SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of
1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2) )
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
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):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
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 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 28, 1997
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 28, 1997, 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 ratify the Board of
Directors' selection of Deloitte & Touche LLP as independent
auditors for the Company for the fiscal year ending December
31, 1997; and
3. 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 16, 1997 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 23, 1997.
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 23, 1997
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 28, 1997, 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 16, 1997 as the record date
(the "Record Date") for determining those shareholders entitled to notice of,
and to vote at, the Annual Meeting. On April 16, 1997 there were 32,718,835
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, 1996 (the "Annual Report") will first be mailed or
delivered to shareholders commencing on or about April 23, 1997.
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; and (ii) 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,
1997; 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; and
(ii) 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, 1997.
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 14, 1997 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> 8,161,174 24.9%
Heartland Advisors, Inc.<F8> 2,378,500 7.2%
Franklin Resources, Inc.<F9> 1,688,966 5.1%
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> 8,161,174 24.9%
Lawrence Rivkin<F7> 90,080 <F6>
Morton B. Silberman 31,200 <F6>
Shirley P. Jordan 69,679 <F6>
Michael V. Oporto 12,262 <F6>
All Directors (including nominees)
and Executive Officers as a group
(seven persons)<F4><F5><F7> 8,944,594 27.2%
<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 110,664 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 12, 1997. This schedule
indicates that as of February 12, 1997, Heartland owned 2,244,500 of
such shares with sole voting power and 2,378,500 with sole dispositive
power.
<F9> The address for Franklin Resources, Inc. ("Franklin") is 777 Mariners
Island Boulevard, San Mateo, California 94404. Information as to
holdings of Franklin is based upon the Schedule 13G filed with the
Securities and Exchange Commission on February 12, 1997. This schedule
indicates that as of February 12, 1997, Franklin owned 1,688,966 of
such shares with sole voting power and 1,688,966 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 77 Director and President of the
Company and Chairman of the Board
of Directors and President of
the Insurance Company
Shirley P. Jordan 62 Executive Vice President and Chief
Investment Officer of the
Insurance Company
Michael V. Oporto 37 Chief Financial Officer and
Treasurer of the Insurance Company
Peter A. Cohen<F1> 50 Director
Jules Kroll<F1> 56 Director
Lawrence Rivkin<F1> 75 Director
Morton B. Silberman 74 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, 1996, there were eight meetings
of the Board of Directors. During the fiscal year ended December 31, 1996,
each director attended at least 75% of the meetings of the Board of Directors
held during the period that he served as a director.
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, 1996, there was one meeting of the Audit Committee.
Compensation Committee. The Compensation Committee was created in May
1996 with responsibility for reviewing and advising the Board with respect to
executive compensation affecting corporate officers subject to Section 162(m)
of the Internal Revenue Code and such other executives as the Company's
management may deem appropriate. The Committee also has responsibility for
administration of the 1996 Stock Incentive Plan and will in the future
establish and administer compensation intended as performance-based
compensation under the Code and fix all salaries, grant all stock options
and approve all employment agreements for executives who are, or are
expected to become, subject to Section 162(m). The Committee, which
consists of Messrs. Silberman (Chairman), Cohen and Rivkin held no meetings
in fiscal 1996. The functions of the Committee were performed in fiscal
1996 by the Board, acting as a whole, with Herbert Kurz abstaining from
discussions and votes on any matters affecting his own compensation. See
"Compensation Committee Interlocks and Insider Participation" on page 12.
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 1994 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. Since 1972 he was President and Chief Executive
Officer of Kroll Associates, Inc. He is also a member of the Board of
Directors of United Auto Group, Inc., a company engaged in acquiring,
consolidating and operating franchised automobile and light truck dealerships.
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, 1996,
1995, and 1994, approximately 0%, 11.5%, and 13.0%, respectively, of the
Company's total insurance revenues were attributable to sales through Pensions
for Business, Inc. For the fiscal years ended December 31, 1996, 1995, and
1994, aggregate commissions and other remuneration to Pensions for Business,
Inc. were approximately $32,283, $181,011, and $289,305, 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, 1994, 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
$300,000, $500,000 and $100,000 during the fiscal years ended December 31,
1996, 1995 and 1994, respectively. Jacques Sartisky, formerly a director
of the Company, purchased an annuity contract for approximately $25,000
during the year ended December 31, 1994. Mr. Sartisky did not purchase any
annuity contracts during the year ended December 31, 1995.
Investments
During 1996, the Insurance Company invested $2,000,000 as a limited
partner in Ramius Halifax Partners, L.P. a partnership in which Peter Cohen, a
director of the Company, is a principal. Management believes that this
investment was made on the same terms available to all investors and similar
terms that could be obtained from unaffiliated partnerships.
COMPENSATION OF DIRECTORS AND
EXECUTIVE OFFICERS
Director Compensation
Directors of the Company 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 $500 for each meeting of a Committee
of the Board of Directors attended. In addition, Directors were reimbursed
for any of their travel expenses to and from such meetings.
