<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
White River 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.
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii) 14a-6(1)(i) or 14a-6(1)(2).
[_] $500 per each party to the ? pursuant to Exchange Act Rule
14a-6(i)(3)
Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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
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(4) Proposed maximum aggregate value of transaction:
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- ---------
*Set forth the amount on which the filing is calculated and state forms was
determined
[_] 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.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
WHITE RIVER CORPORATION
777 Westchester Avenue, Suite 201, White Plains, New York 10604
Telephone: (914) 251-0237
NOTICE OF 1997 ANNUAL MEETING OF STOCKHOLDERS
April 7, 1997
To Our Stockholders:
The 1997 Annual Meeting of Stockholders (the "Annual Meeting") of White River
Corporation, a Delaware corporation ("White River"), will be held on Thursday,
May 8, 1997, at 9:00 a.m. at White River's principal executive office at 777
Westchester Avenue, Suite 201, White Plains, New York. All stockholders are
cordially invited to attend the Annual Meeting which will be held for the
following purposes:
(1) to elect one Class I Director with a term ending in 2000;
(2) to approve the appointment of Ernst & Young LLP as White River's
independent auditors for 1997; and
(3) to transact such other business as may be properly brought before the
Annual Meeting or any adjournment thereof.
Information with respect to the nominee for Class I Director is set forth in the
enclosed Proxy Statement.
Stockholders of record on March 27, 1997, may attend and vote at the Annual
Meeting. A list of all stockholders entitled to vote at the Annual Meeting will
be open for public inspection by stockholders during regular business hours from
April 24, 1997, until May 7, 1997, and during the Annual Meeting at White
River's principal executive office.
By Order of the Board of Directors,
Gordon S. Macklin
---------------------------------------
Chairman
This Proxy Statement and accompanying proxy card will be mailed to stockholders
on or about April 7, 1997. Stockholders, whether or not they expect to attend
the Annual Meeting, are invited to complete, sign, date, and return the
accompanying proxy card to White River Corporation c/o First Chicago Trust
Company of New York, Post Office Box 8125, Edison, New Jersey 08818-9064, in the
envelope provided. It is important that the enclosed proxy card be completed and
returned promptly.
<PAGE>
WHITE RIVER CORPORATION
777 Westchester Avenue, Suite 201, White Plains, New York 10604
Telephone: (914) 251-0237
PROXY STATEMENT
Annual Meeting of Stockholders
Thursday, May 8, 1997
Table of Contents
<TABLE>
<S> <C>
SOLICITATION OF PROXIES........................................................................... 1
VOTING RIGHTS AND MANNER OF VOTING PROXIES........................................................ 1
PROPOSAL 1: ELECTION OF DIRECTOR................................................................. 2
White River Board............................................................................ 2
Compensation of Directors.................................................................... 4
Directors' Deferred Compensation Plan........................................................ 5
Procedures for Nominating Directors.......................................................... 5
PROPOSAL 2: APPOINTMENT OF INDEPENDENT AUDITORS.................................................. 6
EXECUTIVE OFFICERS................................................................................ 6
Compensation of Executive Officers........................................................... 6
Report of the Compensation Committee on Executive Compensation............................... 8
Compensation Committee Interlocks and Insider Participation.................................. 10
Performance Graph............................................................................ 11
Retirement Plans............................................................................. 11
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.................................... 13
Stock Ownership of Directors, Nominees and Executive Officers................................ 13
Principal Stockholders....................................................................... 14
CERTAIN RELATIONSHIPS AND RELATED MATTERS......................................................... 15
OTHER MATTERS..................................................................................... 15
Compliance with Section 16(a) of the Exchange Act............................................ 15
Inspectors of Election....................................................................... 15
Proposals by Stockholders for the 1998 Annual Meeting of Stockholders........................ 16
Available Information........................................................................ 16
</TABLE>
<PAGE>
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of proxies
on behalf of the board of directors (the "White River Board") of White River
Corporation, a Delaware corporation (together with its subsidiaries, unless the
context requires otherwise, "White River" or the "Company") for the 1997 Annual
Meeting of Stockholders (the "Annual Meeting") of White River to be held on
Thursday, May 8, 1997, at 9:00 a.m. The solicitation of proxies will be made
primarily by mail, with proxy materials being distributed to registered
stockholders on or about April 7, 1997. Stockholders should review the
information provided herein in conjunction with White River's 1996 Annual Report
to Stockholders and Form 10-K (the "Annual Report").
