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:
[X] Preliminary proxy statement
[ ] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
E. W. BLANCH HOLDINGS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transactions applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined.)
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
<PAGE>
E. W. BLANCH HOLDINGS, INC.
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500 N. Akard, Suite 4500
Dallas, Texas 75201
March 24, 2000
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders of E. W.
Blanch Holdings, Inc. to be held at Lincoln Plaza, 500 North Akard, 37th Floor,
Dallas, Texas 75201, on Thursday, April 27, 2000, at 10:00 A.M. Central Daylight
Time. I encourage you to attend. Whether or not you plan to attend the meeting,
I urge you to vote your proxy. On behalf of your Board of Directors, thank you
for your continued support of and interest in E. W. Blanch Holdings, Inc.
Sincerely,
Edgar W. Blanch, Jr.
Chairman and Chief Executive Officer
<PAGE>
E. W. BLANCH HOLDINGS, INC.
500 N. AKARD, SUITE 4500
DALLAS, TEXAS 75201
--------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2000
--------------------
Notice is hereby given that the Annual Meeting of Shareholders of E. W.
Blanch Holdings, Inc. (the "Company") will be held at Lincoln Plaza, 500 North
Akard, 37th Floor, Dallas, Texas 75201, on Thursday, April 27, 2000, at 10:00
A.M. Central Daylight Time, for the following purposes:
1. To elect three Class I directors to serve until the Annual
Meeting of Shareholders in 2003 and until their respective
successors are duly elected and qualified;
2. To approve the E. W. Blanch Holdings, Inc. Management
Incentive Plan;
3. To amend the Certificate of Incorporation to increase the
number of authorized common shares from 30,000,000 to
60,000,000;
4. To ratify the appointment of Ernst & Young LLP as the
Company's independent auditors for the 2000 fiscal year; and
5. To act upon any other business that may properly be brought
before the Annual meeting.
The close of business on March 6, 2000 has been fixed as the record
date for determining the shareholders entitled to notice of and to vote at the
Annual Meeting.
Your attention is directed to the accompanying Proxy Statement.
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE ANNUAL MEETING, PLEASE
COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE.
Enclosed for your information is the Company's Annual Report for the
year ended December 31, 1999.
By Order of the Board of Directors
Daniel P. O'Keefe
SECRETARY
March 24, 2000
<PAGE>
E. W. BLANCH HOLDINGS, INC.
500 N. AKARD, SUITE 4500
DALLAS, TEXAS 75201
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PROXY STATEMENT
--------------------
ANNUAL MEETING OF SHAREHOLDERS
APRIL 27, 2000
INFORMATION CONCERNING SOLICITATION AND VOTING
The enclosed proxy is solicited by the Board of Directors of E. W.
Blanch Holdings, Inc. (the "Company") for use at the Annual Meeting of
Shareholders, which will be held at 10:00 A.M. Central Daylight Time on
Thursday, April 27, 2000, at Lincoln Plaza, 500 North Akard, 37th Floor, Dallas,
Texas 75201, and at any adjournment thereof.
Only shareholders of record at the close of business on March 6, 2000
are entitled to vote at the Annual Meeting or any adjournment thereof. As of
said date, 13,331,213 shares of the Company's common stock, $.01 par value per
share (the "Common Stock"), were outstanding and entitled to one vote per share
on all matters submitted to shareholders. A list of shareholders will be
available for inspection for at least ten days prior to the Annual Meeting at
the principal executive offices of the Company at 500 North Akard, Suite 4500,
Dallas, Texas 75201 and at the Annual Meeting.
The Board of Directors is aware of four items of business to be
considered at the Annual Meeting: (1) the election of three Class I directors to
serve until the Annual Meeting of Shareholders in 2003 and until their
respective successors are duly elected and qualified; (2) approval of the
Company's Management Incentive Plan; (3) approval of an amendment to the
Company's Certificate of Incorporation to increase the number of authorized
shares of Common Stock from 30,000,000 to 60,000,000; and (4) ratification of
the appointment of Ernst & Young LLP as the Company's independent auditors for
the 2000 fiscal year. The Board of Directors knows of no matters to be presented
for action at the Annual Meeting other than those mentioned above. However, if
any other matters properly come before the Annual Meeting, the persons named in
the proxy will vote on such other matters and/or for other nominees in
accordance with their best judgment. The Board of Directors recommends that an
affirmative vote be cast in favor of all of the proposals listed above.
The giving of a proxy does not preclude a shareholder from voting in
person at the Annual Meeting. The proxy is revocable before its exercise by
delivering either written notice of such revocation or a later dated proxy to
the Secretary of the Company at its executive office at any time prior to voting
of the shares represented by the earlier proxy. In addition, shareholders
attending the Annual Meeting may revoke their proxies by voting at the Annual
Meeting. All returned proxies that are properly signed and dated will be voted
as the shareholder directs. If no direction is given, executed proxies will be
voted FOR election of the Class I directors named herein, FOR approval of the
Management Incentive Plan, FOR approval of the amendment to the Company's
Certificate of Incorporation to increase the number of authorized shares of
Common Stock from 30,000,000 to 60,000,000 and FOR ratification of the
appointment of Ernst & Young LLP as the Company's independent auditors for the
2000 fiscal year.
This proxy solicitation material is being mailed on or about March 24,
2000 to shareholders as of the record date with a copy of the Company's 1999
Annual Report to Shareholders, which includes financial statements for the
period ended December 31, 1999.
Proxies will be voted at the Annual Meeting, or at any adjournment
thereof, at which a quorum is present, in accordance with the directions on the
proxy card. The holders of a majority of the Common Stock outstanding and
entitled to vote who are present either in person or represented by proxy will
constitute a quorum for the Annual Meeting.
1
<PAGE>
Directors are elected by a plurality of the votes cast. "Plurality"
means that the individuals who receive the largest number of votes cast "For"
are elected as directors up to the maximum number of directors to be chosen at
the Annual Meeting. Consequently, any shares not voted "For" a particular
director (whether as a result of a direction to withhold or a broker non-vote)
will not be counted in such director's favor.
The affirmative vote of a majority of the outstanding shares of Common
Stock is required to approve the amendment to the Company's Certificate of
Incorporation. All other matters to be acted on at the Annual Meeting require
the affirmative vote of a majority of the shares present at the meeting, in
person or by proxy, to constitute the action of the shareholders. If an executed
proxy card is returned and the shareholder has voted "abstain" on any matter (or
"withhold authority" as to the election of any Director), the shares represented
by such proxy will be considered present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote, but will not be
considered to have been voted in favor of such matter. If an executed proxy is
returned by a broker holding shares in street name which indicates that the
broker does not have discretionary authority as to certain shares to vote on one
or more matters, such shares will be considered present at the meeting for
purposes of determining a quorum, but will not be considered to be represented
at the meeting for purposes of calculating the vote with respect to such
matters.
