SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-11(c) or
Rule 14a-12
Life Re Corporation
_______________________________________________________________
(Name of Registrant as Specified in its Charter)
______________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction
applies:
___________________________________________________________
2) Aggregate number of securities to which transaction
applies:
___________________________________________________________
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:/1
___________________________________________________________
4) Proposed maximum aggregate value of transaction:
___________________________________________________________
5) Total fee paid:
___________________________________________________________
Fee paid previously with preliminary materials.
___________________________________________________________
Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
1) Amount Previously Paid:
___________________________________________________________
2) Form, Schedule or Registration Statement No.:
___________________________________________________________
3) Filing Party:
___________________________________________________________
4) Date Filed:
___________________________________________________________
_______________
1/Set forth the amount on which the filing fee is calculated and state
how it was determined.
March 28, 1997
Notice of Annual Meeting of Stockholders
To the Stockholders of
LIFE RE CORPORATION
Life Re Corporation's Annual Meeting of Stockholders will be held on
May 15, 1997, at 9:30 a.m., at the Hyatt Regency Greenwich, 1800 East
Putnam Avenue, Old Greenwich, Connecticut 06870 for the following purposes:
(1) To elect the nominees shown in the Proxy Statement as directors
to serve for three year terms or until their successors have
been duly elected and qualified.
(2) To ratify the appointment of Ernst & Young LLP as Life Re
Corporation's independent auditors for the year 1997.
(3) To transact such other business as may properly come before the
meeting.
These matters are more fully discussed in the accompanying Proxy
Statement.
It is important that your shares be voted at this meeting. Please
mark and sign the proxy card and return it promptly in the enclosed
envelope. If you attend the meeting, you may withdraw your proxy and vote
your stock in person.
Only stockholders of record at the close of business on March 19,
1997 are entitled to vote in person or by proxy at the Annual Meeting of
Stockholders or any adjournment of the meeting.
By Order of the Board of Directors
/s/ W. WELDON WILSON,
Vice President, General Counsel
and Secretary
Life Re Corporation
969 High Ridge Road
Stamford, CT 06905
_______________
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS ON MAY 15, 1997
_______________
The Annual Meeting of the Stockholders of Life Re Corporation
(the "Company") will be held at the Hyatt Regency Greenwich, 1800 East
Putnam Avenue, Old Greenwich, Connecticut 06870, at 9:30 a.m. on
May 15, 1997. This Proxy Statement is being sent to each holder of the
issued and outstanding shares of common stock ("Common Shares") of the
Company entitled to vote at the meeting in order to furnish information
relating to the business to be transacted at the Annual Meeting. The
Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1996, including financial statements, is being mailed to
stockholders, together with this Proxy Statement, beginning on or about
March 28, 1997. No part of such Annual Report shall be regarded as
proxy-soliciting material or as a communication by means of which any
solicitation is made.
We hope you will be present at the Annual Meeting. If you cannot
attend, please complete, sign and return the enclosed proxy in the
accompanying envelope so that your Common Shares will be represented.
The envelope is addressed to the Company's transfer agent and requires
no postage. You may revoke your proxy at any time before it is voted
at the meeting by delivering written notice of revocation to the
Secretary of the Company, by executing a later dated proxy or by
attending the Annual Meeting and voting in person. Each proxy duly
executed and received prior to the Annual Meeting will be voted
according to its terms. Stockholders who receive more than one proxy
card -- due to the existence of multiple accounts -- should sign and
return all proxies received in order to be sure all Common Shares so
owned are in fact voted.
If no direction as to the manner of voting the proxy is made, the
proxy will be voted FOR each of the proposals shown on the cover page
of this Proxy Statement.
The Company will bear the cost of the preparation and
solicitation of proxies, including the reasonable charges and expenses
of brokerage firms or other nominees for forwarding proxy materials to
beneficial owners of Common Shares. In addition to solicitation by
mail, proxies may be solicited by telephone, telegraph, or personally,
by certain officers and regular employees of the Company and its
subsidiaries without extra compensation. The Company has retained
Georgeson & Company Inc., 100 Wall Street, New York, New York to aid in
the solicitation of proxies for a fee estimated at $5,500. The
enclosed proxy is solicited by and on behalf of the Board of Directors
of the Company.
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
At the close of business on March 19, 1997, the record date fixed
for determination of stockholders entitled to vote at the Annual
Meeting, there were 13,558,666 Common Shares outstanding, each entitled
to one vote.
The following table sets forth, as of February 10, 1997 (except
as otherwise indicated), the number of and percentage of outstanding
Common Shares beneficially owned by each person or entity known by the
Company to be a beneficial owner of 5% or more of the Company's voting
securities. Except as otherwise indicated, each person or entity
listed below has sole voting and dispositive power with respect to such
stockholder's Common Shares:
Name and Address of Beneficial Owner Number of Percent of
Common Shares Class (1)
Brandywine Asset Management, Inc. 1,163,860(2) 8.6%
Three Christina Centre
201 North Walnut Street, Suite 1200
Wilmington, DE 19801
The Equitable Companies Incorporated 2,446,000(3) 18.1%
787 Seventh Avenue
New York, NY 10019
Neuberger & Berman L.P. 717,800(4) 5.3%
605 Third Avenue
New York, NY 10158-3968
Rodney A. Hawes, Jr. 1,092,600(5) 7.9%
Life Re Corporation
969 High Ridge Road
Stamford, CT 06905
Douglas M. Schair 1,079,000(5)(6) 7.8%
Life Re Corporation
969 High Ridge Road
Stamford, CT 06905
Jacques E. Dubois 1,092,500(5) 7.9%
Life Re Corporation
969 High Ridge Road
Stamford, CT 06905
(1) Based on the number of Common Shares outstanding on February 10,
1997. Beneficial ownership is determined in accordance with rules
of the Securities and Exchange Commission and includes shares over
which the indicated beneficial owner exercises voting and/or
investment power. Shares of Common Stock subject to options
currently exercisable or exercisable within sixty days of February
10, 1997 are deemed outstanding for purposes of computing the
percentage ownership of the person holding the options but not
deemed outstanding for purposes of computing the percentage
ownership of any other person.
(2) Based on a Schedule 13G dated February 22, 1996. Brandywine Asset
Management, Inc. has sole voting and dispositive power over
1,102,650 Common Shares and beneficially owns, in the aggregate,
1,163,860 Common Shares.
(3) Based on Amendment Number 4 dated February 12, 1997 to a Schedule
13G filed by The Equitable Companies Incorporated jointly with
five French mutual insurance companies: AXA Assurances I.A.R.D.
Mutuelle; AXA Assurances Vie Mutuelle; Alpha Assurances I.A.R.D.
Mutuelle; Alpha Assurances Vie Mutuelle; AXA Courtage Assurance
Mutuelle, as a group, and AXA and their subsidiaries. Alliance
Capital Management L.P. has sole voting power over 1,582,000
Common Shares, shared voting power over 49,000 Common Shares and
sole dispositive power over 1,675,500 Common Shares. The
Equitable Life Assurance Society of the United States has sole
voting power and dispositive power over 770,500 Common Shares.
(4) Based on Amendment Number 1 dated February 10, 1997 to a Schedule
13G filed by Neuberger & Berman L.P. Neuberger & Berman L.P. has
sole voting power over 79,400 Common Shares and shared dispositive
power over 717,800 Common Shares.
(5) Common Shares held by Messrs. Hawes, Schair and Dubois include
vested options to acquire (i) 100,000 Common Shares each at $22 per
share, (ii) 37,500 Common Shares each at $20.125 per share, (iii)
25,000 Common Shares each at $19.625, and (iv) 25,000 Common
Shares each at $25, all of which may be purchased within sixty
days of February 10, 1997. Common Shares held by Messrs. Hawes,
Schair and Dubois exclude an aggregate 175,710 Common Shares that
are subject to an irrevocable proxy in favor of Messrs. Hawes,
Schair and Dubois that were sold to employees and former employees
of Life Reassurance Corporation of America. At December 31, 1997,
all 175,710 Common Shares will be subject to a revocable proxy only.
If the Common Shares subject to the proxy were included,
Messrs. Hawes, Schair and Dubois would own beneficially 1,268,310,
1,254,710, and 1,268,210 Common Shares, respectively,
representing 9.2%, 9.1% and 9.2% of the Common Shares, respectively.
These individuals are directors and executive officers of the Company.
(6) Includes 14,500 Common Shares owned by a non-profit organization
qualified under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, for which Mr. Schair shares voting and
investment power. Mr. Schair expressly disclaims beneficial
ownership of all shares owned by the non-profit organization.
The following table sets forth as of February 10, 1997 the number and
percentage of outstanding Common Shares beneficially owned by each
director and named executive officer of the Company and by directors and
executive officers of the Company as a group. Except as otherwise
indicated, each person listed below has sole voting and dispositive
power with respect to such stockholder's Common Shares.
Percent of
Name Number of Common Shares Class(1)(2)
Rodney A. Hawes, Jr. 1,092,600(2)(3) 7.9%
Douglas M. Schair 1,079,000(2)(3)(4) 7.8%
Jacques E. Dubois 1,092,500(2)(3) 7.9%
Samuel V. Filoromo 137,750(2)(3)(5) 1.0%
Chris C. Stroup 1,000(3) *
W. Weldon Wilson 89,251(2)(3)(5) *
Carolyn K. McCandless 6,000(6) *
K. Fred Skousen 5,700(6) *
T. Bowring Woodbury, II 5,797(6) *
All Directors and Executive
Officers as a Group (9 persons) 3,509,598(3)(5)(6)(7) 24.6%
______________________________
* Represents less than 1% of the Common Shares.
(1) Based on the number of Common Shares outstanding on the record
date, February 10, 1997. Beneficial ownership is determined in
accordance with rules of the Securities and Exchange Commission
and includes shares over which the indicated beneficial owner
exercises voting and/or investment power. Shares of Common Stock
subject to options currently exercisable or exercisable within sixty
days of February 10, 1997 are deemed outstanding for purposes of
computing the percentage ownership of the person holding the
options but not deemed outstanding for purposes of computing the
percentage ownership of any other person.