Each registered holder of shares of White River common stock, par value $0.01
per share (the "Common Stock"), at the close of business on March 27, 1997 (the
"Record Date"), is entitled to vote at the Annual Meeting. Holders of shares of
Common Stock are entitled to one vote for each share of Common Stock held. As of
the Record Date, there were 4,874,756 shares of Common Stock outstanding.
You can ensure that your shares of Common Stock are properly voted at the Annual
Meeting by completing, signing, dating and returning the accompanying proxy card
in the envelope provided. A stockholder has the right to appoint another person
(who need not be a stockholder) to represent the stockholder at the Annual
Meeting by completing an alternative form of proxy which can be obtained from
the Corporate Secretary or by notifying the Inspectors of Election. See "OTHER
MATTERS -- Inspectors of Election".
Stockholders have the right to revoke their proxies at any time prior to the
time their shares are actually voted at the Annual Meeting by: (i) filing a
written notice of revocation with the Corporate Secretary, (ii) presenting
another proxy with a later date or (iii) notifying the Inspectors of Election in
writing of such revocation, provided, however, that no such revocation will be
effective until written notice of the revocation is received by White River or
the Inspectors of Election at or prior to the Annual Meeting. Sending in a
signed proxy will not affect your right to attend the Annual Meeting and vote in
person. If a stockholder attends the Annual Meeting and votes in person, any
previously submitted proxy is considered to be revoked.
White River will bear the cost of preparing, assembling, printing and mailing
this Proxy Statement. Upon written request, White River will reimburse banks,
brokerage houses and other custodians, nominees and fiduciaries for their
reasonable expenses incurred in forwarding proxy materials to their principals.
In addition to using the mails to solicit proxies, White River may also solicit
proxies through the use of personal interview, telephone, telegraph or
facsimile.
VOTING RIGHTS AND MANNER OF VOTING PROXIES
The representation in person or by proxy of the holders of a majority of the
issued and outstanding shares of Common Stock entitled to vote constitutes a
quorum, which is necessary to convene the Annual Meeting. Directors of White
River are elected by a plurality vote of the shares of Common Stock actually
voted at the Annual Meeting. With respect to the election of the director, votes
may be cast in favor of or withheld for the nominee. Withheld votes will be
excluded entirely from the vote and will have no effect thereon. Approval of the
proposal regarding the appointment of independent auditors requires the
affirmative vote of a majority of the stockholders present in person or
represented by proxy at the Annual Meeting and entitled to vote. Abstentions may
be specified on the proposal regarding the appointment of independent auditors
and will be counted as negative votes. Pursuant to Delaware General Corporation
Law ("Delaware Law"), broker non-
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<PAGE>
votes (i.e., shares held by brokers or nominees as to which instructions have
not been received from the beneficial owners or persons entitled to vote and
with respect to which the broker or nominee does not have discretionary power to
vote) are treated as shares not entitled to vote. However, broker non-votes have
the practical effect of reducing the number of affirmative votes required to
approve a proposal since broker non-votes serve to reduce the total number of
shares entitled to vote.
Where specific choices are not indicated, shares of Common Stock represented by
valid proxies received will be voted for: (i) the election of the nominee named
below as a Class I Director and (ii) the approval of the appointment of Ernst &
Young LLP ("Ernst & Young") as independent auditors for 1997. The White River
Board does not intend to present any other business, nor does it know of any
other matters which are to be presented, at the Annual Meeting. However, should
any matter not described above be acted upon at the Annual Meeting, Robert T.
Marto and Gordon S. Macklin, as proxies, will vote in accordance with their
judgment.
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PROPOSAL 1
ELECTION OF DIRECTOR
The Restated Certificate of Incorporation of White River (the "Certificate of
Incorporation"), together with the By-laws of White River (the "By-laws"),
provide for three classes of directors (each a "Class"), with the directors of a
particular Class being elected each year to serve for three-year terms. At the
Annual Meeting, Andrew Delaney is nominated to be elected as a Class I Director
of the White River Board with a term ending in 2000. Mr. Delaney is the current
Class l Director of the White River Board. See "White River Board" below.
The White River Board recommends a vote FOR Proposal 1 which calls for the
election of the 1997 nominee.
- --------------------------------------------------------------------------------
White River Board
The following information with respect to the principal occupation, business
experience and other affiliations of the nominee and the other directors of
White River has been furnished to White River by the nominee and respective
directors.
