Touche LLP has served as the
independent auditors for the Company since December 11, 1992. Deloitte &
Touche LLP does not have any direct financial interest or any material
indirect financial interest in the Company. Assuming a quorum is present,
the affirmative vote by the holders of a majority of shares represented at
the Annual Meeting will be required to ratify the selection of Deloitte &
Touche LLP as the Company's independent auditors for the fiscal year ending
December 31, 1996. A representative of Deloitte & Touche LLP is expected
to be present at the Annual Meeting. Such representative will have the
opportunity to make a statement if he or she desires to do so, and will
be available to respond to appropriate questions.
During the two most recent fiscal years, the Company has not consulted
with Deloitte & Touche LLP regarding the subject matter of a disagreement or a
reportable event on the application of accounting principles to any specified
transaction or the type of audit opinion that might be rendered on the
Company's financial statements during the period from December 31, 1988
through December 31, 1995.
The Board of Directors recommends that the shareholders vote FOR ratification
of the selection of Deloitte & Touche LLP as the Company's independent
auditors.
SHAREHOLDERS' PROPOSALS FOR THE 1997 ANNUAL MEETING
A shareholder who desires to include a proposal in the proxy material
relating to the 1997 annual meeting of shareholders of the Company must submit
the same in writing, so as to be received at the principal executive office of
the Company (to the attention of the Secretary) on or before December 24,
1996, for such proposal to be considered for inclusion in the proxy statement
for such meeting. Such proposal also must meet the other requirements of
the Securities and Exchange Commission (the "SEC") relating to shareholder
proposals required to be included in the Company's proxy statement.
OTHER MATTERS
The Board of Directors does not know of any other business to be
presented for consideration at the Annual Meeting. If other matters properly
come before the Annual Meeting, the persons named in the accompanying form of
proxy intend to vote thereon in accordance with their best judgment.
The Company will furnish, without charge, to each person whose proxy
is being solicited, upon request, a copy of its Annual Report on Form 10-K for
the fiscal year ended December 31, 1995 as filed with the SEC, including the
financial statements, notes to the financial statements and the financial
schedules contained therein (the "1995 Form 10-K"). Copies of any exhibits
to the 1995 Form 10-K also will be furnished to any such shareholder upon the
payment of a reasonable duplicating charge. Requests for copies of any such
materials should be directed to Presidential Life Corporation (attention
Secretary), 69 Lydecker Street, Nyack, New York 10960.
By Order of the Board of Directors
Donna Monacelli,
Secretary
April 24, 1996
[FORM OF PROXY CARD]
PRESIDENTIAL LIFE CORPORATION
69 LYDECKER STREET
NYACK, NEW YORK 10960
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
OF PRESIDENTIAL LIFE CORPORATION.
The undersigned hereby appoints Jules Kroll, Herbert Kurz and Lawrence
Rivkin, and each of them, with full power of substitution, the proxy or proxies
of the undersigned to vote all shares of Common Stock of Presidential Life
Corporation (the "Company") which the undersigned is entitled to vote at the
Annual Meeting of Shareholders of the Company to be held at the offices of
Presidential Life Insurance Company, 69 Lydecker Street, Nyack, New York 10960,
at 9:30 a.m., local time, on Wednesday, May 29, 1996, or at any postponement,
adjournment or adjournments thereof (the "Annual Meeting"), with the same force
and effect as the undersigned might or could do if personally present.
This proxy card, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. IF NO DIRECTION IS GIVEN, THIS
PROXY CARD WILL BE VOTED FOR ALL OF THE NOMINEES LISTED IN PROPOSAL 1 AND FOR
PROPOSALS 2 AND 3 AND WILL GRANT THE PROXYHOLDERS DISCRETIONARY AUTHORITY TO
VOTE UPON SUCH OTHER BUSINESS AS PROPERLY MAY COME BEFORE THE ANNUAL MEETING.
COMPANY PROPOSAL NUMBER 1: TO ELECT THE FOLLOWING NOMINEES TO THE
BOARD OF DIRECTORS, EACH FOR A TERM OF ONE
YEAR AND UNTIL THEIR RESPECTIVE SUCCESSORS
ARE DULY ELECTED AND QUALIFIED:
Peter A. Cohen, Jules Kroll, Herbert Kurz, Lawrence
Rivkin, and Morton B. Silberman
FOR all nominees AGAINST all nominees FOR all nominees except
the following nominee(s)
_____________________
COMPANY PROPOSAL NUMBER 2: TO ADOPT THE 1996 STOCK INCENTIVE PLAN:
FOR AGAINST ABSTAIN
COMPANY PROPOSAL NUMBER 3: TO RATIFY THE BOARD OF DIRECTORS' SELECTION OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
1996:
FOR AGAINST ABSTAIN
IN THEIR DISCRETION, THE PROXYHOLDERS ARE AUTHORIZED TO VOTE UPON SUCH
OTHER BUSINESS AS PROPERLY MAY COME BEFORE THE ANNUAL MEETING.