(2) Common Shares held by Messrs. Hawes, Schair and Dubois include
vested options to acquire (i) 100,000 Common Shares each at $22
per share, (ii) 37,500 Common Shares each at $20.125 per share,
(iii) 25,000 Common Shares each at $19.625 per share and (iv)
25,000 Common Shares each at $25, all of which may be purchased
within sixty days of February 10, 1997. Common Shares held by
Messrs. Hawes, Schair and Dubois exclude an aggregate 175,710
Common Shares that are subject to an irrevocable proxy in favor of
Messrs. Hawes, Schair and Dubois that were sold to employees and
former employees of Life Reassurance Corporation of America.
At December 31, 1997, all 175,710 Common Shares will be subject to a
revocable proxy only. If the Common Shares subject to the proxy
were included, Messrs. Hawes, Schair and Dubois would own
beneficially 1,268,310 Common Shares, 1,254,710 Common Shares, and
1,268,210 Common Shares, respectively, representing 9.2%, 9.1% and
9.2% of the Common Shares, respectively. Common Shares held by
Mr. Filoromo include vested options to acquire (i) 44,000 Common
Shares at $22 per share, (ii) 15,000 Common Shares at $20.125 per
share, (iii) 12,500 Common Shares at $19.625 per share, and
(iv) 6,250 Common Shares at $25 per share, which may be purchased
within sixty days of February 10, 1997. Common Shares held by
Mr. Wilson include vested options to acquire (i) 32,000 Common Shares
at $22 per share, (ii) 15,000 Common Shares at $20.125, (iii) 10,000
Common Shares at $19.625 per share, and (iv) 6,250 Common Shares at
$25 per share, which may be purchased within sixty days of
February 10, 1997.
(3) Excludes unvested options to purchase an aggregate of 936,500
Common Shares granted to Messrs. Hawes, Schair, Dubois, Filoromo,
Stroup and Wilson.
(4) Includes 14,500 Common Shares owned by a non-profit organization
qualified under Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, for which Mr. Schair shares voting and
investment power. Mr. Schair expressly disclaims beneficial
ownership of all shares owned by the non-profit organization.
(5) 60,000 Common Shares held by Mr. Filoromo and 26,000 Common Shares
held by Mr. Wilson are subject to an irrevocable proxy, which
becomes a revocable proxy as of March 29, 1997 as to 80,000 Common
Shares and as of November 3, 1997 as to the remaining 6,000 Common
Shares, in favor of Messrs. Hawes, Schair and Dubois granted under
certain management stock purchase agreements. The amount of
Common Shares held by all directors and executive officers of the
Company as a group excludes an aggregate 175,710 Common Shares
subject to an irrevocable proxy in favor of Messrs. Hawes, Schair
and Dubois, which will become a revocable proxy by December 31,
1997.
(6) Includes vested options to acquire (i) 2,500 Common Shares each at
$31.50 per share, (ii) 1,000 Common Shares each at $20.125 per
share, (iii) 1,000 Common Shares each at $17.375 per share, and
(iv) 1,000 Common Shares each at $24.875, all of which may be
purchased within sixty days of February 10, 1997 and excludes
unvested options to purchase an additional 1,000 Common Shares
each granted to Ms. McCandless, Dr. Skousen and Mr. Woodbury.
(7) Includes vested options to purchase 720,000 Common Shares within
sixty days of February 10, 1997 by certain directors and executive
officers of the Company.
DIRECTORS AND EXECUTIVE OFFICERS
PROPOSAL ONE
ELECTION OF DIRECTORS
It is intended that the proxies will be voted for the election of
the two nominees named below as Directors to hold office until the
regular Annual Meeting of Stockholders in the year 2000 or until their
respective successors are duly elected and qualified. All of the
nominees presently are Directors of the Company. While management has
no reason to believe that either of the nominees will not be available
to serve as a Director, if for any reason either of them should become
unavailable, the proxies will be voted for such substitute nominee(s) as
may be designated by the Board of Directors. The Directors shall be
elected by the vote of the majority of votes present in person or
represented by proxy at the Annual Meeting. Votes withheld (including
shares as to which a broker indicates that it does not have
discretionary authority to vote, referred to as non-votes) will count
toward the establishment of a quorum, but will not have an effect on the
election of Directors or any other matters submitted herein to the
stockholders for approval.
Set forth on the following pages is biographical information
concerning each nominee for election as a Director, including as to each
nominee, the nominee's principal occupation and the period during which
the nominee has served as a Director of the Company. Ages shown are as
of December 31, 1996.
Nominees for Director
_________________________________________________________________
Jacques E. Dubois (47) Director since 1988
Mr. Dubois has served as President and Director of the Company
since November 1988 and Chief Operating Officer and in the Office of the
Chairman since May 1992. Mr. Dubois also serves as President and Chief
Executive Officer of Life Reassurance Corporation of America ("Life
Reassurance") and as Chief Executive Officer of Reassure America Life
Insurance Company ("REALIC"), which are indirect, wholly-owned
subsidiaries of the Company. In addition, Mr. Dubois has been
associated with Insurance Investment Associates ("IIA"), which provides
investment banking services to the insurance industry, since 1979.
_________________________________________________________________
K. Fred Skousen, Ph.D. (54) Director since 1992
Dr. Skousen has served as a Director of the Company since November
1992. Since 1989, Dr. Skousen has been the Dean of the Marriott School
of Management at Brigham Young University, Provo, Utah. From 1983 to
1989, Dr. Skousen held the Peat Marwick Mitchell Professorship and from
1974 to 1983 served as Director of the School of Accountancy at Brigham
Young University. Dr. Skousen is a certified public accountant. Dr.
Skousen also serves on the board of Geneva Steel Co.
_________________________________________________________________
The affirmative vote of persons holding at least a majority of the
total number of shares present in person or represented by proxy and
entitled to vote is required for the election of the listed nominees as
Directors. The Board of Directors recommends that stockholders vote FOR
the nominees. Proxies solicited by the Board of Directors will be so
voted unless stockholders specify in their proxies a contrary choice.
Directors Continuing in Office
_________________________________________________________________
Samuel V. Filoromo (52) Director since 1992
Mr. Filoromo has served as Vice President - Operations of the
Company since June 1996 and served as Vice President and Chief Financial
Officer of the Company from May 1992 to June 1996. Mr. Filoromo has
served as Executive Vice President - Operations of Life Reassurance
since August 1996, and as its Executive Vice President and Chief
Financial Officer from May 1992 to August 1996. He also has served as
Vice President - Operations of REALIC since August 1996 and served as
its Chief Financial Officer from July 1995 to August 1996. From January
1992 to May 1992, Mr. Filoromo was employed on a full-time basis as a
consultant for the Company. From May 1991 to January 1992, Mr. Filoromo
was an independent consultant. From November 1990 to May 1991, Mr.
Filoromo served as a Senior Vice President of Conseco, Inc. From 1986 to
February 1990, Mr. Filoromo served as Vice President - Finance and
Controller of Sun America Corporation.
_________________________________________________________________
Rodney A. Hawes, Jr. (58) Director since 1988
Mr. Hawes has served as Chairman of the Board and Chief Executive
Officer of the Company since November 1988 and in the Office of the
Chairman since May 1992. He also has served as Chairman of the
Executive Committees of Life Reassurance since 1988 and REALIC since 1995,
and Chairman of the Boards of Life Reassurance since July 1993 and REALIC
since August 1995. In addition, Mr. Hawes is associated with IIA, which
he founded in 1972.
_________________________________________________________________
Carolyn K. McCandless (51) Director since 1992
Ms. McCandless has served as a Director of the Company since
November 1992. Since April 1990, Ms. McCandless has served as Vice
President of Human Resources and Administration for Time Warner Inc.
From 1985 to 1990, Ms. McCandless was Vice President and Director of
Employee Benefits for Time Inc.
_________________________________________________________________
Douglas M. Schair (51) Director since 1988
Mr. Schair has served as Vice Chairman of the Board of the Company
since November 1988 and Chief Investment Officer and in the Office of
the Chairman since May 1992. Mr. Schair also has served as Vice
Chairman of the Board and Chief Investment Officer of Life Reassurance
since July 1993 and of REALIC since August 1995. In addition, Mr.
Schair has been associated with IIA since 1975.
_________________________________________________________________
Chris C. Stroup (35) Director since 1996
Mr. Stroup has served as Executive Vice President and Chief
Financial Officer and as a Director of the Company since June 1996. Mr.
Stroup also has served as Executive Vice President and Chief Financial
Officer of Life Reassurance and Vice President and Chief Financial
Officer of REALIC since August 1996. From 1983 to 1996, Mr. Stroup was
associated with the firm of Ernst & Young LLP, where he served as a
partner from 1993, providing accounting and consulting services to the
insurance industry.
_________________________________________________________________
T. Bowring Woodbury, II (59) Director since 1992
Mr. Woodbury has served as a Director of the Company since
November 1992. He currently serves as President of the Tacoma,
Washington Mission of The Church of Jesus Christ of Latter-day Saints.
From June 1989 to April 1995, Mr. Woodbury served as Senior Vice
President and General Counsel of Consolidated Edison, where he also
served as a member of the corporate policy committee, and from May 1995
through June 1996 he served as a consultant to Consolidated Edison.
From 1987 to 1989, Mr. Woodbury served as Senior Vice President, General
Counsel and Corporate Secretary of Commercial Union Insurance Company.
From 1986 to 1987, Mr. Woodbury served as Executive Vice President,
General Counsel and Corporate Secretary of The Home Insurance Company.
_________________________________________________________________
Named Executive Officers
The following provides the name, principal occupation and other
pertinent information concerning the named executive officer of the
Company who does not also serve as a Director. The executive officer is
elected by the Board of Directors annually and serves at the pleasure of
the Board. There are no arrangements or understandings between the
executive officer and any other person pursuant to which the executive
officer was selected, other than the employment agreement more fully
described herein. The age shown is as of December 31, 1996.