Class I: Term Ending 1997
Andrew Delaney, age 76, has been a director of White River since September 1993.
Mr. Delaney served as Vice Chairman of American General Corporation, a
diversified insurance and financial services organization, from 1982 until his
retirement in 1985. He joined that company in 1954. He also served as a director
of Fund American Enterprises Holdings, Inc. (together with its subsidiaries,
"Fund American"), the former parent company of White River, and certain of its
subsidiaries until December 1993. Mr. Delaney has been nominated to be
re-elected as a Class I Director with a term ending in 2000.
2
<PAGE>
Class II: Term Ending 1998
Gordon S. Macklin, age 68, has been Chairman of the White River Board since
September 1993. Mr. Macklin served as Chairman of Hambrecht & Quist, LLC, a
venture capital and investment banking company, from 1987 until 1992. Prior to
that, he served as President of the National Association of Securities Dealers,
Inc. from 1970 to 1987. Mr. Macklin serves as a trustee, director or managing
general partner, as the case may be, of 52 of the investment companies in the
Franklin/Templeton Group of Funds. He is a director of CCC Information Services
Group Inc. ("CCC"), formerly InfoVest Corporation, (a subsidiary of White River,
wherein White River has 51% of the vote associated with CCC's total outstanding
voting stock), MCI Communications Corporation, Medlmmune, Inc., Shoppers Express
and Spacehab, Inc. He has also served, since 1987, as a director of Fund
American and Source One Mortgage Services Corporation, a subsidiary of Fund
American.
Class III: Term Ending 1999
Robert T. Marto, age 51, has been a director of White River since September
1993. Mr. Marto has been President and Chief Executive Officer of White River
since 1993. He became affiliated with Fund American in 1985 and served as
Executive Vice President and Chief Financial Officer of Fund American and as
President of its subsidiary, Fund American Enterprises, Inc. ("FAE"), from 1990
to December 1993. He is a director of CCC, Zurich Reinsurance Centre Holdings,
Inc. and VICORP Restaurants, Inc. He also served as a director of Fund American
until December 1993.
Patrick M. Byrne, age 34, has been a director of White River since May 1996. Mr.
Byrne has been Chairman since 1994, and President and Chief Executive Officer
since March 1996, of Centricut, LLC, a manufacturer of industrial torch
consumable parts. In addition, since 1991, he has been the managing general
partner of a number of limited partnerships investing in real estate, gaming,
insurance and international trade. He is also a director of Merastar Insurance
Company. Patrick M. Byrne is the son of John J. Byrne, the Chairman, President
and Chief Executive Officer of Fund American. John J. Byrne and Fund American
are the beneficial owners of 17.1% and 20.8%, respectively, of the total
outstanding shares of Common Stock as of the Record Date.
Committees of the White River Board. The White River Board has established
the Audit Committee and the Compensation Committee. The White River Board does
not have a nominating committee.
The Audit Committee is comprised entirely of non-employee directors ("Eligible
Directors"), specifically Messrs. Byrne, Delaney and Macklin, and has general
responsibility for the oversight and surveillance of the accounting, reporting
and financial control practices of White River. The Audit Committee annually
reviews the qualifications of the independent auditors, makes recommendations to
the White River Board as to their selection, and reviews the scope, fees and
results of Ernst & Young's audit. Mr. Byrne is Chairman of the Audit Committee.
The Compensation Committee is comprised entirely of Eligible Directors,
specifically Messrs. Byrne, Delaney and Macklin, and oversees White River's
compensation and benefit policies and programs, including administration of the
1993 White River Incentive Compensation Plan (the "Incentive Plan"), the White
River Voluntary Deferred Compensation Plan (the "Deferred Compensation Plan")
and the White River Deferred Benefit Plan (the "Deferred Benefit Plan", and
together with the Deferred Compensation Plan, the "Retirement Plans"). The
Compensation Committee also establishes the base salaries and annual cash
bonuses for
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<PAGE>
selected officers. Mr. Macklin is Chairman of the Compensation Committee.
See "EXECUTIVE OFFICERS -- Report of the Compensation Committee on Executive
Compensation".
Meetings of the White River Board. During 1996, the White River Board held 7
meetings: 4 regular meetings and 3 special meeting. The Compensation Committee
held 5 meetings and the Audit Committee met once. Each current director attended
all board and applicable committee meetings held during 1996.