The expense of preparing, printing and mailing this Proxy Statement
will be paid by the Company.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes, being divided as
equally as possible and each class having a term of three years. Each year the
term of office of one class expires. This year the term of Class I, consisting
of three Directors, expires. The following changes occurred to the Class I
Directors during 1999: (1) in April the Board of Directors, pursuant to the
Bylaws of the Company, voted to increase the number of Directors to nine and
appointed Rodman R. Fox as a Class I Director to fill the vacancy created by
that increase; (2) in October the Board of Directors, pursuant to the Bylaws of
the Company, voted to increase the number of Directors to ten and appointed Kaj
Ahlmann as a Class I Director to fill the vacancy created by that increase; and
(3) in October Joseph D. Sargent retired from the Board of Directors and in
December Gerald A. Isom was appointed as a Class I Director to fill the vacancy
created by Mr. Sargent's retirement. In addition, Frank S. Wilkinson, Jr. is not
seeking reelection as a Class I Director. Consequently, each of the Class I
Directors standing for reelection at the 2000 Annual Meeting is new since the
Company's 1999 Annual Meeting.
It is the intention of the Board that the shares represented by proxy,
unless otherwise indicated thereon, will be voted for the reelection of Kaj
Ahlmann, Rodman R. Fox, and Gerald A. Isom as Directors to hold office for a
term of three years until the Annual Meeting of Shareholders in 2003 and until
their respective successors are duly elected and qualified.
The persons designated as proxies reserve full discretion to cast votes
for other persons in the event any such nominee is unable to serve. However, the
Board of Directors has no reason to believe that any nominee will be unable to
serve if elected. The election of Directors requires a plurality of the votes
cast at the Annual Meeting, in person or by proxy. The proxies cannot be voted
for a greater number of persons than the three named nominees.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR EACH OF
THE NOMINEES.
The following sets forth information regarding each nominee and the
remaining Directors who will continue in office after the Annual Meeting.
CLASS I DIRECTORS
(TERMS EXPIRING IN 2000)
KAJ AHLMANN (49)--Mr. Ahlmann has served as Vice Chairman and Director
of the Company since November 24, 1999. Mr. Ahlmann has worked in the insurance
industry since 1972. He was appointed as Deputy General Manager of Baltica
Insurance in 1980. Baltica acquired Nordisk Reinsurance Company A/S and Mr.
Ahlmann was appointed Chief General Manager of Baltica-Nordisk Reinsurance in
1985 and as Managing Director of Nordisk Reinsurance Company A/S in 1988.
Following the acquisition of Nordisk Reinsurance Company by Employers
Reinsurance Corporation in 1988, Mr. Ahlmann served as Managing Director of
Nordisk and Chief Operating Officer for Europe beginning in 1990. In 1992 he
assumed the additional responsibility of Chief Operating Officer of Employers
Reinsurance International, and in September of 1993 he was named Chairman,
President and Chief Executive Officer of the parent organization, Employers
Reinsurance Corporation. Mr. Ahlmann currently is a Director of Insurance
Holdings of America, Inc.
2
<PAGE>
RODMAN R. FOX (36)--Mr. Fox is an officer of the Company's wholly-owned
subsidiary, E. W. Blanch Co., Inc., serving as President and Chief Operating
Officer since March of 1997 and as a Director of the Company since April of
1999. Mr. Fox has been associated with the Company and its predecessors since
1985 and has held a variety of positions in the London, New York, Philadelphia
and Dallas offices. He is currently responsible for all operations of E. W.
Blanch Co., Inc., the wholly-owned subsidiary of the Company of which he is
President and Chief Operating Officer, with offices in Minneapolis, Chicago,
Dallas, Atlanta, Philadelphia, New York, San Francisco and Boston.
GERALD A. ISOM (61)--Mr. Isom has served as a Director of the Company
since December of 1999, when he was appointed to the vacancy created by the
retirement of Mr. Joseph Sargent. Mr. Isom was President of CIGNA Property &
Casualty from March 1993 until his retirement in August 1999. Mr. Isom began his
insurance career with Fireman's Fund. In June 1985 he became President and CEO
of Transamerica Insurance; he also served as a group Vice President of
Transamerica Corporation from 1991 to 1993. Mr. Isom is currently a director of
Clinician Support Technology, Inc., a member of the Ohio Valley College Board of
Trustees and a member of the Pepperdine University Board of Regents.
CLASS II DIRECTORS
(TERMS EXPIRING IN 2001)
PAUL B. INGREY (60)--Mr. Ingrey has served as a Director of the Company
since January 1997. Mr. Ingrey retired in January 1997 from F&G Re, which he
helped found and where he served as Chairman of the Board and Chief Executive
Officer from January 1996 until his retirement. Prior to 1996, Mr. Ingrey served
as President of F&G Re. F&G Re is a reinsurance company and a division of United
States Fidelity and Guaranty Company.
JAMES N. LAND, JR. (70)--Mr. Land has served as a Director of the
Company since April 1993 and as a corporate financial consultant to a number of
companies since October 1976. Mr. Land currently serves on the Board of
Directors of Riviera Holdings Corporation. In addition, Mr. Land served on the
Executive Committee of the Board of Directors of The First Boston Corporation
from 1967 to 1976.
CHRIS L. WALKER (42)--Mr. Walker has served as President and Chief
Operating Officer of the Company since July 1995, as Executive Vice President
from March 1993 to July 1995 and as a Director of the Company since October
1994. Mr. Walker has been associated with predecessors of the Company since
1980. From 1985 to 1990, he served as Vice President, from 1990 to 1993, he
served as Senior Vice President, and from February 1993 to March 1993, he served
as Executive Vice President of those predecessors. He is currently serving as
Chief Executive Officer of the Company's wholly owned subsidiary, E. W. Blanch
Co., Inc.
NOMINEES FOR CLASS III DIRECTORS
(TERMS EXPIRING IN 2002)
EDGAR W. BLANCH, JR. (63)--Mr. Blanch has served as Chief Executive
Officer and Chairman of the Board of Directors of the Company since its
formation in March 1993. Mr. Blanch has been associated with predecessors of the
Company since 1958. From 1976 to 1993, he served as Chief Executive Officer of
those predecessors.
WILLIAM B. MADDEN (61)--Mr. Madden has served as a Director of the
Company since April 1993 and as the President of Madden Securities Corporation,
a general securities and investment banking firm, since 1986. Mr. Madden
currently is the Chairman of the Board of Directors of Mercantile Bank and Trust
and serves as a Director of Pillowtex Corporation.
STEVEN G. ROTHMEIER (53)--Mr. Rothmeier has served as a Director of the
Company since April 1993 and as Chairman of the Board of Directors and Chief
Executive Officer of Great Northern Capital, a private investment management
firm, since March 1993. Mr. Rothmeier served as President of IAI Capital Group,
a venture capital and merchant banking firm, from 1989 to 1993 and as Chairman
of the Board of Directors and Chief Executive Officer of NWA, Inc. and Northwest
Airlines Inc. from 1985 to 1989. Mr. Rothmeier currently is a Director of
GenCorp, Department 56, Inc., Precision Castparts Corp., and Waste Management,
Inc.