_________________________________________________________________
W. Weldon Wilson (35)
Mr. Wilson has served as Vice President, General Counsel and
Secretary of the Company since May 1992. Mr. Wilson also has served as
Executive Vice President, General Counsel and Secretary of Life
Reassurance since June 1995, as its Senior Vice President, General
Counsel and Secretary since January 1992 and as its Vice President,
General Counsel and Secretary since July 1991. Mr. Wilson also has
served as Vice President, General Counsel and Secretary of REALIC since
June 1995. Prior to joining Life Reassurance, from May 1989 to June
1991, Mr. Wilson was associated with the law firm of Johnson & Gibbs in
Dallas, Texas. From September 1986 to May 1989, Mr. Wilson was
associated with the law firm of Moore & Peterson in Dallas, Texas.
________________________________________________________________
Section 16(a) Beneficial Ownership Reporting Compliance
Pursuant to the Securities Exchange Act of 1934, as amended, the
Company's directors, executive officers and certain other officers are
required to file reports of ownership and changes in ownership of the
Company's securities with the Securities and Exchange Commission and the
New York Stock Exchange. Copies of such reports also must be provided
to the Company.
Based solely upon a review of the copies of the reports provided
to the Company and representations from certain persons that no other
reports were required, the Company believes that during the preceding
year the filing requirements applicable to directors, executive officers
and certain other officers were met.
Indebtedness of Management
During 1992, the Company issued, subject to restricted stock
purchase agreements, 214,510 Common Shares to certain officers of the
Company and its subsidiaries in exchange for notes in favor of the
Company. Certain of the sales were at prices below fair value at the
date of sale, resulting in compensation expense to the Company in 1992.
Listed in the chart below are all loans in excess of $60,000 to the
executive officers of the Company to purchase Common Shares, including
accrued interest, at December 31, 1996. The loans bear interest at rates
ranging from 6.01% to 7.04%, rates not less than those necessary to
avoid imputed interest under the Internal Revenue Code of 1986, as
amended (the "Code"). The notes listed in the chart below mature during
1997 and all but $31,793 of such notes are nonrecourse and are
collateralized by all or a portion of the Common Shares acquired with
the proceeds.
Balance at Balance at
Beginning End of
Name of Debtor of 1996 Additions Deductions 1996
Samuel V. Filoromo $408,986 $26,626 0 $435,612
W. Weldon Wilson $187,928 $12,017 0 $199,945
Committees of the Board of Directors
The Board of Directors of the Company has appointed standing
committees, including Audit, Benefits, Compensation, Executive and
Investment Committees. Membership on the Committees is as follows:
Audit Benefits
K. Fred Skousen(1) Carolyn K. McCandless(1)
Carolyn K. McCandless K. Fred Skousen
T. Bowring Woodbury, II T. Bowring Woodbury, II
Compensation Executive
T. Bowring Woodbury, II(1) Rodney A. Hawes, Jr.(1)
Carolyn K. McCandless Douglas M. Schair
K. Fred Skousen Jacques E. Dubois
Investment
Douglas M. Schair(1)
Rodney A. Hawes, Jr.
Jacques E. Dubois
_______________
(1) Chairperson
The Audit Committee provides assistance to the Board of Directors
in discharging its responsibilities in connection with the financial and
accounting practices of the Company and the internal controls related
thereto, and represents the Board of Directors in connection with the
services rendered by the Company's independent auditors. The Audit
Committee was formed on November 10, 1992 and met three times during
1996.
The Benefits Committee is responsible for the formation of benefit
plans and packages applicable to all employees of the Company and the
operating subsidiaries of the Company. The Benefits Committee also has
general oversight responsibility with respect to the Company's other
employee benefit programs. The Benefits Committee was formed on
November 10, 1992 and met three times during 1996.
The Compensation Committee annually reviews and makes
recommendations to the Board of Directors regarding the compensation of
the Chairman, Vice Chairman, Chief Executive Officer, President and
Chief Operating Officer of the Company. The Compensation Committee also
reviews, advises and consults with the Office of the Chairman regarding
the compensation of other officers and key employees and as to the
Company's policy on compensation. The Compensation Committee administers
the Company's stock option plan, including the granting of stock options
and interpreting the plan. The Compensation Committee was formed on
November 10, 1992 and met five times during 1996.
When the Board of Directors is not in session, the Executive
Committee is empowered to exercise such powers and authority in the
management of the business and affairs of the Company as would be
exercised by the Board of Directors, subject to certain exceptions. The
Executive Committee was formed prior to 1992 and met eight times during
1996.
The Investment Committee has the authority to develop the
investment strategy for the Company. The Investment Committee also
reviews the performance of the investment advisors used by the Company
and its subsidiaries. The Investment Committee was formed prior to 1992,
and met six times during 1996.
During 1996, the Board of Directors met nine times. During 1996,
no director attended less than 75% of the aggregate of the total number
of meetings of the Board of Directors and of any committee on which such
director served.
Director Compensation
Each non-employee director of the Company receives an annual
retainer of $20,000 for services to the Board of Directors. Non-employee
directors also receive a $1,500 fee for each board meeting they attend,
plus expenses. Each non-employee director who serves as a chairperson
of a committee is paid an annual fee of $2,000 for such service. No
additional fees are paid for attendance at committee meetings. Each
non-employee director of the Company is entitled to participate in the
Life Re Corporation 1993 Non-Employee Directors Stock Option Plan. The
non-employee directors each receive an initial grant of options to
purchase 2,500 Common Shares and annual grants of options to purchase
1,000 Common Shares thereafter. Ms. McCandless, Dr. Skousen and Mr.
Woodbury each received annual grants of options to purchase 1,000 Common
Shares in January 1996 and January 1997 at exercise prices of $24.875
and $39.625, respectively.
<TABLE>
<CAPTION>
LIFE RE CORPORATION
Summary Compensation Table
<S> <C> <C> <C> <C> <C> <C> <C>
Long-Term Compensation
Annual Compensation Awards Payouts
Number of
Other Shares
Annual Underlying LTIP All Other
Compen- Options/ Payouts Compensation
Name and Principal Year Salary(2) Bonus sation SARs (4) (5)
Positions (1)
Rodney A. Hawes, Jr. 1996 $686,659 $607,720 $0 100,000 $657,408 $20,558
Chmn of the Board, Chief 1995 $654,240 $238,000 $0 50,000 $196,195 $13,470
Executive Officer and 1994 $624,232 $545,000 $0 50,000 $ 0 $13,350
Office of the Chmn; Life
Reassurance and REALIC -
Chmn of the Board and
Chmn Executive Committee
Douglas M. Schair 1996 $655,437 $607,720 $0 100,000 $657,408 $18,467
Vice Chmn of the Board, 1995 $556,693 $238,000 $0 50,000 $196,195 $10,284
Chief Investment Officer 1994 $564,764 $545,000 $0 50,000 $ 0 $ 7,793
and Office of the Chmn;
Life Reassurance and
REALIC - Vice Chmn of
the Board and Chief
Investment Officer
Jacques E. Dubois 1996 $655,437 $607,720 $0 100,000 $657,408 $ 9,448
President, Chief 1995 $624,961 $238,000 $0 50,000 $196,195 $ 7,926
Operating Officer 1994 $598,226 $545,000 $0 50,000 $ 0 $ 7,793
and Office of the Chmn;
Life Reassurance -
President and Chief
Executive Officer;
REALIC - Chief Executive
Officer
Chris C. Stroup 1996 $195,199 $218,735(6)$0 100,000 $ 0 $ 770
Executive Vice President
and Chief Financial
Officer; Life Reassurance -
Executive Vice President
and Chief Financial Officer;
REALIC - Vice President
and Chief Financial
Officer
W. Weldon Wilson (3) 1996 $251,417 $247,477(6)$0 25,000 $ 0 $ 5,866
Vice President, 1995 $173,231 $32,000 $0 20,000 $ 0 $ 5,315
General Counsel and 1994 $154,231 $64,000 $0 20,000 $ 0 $ 5,148
Secretary; Life
Reassurance - Executive
Vice President, General
Counsel and Secretary;
REALIC - Vice President,
General Counsel and
Secretary
</TABLE>
_______________
(1) Positions are at Life Re Corporation unless otherwise noted.
(2) Salaries for the top three named executive officers reflect their
similar levels of responsibility and contribution to the Company as
members of the Office of the Chairman and are set in accordance
with their respective employment agreements. Their respective
salary increases in each of 1994, 1995 and 1996 ranged from 4% to
5%. Mr. Schair voluntarily reduced his base salary from October
1994 through June 1995. The Company anticipates that competitive
increases will occur in 1997 and beyond, based upon executive
performance and competitive wage inflation rates. Mr. Stroup
joined the Company in June 1996 and therefore his salary shown only
covers the period June through December 1996.
(3) At December 31, 1996, the value of restricted stock awards held by
Mr. Wilson (26,000 Common Shares) was $1,004,250. Dividends are
paid on such restricted stock. See "Restricted Stock Purchase
Agreements" herein for a description of the terms of such
restricted stock.
(4) The 1995 and 1996 LTIP Payouts for Messrs. Hawes, Schair and Dubois
were determined in accordance with the terms of the Life Re
Corporation Long-Term Incentive Plan. All of the 1995 LTIP Payouts
related to the Company's acquisition of REALIC in July 1995, and
all of the 1996 LTIP Payouts related to (i) the acquisition of
a block of insurance from United Insurance Company of America
("United"), (ii) the investment in Resource Financial Corporation
and certain of its affiliates ("RFC") and reinsurance arrangements
with RFC and affiliates of Aon Corporation, (iii) the acquisitions
of Modern American Life Insurance Company ("Modern"), Western
Pioneer Life Insurance Company ("Western") and New American Life
Insurance Company ("New American") and (iv) the sale at a gain
of the Company's investment in Nacolah Holding Corporation
("Nacolah").