Compensation of Directors
Concurrent with the approval by the board of directors of Fund American (the
"Fund American Board") of a plan to distribute (the "Distribution")
approximately 75% of the outstanding shares of Common Stock to holders of Fund
American common stock, Messrs. Macklin and Delaney received, in lieu of annual
retainer and meeting attendance fees, a grant of 48,649 and 16,216 performance
units ("Director Performance Units"), respectively. The initial value of such
Director Performance Units were determined by the Fund American Board based upon
the anticipated relative contribution of such individuals to the management of
White River.
Each Director Performance Unit had a potential cash value equal to the market
price of one share of Common Stock on December 31, 1996. Director Performance
Units were payable solely in cash and were scheduled to vest contingent upon the
attainment of an annualized return on stockholders' equity ("ROE") by White
River of 15% per annum (the "Performance Target"), measured as the change in
White River's book value per common and common equivalent share (as adjusted for
dividends, stock splits and other adjustments necessary to reflect true economic
value) over the period from September 24, 1993, to December 31, 1996. During
September 1996 (upon the third anniversary of the capitalization of White River)
and based upon the attainment of the Performance Target, the White River Board
declared the outstanding Director Performance Units earned and payable on June
30, 1997, contingent upon the continued voluntary service of Messrs.
Macklin and Delaney through such date.
During September 1996, the White River Board also granted a new award of
Director Performance Units to Eligible Directors, in lieu of annual retainer and
meeting attendance fees, as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Number of
Director Performance
Performance Period
Name Units (a) for Payout
- --------------------------------------------------------------------------------
<S> <C> <C>
Gordon S. Macklin 21,000 3 years
Patrick M. Byrne 7,000 3 years
Andrew Delaney 7,000 3 years
================================================================================
</TABLE>
(a) Director Performance Units are payable solely in cash and vest on September
23, 1999, contingent upon the attainment of the Performance Target over the
3-year period then ended. Each Director Performance Unit has a potential
cash value equal to the market price of one share of Common Stock on
September 23, 1999.
In addition to the Director Performance Units described above, during 1996, Mr.
Macklin received a reimbursement of $30,000 for office expenses incurred in
connection with his service as a director of White River and a fee of $21,800
for his service as a director of CCC.
4
<PAGE>
During 1996, Patrick M. Byrne, received an annual retainer of $20,000 and a
grant of stock appreciation rights ("SAR's") representing 1,500 shares of Common
Stock. Such SAR's are payable solely in cash and will expire on May 8, 2006. The
value of each SAR is measured by the Market Price of one share of Common Stock
over exercise price of $41.00 per SAR.
Mr. Marto does not receive any additional compensation for his service as a
director of White River or any of its subsidiaries.
Directors' Deferred Compensation Plan
The Directors' Deferred Compensation Plan, which was adopted during August 1996,
is an unfunded, non-qualified plan which provides Eligible Directors a means of
deferring the receipt of a part or all of their compensation, including
incentive compensation consisting of either performance units or performance
shares or such other qualifying incentive compensation paid or otherwise payable
by White River. Eligible Directors may, within the prescribed times established
by the Deferred Compensation Plan, make an irrevocable election to defer
eligible compensation that would otherwise be payable to such Eligible Directors
in future periods.
At the election of the Eligible Director, amounts deferred earn an investment
return at a rate equal to either: (i) the prime rate, as defined therein (the
"Prime Rate Option") or (ii) a rate equivalent to the change in the market price
of shares of Common Stock (the "Phantom Share Option"). Amounts deferred under
the Directors' Deferred Compensation Plan are subject to the general claims of
creditors of White River. Payments made pursuant to the Directors' Deferred
Compensation Plan from the Prime Rate Option account will be made in cash and,
for amounts paid from the Phantom Share Option account, in either cash or shares
of Common Stock, at the discretion of the White River Board. White River has
reserved one million shares of Common Stock for such purpose.
Procedures for Nominating Directors
Under the By-laws, any stockholder entitled to vote for the election of
directors, which is a qualified holder of record of shares of Common Stock, may
nominate a person for election as director provided such nomination is made in
compliance with the following procedures.
The stockholder must give, either by personal delivery or by U.S. mail (postage
prepaid), written notice to the Corporate Secretary not later than: (i) 90 days
in advance of the annual meeting of stockholders, with respect to an election to
be held at such meeting or (ii) the close of business on the seventh day
following the date on which notice of a special meeting of stockholders is first
given to stockholders, with respect to an election of directors to be held at
such meeting.