3
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Compensation
Committee") consists of Messrs. Ingrey, Isom, Land, Madden and Rothmeier. The
Compensation Committee determines the compensation for executive officers of the
Company and establishes the Company's compensation policies and practices. The
Compensation Committee also grants awards under the Company's employee stock
plans.
AUDIT COMMITTEE
The Audit Committee of the Board of Directors (the "Audit Committee")
consists of Messrs. Ingrey, Isom, Land, Madden and Rothmeier. The Audit
Committee submits recommendations to the Board of Directors with respect to the
selection of the Company's independent auditors and with respect to any other
matters it deems appropriate. It reviews the annual financial statements of the
Company with the Company's independent auditors, the practices and procedures
adopted by the Company in the preparation of such statements and the independent
auditor's annual scope of audit.
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES
During the fiscal year ended December 31, 1999, the Board of Directors
held ten meetings, the Compensation Committee held four meetings and the Audit
Committee held four meetings. All Directors attended more than 75% of the
meetings of the Board of Directors and committees on which they served.
DIRECTORS' COMPENSATION
Directors of the Company who are not officers or employees of the
Company receive a fee of $9,000 per quarter plus $1,000 per meeting, including
committee meetings, attended. Directors of the Company who are officers or
employees of the Company do not receive additional compensation for their
services as a Director. No Director receives additional compensation for serving
on a committee other than the fee for attendance at committee meetings.
Directors of the Company who are not officers or employees of the Company may
elect to receive their fees in the form of Common Stock of the Company, or to
defer receipt of such fees and have the deferred amounts treated as if invested
in Common Stock, pursuant to the Company's Non-Employee Directors' Stock Plan.
In addition, pursuant to the Company's Directors' Stock Option Plan
(the "Directors' Stock Option Plan") adopted on July 24, 1997, each non-employee
Director automatically receives an initial stock option grant for 5,000 shares
of Common Stock on the date such person first becomes a Director and an
additional annual stock option grant for 2,000 shares of Common Stock on the
date of the Annual Meeting of Shareholders in each year. The initial stock
option grant of 5,000 shares was granted to each non-employee Director in office
on the date the Directors' Stock Option Plan was adopted and to Mr. Isom on
December 20, 1999, when he became a member of the Company's Board of Directors.
The initial stock option grant vests one-third on the date of grant and
one-third on each of the first and second anniversary dates of the date of
grant, provided the non-employee Director is still a Director of the Company on
such date. The annual option grants vest in full six months following the date
of grant, provided the non-employee Director is still a Director of the Company
on such date. The annual stock option grant is only awarded to non-employee
Directors who have served since the date of the last annual Meeting of
Shareholders and who will continue to serve as Directors after the date of such
grant. All options granted under the Directors' Stock Option Plan are
nonqualified stock options with a term of ten years and are granted at an option
price equal to the fair market value of the Common Stock on the date of grant.
4
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of Common Stock as of March 6, 2000: (i) by each Director;
(ii) by each of the executive officers included in the Summary Compensation
Table set forth under the caption "Executive Compensation;" (iii) by all
Directors and executive officers of the Company as a group; and (iv) by each
person known to the Company to be the beneficial owner of more than 5% of the
outstanding shares of Common Stock. Except as otherwise indicated, the named
beneficial owner has sole voting and investment power with respect to the shares
held by such beneficial owner.
AMOUNT AND NATURE OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP CLASS
------------------------ ------------------------------- ----------
Kaj Ahlmann -0- -0-
Edgar W. Blanch, Jr. 587,432(1) 4.41%
Rodman R. Fox 88,547(13) *
Paul B. Ingrey 23,500(2) *
Gerald A. Isom -0- -0-
James N. Land, Jr. 6,000 *
William B. Madden 3,000(3) *
Ian D. Packer 3,067(4) *
Steven G. Rothmeier 5,000 *
Chris L. Walker 196,897(5) 1.48%
Frank S. Wilkinson, Jr. 86,842(6) *
All directors and executive officers 1,000,285 7.49%
as a group (11 persons)
American Express Financial Corporation 770,179(7) 5.78%
IDS Tower 10
Minneapolis, MN 55440
BankAmerica Corporation 768,600(8) 5.77%
555 California Street, Suite 2600
San Francisco, CA 94104
FMR Corp. 1,074,900(9) 8.06%
82 Devonshire Street
Boston, MA 02109
Franklin Resources, Inc. 675,700(10) 5.07%
777 Mariners Island Blvd.
6th Floor
San Mateo, CA 94404
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<PAGE>
Royce & Associates, Inc. 697,600(11) 5.23%
Royce Management Company 30,200(11) *
Charles M. Royce, Controlling Person
1414 Avenue of the Americas
New York, NY 10019
T. Rowe Price Associates, Inc. 1,315,250(12) 9.87%
100 East Pratt Street
Baltimore, MD 21202
- ----------------------
* Indicates ownership of less than 1% of the outstanding Common Stock.
(1) Includes 918.78 shares of Common Stock held in Mr. Blanch's 401K account.
(2) Includes 10,000 shares of Common Stock beneficially owned by a family trust
and which, due to Mr. Ingrey's position as trustee of such trust, may be
deemed to be beneficially owned by him. Includes 2,000 shares of Common
Stock owned by Mr. Ingrey's spouse as to which he disclaims beneficial
ownership.
(3) Includes 1,000 shares of Common Stock beneficially owned by Mr. Madden's
spouse as to which he disclaims beneficial ownership.
(4) Includes 2,496 shares of Common Stock held by Mr. Packer in an IRA.
(5) Includes 918.79 shares of Common Stock held in Mr. Walker's 401K account
and 1,439.91 shares of Common Stock held by Mr. Walker in the Company's
Employee Stock Purchase Plan.
(6) Includes 12,120 shares of Common Stock beneficially owned by minors' trusts
and which, due to Mr. Wilkinson's position as trustee of such trusts, may
be deemed to be beneficially owned by him. Includes 15,000 shares of Common
Stock beneficially owned by a charitable trust and which, due to Mr.
Wilkinson's position as trustee of such trust, may be deemed to be
beneficially owned by him. Includes 917.97 shares of Common Stock held in
Mr. Wilkinson's 401K account.
(7) Based on a Schedule 13G dated December 31, 1999 prepared by American
Express Financial Corporation ("Amex Financial") and filed with the
Securities and Exchange Commission. Amex Financial and American Express
Company ("Amex") had shared voting power with respect to 14,800 shares and
shared dispositive power with respect to 770,179 shares. Amex Financial
also reported that it was an investment advisor and that Amex was a parent
holding company.