(5) Represents Company matching contributions under the 401(k) defined
contribution plan (in 1996: $4,750 each for Messrs. Hawes, Schair,
Dubois and Wilson; in 1995: $4,620 each for Messrs. Hawes, Schair,
Dubois and Wilson; and in 1994: $4,620 each for Messrs. Hawes,
Schair and Dubois; $4,511 for Mr. Wilson) and life insurance
premiums (in 1996: $15,808 for Mr. Hawes; $13,717 for Mr. Schair;
$4,698 for Mr. Dubois; $1,116 for Mr. Wilson; and $770 for Mr.
Stroup; in 1995: $8,850 for Mr. Hawes; $5,664 for Mr. Schair;
$3,306 for Mr. Dubois; and $695 for Mr. Wilson; and in 1994: $8,730
for Mr. Hawes; $3,173 for Mr. Schair; $3,173 for Mr. Dubois; and
$637 for Mr. Wilson).
(6) A portion of the bonuses paid to Messrs. Stroup and Wilson in the
amounts of $96,235 and $142,477, respectively, were special bonuses
paid in accordance with their employment agreements which provide
for bonuses upon the completion of certain of the 1996 transactions
noted in footnote (4) above, except Mr. Wilson's bonus did not
include the Nacolah transaction, and Mr. Stroup's bonus did not
include the Nacolah, United, Modern and Western transactions.
<TABLE>
<CAPTION>
LIFE RE CORPORATION
Option/SAR Grants in Last Fiscal Year
Individual Grants
<S> <C> <C> <C> <C> <C>
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or Grant Date
Name and Principal Options/SARs Employees Base price Expiration Present
Positions (1) Granted (2) in 1996 ($/Shares) Date Value (3)
Rodney A. Hawes, Jr. 100,000 14.06% $25.00 02/28/2006 $747,000
Chmn of the Board, Chief
Executive Officer and
Office of the Chmn; Life
Reassurance and REALIC -
Chmn of the Board and
Chmn Executive Committee
Douglas M. Schair 100,000 14.06% $25.00 02/28/2006 $747,000
Vice Chmn of the Board,
Chief Investment Officer
and Office of the Chmn; Life
Reassurance and REALIC -
Vice Chmn of the Board
and Chief Investment Officer
Jacques E. Dubois 100,000 14.06% $25.00 02/28/2006 $747,000
President, Chief
Operating Officer
and Office of the Chmn;
Life Reassurance - President
and Chief Executive Officer;
REALIC - Chief Executive
Officer
Chris C. Stroup 100,000 14.06% $30.25 06/03/2006 $962,000
Executive Vice President
and Chief Financial
Officer; Life Reassurance -
Executive Vice President
and Chief Financial Officer;
REALIC - Vice President and
Chief Financial Officer
W. Weldon Wilson 25,000 3.52% $25.00 02/28/2006 $186,750
Vice President,
General Counsel and
Secretary; Life
Reassurance - Executive
Vice President, General
Counsel and Secretary;
REALIC - Vice President,
General Counsel and
Secretary
</TABLE>
__________________________________
(1) Positions are at Life Re Corporation unless otherwise noted.
(2) Only stock options were granted, which vest over four years at a rate
of 25% per year with initial vesting on February 28, 1997, except for
Mr. Stroup's stock options which initially vest on June 3, 1997.
(3) Option values are determined using the Black-Scholes option pricing
model adapted for use in valuing executive stock options. The values
are based on assumptions regarding a number of variables for the term
of an option such as interest rates, future volatility of the price
of Common Shares, and the Company's future dividend yield.
Therefore, there can be no assurance that the values realized upon
exercise of options by the named executive officers will be at or
near the values estimated by the Black-Scholes model.
<TABLE>
<CAPTION>
LIFE RE CORPORATION
Aggregated Option/SAR Exercises in Last Fiscal Year
and Fiscal Year End Option/SAR Values
Individual Grants
<S> <C> <C> <C> <C> <C><C>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs at
at Year End Fiscal Year End
Name and Principal Shares Acquired Value Exercisable/ Exercisable/
Positions (1) on Exercise (2) Realized Unexercisable Unexercisable (3)
Rodney A. Hawes, Jr. 0 $0 E 137,500 E $2,362,500
Chmn of the Board, Chief $0 U 162,500 U $2,537,500
Executive Officer and
Office of the Chmn; Life
Reassurance and REALIC -
Chmn of the Board and
Chmn Executive Committee
Douglas M. Schair 0 $0 E 137,500 E $2,362,500
Vice Chmn of the Board, $0 U 162,500 U $2,537,500
Chief Investment Officer
and Office of the Chmn; Life
Reassurance and REALIC -
Vice Chmn of the Board and
Chief Investment Officer
Jacques E. Dubois 0 $0 E 137,500 E $2,362,500
President, Chief $0 U 162,500 U $2,537,500
Operating Officer
and Office of the Chmn;
Life Reassurance - President
and Chief Executive Officer;
REALIC - Chief Executive
Officer
Chris C. Stroup 0 $0 E 0 E $ 0
Executive Vice President $0 U 100,000 U $ 837,500
and Chief Financial
Officer; Life Reassurance -
Executive Vice President
and Chief Financial Officer;
REALIC - Vice President and
Chief Financial Officer
W. Weldon Wilson 0 $0 E 47,000 E $ 812,000
Vice President, $0 U 58,000 U $ 943,625
General Counsel and
Secretary; Life
Reassurance - Executive
Vice President, General
Counsel and Secretary;
REALIC - Vice President,
General Counsel and
Secretary
</TABLE>
___________________________________
(1) Positions are at Life Re Corporation unless otherwise noted.
(2) There were no options exercised by named executive officers during
1996.
(3) The value of unexercised options is based on the product of the number
of Common Shares underlying an option and the difference between the
closing share price of the Company's Common Shares at December 31,
1996 ($38.625) and the option exercise price.
Long-Term Incentive Plans - Awards in Last Fiscal Year
The Company has not included a Long-Term Incentive Plan table because
the estimated future payments under the Life Re Corporation Long-Term
Incentive Plan ("LTIP") are indeterminable at this time. The Company
therefore has provided the following narrative description of the LTIP:
The top three executive officers in the Office of the Chairman are
eligible to participate in the LTIP. Each such executive officer is granted
one unit under the LTIP. Each unit entitles the holder, upon the attainment
of performance goals as established by the Compensation Committee of the
Board of Directors and the closing of the transaction related to the
performance goal, to receive a portion of the Bonus Pool (as defined in the
LTIP) as a cash lump sum payment. The value of each unit is equal to the
total amount allocated to the Bonus Pool, multiplied by a fraction, the
numerator of which is one, and the denominator of which is the total number
of units which were granted with respect to such Bonus Pool.
The Bonus Pool is established upon the closing of a transaction by the
Company and is equal to (i) 2% of the amount involved in connection with any
eligible acquisition or merger with another entity, (ii) 2% of the amount
involved in connection with any eligible acquisition of a block of insurance
in force, and (iii) 5% of the amount involved in connection with a
recognition of capital gains upon the sale of an eligible investment.
In 1996, LTIP payments were made as a result of the successful
achievement of performance goals, which resulted in the sale at a gain of
the Company's equity investment in Nacolah; the assumption of a block of
insurance from United; the acquisition of Modern, Western and New American;
and the Company's reinsurance agreements with affiliates and subsidiaries of
Aon Corporation and investment in and reinsurance arrangements with RFC and
its affiliates. The 1996 LTIP payments for Messrs. Hawes, Schair and
Dubois were each in the amount of $657,408. The Company anticipates that
quarterly LTIP payments will be made to these officers with respect to the
agreement with RFC for a five year period which began on July 1, 1996.
Other LTIP payments may be made in the future depending on the achievement
of additional performance goals under the LTIP, which are: (i) acquisitions
(as more fully described in the LTIP) valued at or above $5 million, or the
merger of the Company with another entity; (ii) acquisitions (as more fully
described in the LTIP) of blocks of insurance in force with ceding
allowances valued at or about $5 million; and (iii) sales at a gain of
investments held prior to the effectiveness of the LTIP or acquired by the
Company as described in clause (i) above, are achieved.
Employee Benefit Plans
Savings Plan. The Life Reassurance Corporation of America and Its
Affiliates Employee Savings Plan (the "Savings Plan") is a defined
contribution plan that is qualified under Sections 401(a) and 401(k) of the
Code. Employees of the Company and its subsidiaries who have completed six
consecutive months of service and attained age twenty-one are eligible to
participate in the Savings Plan. Under the Savings Plan, each participant
is eligible to enter into a written salary reduction agreement with the
Company whereby the participant's salary will be reduced as elected by the
participant on a before-tax basis in accordance with the rules governing
cash or deferred arrangements under Section 401(k) of the Code, with the
total reduction not exceeding $9,500 for 1996. The amount deferred by a
participant is contributed to the trust fund for the Savings Plan and
invested in accordance with the election of the participant from among
investment funds established under the trust agreement in accordance with
Section 404(c) of the Code. The Company makes a contribution to the Savings
Plan trust fund equal to 50% of the participant's pre-tax contributions that
equal up to 6% of that participant's base salary. All employee
contributions are 100% vested at all times. With respect to matching
contributions by the Company, such contributions are 50% vested after two
years of service, 75% vested after three years of service and 100% vested
after four years of service with the Company. Participants' vested accounts
under the Savings Plan are distributable after termination of employment.
During employment, participants may withdraw funds from their accounts in
the event of financial hardship as defined in the Savings Plan and permitted
under the Code. The Code imposes various limits on the amounts which can be
contributed to the Savings Plan by or for any participant each year. During
the year ended December 31, 1996, the following matching contributions were
made on behalf of the individuals named in the executive compensation table:
$4,750 for each of Messrs. Hawes, Schair, Dubois and Wilson and $0 for
Mr. Stroup as he was not yet eligible to participate in the Savings Plan;
and $19,000 for all named executive officers as a group.
Retirement Plan. The Company maintains the Employees' Retirement Plan
of Life Reassurance Corporation of America and Its Affiliates (the
"Retirement Plan"), which is a defined benefit pension plan qualified under
Section 401(a) of the Code.