(OVER )
The undersigned hereby acknowledges prior receipt of a copy of the
Notice of Annual Meeting of Shareholders and Proxy Statement, each dated
April 24, 1996, and the Annual Report to Shareholders for the fiscal year
ended December 31, 1995, and hereby revokes any proxy or proxies heretofore
given. This proxy card may be revoked at any time before it is voted by
delivering to the Secretary of the Company either a written revocation of
proxy or a duly executed proxy bearing a later date, or by appearing at the
Annual Meeting and voting in person.
Date: ___________________, 1996
_____________________________
_____________________________
Signature of Shareholder or Authorized
Representative
Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized signatory.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND RETURN ALL
CARDS IN THE ACCOMPANYING ENVELOPE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE NOMINEES LISTED IN
PROPOSAL NUMBER 1 AND FOR PROPOSAL NUMBERS 2 AND 3.
Appendix A
PRESIDENTIAL LIFE CORPORATION
1996 STOCK INCENTIVE PLAN
1. Purposes.
The purpose of the 1996 Stock Incentive Plan (the "Plan") is to (i) provide
long-term incentives and rewards to employees of Presidential Life Corporation
("Presidential") and its Subsidiaries; (ii) assist Presidential in attracting
and retaining employees with experience and/or ability on a basis competitive
with industry practices; and (iii) associate the interests of such employees
with those of Presidential's stockholders.
2. Effective Date.
The Plan is effective as of the date it is adopted by the Board of Directors
of Presidential, subject to the approval of the Plan by the holders of at least
a majority of the outstanding shares of Presidential common stock present, or
represented, and entitled to vote at the 1996 Annual Meeting of Stockholders.
Awards may be made under the Plan on and after its effective date subject to
stockholder approval of the Plan as provided above. In the event such approval
of the stockholders is not obtained, all awards granted under the Plan shall be
null and void.
3. Administration of the Plan.
The Plan shall be administered by the Compensation Committee of the Board of
Directors of Presidential, or such other committee of the Board as may be
directed by the Board (any such committee shall hereinafter be referred to as
the "Committee"), and the Committee shall be so constituted as to permit the
Plan to comply with the disinterested administration requirements under
Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the "outside director" requirement of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"). Members of the
Committee shall serve at the pleasure of the Board of Directors of Presidential.
The Committee shall have all the powers vested in it by the terms of the
Plan, such powers to include exclusive authority (within the limitations
described herein) to select the employees to be granted awards under the
Plan, to determine the type, size and terms of awards to be made to each
employee selected, to determine the time when awards will be granted, when
they will vest, when they may be exercised and when they will be paid, to
amend awards previously granted and to establish objectives and conditions,
if any, for earning awards and whether awards will be paid after the end
of the award period. The Committee shall have full power and authority
to administer and interpret the Plan and to adopt such rules, regulations,
agreements, guidelines and instruments for the administration of the Plan
and for the conduct of its business as the Committee deems necessary or
advisable and to interpret same. The Committee's interpretation of the
Plan, and all actions taken and determinations made by the Committee
pursuant to the powers vested in it hereunder, shall be conclusive and
binding on all parties concerned, including Presidential, stockholders,
any participants in the Plan and any other employee of Presidential.
All employees of Presidential and all employees of Affiliates shall be
eligible to participate in the Plan. The Committee, in its sole discretion,
shall from time to time designate from among the eligible employees those
individuals who are to receive awards under and thereby become participants
in the Plan. For purposes of the Plan, "Affiliate" shall mean any entity,
as may from time to time be designated by the Committee, that is a
subsidiary corporation of Presidential (within the meaning of Section 424 of
the Code), and each other entity directly or indirectly controlling or
controlled by or under common control with Presidential. For purposes of
this definition, "control" means the power to direct the management and
policies of such entity, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meaning correlative to the foregoing.
4. Awards.
(a) Types. Awards under the Plan shall be made with reference to shares of
Presidential common stock and may include, but need not be limited to, stock
options (including nonqualified stock options and incentive stock options
qualifying under Section 422 of the Code), stock appreciation rights (including
free-standing, tandem and limited stock appreciation rights), warrants,
dividend equivalents, stock awards, restricted stock, phantom stock,
performance shares or other securities or rights that the Committee
determines to be consistent with the objectives and limitations of the
Plan. The Committee may provide for the issuance of shares of Presidential
common stock as a stock award for no consideration other than services
rendered or, to the extent permitted by applicable state law, to be
rendered. In the event of an award under which shares of Presidential
common stock are or may in the future be issued for any other type of
consideration, the amount of such consideration shall (i) be equal to
or greater than the amount (such as the par value of such shares) required
to be received by Presidential in order to assure compliance with
applicable state law and (ii) to the extent necessary to comply with
Rule 16b-3 of the Exchange Act, be equal to or greater than 50% of the fair
market value of such shares on the date of grant of such award. The
Committee may make any other type of award which it shall determine is
consistent with the objectives and limitations of the Plan.