(8) Based on a Schedule 13G dated February 8, 1999 prepared by BankAmerica
Corporation ("BankAmerica") and filed with the Securities and Exchange
Commission. BankAmerica and certain of its affiliates and subsidiaries had
shared voting power and shared dispositive power with respect to 768,600
shares. BankAmerica also reported that this filing was made in its capacity
as a bank holding company, and as the successor to all assets and
liabilities after a merger between NationsBank Corporation and BankAmerica
on September 30, 1998.
(9) Based on an amended Schedule 13G dated February 14, 2000 prepared by FMR
Corp. and filed with the Securities and Exchange Commission. FMR Corp. and
certain of its affiliates and subsidiaries had sole voting power with
respect to 398,700 shares, no shared voting power with respect to the
shares and sole dispositive power with respect to 1,074,900 shares. FMR
Corp. also reported that various persons have the right to receive or the
power to direct the receipt of dividends from, or the proceeds from the
sale of, the shares, and that none of such persons had an interest relating
to more than 5% of the Company's outstanding Common Stock.
(10) Based on a Schedule 13G, dated January 20, 2000, prepared by Franklin
Resources, Inc. ("FRI") and filed with the Securities and Exchange
Commission. FRI, its principal shareholders, certain of its investment
advisory subsidiaries and other affiliates had sole voting power and sole
dispositive power with respect to 675,700 shares. FRI is an investment
advisor. FRI, the principal shareholders and investment advisory
subsidiaries disclaim any economic interest or any beneficial ownership of
the shares.
(11) Based on an amended Schedule 13G, dated February 4, 1998, prepared by Royce
& Associates, Inc. ("Royce"), Royce Management Company ("RMC") and Charles
M. Royce, filed with the Securities and Exchange Commission. Royce had sole
voting and dispositive powers with respect to 697,600 shares and RMC had
sole voting and dispositive powers with respect to 30,200 shares.
6
<PAGE>
Royce and RMC reported that the filing was made on their behalf as
investment advisers. Mr. Royce reported that he does not own any shares of
the Company's Common Stock and he disclaims beneficial ownership of the
shares held by Royce and RMC.
(12) Based on an amended Schedule 13G, dated February 10, 2000, prepared by T.
Rowe Price Associates, Inc. ("Price") and filed with the Securities and
Exchange Commission. Price had sole voting power with respect to 237,000
shares and sole dispositive power with respect to 1,315,250 shares. Price
also reported that these securities were owned by various individual and
institutional investors for which Price serves as investment advisor with
power to direct investments and/or sole power to vote the securities. For
purposes of the reporting requirements of the Securities Exchange Act of
1934, Price is deemed to be a beneficial owner of such securities; however,
Price expressly disclaims that it is, in fact, the beneficial owner of such
securities.
(13) Includes 922.08 shares held in Mr. Fox's 401K account and 77.26 shares held
by Mr. Fox in the Company's Employee Stock Purchase Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Directors and executive officers to file reports of ownership and
changes in ownership of the Company's Common Stock with the Securities and
Exchange Commission and the New York Stock Exchange, and the Company is required
to identify any of those individuals who failed to file such reports on a timely
basis. The Company believes that during 1999 all Directors and executive
officers of the Company complied with their Section 16(a) filing requirements,
except: a Form 3, Initial Statement of Beneficial Ownership Of Securities due
January 25, 1999 was filed April 7, 1999 for Rodman R. Fox; a Form 4 Statement
of Changes in Beneficial Ownership for March, for Frank S. Wilkinson, Jr., was
filed April 16, 1999; a Form 4 Statement of Changes in Beneficial Ownership for
April, for Frank S. Wilkinson, Jr., was filed June 10, 1999; a Form 4 Statement
of Changes in Beneficial Ownership for October, for Joseph D. Sargent, was filed
December 3, 1999 (Final Filing); an amended Form 4 Statement of Changes in
Beneficial Ownership for February, for Daniel P. O'Keefe, was filed August 16,
1999.
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EXECUTIVE COMPENSATION
The following table shows compensation for each of the last three
fiscal years of the Chief Executive Officer and the other four most highly
compensated persons serving as executive officers at the end of the last fiscal
year.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
AWARDS
OTHER RESTRICTED SECURITIES
NAME AND PRINCIPAL ANNUAL STOCK UNDERLYING ALL OTHER
POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2) AWARDS($)(3) OPTIONS(#) COMPENSATION($)(4)
-------- ---- --------- ----------- ------------------ ------------ ---------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Edgar W. Blanch, Jr. 1999 $800,000 $159,352 $ 73,755 $318,704 41,864 $ 82,576
Chairman of the 1998 $800,000 $764,292 -- $328,584 -- $ 84,688
Board, Chief 1997 $823,750 $849,902 -- $412,733 500,000 $ 82,719
Executive Officer
And Director
Chris L. Walker 1999 $480,000 $ 95,611 -- $191,223 49,691 $ 43,774
President, Chief 1998 $455,000 $598,575 -- $197,150 15,000 $ 44,063
Operating Officer 1997 $403,750 $425,895 $189,803 $196,053 115,000 $ 37,033
And Director
Rodman R. Fox 1999 $400,000 $ 79,686 -- $159,373 40,411 $ 38,404
President and Chief 1998 $400,000 $582,146 -- $164,292 12,000 $ 38,409
Operating Officer of 1997 $375,000 $298,186 -- $206,372 162,000 $ 34,495
E. W. Blanch Co.,
Inc.
Frank S. Wilkinson, Jr. 1999 $349,904 $ 69,703 $124,064 $139,405 8,782 $ 40,380
Executive Vice 1998 $349,904 $196,852 -- $143,704 -- $ 39,014
President and 1997 $371,773 $199,545 -- $180,556 75,000 $ 39,014
Director
Ian D. Packer(5) 1999 $285,000 -- -- -- 8,782 $ 23,204
Executive Vice 1998 $240,000 $174,288 $ 35,334 $ 98,575 -- $ 23,238
President and Chief 1997 $255,000 $280,486 $171,356 $123,837 100,000 $ 23,245
Financial Officer
</TABLE>
- ---------------------
(1) "Bonus" for 1999 consists solely of shares of Common Stock which will be
paid on April 1, 2000 pursuant to the Executive Restricted Stock Incentive
Plan for 1999, as follows: Mr. Blanch (2,602); Mr. Walker (1,561); Mr. Fox
(1,301); and Mr. Wilkinson (1,138). The value of such shares are reported
in the above table based on the closing price of the Common Stock on
December 31, 1999 of $61.25 per share.
No bonus was paid under the 1999 Management Incentive Plan described below.
(2) "Other Annual Compensation" includes: (a) financial and tax preparation
fees, with respect to Mr. Wilkinson ($23,150); (b) use of corporate jet,
with respect to Mr. Blanch ($73,755); and (c) vehicle with respect to Mr.
Wilkinson ($96,174).