The table set forth below illustrates the approximate annual
retirement benefits which would be payable at age 65 as a single life
annuity, based on the Average Monthly Compensation and years of credited
service indicated, under the Retirement Plan to participants whose benefits
are determined by the Retirement Plan formula, before any reduction for
benefits under any General Reassurance Corporation plan or for Social
Security benefits. The values shown below reflect the change in tax law
effective January 1, 1994 that limits the amount of annual compensation that
may be taken into account under qualified plans, such as the Retirement
Plan, to $150,000 (as indexed).
PENSION PLAN TABLE
Estimated Annual Retirement Benefits
Participants Whose Benefits are
Determined by Retirement Plan Formula
Years of Credited Service
Average Yearly Compensation 15 20 25 30
$ 50,000 $12,259 $16,345 $20,432 $24,518
$100,000 $25,759 $34,345 $42,932 $51,518
$160,000 and over $41,959 $55,945 $69,932 $83,918
With respect to each of the individuals named in the executive
compensation table, the estimated credited years of service under the
Retirement Plan as of December 31, 1996 were as follows: Mr. Hawes, eight
years; Mr. Schair, eight years; Mr. Dubois, eight years; Mr. Stroup, zero
years; Mr. Wilson, six years; and all named executive officers as of
December 31, 1996 as a group, an average of six years.
Benefits are funded through employer contributions to a trust.
Employees of the Company are eligible to participate in the Retirement Plan
when they have completed one year of service and attained age twenty and
one-half. Participants become vested in their benefits under the Retirement
Plan as follows: 20% after three years' service, 40% after four, 60% after
five, 80% after six, and 100% (fully) vested after seven years' service,
subject to certain break-in-service rules. The Retirement Plan provides a
benefit upon retirement at the normal retirement age of 65 which, when
expressed as a single life annuity, equals (i) 1.5% of Average Monthly
Compensation (as that term is defined in the Retirement Plan) multiplied by
the number of the participant's years of service up to a maximum of thirty
years, plus (ii) 0.3% of Average Monthly Compensation in excess of Social
Security Retirement Benefits covered compensation multiplied by the
participant's years of service up to a maximum of thirty years, less (iii)
the amount of any accrued benefit provided under any defined benefit plan of
General Reassurance Corporation for service prior to January 1, 1989.
Average Monthly Compensation is the participant's average monthly
compensation (excluding overtime pay and bonuses) for the five most highly
compensated consecutive calendar years of service from the participant's
date of hire to his or her date of termination of employment. A participant
may elect to commence receiving benefits under the Retirement Plan when he
or she has attained age 55 and completed ten years of service. Benefits
under the Retirement Plan are normally payable in the form of a single life
annuity in the case of unmarried participants and in the form of a joint and
survivor annuity in the case of married participants. If a participant
continues employment past Normal Retirement Age (as that term is defined in
the Retirement Plan), his or her retirement benefit determined at the close
of each Plan Year (as that term is defined in the Retirement Plan) prior to
actual retirement is equal to the greater of (i) the actuarial equivalent of
the monthly retirement benefit as of the close of the prior Plan Year, or
(ii) his or her accrued benefit at the close of the Plan Year. This benefit
is offset by any benefit distributions during the Plan Year. Sections
401(a)(17) and 415 of the Code limit both the amount of a participant's
compensation that may be taken into account for purposes of calculating
Average Monthly Compensation and the amount of benefits that may be paid
from the Retirement Plan.
Supplemental Executive Retirement Plan. With certain exceptions,
Section 415 of the Code currently limits pension benefits which may be paid
under plans qualified under the Code to an annual benefit of $120,000,
indexed annually. The Tax Reform Act of 1986 limits the amount of annual
compensation which may be considered in determining qualified plan pensions
to $150,000 effective January 1, 1994. Previously, the limit was $200,000,
indexed annually. In March 1995 the Board of Directors, upon the
recommendation of the Benefits Committee, established the Life Re
Corporation Supplemental Executive Retirement Plan ("SERP") for certain
designated officers of the Company to whom these limits apply, or will
apply in the future, so that these employees will obtain the benefit
that would have applied in the absence of these limits, as well as to
provide additional retirement benefits to a number of key executives whose
many years of service in the industry prior to joining the Company would
not be counted as years of service under the Retirement Plan.
The table set forth below illustrates the approximate annual
retirement benefits which would be payable at age 62 based on the Average
Monthly Compensation and years of credited service indicated under the SERP
to participants whose benefits are determined by the SERP formula.
SUPPLEMENTAL EXECUTIVE RETIREMENT PENSION PLAN TABLE
Estimated Annual Retirement Benefits
Participants Whose
Benefits are
Determined by SERP
Formula
Years of Credited Service
Average Yearly Compensation 15 20 25 30
$200,000 $ 37,561 $ 50,082 $ 62,602 $ 80,789
$250,000 $ 56,311 $ 75,082 $ 93,852 $118,289
$300,000 $ 75,061 $100,082 $125,102 $155,789
$350,000 $ 93,811 $125,082 $156,352 $193,289
$400,000 $112,561 $150,082 $187,602 $230,789
$450,000 $131,311 $175,082 $218,852 $268,289
$500,000 $150,061 $200,082 $250,102 $305,789
$550,000 $168,811 $225,082 $281,352 $343,289
$600,000 $187,561 $250,082 $312,602 $380,789
$650,000 $206,311 $275,082 $343,852 $418,289
$700,000 $225,061 $300,082 $375,102 $455,789
The SERP provides monthly supplemental benefits upon retirement equal
to 2.5% of the participant's Average Monthly Compensation (as defined in the
above described Retirement Plan) multiplied by the number of the
participant's Years of Service (as defined under the Retirement Plan) less
(i) 3.33% of Social Security Retirement Benefits multiplied by Years of
Service, and (ii) the amount of the monthly benefit provided under the
Retirement Plan. Upon a Change in Control, Years of Service will
automatically be increased by five years.
The estimated annual benefits payable upon retirement at normal
retirement age for each of the named executive officers under the SERP are
$170,000 for Mr. Hawes, $380,000 for Mr. Schair, $570,000 for Mr. Dubois,
$670,000 for Mr. Stroup and $550,000 for Mr. Wilson.
In connection with the SERP, the Board and the Benefits Committee
authorized the creation of a Rabbi Trust. The Rabbi Trust must be created
and funded by the Company upon a "Change in Control" (which is defined in a
manner substantially equivalent to a Change in Control under the 1992 Life
Re Corporation Stock Option Plan) or a threatened Change in Control.
Funding must be an amount sufficient to provide for the payment of all
benefits provided for under the SERP. The trust assets, as assets of the
Company, will be subject to the claims of the Company's creditors in the
event of the Company's bankruptcy or insolvency.
Assuming a Change in Control occurred on December 31, 1997, that all
of the named executive officers were still employed on that date, and that
each named executive officer's employment terminated on that date, the
present value (calculated using a 7.5% interest rate) of the additional
payment that would be required for the extra five years of service upon a
Change in Control under protection implemented by the Company in connection
with the SERP to Messrs. Hawes, Schair, Dubois, Stroup and Wilson would be
$570,000, $320,000, $250,000, $70,000, and $30,000, respectively.
Discretionary Bonus Plan. The Company's Bonus Plan (the "Discretionary
Bonus Plan") provides individual awards based on annual performance goals.
The Executive Committee of the Board of Directors evaluates qualitative
performance and approves the list of participants. Individual awards for
performance are determined by the Executive Committee and are paid during
the first quarter after the close of the fiscal year to which the award
pertains. No award is payable to a participant who terminates employment
voluntarily or is terminated by the Company with or without cause prior to
the payment date, except that a pro-rated award will be paid in the event of
termination by reason of retirement, death or permanent disability. The
amounts of awards paid under the Discretionary Bonus Plan to the Company's
five named executive officers with respect to the fiscal year ended
December 31, 1995 are reflected in the Summary Compensation Table. No
awards were paid under the Discretionary Bonus Plan to the Company's
five named executive officers for the fiscal years ended December 31, 1994 and
1996. Award payments are made in cash solely from general corporate assets.
Awards under the Discretionary Bonus Plan do not meet the criteria for
performance-based compensation and, therefore, may not be deductible under
the applicable rules and regulations of Section 162(m) of the Code.
Annual Plan. The Life Re Corporation Annual Incentive Plan (the
"Annual Plan") provides annual cash bonuses to officers of the Company.
Participants are the key executives of the Company selected by the
Compensation Committee to participate in the Annual Plan prior to the start
of each plan year. The amount of the awards, if any, are based on the
attainment of certain performance objectives determined by the Compensation
Committee including, without limitation, the future performance of the
Company, the participant's level of responsibilities, performance, salary
and other compensation. The performance objectives applicable to a plan
year are set prior to the beginning of that plan year and are related to
measures of the Company's performance such as profitability and growth. The
participants are assigned an impact level determined in the discretion of
the Compensation Committee. The performance objectives and the benefits may
be different between and among impact levels. If a participant's employment
terminates or there is a reduction in duties, title or position, within
twelve months after a Change in Control, the participant will be entitled to
a payment under the Annual Plan equal to the current year's pro-rata portion
of the bonus amount earned in the previous year. The Board may alter,
amend, suspend, or discontinue the Annual Plan, but participants' rights
regarding outstanding awards may not be adversely affected. The
Compensation Committee designated the seven senior officers of the Company
as participants in the Annual Plan for 1997.
The material terms of the performance goals established for the top
three executives in the Office of the Chairman for 1997 are based on after-tax
return on equity levels and the percentage increase in pre-tax operating
earnings. Based upon the results of each, a pool will be created to be
divided among the top executives in the Office of the Chairman. Once the
threshold levels are met the pool will equal a percentage of pre-tax
operating earnings. The maximum pool would be comprised of 4% of pre-tax
operating profits. The 1997 performance objectives were set by the
Compensation Committee in November 1996. The Compensation Committee will
certify in writing prior to payment that the performance goals have, in
fact, been satisfied.