(b) Performance Goals. The Committee may, but need not, establish
performance goals to be achieved within such performance periods as may
be selected by it in its sole discretion, using such measures of the
performance of Presidential and/or its Affiliates as it may select.
(c) Rules and Policies. The Committee may adopt from time to time written
rules and policies implementing the Plan. Such rules and policies may include,
but need not be limited to, the type, size and term of awards to be made to
participants and the conditions for the exercise or payment of such awards.
(d) Maximum Awards. An employee may be granted multiple awards under the
Plan. The maximum number of shares of Presidential common stock subject to
awards of stock options, warrants and stock appreciation rights under the
Plan, both individually and in the aggregate with respect to each such type
of award, that may be granted during any period of five consecutive calendar
years to any one individual shall be limited to 100,000. To the extent
required by Section 162(m) of the Code, awards subject to the foregoing
limit that are cancelled or repriced shall not again be available for award
under this limit. With respect to awards of stock, restricted stock, phantom
stock, performance shares or other forms of award conveying a similar
economic benefit (but excluding options, warrants and stock appreciation
rights), the maximum number of shares of Presidential common stock that may
be awarded during any period of five consecutive calendar years to any one
individual shall be 100,000 and the maximum number of shares that may be
awarded to all participants under the Plan shall be 1,000,000, in each such
case on an individual and aggregate basis with respect to each of such types
of award.
5. Shares of Stock Subject to the Plan.
The shares that may be delivered or purchased or used for reference purposes
under the Plan shall not exceed an aggregate of 1,000,000 shares of
Presidential common stock. Any shares subject to an award which for any
reason expires or is terminated unexercised as to such shares shall again
be available for issuance under the Plan.
6. Payment of Awards.
The Committee shall determine the extent to which awards shall be payable in
cash, shares of Presidential common stock or any combination thereof. The
Committee may determine that all or a portion of a payment to a participant
under the Plan, whether it is to be made in cash, shares of Presidential
common stock or a combination thereof shall be deferred. Deferrals shall be
for such periods and upon such terms as the Committee may determine in its
sole discretion.
7. Vesting.
The Committee may determine that all or a portion of a payment to a
participant under the Plan, whether it is to be made in cash, shares of
Presidential common stock or a combination thereof, shall be vested at such
times and upon such terms as may be selected by it in its sole discretion.
8. Dilution and Other Adjustment.
In the event of any change in the outstanding shares of Presidential common
stock by reason of any split, stock dividend, recapitalization, merger,
consolidation, spin-off, reorganization, combination or exchange of shares or
other similar corporate change, such equitable adjustments shall be made in the
Plan and the awards thereunder as the Committee determines are necessary or
appropriate, including, if necessary, any adjustments in the number, kind or
character of shares that may be subject to existing or future awards under the
Plan (including by substitution of shares of another corporation including,
without limitation, any successor of Presidential), adjustments in the
exercise, purchase or base price of an outstanding award and any adjustments
in the maximum numbers of shares referred to in Section 4 or Section 5 of
the Plan. All such adjustments shall be conclusive and binding for all
purposes of the Plan.
9. Miscellaneous Provisions.
(a) Rights as Stockholder. A participant under the Plan shall have no
rights as a holder of Presidential common stock with respect to awards
hereunder, unless and until certificates for shares of such stock are
issued to the participant.
(b) Assignment to Transfer. No award under this Plan shall be transferrable
by the participant or shall be subject to any manner to alienation, sale,
transfer, assignment, pledge, encumbrance or charge (other than by or to
Presidential), except (i) by will or the laws of descent and distribution (with
all references herein to the rights or duties of holders or participants to be
deemed to include such beneficiaries or legal representatives of the holder or
participant unless the context otherwise expressly requires); (ii) subject to
the prior approval of the Committee, for transfers to members of the
participant's immediate family, charitable institutions, trusts whose
beneficiaries are members of the participant's immediate family and/or
charitable institutions, or to such other persons or entities as may be
approved by the Committee, in each case subject to the condition that the
Committee be satisfied that such transfer is being made for estate and/or
tax planning purposes on a gratuitous or donative basis and without
consideration (other than nominal consideration) being received
therefor. Except as provided above, during the lifetime of a participant,
awards hereunder are exercisable only by, and payable only to, the participant.