(3) Shares of restricted stock awarded pursuant to the Executive Restricted
Stock Incentive Plan for 1999, as follows: Mr. Blanch (5,203); Mr. Walker
(3,122); Mr. Fox (2,602); and Mr. Wilkinson (2,276). The value of the
shares reported in the above table is based on the closing price of the
Common Stock on December 31, 1999 of $61.25 per share. The shares of
restricted stock vest 50% on April 1, 2001 and 50% on April 1, 2002.
Dividends are paid on the shares of restricted stock at the same rate as
paid to all stockholders, but the executive officer is not entitled to
receive such dividends unless and until the related shares vest. As of
December 31, 1999, each named executive officer held total shares of
restricted stock, as follows: Mr. Blanch (20,724 shares;
8
<PAGE>
$1,269,345); Mr. Walker (11,685 shares; $715,706); Mr. Fox (10,633 shares;
$634,734); Mr. Wilkinson (9,065 shares; $555,231.25); and Mr. Packer (6,318
shares; $386,978). Share values are based on $61.25 per share, the closing
price of the Common Stock on December 31, 1999.
(4) "All Other Compensation" for 1999 includes:
(a) Contribution at 7.5% of salary pursuant to the Company's retirement
plan, subject to the Internal Revenue Code limitation of $12,000 with
the remainder being paid in cash, to Mr. Blanch ($63,000); Mr. Walker
($30,656); Mr. Fox ($25,500); Mr. Wilkinson ($20,804); and Mr. Packer
($10,500).
(b) Group term life taxable income with regard to Mr. Blanch ($7,576); Mr.
Walker ($1,118); Mr. Fox ($904); Mr. Wilkinson ($7,576); and Mr.
Packer ($704).
(5) Mr. Packer resigned his employment with the Company, effective February 18,
2000.
9
<PAGE>
OPTIONS/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable Value
At Assumed Annual Rates of
Stock Price
Appreciation
Individual Grants For Option Term
----------------------------------------------------------------------- --------------------------
% of Total
Options/SARs
Number of Securities Granted to
Underlying Options/SARs Employees in Exercise or Base Expiration
Granted(#) Fiscal Year Price ($/Sh) Date 5% 10%
---------- ----------- ------------ ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Edgar W. Blanch, Jr. 41,864(1) 7.24% $56.0625 1/28/09 $1,497,408 $3,794,725
Chris L. Walker 15,000(2) 2.59% $66.6200 4/25/09 $480,449 $1,356,953
34,691(1) 6.00% $56.0625 1/28/09 $1,240,841 $3,144,535
Rodman R. Fox 12,000(2) 2.08% $66.6200 4/25/09 $384,359 $1,085,562
28,411(1) 4.91% $56.0625 1/28/09 $1,016,216 $2,575,290
Frank S. Wilkinson, Jr. 8,782(1) 1.52% $56.0625 1/28/09 $314,118 $796,037
Ian D. Packer 8,782(1) 1.52% $56.0625 1/28/09 $314,118 $796,037
</TABLE>
- --------------------
(1) Options vest one-third after one year from date of grant, and one-third
after the second and third years from date of grant. Vesting of non-vested
options accelerates in the event of a change in control. Options have a
ten-year term.
(2) Granted automatically pursuant to a special agreement entered into in 1995;
the exercise price for these options is ten percent above the trading price
of the Company's Common Stock on the date of each annual issuance. Options
fully vest on 4/25/01. Vesting of non-vested options accelerates in the
event of a change in control. Options have a ten-year term.
AGGREGATE OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Number of Securities Underlying Unexercised Value of Unexercised In-the-Money
Options/SARs at FY-End(#) Options/SARs at FY-End($)(1)
------------------------------------------- ---------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Edgar W. Blanch, Jr. 333,334 208,530 $11,416,690 $14,390,299
Chris L. Walker 166,667 98,024 $6,044,177 $2,050,058
Rodman R. Fox 45,328 221,583 $1,859,765 $6,109,824
Frank S. Wilkinson, Jr. 50,000 67,564 $1,493,750 $967,676
Ian D. Packer -0- 42,115 -0- $1,114,294
</TABLE>
- -----------------------
(1) Based on $61.25 per share, which was the closing price of a share of the
Common Stock on the New York Stock Exchange on December 31, 1999.
EMPLOYMENT AGREEMENTS
On May 6, 1993, at the time of the Company's initial public offering,
the Company entered into employment agreements with Messrs. Blanch, Walker, Fox
and Wilkinson. These agreements provide for an initial term of three years and
are renewable thereafter on a month-to-month basis at a minimum annual salary as
follows: Mr. Blanch ($895,000); Mr. Wilkinson ($437,380); Mr. Walker ($275,000);
and Mr. Fox ($135,000). On January 1, 1997, the Company entered into a new
employment agreement with Mr. Blanch. This agreement provides for a term of five
years and a minimum annual salary of $1,000,000. Pursuant to the terms of the
employment
10
<PAGE>
agreements, each executive is prohibited from competing against the Company for
a period ending two years after the termination of the executive's employment
with the Company.
On July 24, 1997, the Company entered into change of control Severance
Agreements (the "Agreements") with Mr. Blanch, Mr. Walker, Mr. Fox, Mr.
Wilkinson and Mr. Packer (the "Executives"). The Agreements provide for certain
payments and other benefits from the Company to the Executives if, following a
Change in Control, the Company terminates the Executive's employment without
Cause or the Executive terminates his employment for Good Reason. Such payments
and benefits include: (i) severance pay equal to three times the Executive's
salary, bonus and incentive payments (at the highest annual rate in effect
during the three years prior to the termination); (ii) a lump-sum payment equal
to the benefit the Executive would have received under the Company's retirement
plan if he had remained employed by the Company at the compensation level
provided by the Agreement for three years following the date of termination;
(iii) payment for [a] any earned bonus for the preceding fiscal year not already
paid; and [b] any vacation earned or accrued but not taken; (iv) the payment of
legal fees and expenses relating to the termination; (v) the termination of any
noncompetition arrangement between the Company and the Executive; and (vi) a
gross-up payment for any excise tax imposed on such payments or benefits and for
any tax imposed on such gross-up. Under the Agreements, "Cause" is defined as
willful and continued failure to perform duties and obligations or willful
misconduct materially injurious to the Company; "Good Reason" is defined to
include a change in the Executive's responsibility or status which is not
comparable with those prior to a Change in Control, a reduction in salary or
benefits, or a mandatory relocation; and "Change in Control" is defined to
include a change in the control of the type required to be disclosed under
Securities and Exchange Commission proxy rules, acquisition by a person or group
of 20% of the outstanding voting stock of the Company, a proxy fight or
contested election which results in Continuing Directors (as defined in the
Agreements) not constituting a majority of the Company's Board of Directors, or
another event the majority of the Continuing Directors determines to be a Change
in Control. The Agreements cover an initial period from July 24, 1997 to April
1, 2001 and may be extended on an annual basis thereafter.