The 1997 performance objectives for the remaining named executive
officers also were set by the Compensation Committee in November 1996 and
are based on achievement of certain targeted after-tax returns on equity
levels and increases in pre-tax operating earnings. The actual bonus
amounts for the remaining named executive officers listed in the Summary
Compensation Table are computed as a percent of each individual's salary,
with a maximum of 90%.
In each case, the Committee has downward discretion on the amount of
bonus to be awarded. To determine whether such downward discretion will be
utilized, the Committee may consider individual and Company performance
including return on equity, increase in book value determined according to
generally accepted accounting principles, revenues, cash flow, net income,
and stock price, as well as other factors.
The Compensation Committee intends to administer the Annual Plan in
accordance with the applicable rules and regulations under Section 162(m) of
the Code.
Long-Term Plan. The Life Re Corporation Long-Term Incentive Plan (the
"LTIP") provides cash bonuses to members of the Office of the Chairman of
the Company. Participants are the members of the Office of the Chairman of
the Company selected by the Compensation Committee to participate in the
LTIP prior to the start of each plan year. The amount of the awards, if
any, are based on the attainment of certain performance goals set forth in
the LTIP including, without limitation, acquisitions, mergers, and gains on
the sale of certain investments. The Board may alter, amend, suspend, or
discontinue the LTIP, but participants' rights regarding outstanding awards
may not be adversely affected. The Compensation Committee designated the
three individuals in the Office of the Chairman of the Company as equal
participants in the bonus pool under the LTIP for 1997. The participants
and the percentage participation in the pool may change from year to year in
the discretion of the Compensation Committee.
The material terms of the performance goals established for the top
three executives in the Office of the Chairman for 1997 are based upon the
results of certain transactions including acquisitions of assets, blocks of
business, or other entities, mergers or gains from the disposition of
certain investments. A bonus pool will be created to be divided among the
participants according to the participation units specified by the
Compensation Committee. The pool will equal a percentage of the amount
involved in the applicable transaction. The maximum percentage would be 5%
of the amount involved. The performance objectives remain identical to
those approved by stockholders at the Company's 1995 Annual Meeting. The
Compensation Committee will certify in writing prior to payment that the
performance goals have, in fact, been satisfied. The Compensation Committee
has downward discretion on the amount of bonus to be awarded under the LTIP.
The Compensation Committee intends to administer the LTIP in
accordance with the applicable rules and regulations under Section 162(m) of
the Code.
Restricted Stock Purchase Agreements. Since the acquisition of Life
Reassurance in 1988, the Company has sold Common Shares to certain
executive, managerial and professional employees ("key employees") of Life
Reassurance pursuant to substantially similar restricted stock purchase
agreements ("Stock Purchase Agreements") entered into with each key
employee. The price paid for the Common Shares pursuant to the Stock
Purchase Agreements was, in certain instances, less than the fair market
value at the time of the purchase. Compensation expense was recognized in
the financial statements.
A key employee will become 20% vested in the Common Shares purchased
pursuant to a Stock Purchase Agreement on the date set forth in such Stock
Purchase Agreement and thereafter will vest annually in an additional 20% of
the Common Shares. In addition, certain Stock Purchase Agreements provide
that the Common Shares become fully vested in the event of a "change in
control" of the Company (as defined in such agreements). Common Shares sold
under the Stock Purchase Agreements are subject to forfeiture to the Company
if the key employee leaves the employment of the Company for any reason at
any time prior to becoming vested in the purchased Common Shares. Such
forfeited Common Shares may be sold to the then current employees of Life
Reassurance at a price that may not be equal to the then current market
price.
The Stock Purchase Agreements provide an automatic appointment of
Messrs. Hawes, Schair and Dubois as proxies to vote all shares purchased
under the Stock Purchase Agreements. The appointment of proxies generally
expires on the fourth anniversary of the date on which the key employee
becomes 20% vested in the Common Shares.
Upon termination of a key employee's employment for any reason, the
Company may repurchase all or any portion of the key employee's vested
Common Shares obtained under the Stock Purchase Agreements. If the Company
does not elect to repurchase all or any portion of such Common Shares, it
has a right of first refusal with respect to such Common Shares at the price
and on the terms and conditions bid by an independent third party.
As of December 31, 1996, the number of Common Shares vested pursuant
to the Stock Purchase Agreements for any of the individuals named in the
Summary Compensation Table was 24,800, which were held by Mr. Wilson.
EMPLOYMENT AGREEMENTS
The Company entered into substantially similar automatically renewing
employment agreements with Messrs. Hawes, Schair and Dubois in June 1995,
which were amended effective as of September 1996.
Each of the employment agreements, as amended, provides that during
its term the Company will continue to employ the executive in his respective
position, pay the executive a minimum annual salary, consider the executive
for bonuses at such times and in the amounts determined by the Compensation
Committee and continue the executive's participation in all of the Company's
incentive plans and equity compensation plans available to other senior
officers. The minimum annual salary for Mr. Hawes is $660,000 and the
minimum annual salary for each of Messrs. Schair and Dubois is $630,000.
The employment agreements provide that if the Company terminates the
employment of any of the executives without cause or an executive terminates
his employment for good reason, the Company will pay the terminated
executive a severance allowance. The severance allowance includes (i) cash
equal to two times the sum of (a) the executive's annual base salary at the
date of termination and (b) the executive's highest aggregate incentive
award paid in any one year based on the aggregate incentive awards paid
during any one of the three bonus periods immediately preceding termination,
(ii) benefits and service credit for benefits for three years after the date
of termination and (iii) legal fees or other expenses, if any, due under the
employment agreements.
Each employment agreement, as amended, provides that upon a change in
control, the executive may elect to either (i) terminate his employment with
the Company or (ii) continue his employment with the Company. If the
executive elects to terminate his employment with the Company following the
change in control, the Company will cause the executive to be paid the
amount the executive would have been paid had his employment with the
Company been terminated, as described in the preceding paragraph. If the
executive elects to continue his employment with the Company, each
employment agreement provides that upon a change in control (i) the salary
and bonus of the executive shall not be reduced because of the change in
control, (ii) the regular increases in salary and bonus shall not be reduced
or terminated because of a change in control, and (iii) grants of options to
purchase Common Shares shall be made on the same terms and conditions as
options granted prior to the occurrence of the change in control and the
number of options granted shall not be reduced because of a change in
control.
In June 1996, the Company entered into substantially similar
employment agreements with Messrs. Filoromo, Stroup and Wilson. Each of the
employment agreements provides that during its term the Company will
continue to employ the executive in his respective position, pay the
executive a minimum annual salary, consider the executive for bonuses at
such times and in the amounts determined by the Compensation Committee and,
in the case of Messrs. Stroup and Wilson, consider such executives annually
under the Company's Annual Incentive Plan and award them "LTIP-Type" bonuses
in an amount equal to one-third of the amount of a bonus awarded to a member
of the Office of the Chairman under the Company's LTIP. The minimum annual
salary for Mr. Filoromo is $241,500, Mr. Stroup is $350,000 and Mr. Wilson
is $300,000.
The employment agreements provide that if the Company terminates the
employment of any of the executives without cause or an executive terminates
his employment for good reason, the Company will pay the terminated
executive a severance allowance in a lump sum amount equal to the sum of (a)
the executive's annual base salary at the date of termination through the
termination of the employment agreement and (b) annual bonus for each year
from the date of termination through the end of the employment agreement in
an amount based on the highest aggregate incentive award paid to the
executive during any one of the two bonus periods immediately preceding
termination. Messrs. Stroup's and Wilson's employment agreements generally
provide that upon a change in control, the executive may choose either (A)
to receive a cash severance allowance equal to the greater of (i) the amount
the executive would be paid if he had been terminated, as described above or
(ii) two times the sum of (a) the executive's annual base salary at the date
of termination and (b) the executive's highest aggregate incentive bonus
awarded to the executive during any one of the three bonus periods
immediately preceding termination or (B) to continue employment with the
Company with such executive's current position, duties, salary and benefits
contractually guaranteed until the later of (i) three years from the
effective date of the employment agreement and (ii) two years from the
occurrence of the change in control. Mr. Filoromo's employment agreement
provides for change of control provisions similar to those described below
under the caption entitled "Change in Control Agreements".
All of the agreements provide that the executive will refrain from
competing with the Company for one year after the date of termination of
such executive's employment agreement.
CHANGE IN CONTROL AGREEMENTS
The Company has entered into severance agreements with certain of its
officers other than the named executive officers. The purpose of these
agreements is to encourage the officers to continue to carry out their
responsibilities in the event of a possible change in control of the Company,
which might result in the termination of their employment. Under the terms
of these agreements, upon a change in control of the Company (as defined in
the agreements) the officers may elect to either (i) terminate their
employment and receive a severance allowance equal to two times (a) the
officer's annual base salary at the date of termination and (b) the highest
aggregate incentive award awarded to the officer during any one of the three
bonus periods immediately preceding termination or (ii) continue employment
with the Company with their current position, duties, salary and benefits
contractually guaranteed for a period of two years.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Compensation Committee (the "Committee") are T.
Bowring Woodbury, II, Carolyn K. McCandless and K. Fred Skousen. No member
of the Committee was an officer or an employee of the Company or its
subsidiaries during the year ended December 31, 1996 and none was formerly
an officer of the Company or any of its subsidiaries. In addition, no
executive officer of the Company serves on the board of directors or the
compensation committee of another entity where a Committee member is
employed.
The report of the Compensation Committee and the performance graph
that follow shall not be deemed incorporated by reference by any general
statement incorporating by reference this Proxy Statement into any filing
under the Securities Act of 1933 or under the Securities Exchange Act of
1934, except to the extent that the Company specifically incorporates the
information by reference and shall not otherwise be deemed filed under the
Securities Act or Exchange Act.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors
of Life Re Corporation (the "Company") has served since appointment by the
Company's Board of Directors in November 1992. The Committee consists of
three independent, non-employee directors who are responsible for
establishing executive compensation including the determination of base
salary and bonuses for senior executives and administering the Company's
long-term incentive stock programs. All decisions by the Committee are
subject to the approval of the Board of Directors.