Notwithstanding anything to the contrary contained herein, until the expiration
of the phase-in period under current Rule 16b-3 under the Exchange Act (as
generally effective May 1, 1991, and amendments thereto), any derivative
security the grant of which is intended to be exempt from Section 16(b) under
the Exchange Act shall not be transferable or exercisable other than as
permitted by former Rule 16b-3(d)(1)(ii) under the Exchange Act.
(c) Agreements. All awards granted under the Plan shall be evidenced by
agreements in such form and containing such terms and conditions (not
inconsistent with the Plan) as the Committee shall adopt.
(d) Compliance with Legal Regulations. During the term of the Plan and the
term of any awards granted under the Plan, Presidential will at all times
reserve and keep available such number of shares as may be issuable under the
Plan, and will seek to obtain from any regulatory body having jurisdiction,
any requisite authority required in the opinion of counsel for Presidential
in order to grant shares of Presidential common stock, or options to purchase
such stock or other awards hereunder, and transfer, issue or sell such number
of shares of common stock as shall be sufficient to satisfy the requirements
of any options or other awards. If in the opinion of counsel for Presidential
the transfer, issue or sale of any shares of its stock under the Plan shall
not be lawful for any reason including the inability of Presidential to
obtain from any regulatory body having jurisdiction authority deemed by such
counsel to be necessary to such transfer, issuance or sale, Presidential
shall not be obligated to transfer, issue or sell any such shares. In any
event, Presidential shall not be obligated to transfer,
issue or sell any shares to any participant unless a registration statement
which complies with the provisions of the Securities Act of 1933, as amended
(the "Securities Act"), is in effect at the time with respect to such shares
or other appropriate action has been taken under and pursuant to the terms
and provisions of the Securities Act and any other applicable securities laws,
or Presidential receives evidence satisfactory to the Committee that the
transfer, issuance or sale of such shares, in the absence of an effective
registration statement or other appropriate action, would not constitute a
violation of the terms and provisions of the Securities Act. Presidential's
obligation to issue shares upon the exercise of any award granted under the
Plan shall in any case be subject to Presidential being satisfied that the
shares purchased are being purchased for investment and not with a view to
the distribution thereof, if at the time of such
exercise a resale of such shares would otherwise violate the Securities
Act in the absence of an effective registration statement relating to such
shares.
(e) Withholding Taxes. Presidential shall have the right to deduct from all
awards hereunder paid in cash any federal, state, local or foreign taxes
required by law to be withheld with respect to such awards and, with respect
to awards paid in stock, to require the payment (through withholding from
the participant's salary or otherwise) of any such taxes. The obligation
of Presidential to make delivery of awards in cash or Presidential common
stock shall be subject to currency or other restrictions imposed by
any government.
(f) No Rights to Award. No employee or other person shall have any right to
be granted an award under the Plan. Neither the Plan nor any action taken
hereunder shall be construed as giving any employee any right to be retained in
the employ of Presidential or any of its subsidiaries or shall interfere with
or restrict in any way the rights of Presidential or any of its
subsidiaries, which are hereby reserved, to discharge the employee at
any time for any reason whatsoever, with or without good cause.
(g) Costs and Expenses. The costs and expenses of administering the Plan
shall be borne by Presidential and not charged to any award nor to any employee
receiving an award.
(h) Funding of Plan. The Plan shall be unfunded. Presidential shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any award under the Plan.
10. Amendments and Termination.
(a) Amendments. The Committee may at any time terminate or from time to
time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any awards theretofore
made under the Plan.
Unless the holders of at least a majority of the outstanding shares of
Presidential common stock present, or represented, and entitled to vote at a
meeting of stockholders shall have first approved thereof, no amendment of the
Plan shall be effective which would (i) increase the maximum number of shares
referred to in Section 5 of the Plan or the maximum awards that may be granted
pursuant to Section 4(d) of the Plan to any one individual or (ii) extend the
maximum period during which awards may be granted under the Plan. For purposes
of this section 10 (a), any (A) cancellation and reissuance or (B) repricing of
any awards made under the Plan at a new option price shall not constitute an
amendment of this Plan.
With consent of the employee adversely affected, the Committee may amend
outstanding agreements evidencing awards under the Plan in a manner not
inconsistent with the terms of the Plan.
(b) Termination. Unless the Plan shall theretofore have been terminated as
above provided, the Plan (but not the awards theretofore granted under the
Plan) shall terminate on and no awards shall be granted after June 1, 2006.
11. Governing Law.
The validity and construction of the Plan and any agreements entered into
thereunder shall be governed by the laws of the State of Delaware.