11
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board has the overall responsibility
for compensation actions affecting the Company's executive officers. The
Compensation Committee's responsibilities include approving base and incentive
compensation. The Compensation Committee is comprised entirely of Directors who
are neither current nor former employees of the Company. There are no
compensation committee interlocks, i.e., no executive officer of the Company
serves as a member of the board of directors or compensation committee of
another entity that has an executive officer serving on the Board or the
Compensation Committee at the Company.
The goal of the Company's executive compensation program is to
encourage performance, as well as to attract and retain the management talent
required to operate the Company successfully. The program has also been designed
to create a strong and direct link between the compensation of the Company's
executive officers, on the one hand, and the Company's long range success and
shareholder value, on the other hand.
BASE COMPENSATION
The Compensation Committee reviews and approves annually all salary
increases for executive officers. As discussed above, minimum annual base
salaries were established pursuant to the employment agreements with certain
executive officers. Base salaries are adjusted in the discretion of the
Compensation Committee based on the level of responsibility and the individual
performance of each officer. Determinations with respect to base salaries are
primarily subjective and are not targeted to any specific criteria.
During 1999, the Company paid base compensation to each of the
executive officers as follows: Mr. Blanch, $800,000; Mr. Walker, $480,000; Mr.
Fox, $400,000; Mr. Wilkinson, $349,904; and Mr. Packer, $285,000.
INCENTIVE COMPENSATION
The incentive compensation for executive officers of the Company is
principally derived from the Company's Management Incentive Plan. The Management
Incentive Plan is a shareholder-approved cash bonus plan designed to reward the
executive officers for exceptional performance based on the achievement of
annual Company performance goals. In order for participants to earn an award,
the Company's growth in revenues and net income must exceed predefined amounts.
Revenues for the year ended December 31, 1999 were $244.5 million,
representing a 14.9% increase over 1998 revenues. Net income for the year ended
December 31, 1999 was $39.7 million, representing a 25.0% increase over 1998 net
income. Under the terms of the Management Incentive Plan, these financial
results would have yielded a bonus pool of $805,903. The Chairman of the Board
and Chief Executive Officer, after consulting with the other members of the
executive officer group, makes a recommendation to the Compensation Committee
regarding the allocation of the bonus pool among the executive officers, and the
Compensation Committee approves the actual allocation of bonuses under the Plan.
For 1999 the Chairman of the Board and Chief Executive Officer recommended that
no bonuses be distributed pursuant to the Management Incentive Plan, and the
Compensation Committee approved that recommendation.
STOCK BASED COMPENSATION
The Compensation Committee believes that ownership of the Company's
Common Stock by management can effectively motivate the building of shareholder
wealth by aligning the interests of management with those of the Company's
shareholders. Stock based compensation for executive officers of the Company has
historically taken the form of stock options.
The Compensation Committee's determinations with regard to stock option
grants to executive officers are based primarily on the officer's level of stock
ownership, level of responsibility and individual performance. In 1999, the
Compensation Committee granted no stock options to executive officers of the
Company based on the foregoing criteria.
In 1998 the Board of Directors adopted the E. W. Blanch Holdings, Inc.
Global Compensation Plan. This plan includes a long term incentive compensation
program under which all full-time employees receive an annual grant of stock
options, according to factors set forth in the plan. Options granted under this
plan in 1999 to all employees included grants to Messrs. Blanch (41,864); Walker
(34,691); Fox (28,411); Wilkinson (8,782); Packer (8,782); and all executives as
a group (122,530).
EXECUTIVE RESTRICTED STOCK INCENTIVE PLAN
In 1997, the Compensation Committee adopted and the shareholders
approved the Company's Executive Restricted Stock Incentive Plan (the
"Restricted Stock Incentive Plan"). The purpose of the Restricted Stock
Incentive Plan is to provide at-risk, equity-
12
<PAGE>
based compensation for officer-level employees, in order to further incentivize
those key employees to contribute to the financial success and growth of the
Company, to the benefit of the Company's shareholders.
Under the Restricted Stock Incentive Plan, each eligible participant
may make an irrevocable election to forego a specified percent of his or her
base compensation in exchange for the right to receive a restricted stock grant.
If the target performance goals set by the Committee for the performance period
are achieved, the participant is awarded restricted stock equal in value to two
times the amount of base compensation the participant elected to forego, which
restricted stock vests one-third on the April 1 following the end of that
performance period and one-third on April 1 of the two subsequent years. If
those target performance goals are not achieved, the participant is awarded
restricted stock equal in value to 50% of the amount of base compensation the
participant elected to forego, which restricted stock fully vests on the April 1
following the end of that performance period. Messrs. Blanch, Walker, Fox,
Wilkinson and Packer elected to participate in the Restricted Stock Incentive
Plan in 1999. The performance target established by the Compensation Committee
for the 1999 performance period was achieved, resulting in the award of shares
as reported in the Summary Compensation Table.
RETIREMENT BENEFITS
Executive officers also participate in the Company's retirement plan
which provides that 7.5% of the first $160,000 of compensation (which is the
Internal Revenue Code compensation limit for retirement plans) be contributed to
the Company's retirement plan, and that 7.5% of the compensation in excess of
the $170,000 Internal Revenue Code limit be paid by the Company as a cash award.
CEO COMPENSATION
Mr. Blanch has served as CEO of the Company since its formation in
March 1993. Based on the Stock Performance Graph below, the Company's
shareholders have received a total return (consisting of appreciation in the
price of the Common Stock and assuming the reinvestment of all dividends) of
220.4% from December 31, 1994 through December 31, 1999. Effective January 1,
1998, the base salary for Mr. Blanch was increased to $1,000,000 pursuant to the
employment agreement discussed above. Mr. Blanch is eligible to receive
incentive compensation under the Company's Management Incentive Plan, is
eligible to participate in the Executive Restricted Stock Incentive Plan and
receives benefits pursuant to the Company's retirement plan. Mr. Blanch received
no bonus under the 1999 Management Incentive Plan. Mr. Blanch received 41,864
options under the Company's Global Compensation Plan, as discussed above.
Compensation decisions with regard to Mr. Blanch were based primarily on his
level of responsibility, individual performance and Company performance.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(m)
Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1,000,000
paid to the Company's Chief Executive Officer and four other most highly
compensated executive officers. Qualifying "performance-based compensation" and
compensation paid pursuant to plans adopted prior to a Company's initial public
offering of securities will not be subject to the deduction limit if certain
requirements are met. The Company currently intends to structure the
compensation of its executive officers in a manner that avoids the deduction
limits of Section 162(m). Accordingly, in order to comply with the shareholder
approval requirements for "performance-based compensation", the Company is
submitting for shareholder approval its Management Incentive Plan.
Compensation Committee
Steven G. Rothmeier, Chairman
Paul B. Ingrey, Member
Gerald A. Isom, Member
James N. Land, Jr., Member
William B. Madden, Member
13
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares the cumulative total shareholder return*
(assuming dividends reinvested) on the Common Stock since December 31, 1994 to
the cumulative total shareholder return over such period of (i) the S&P 500
Index and (ii) the S&P Insurance Broker Index.