The Committee believes that total compensation of executives should be
broad-based and include elements such as base salaries, annual incentive
bonuses, long-term cash incentives, and stock option grants. It is
anticipated that total compensation levels of executives will be positioned
close to the competitive market norms for comparable executive positions
within the Company's selected peer group to attract seasoned executives to
the Company who have the experience and skill necessary to manage the
Company's highly technical and sophisticated business. The selected peer
group contains some of the companies in the Company's Peer Group Index
appearing on the Comparison of 50 Month Cumulative Total Return Graph herein
as well as companies of comparable scope appearing in other competitive
compensation surveys of life insurance and reinsurance companies.
The Omnibus Budget Reconciliation Act of 1993 restricts the
deductibility, for federal income tax purposes, of executive compensation
above a specified threshold. While only three of the Company's executives
currently receive total compensation packages that would be above this
threshold, the tax law provisions are complex, and under certain
circumstances could restrict the Company's deduction in a given year. To
protect the Company's right to deduct compensation paid to the extent
possible while retaining key executives, the Committee has taken these tax
law provisions into account in structuring the Company's executive
compensation. In November 1994, the Committee recommended two incentive
plans for adoption by the Company's Board of Directors. The Board of
Directors adopted both the Life Re Corporation Annual Incentive Plan and the
Life Re Corporation Long-Term Incentive Plan, and such plans were approved
by a vote of the Company's stockholders. In March 1995, the Committee and
the Board approved an amendment to the 1992 Life Re Corporation Stock Option
Plan to comply with the new tax law provisions and to increase the number of
shares available for grant. The amendment was subsequently approved by the
Company's stockholders at the Company's 1995 Annual Meeting.
Salary
At the time of the Committee's appointment, salary levels for the
Office of the Chairman were in place pursuant to three year employment
agreements. These salaries reflected the similar levels of responsibility
and contribution to the Company and were set at competitive levels after
extensive discussions and consultation with the Company's investment bankers
and underwriters. In June 1995, the members of the Office of the Chairman
entered into new automatically renewing employment agreements (which were
amended in September 1996 to expand the provisions concerning a change in
control of the Company) and the base salaries of the top three named executive
officers are established pursuant to such employment agreements. The terms
of all of the employment agreements are consistent with the Company's
executive compensation policies. The salary of the Chief Executive Officer
is at the high end of the range for executive officers in the selected peer
group. The base salaries of the top three executives in the Office of the
Chairman as an aggregate and the base salaries of the fourth and fifth named
executive officers are at or above the high end of the range. In January
1997, the top three named executive officers each received an increase of 5%
of base salary, which was consistent with the increases in base salary
received by employees of the major operating subsidiary and in all cases
reflected the attainment of individual and corporate performance measures.
Aggregate compensation, which includes base salary, annual incentive plan
bonuses, long-term cash incentives and grants of stock options, is tied
directly to the Company's financial performance.
Decisions regarding compensation for the senior executives other than
the Office of the Chairman were based on recommendations made by the Office
of the Chairman based on individual performance, salary surveys, and other
information regarding competitive salaries in the industry. The salary and
bonus proposals were then submitted to the Committee for review. Levels of
executive compensation were based on what the Committee believed would be
appropriate levels of compensation for executives in comparable competitive
positions taking into account the executives' skills, performance, and
service. In June 1996, Mr. Stroup joined the Company as Executive Vice
President and Chief Financial Officer. In that connection, the Committee
approved the terms and conditions of employment agreements for both Mr.
Stroup and Mr. Wilson, which terms and conditions were based on the
Committee's consideration of the compensation of such executive officer
positions at comparable companies and the experience of, and
responsibilities held by, each of Messrs. Stroup and Wilson.
Annual Incentive Plan
The Life Re Corporation Annual Incentive Plan (the "Annual Plan") was
approved by the Company's stockholders at the Company's 1995 Annual Meeting.
Annual incentive bonuses are based on both the Company's financial
performance and the executive's individual contribution to the Company's
growth and profitability over the preceding year. In measuring the Company's
financial performance the Committee looks at measures such as the Company's
return on common stockholders' equity, increase in book value, revenues,
cash flow, net income and any other financial measures which the Committee,
after discussions with management and outside consultants, believes reflect
the executive's contribution to the Company's annual operating performance.
With respect to the Annual Plan, the compensation has been designed to meet
the criteria of qualified performance-based compensation. Incentive payments
are based solely on the attainment of one or more preestablished objective
performance goals, which are established by the Committee.
The performance objectives for 1996 were established by the Committee
in November 1995. Annual incentive bonus awards to the named executive
officers for the 1996 fiscal year were based on an evaluation of each
executive's individual performance and the Company's performance. Individual
performance ranged from good to excellent during 1996. The Company's total
assets increased to $2.5 billion in 1996 from $2.0 billion in 1995 and
common stockholders' equity rose to $21.45 per share at December 31, 1996
compared to $19.99 per share at December 31, 1995. In addition, the
Committee reviewed the factors enumerated above including return on equity,
change in book value, revenues, cash flow, net income and stock price,
although the ultimate determinations were based on the mechanical targets
formulated for 1996. Although Mr. Stroup was not eligible to participate in
the Annual Plan during 1996, he was, pursuant to the terms of his employment
agreement, awarded a bonus formulated according to the Annual Plan criteria
applicable to executive officers other than the top three executives in the
Office of the Chairman.
The material terms of the performance goals established for the top
three executives in the Office of the Chairman for 1997, which are identical
to those used in 1996, are based on after-tax return on equity levels and
the percentage increase in pre-tax operating earnings. Based upon the
results of each, a pool will be created to be divided equally among the top
three executives in the Office of the Chairman. Once the threshold levels
are met the pool will equal a percentage of the Company's pre-tax operating
earnings. The Committee will certify in writing prior to payment that the
performance goals have, in fact, been satisfied.
The performance objectives for the remaining named executive officers
also are based on achievement of certain targeted after-tax returns on
equity levels and increases in pre-tax operating earnings. The actual bonus
amounts for such named executive officers are computed as a percent of each
individual's salary.
In each case, the Committee has downward discretion on the amount of
bonus to be awarded. To determine whether such downward discretion will be
utilized, the Committee may consider individual and Company performance
including return on equity, change in book value, revenues, cash flow, net
income and stock price, as well as other factors.
For 1996, the Committee designated Messrs. Hawes, Schair, Dubois,
Filoromo and Wilson and Tracy L. Rudolph as participants in the Annual
Plan and such persons continue to be the designated participants for 1997.
In addition, Mr. Stroup has been designated as a participant for 1997.
Discretionary Bonus Plan
The Company's Discretionary Bonus Plan (the "Discretionary Plan")
provides awards based on individual performance that may not be
appropriately recognized under either the Annual Plan or the Life Re
Corporation Long-Term Incentive Plan. Awards under the Discretionary Plan
do not meet the criteria for performance-based compensation, and therefore
may not be deductible under the applicable rules and regulations of Section
162(m) of the Internal Revenue Code of 1986, as amended.
The Compensation Committee did not award bonuses under the
Discretionary Plan in 1996 or during the beginning of 1997 based on the
performance of the executives during 1996 because the Committee believes the
individual performance of its executives was adequately recognized under the
Annual Plan, the Life Re Corporation Long-Term Incentive Plan or the
provision for bonuses set forth in the employment agreements of certain
executives.
Long-Term Incentive Plan
The Committee expects that, above and beyond traditional operating
activities, the executive officers will discover and evaluate strategic,
long-term investment opportunities for the Company that do not necessarily
fall within normal operating activities nor the traditional lines of
business. Because the Annual Plan is not designed to reward the Office of
the Chairman for these types of initiatives, the Committee has established
the Life Re Corporation Long-Term Incentive Plan (the "LTIP"). The LTIP was
approved by the Board of Directors and was subsequently approved by the
stockholders at the 1995 Annual Meeting.
The purpose of the LTIP is to recognize the efforts of the executives
in locating, evaluating, and entering into long-term strategic initiatives
that have a substantial, beneficial financial or strategic impact on the
Company, but that may take a significant period of time to have such an
impact. Long-term strategic initiatives of this type may include strategic
investments, acquisitions of blocks of business or other companies as a
whole, or joint ventures. The Committee believes that (i) strategic
investments and diverse initiatives are important to the strength of the
Company and its future and (ii) the LTIP will serve as an incentive for the
executive officers to undertake the additional responsibilities and time
commitments required to complete such initiatives. Because it is impossible
to determine when such initiatives will occur or when the results of such
activities may be optimized, the Committee believes that payments under the
LTIP may not be paid every year.
The amount of any cash award paid under the LTIP is determined by the
members of the Committee, who have downward discretion on the amount of the
cash award, considering the impact the transaction has or may have on the
financial strength or strategic placement of the Company, the efforts
expended by the executives in completing the transaction and the equity
value the transaction adds to the Company. Specific factors involving the
financial strength of the Company that will be considered by the Committee
may include: (i) increases in insurance in force, (ii) increases in policy
revenues, (iii) increases in operating earnings, (iv) increases in assets,
(v) increases in investment income, (vi) enhancements of statutory capital
and surplus, (vii) increases in stock price, (viii) increases in cash flow,
and (ix) increases in GAAP book value. The benefit to the Company resulting
from projects on which LTIP cash awards are paid will not be double counted
when the Committee is determining the executive's annual incentive bonus
under the Annual Plan.
The Committee had occasion to award payments for transactions that
qualified under the LTIP to the designated 1996 LTIP participants. The
qualifying transactions were (i) the assumption of a block of insurance in
force from United Insurance Company of America ("United"), (ii) the
acquisitions of Modern American Life Insurance Company ("Modern"), Western
Pioneer Life Insurance Company ("Western") and New American Life Insurance
Company ("New American"), (iii) the Company's investments in Resource
Financial Corporation ("RFC") and its subsidiary, which companies provide
insurance product distribution and administrative and financial services for
the retail automotive industry throughout the United States, as well as
reinsurance arrangements with a subsidiary of RFC and subsidiaries of Aon
Corporation ("Aon") and (iv) the sale at a gain of the Company's equity
investment in Nacolah Holding Corporation ("Nacolah").