Executive Compensation
The following table sets forth, for the Company's last three fiscal years,
the annual and long-term compensation of those persons who were, at December
31, 1996, (i) the President (who is the individual acting in the capacity as
the Company's chief executive officer) and (ii) the other two most highly
compensated executive officers of the Company (the "Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
Long Term
Annual Compensation Compensation
Name and
Principal Fiscal All Other
Position Year Salary($) Bonus($) Options(#) Compensation<F1>
<S> <C> <C> <C> <C> <C>
Herbert Kurz 1996 $533,806 $1,070 -0- $79,366
President 1995 525,300 1,053 -0- 73,647
1994 525,300 2,010 -0- 60,154
Shirley P. Jordan 1996 288,500 1,070 8,000 23,465
Executive Vice 1995 278,418 1,053 57,667 1,933
President of 1994 272,650 2,010 57,667 1,834
the Insurance
Company
Michael V. Oporto 1996 145,000 1,070 12,500 20,673
Treasurer of the 1995 136,615 1,053 5,000 955
Insurance Company 1994 132,000 -0- 5,000 887
<FN>
<F1> All Other Compensation represents: (a) the Company's payment of
premiums with respect to term life insurance policies for the
Executive Officers, plus (b) with respect to Mr. Kurz, directors fees
of $9,500 in 1996 and $9,500 in 1995, (c) with respect to Ms. Jordan
and Mr. Oporto, 2,000 shares and 1,887 shares, respectively, issued
by the Company on May 29, 1996 as other compensation, and (d)
matching contributions by the Company under the Employee Savings
Plan, which permits salaried employees to make tax-deferred
contributions of a portion of their base compensation pursuant to
Section 401(k) of the Internal Revenue Code, of $1,500 for each of
Mr. Kurz and Ms. Jordan and $1,377 for Mr. Oporto during fiscal 1996.
</FN>
</TABLE>
<TABLE>
OPTION TABLES
Options/SAR Grants in Last Fiscal Year
The following table sets forth certain information concerning options/SARs
granted during 1996 to the named executives:
Individual Grants
Potential
Realizable
Value at
Assumed
% of Total Annual Rates
Number of Options/SARs of Stock Price
Securities Granted to Appreciation
Underlying Employees Exercise or Expir- for Option
Options/SARs in Fiscal Base Price ation Term
Name Granted Year ($/Share) Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Herbert Kurz 0 0.00% 0.00 0 0 0
Shirley P. Jordan 8,000 18.02% 9.6875 5/29/2001 $21,411 $47,314
Michael V. Oporto 7,500 16.89% 9.6875 5/29/2001 20,074 44,357
_________________
</TABLE>
<TABLE>
Aggregated Options/SAR Exercised in Last Fiscal Year and Fiscal Year-End
Options/SAR Values
The following table summarizes options and SARs exercised during 1996 and
presents the value of unexercised options and SARs held by the named executives
at fiscal year-end:
Number of
Securities
Underlying In-the Money
Unexercised Options/SARs
Options/SARs at Fiscal
Shares At Fiscal Year-End ($)
Acquired Value Year-End (#) Exercisable (E)
on Exercise Realized Exercisable (E)/ Unexercisable
Name (#) ($) Unexercisable (U) (U) <F1>
<S> <C> <C> <C> <C>
Herbert Kurz 0 0 0 0
Shirley P. Jordan 57,667 353,210 0 (E) 0 (E)
Shirley P. Jordan 0 0 8,000 (U) 19,000 (U)
Michael V. Oporto 0 0 3,750 (E) 18,047 (E)
Michael V. Oporto 0 0 8,750 (U) 23,828 (U)
_________________
<FN>
<F1> Represents the difference between the exercise price of the options and
$12.0625 which represents the closing price of the Company's Common
Stock on December 31, 1996.
</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, 1997 are 10 and 3, 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 during
fiscal 1996 were made by the entire Board of Directors. Commencing in fiscal
1997 decisions with respect to compensation of the Executive Officers who
are, or are expected to become, subject to Section 162(m) of the Internal
Revenue Code will be made by the Compensation Committee of the Board of
Directors. Commencing in fiscal 1997, decisions with respect to the granting
of awards pursuant to the 1996 Stock Incentive Plan will be made by the
Compensation Committee.
Set forth below is a report of the Board of Directors which addresses
the Company's compensation policies for fiscal 1996 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 who
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 Company believes 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 or, in the case of Executive
Officers who are or may become subject to Section 162(m) of the Internal
Revenue Code, the Compensation Committee of the Board of Directors, reviews
on an annual basis the salaries of its executive officers in light of the
foregoing factors. In fiscal 1996, 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. The size of individual stock and stock option grants
is related to the level of responsibility of the individual executive and the
quality of an individual executive's contribution to the Company's performance.
During fiscal 1996, the Company granted stock-based incentive compensation
based on the foregoing factors. 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 1996, 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. In fiscal 1996, a salary increase
was granted to Mr. Kurz based on the factors discussed at the beginning of this
report.
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 1996 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 1996 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 and votes
regarding his own compensation and individual stock and stock option grants to
employees of the Company.
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, 1991 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-12/31/91 $100 $100 $100
FYE 12/31/92 158.36 107.62 134.18
FYE 12/31/93 207.85 118.47 135.92
FYE 12/31/94 124.81 120.03 112.74
FYE 12/31/95 237.48 165.14 161.89
FYE 12/31/96 293.97 203.05 197.80
</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 (5) and not more than nineteen (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 both to
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.
SELECTION OF INDEPENDENT AUDITORS
(Proposal 2 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, 1997. 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, 1997. 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, 1996.
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 1998 ANNUAL MEETING
A shareholder who desires to include a proposal in the proxy material
relating to the 1998 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,
1997, 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, 1996 as filed with the SEC, including
the financial statements, notes to the financial statements and the financial
schedules contained therein (the "1996 Form 10-K"). Copies of any exhibits to
the 1996 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 23, 1997
[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 28, 1997, 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
PROPOSAL 2 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 RATIFY THE BOARD OF DIRECTORS' SELECTION OF
DELOITTE & TOUCHE LLP AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE FISCAL YEAR ENDING DECEMBER 31,
1997:
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 23, 1997, and the Annual Report to Shareholders for the fiscal year
ended December 31, 1996, 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: ___________________, 1997
_____________________________
_____________________________
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 NUMBER 2.