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
AMONG E. W. BLANCH HOLDINGS, INC., THE S & P 500 INDEX
AND THE S & P INSURANCE BROKERS INDEX
[PLOT POINTS CHART]
Cumulative Total Return
---------------------------------------------------
12/94 12/95 12/96 12/97 12/98 12/99
E. W. BLANCH HOLDINGS, INC. 100.00 115.75 101.53 176.39 246.06 320.38
S & P 500 100.00 137.58 169.17 225.61 290.09 351.13
S & P INSURANCE BROKERS 100.00 114.40 136.01 197.76 217.30 316.85
* $100 invested on December 31, 1994 in Common Stock--including reinvestment of
dividends.
14
<PAGE>
APPROVAL OF THE E. W. BLANCH HOLDINGS, INC.
MANAGEMENT INCENTIVE PLAN
The Compensation Committee has adopted a Management Incentive Plan
which is summarized below. The Plan is being submitted for shareholder approval
in order to comply with the shareholder approval requirement for qualifying
"performance-based compensation" under Section 162(m) of the Code which would
generally preserve the tax-deductible status of the incentive compensation
payments.
SUMMARY OF MANAGEMENT INCENTIVE PLAN
The participants in the Management Incentive Plan are certain executive
officers of the Company, currently Messrs. Blanch, Fox, Walker and Ahlmann.
Under the Management Incentive Plan, participants will be allocated awards from
a bonus pool equal to 20% of the Company's Income before Taxes for each year
(excluding the Management Incentive Plan expense) in excess of 120% of the
Company's Income before Taxes for the prior year (excluding the Management
Incentive Plan expense and excluding other extraordinary events, such as
restructuring charges, as determined by the Compensation Committee) plus 37.5%
of the aggregate bonus amount awarded to all employees under the Company's
Employee Incentive Plan. The amount awarded to all employees under the Employee
Incentive Plan is based on the achievement of earnings growth in excess of a
predefined goal.
The plan provides that the Chief Executive Officer shall be paid 50% of
the Management Incentive Plan bonus pool. The Compensation Committee may not
increase this percentage allocation, but may, in its discretion, reduce it.
Bonuses will be allocated to the other participating executive officers from the
remaining funds in the pool based upon the Committee's judgment of their
performance during the year. In addition, individual bonuses paid to the
participants may not exceed 100% of their respective base salaries for the year.
Bonuses available for distribution will be paid by March 15 of the following
year. In order to be eligible to receive a bonus, a participant must be an
employee of the Company on the date such bonus is to be paid.
The design of the Management Incentive Plan is the same as the 1999
Management Incentive Plan, previously approved by shareholders. There were no
bonuses granted under the Management Incentive Plan in effect during 1999.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPROVAL OF THE MANAGEMENT INCENTIVE PLAN.
APPROVAL OF THE INCREASE OF COMMON
SHARES AUTHORIZED
On January 27, 2000, the Board of Directors approved a resolution
recommending to the shareholders of the Company that the Company's Certificate
of Incorporation be amended, increasing the total number of authorized shares of
Common Stock from 30,000,000 to 60,000,000. If the amendment is approved by the
Company's shareholders, the first paragraph of Article Fourth of the Company's
Certificate of Incorporation would be amended to read as follows (with emphasis
added to identify the increased number of authorized shares of Common Stock):
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 70,000,000 shares of all
classes of stock. Of such total number of authorized shares of stock,
60,000,000 shares consist of shares of Common Stock (the "Common
Stock"), $.01 par value per share, and 10,000,000 shares consist of
shares of Preferred Stock (the "Preferred Stock"), $.01 par value per
share. Each issued and outstanding share of Common Stock shall entitle
the holder thereof to one vote. The holders of the Common Stock shall
have no preemptive rights to subscribe for any shares of any class of
stock of the Corporation whether now or hereafter authorized.
As of March 6, 2000, there were 13,331,213 shares of Common Stock
outstanding and 7,057,874 shares of Common Stock reserved for issuance pursuant
to the Company's employee stock plans. Accordingly, as of March 6, 2000, there
were 9,610,913 shares of Common Stock available for issuance for other purposes.
The additional shares of Common Stock for which authorization is sought
would be part of the existing class of Common Stock and, if and when issued,
would have the same rights and privileges as the shares of Common Stock
presently outstanding. Such additional shares of Common Stock would not (and the
shares of Common Stock presently outstanding do not) entitle the holders thereof
15
<PAGE>
to preemptive rights to subscribe for or purchase additional shares of Common
Stock of the Company or to cumulative voting for the election of Directors.
PURPOSES AND EFFECTS OF THE AMENDMENT
Except for shares reserved as noted above, the Company has no
agreements or understandings concerning the issuance of any additional shares of
Common Stock. However, the Board of Directors believes that the increased
authorization of Common Stock is advisable at this time so that shares will be
available for issuance in the future on a timely basis if such need arises in
connection with stock splits or dividends, financings, acquisitions or other
corporate purposes. This will enable the Company to take advantage of market
conditions, the availability of favorable financing, and opportunities for
acquisitions without the delay and expense associated with convening a special
shareholders' meeting.
Unless required by law, the Company's Certificate of Incorporation or
the rules of any stock exchange on which the Company's Common Stock may in the
future be listed, the Board of Directors will be able to provide for the
issuance of the additional shares of Common Stock without further action by the
Company's shareholders and no further authorization by the shareholders will be
sought prior to such issuance. Under existing regulations of the New York Stock
Exchange governing companies that have shares listed for trading on the New York
Stock Exchange, approval by a majority of the shares of Common Stock would be
required prior to the original issuance of additional shares of Common Stock in
certain circumstances, including (a) in connection with certain stock plans, (b)
in connection with certain acquisitions if the number of shares of Common Stock
to be issued (including securities convertible into or exercisable for shares of
Common Stock) is or will be equal to or in excess of 20% of the number of shares
outstanding before the issuance of such Common Stock, or (c) if the issuance
would result in a change in control of the Company.
Although not designed or intended for such purposes, one effect of the
proposed increase in the authorized shares of Common Stock might be to render
more difficult or to discourage a merger, tender offer, proxy contest or change
in control of the Company and the removal of management, which shareholders
might otherwise deem favorable. The authority of the Board of Directors to issue
shares of Common Stock might be used to create voting impediments or to
frustrate an attempt by another person or entity to effect a takeover or
otherwise gain control of the Company because the issuance of additional shares
of Common Stock would dilute the voting power of the shares of Common Stock then
outstanding. Common Stock could also be issued to purchasers who would support
the Board of Directors in opposing a takeover bid which the Board determines not
to be in the best interests of the Company and its shareholders.
In addition to the proposed amendment, the Company's Certificate of
Incorporation and Bylaws currently contain provisions that may have the effect
of discouraging certain types of tender offers and other transactions that
involve a change of control in the Company. The Company's Directors are elected
for staggered three-year terms. The Company's Bylaws further provide that a
Director of the Company may be removed from office only for cause and only by a
vote of the holders of at least 50% of the outstanding shares of Common Stock.