For 1996, the Committee designated Messrs. Hawes, Schair and Dubois as
participants in the LTIP and such persons were similarly designated for
participation in 1997.
In connection with the employment agreements entered into by the
Company and Messrs. Stroup and Wilson, the Company agreed to pay such
executive officers "LTIP-Type" bonuses in an amount equal to one-third of the
amount of a bonus awarded to a member of the Office of the Chairman under
the LTIP, in recognition of such executive officers' additional
responsibilities and efforts in achieving the goals set forth in the LTIP.
Stock Option Plan
In January 1997, the Committee continued the policy of making annual
grants under the 1992 Life Re Corporation Stock Option Plan (the "Option
Plan") consistent with competitive market practices. The named executive
officers were granted a number of options in line with other comparable
insurance company competitors. The stock option grants to the named
executive officers vest 25% per year over four years commencing one year
from the date of grant. These grants are intended to reinforce the
executives' common interests with stockholders, provide additional incentive
to increase stockholder value and to help retain key executive talent.
Compensation for the Chief Executive Officer
The salary for the Chief Executive Officer was determined by the
Committee after review of his employment agreement, discussions with
outside consultants and review of competitive salary surveys. After year end
results were available, the Committee reviewed the bonus calculations
according to a formula adopted for 1996 based on the Annual Plan. Based on
the 1996 performance objectives, the Committee determined the amount of the
incentive bonus to be awarded for 1996. The goal of this process was to
attempt to keep the compensation of the Company's Chief Executive Officer at
competitive market levels and to properly reward performance. In
establishing the increase of $35,000 (5.0%) to his 1996 base salary level as
previously increased under his employment contract to $693,000 for an
aggregate base salary of $728,000, the Committee used a percentage increase
consistent with the aggregate percentage increases of all employees of the
major operating subsidiary. The Committee believes the increase is well
within the bounds of the standard wage increases in the industry.
For 1996, the Committee awarded Mr. Hawes a long-term incentive
payment under the LTIP in connection with the successful completion of (i)
the assumption of a block of insurance in force from United, (ii) the
acquisitions of Modern, Western and New American, (iii) the Company's
investments in RFC and its subsidiary, which companies provide insurance
product distribution and administrative and financial services for the
retail automotive industry throughout the United States, as well as
reinsurance arrangements with a subsidiary of RFC and subsidiaries of Aon
and (iv) the sale at a gain of the Company's equity investment in Nacolah.
As part of Mr. Hawes' total compensation package, in January 1997 he
received a grant of stock options to purchase 100,000 shares of the
Company's Common Stock. The amount of the annual grant was determined by
the Committee based on the terms of the Option Plan, the limitations based
on the number of shares available under the Option Plan, and common practice
in the market for public companies of similar size.
The Committee reviewed several factors in making the determinations
applicable to Mr. Hawes' compensation, including his demonstrated management
skills, years of experience within the life insurance industry and
compensation paid to Chief Executive Officers at other life insurance and
reinsurance companies.
T. Bowring Woodbury, II, Chairman
Carolyn K. McCandless
K. Fred Skousen
COMPARISON OF 50 MONTH CUMULATIVE TOTAL RETURN*
AMONG LIFE RE CORPORATION, THE WILSHIRE 5000 INDEX
AND THE S&P FINANCIAL INDEX
Cumulative Total Return
10/28/92 12/92 12/93 12/94 12/95 12/96
Life Re Corp LRE 100 116 82 72 104 163
WILSHIRE 5000 IW50 100 107 119 119 163 197
S & P FINANCIAL IFIL 100 114 127 122 189 255
* $100 INVESTED ON 10/28/92 IN STOCK OR ON 09/30/92 IN INDEX INCLUDING
REINVESTMENT OF DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
PROPOSAL TWO
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company, following the recommendation of
the Audit Committee, has appointed Ernst & Young LLP as the Company's
independent auditors for the year 1997. Ernst & Young LLP was first
retained as the Company's independent auditors in November 1988. Ernst &
Young LLP assists the Company with certain matters under the pension plan
and has served as a consultant to the Compensation Committee during 1993,
1994, 1995 and 1996 and to the Benefits Committee in 1994, 1995 and 1996.
In addition, during 1995 and 1996 Ernst & Young LLP consulted the Company
with respect to certain aspects of its reinsurance administration. No
relationship exists between Ernst & Young LLP and the Company other than the
usual relationship between independent auditors and client.
Although this appointment is not required to be submitted to a vote of
the stockholders, the Board of Directors believes it appropriate as a matter
of policy to request that the stockholders ratify the appointment of the
independent auditors for the year 1997.
The Company anticipates that a representative of Ernst & Young LLP
will be present at the Annual Meeting. Such representative will be given
the opportunity to make a statement if he or she desires to do so, and is
expected to be available to respond to any questions which may be submitted
at the Annual Meeting.
The Board of Directors has proposed that the stockholders adopt the
following resolution:
RESOLVED, that the appointment of Ernst & Young LLP by the Board of
Directors as the Company's independent auditors for the year 1997 is hereby
ratified.
The Board of Directors recommends that stockholders vote FOR the
selection of Ernst & Young LLP as the Company's independent auditors for
1997. Proxies solicited by the Board of Directors will be so voted unless
stockholders specify in their proxies a contrary choice. In the event a
majority of the votes cast at the meeting are not voted in favor of the
above resolution, the adverse vote will be considered as a direction to the
Board of Directors to select another auditor for the year 1998. Because of
the difficulty and expense of making any substitution of auditors so long
after the beginning of the current year, it is contemplated that the
appointment for the year 1997 will be permitted to stand unless the Board of
Directors determines another good reason for making a change.
1998 PROPOSALS OF STOCKHOLDERS
In order to be considered for inclusion in the proxy statement for the
regular annual meeting of the stockholders of the Company in the year 1998,
stockholder proposals must have been received by the Company not later than
November 28, 1997. Such proposals should be sent to the Corporate Secretary
of the Company at the address listed on page 1 hereof.
AVAILABILITY OF 10-K REPORT
The Company filed its Annual Report on Form 10-K for the year ended
December 31, 1996, with the Securities and Exchange Commission on March 28,
1997. A copy of the Form 10-K, including any financial statements and
financial statement schedules, and a list describing any exhibits not
contained therein, may be obtained without charge by any stockholder. The
exhibits are available upon payment of charges which approximate the
Company's cost of furnishing the exhibits. Requests for copies of the
Form 10-K should be sent to the Corporate Secretary at the address listed
on page 1 hereof.
OTHER MATTERS
Management is not aware of any business to be acted upon at the Annual
Meeting other than the business described in this Proxy Statement, but in
the event any other business should properly come before the Annual Meeting
calling for a vote of the stockholders, the proxy holders (as indicated on
the accompanying proxy card) will vote the proxies according to their best
judgment in the interests of the Company.
Exercise your right to vote; complete and sign the enclosed proxy card
and return it promptly in the envelope enclosed for your convenience. In the
event that you attend the Annual Meeting, you may revoke your proxy and vote
your shares in person.
By Order of the Board of Directors
/s/ W. WELDON WILSON,
Vice President, General Counsel
and Secretary
LIFE RE CORPORATION PROXY/VOTING INSTRUCTION CARD
969 HIGH RIDGE ROAD
STAMFORD, CONNECTICUT 06905
This Proxy is solicited on behalf of the Board of Directors of
Life Re Corporation for the Annual Meeting of Stockholders
on May 15, 1997
The undersigned hereby appoints Rodney A. Hawes, Jr., Douglas M. Schair
and Jacques E. Dubois, as proxies, severally and each with full power of
substitution, to vote all shares of Common Stock of Life Re Corporation
standing in the name of the undersigned on its books on March 19, 1997, at
the Annual Meeting of Stockholders to be held on May 15, 1997, at 9:30 a.m.
at the Hyatt Regency Greenwich, 1800 East Putnam Avenue, Old Greenwich,
Connecticut 06870, or at any adjournments thereof, with all the powers the
undersigned would possess if personally present as follows:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND IF
PROPERLY EXECUTED AND TIMELY DELIVERED, WILL BE VOTED AS DIRECTED HEREIN.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF
DIRECTORS AND "FOR" THE RATIFICATION OF INDEPENDENT AUDITORS.
(Continued, and to be dated and signed, on the reverse side)
LIFE RE CORPORATION
P.O. BOX 11026
NEW YORK, N.Y. 10203-0026
1. Election of directors:
FOR all nominees X WITHHOLD AUTHORITY to vote X *EXCEPTIONS X
listed below. for all nominees listed
below.
Nominees: Jacques E. Dubois and K. Fred Skousen, Ph.D.
(INSTRUCTIONS: To withhold authority to vote for any individual nominee, mark
the "Exceptions" box and write that nominee's name in the space provided
below.)
*Exceptions__________________________________________________________________
2. To ratify the appointment of Ernst & Young LLP as Life Re Corporation's
independent auditors for 1997.
FOR X AGAINST X ABSTAIN X
In their discretion the Proxies are authorized to vote upon such matters as
may properly come before the meeting or any adjournment or postponement
thereof.
Change of Address and X
or Comments Mark Here
The signature on this Proxy should correspond exactly with the stockholder's
name as printed to the left. In the case of joint tenancies, co-executors
or co-trustees, all should sign. Persons signing as Attorney, Executor,
Administrator, Trustee or Guardian should give their full title.
Dated:__________________________________, 1997
______________________________________________
Signature of Stockholder
______________________________________________
Signature of Stockholder
Votes MUST be indicated (x) in Black or Blue Ink. X
Please sign, date and return this Proxy in the enclosed postage prepaid
envelope.