The Certificate of Incorporation and Bylaws provide that any action to be taken
by shareholders must be taken at a meeting of shareholders and may not be taken
by written consent. The Company's Bylaws provide that only the Board of
Directors, the Chief Executive Officer or the President of the Company may call
a special meeting of shareholders. The Bylaws of the Company may be amended or
rescinded only by a majority of the Board of Directors or by the vote of at
least 80% of the outstanding shares of Common Stock.
On January 24, 1997, the Company's Board of Directors declared a
dividend of one Preferred Share Purchase Right (a "Right") for each outstanding
share of Common Stock held of record as of February 7, 1997. One Right was also
issued with respect to each share of Common Stock issued after February 7, 1997.
Each Right entitles the holder to purchase from the Company one one-hundredth of
a share of newly created Series A Junior Participating Preferred Stock at a
price of $100, subject to certain adjustments. The Rights are exercisable when,
and are not transferable apart from the shares of Common Stock until, a person
or group has acquired 15% or more, or commenced a tender or exchange offer for
15% or more, of the Company's Common Stock. If the specified percentage of the
Company's Common Stock is acquired, each Right will entitle the holder (other
than the acquiring person or group) to receive, upon exercise, shares of Common
Stock of either the Company or the acquiring company having a market value equal
to two times the exercise price of the Right. The Rights are redeemable by the
Company's Board of Directors in certain circumstances and expire on January 24,
2007.
The overall effect of the foregoing provisions of the Company's
Certificate of Incorporation and Bylaws, together with the Rights and the
ability of the Board of Directors to issue additional shares of Common Stock and
shares of Preferred Stock, may be to delay or prevent attempts by other persons
or entities to acquire control of the Company without negotiations with the
Company's Board of Directors.
16
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPROVAL OF AN INCREASE OF 30,000,000 AUTHORIZED SHARES OF COMMON STOCK OF THE
COMPANY.
RATIFICATION AND APPROVAL OF THE
APPOINTMENT OF INDEPENDENT AUDITORS
On January 27, 2000, the Board of Directors selected the accounting
firm of Ernst & Young LLP to serve as its independent auditor for the fiscal
year ending December 31, 2000. A proposal to ratify that appointment will be
presented at the Meeting. Representatives of Ernst & Young LLP are expected to
be present at the meeting. They will have an opportunity to make a statement if
they desire to do so and will be available to respond to appropriate questions
from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On March 2, 2000, following approval of the Board of Directors, the
Company purchased 15,798 shares of Common Stock from Edgar W. Blanch, Jr. to be
held as treasury shares. The shares of Common Stock were purchased at a price of
$47.07 per share, based on the average of the trading price for the preceding
ten (10) trading days.
On December 21, 1998, the Company loaned $500,000 to Rodman R. Fox, the
President and Chief Operating Officer of E. W. Blanch Co., Inc., a wholly-owned
subsidiary of the Company. The interest rate on the loan is one-half of the
prime rate, adjusted annually. The term of the loan is for five years, to be
fully paid on December 31, 2003.
ADDITIONAL INFORMATION
GENERAL
As of the date of this Proxy Statement, management knows of no matters
that will be presented for determination at the Annual Meeting other than those
referred to herein. However, since matters of which Management is not now aware
may come before the Annual Meeting or any adjournment, the proxies intend to
vote, act and consent in accordance with their best judgment with respect
thereto. Upon receipt of such proxies (in the form enclosed and properly signed)
in time for voting, the shares represented thereby will be voted as indicated
thereon and in this Proxy Statement.
SHAREHOLDER PROPOSALS FOR THE NEXT ANNUAL MEETING
It is anticipated that the next Annual Meeting, after the one scheduled
for April 27, 2000, will be held on or about April 26, 2001. All shareholder
proposals relating to a proper subject for action at the Annual Meeting in 2001,
to be included in the Company's Proxy Statement and form of proxy relating to
that meeting, must be received by the Company for its consideration at its
principal executive offices no later than November 23, 2000. Any such proposal
should be submitted by certified mail, return receipt requested.
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K IS AVAILABLE WITHOUT
CHARGE TO ANY SHAREHOLDER OF THE COMPANY WHO REQUESTS A COPY IN WRITING.
REQUESTS FOR COPIES OF THIS REPORT SHOULD BE DIRECTED TO THE INVESTOR RELATIONS
DEPARTMENT, E. W. BLANCH HOLDINGS, INC., 500 N. AKARD, SUITE 4500, DALLAS, TX
75201.
By Order of the Board of Directors
Daniel P. O'Keefe
Secretary
March 24, 2000
17
<PAGE>
E. W. BLANCH HOLDINGS, INC.
ANNUAL MEETING OF STOCKHOLDERS
THURSDAY, APRIL 27, 2000
10:00 A.M.
LINCOLN PLAZA
500 NORTH AKARD
37TH FLOOR
DALLAS, TX 75201
E. W. BLANCH HOLDINGS, INC.
500 NORTH AKARD, SUITE 4500
DALLAS, TX 75201 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS FOR USE AT THE ANNUAL MEETING
ON APRIL 27, 2000.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.
By signature on this proxy, SIGNER hereby appoints Rodman R. Fox and Chris L.
Walker as Proxies, each with the power to appoint his substitute, and hereby
authorizes them to represent and to vote, as designated below, all the shares of
Common Stock of E. W. Blanch Holdings, Inc. held of record by the undersigned on
March 6, 2000, at the Annual Meeting of Shareholders to be held on April 27,
2000 or any adjournment thereof.
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THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2, 3 AND 4.
1. ELECTION OF DIRECTORS
01 Kaj Ahlmann [ ] Vote For
02 Rodman R. Fox All nominees
03 Gerald A. Isom [ ] Vote WITHHELD
From all nominees listed below
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDICATED NOMINEE, WRITE
THE NAME(S) OF THE NOMINEE(S) IN THE BOX PROVIDED BELOW.)
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2. APPROVAL OF THE E. W. BLANCH HOLDINGS, INC. MANAGEMENT INCENTIVE PLAN
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. APPROVAL TO AMEND THE CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF
AUTHORIZED COMMON SHARES FROM 30,000,000 TO 60,000,000
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. RATIFICATION OF APPOINTMENT OF ERNST & YOUNG LLP AS INDEPENDENT AUDITORS.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion the Proxies are authorized to vote upon such other
business as may properly come before the Meeting.
Dated: ___________________________, 2000
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Signature(s)
Please sign exactly as your name(s)
appear on this Proxy. If held in joint
tenancy, all persons must sign. When
signing as attorney, executor,
administrator, trustee, guardian, etc,
please give full title as such.
Corporations should provide full name of
corporation and title of authorized
officer signing the proxy. If a
partnership, please sign in partnership
name by authorized person.