Such notice must include: (i) the name and address of the stockholder who
intends to make the nomination and the name and address of the person or persons
to be nominated; (ii) a representation that the stockholder is a holder of
record of shares of Common Stock entitled to vote for the election of directors
at such meeting; (iii) a representation that the stockholder intends to appear
at the meeting, in person or by proxy, to nominate the person or persons
specified in such notice; (iv) a description of all arrangements or
understandings between the stockholder and each nominee and any other person or
persons (naming such person or persons) pursuant to which the nomination or
nominations are to be made by the stockholder; (v) such other information
regarding each nominee proposed by such stockholder as would have been required
to be included in a proxy
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statement filed pursuant to the proxy rules of the Securities and Exchange
Commission (the "Commission") had each nominee been nominated, or intended to be
nominated, by the White River Board and (vi) the consent of each nominee to
serve as a director of White River if so elected.
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PROPOSAL 2
APPOINTMENT OF INDEPENDENT AUDITORS
Based upon the recommendation of the Audit Committee and subject to stockholder
approval, the White River Board has appointed Ernst & Young as White River's
independent auditors for 1997. Ernst & Young provided various professional
services to White River during 1996. Arrangements have been made for one or more
representatives of Ernst & Young to attend the Annual Meeting for the purpose of
answering appropriate questions and making a statement if they desire to do so.
The White River Board recommends a vote FOR Proposal 2 which calls for the
approval of the appointment of Ernst & Young as White River's independent
auditors for 1997.
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EXECUTIVE OFFICERS
For biographical information relating to Mr. Marto, see "PROPOSAL 1: ELECTION OF
DIRECTORS -- White River Board". Information concerning the other executive
officers of White River follows:
Bonnie B. Stewart, age 36, has been Corporate Secretary of White River since
September 1996. From 1994 to September 1996 she was Assistant Corporate
Secretary and from 1993 to present she has been Executive Assistant to Mr.
Marto. Prior to 1993, Ms. Stewart held various positions with FAE.
Brian P. Zwarych, age 36, has been Vice President and Chief Financial Officer of
White River since September 1993 and, from July 1993 to September 1993, was
Director of Accounting of FAE. Prior to joining FAE, Mr. Zwarych was Chief
Financial Officer of Godwins International Holdings, Inc., an international
employee benefits consulting and brokerage firm, from 1989 to 1993.
Compensation of Executive Officers
Unless otherwise indicated, the table on the following page sets forth certain
information regarding the cash and non-cash compensation earned by the listed
executive officers (the "Named Executive Officers").
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Summary Compensation Table
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Annual Compensation Long Term Compensation All Other
-------------------------------------------------
Name and principal position Year Salary Bonus LTIP Payout(a) Compensation (b)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert T. Marto 1996 $ 375,000 $ 250,000 $9,485,280 $(259,724) (c)
President and 1995 $ 375,000 $ 110,000 $ -- $ 361,160 (c)
Chief Executive Officer 1994 $ 375,000 $ 100,000 $ -- $ 197,395 (c)
Leonard L. Ciarrocchi (d) 1996 $ 68,910 $ -- $1,101,960 $ (15,947)
Former Vice President and 1995 $ 131,666 $ 38,000 $ -- $ 34,011
Treasurer 1994 $ 123,974 $ 32,000 $ -- $ 10,224
John P. Corrigan (e) 1996 $ 110,796 $ -- $ 991,920 $ 71,097
Former Vice President and 1995 $ 137,367 $ -- $ -- $ 25,172
Corporate Secretary 1994 $ 141,404 $ 32,000 $ -- $ 9,461
Bonnie B. Stewart 1996 $ 90,852 $ 50,000 $ 583,860 $ (53,521)
Corporate Secretary 1995 $ 85,312 $ 22,000 $ -- $ --
1994 $ 79,139 $ 20,000 $ -- $ --
Brian P. Zwarych 1996 $ 145,845 $ 70,000 $1,380,000 $ (41,420)
Chief Financial Officer and 1995 $ 138,846 $ 34,000 $ -- $ --
Treasurer 1994 $ 129,231 $ 32,000 $ -- $ --
===================================================================================================================
</TABLE>
(a) LTIP payouts include amounts for awards originally granted by Fund
American. White River assumed the liability for these awards prior to
the Distribution. The 1996 LTIP payouts included $7,085,280, $141,960,
$991,920 and $283,860 for Messrs. Marto, Ciarrocchi, Corrigan and Ms.
Stewart, respectively, which related to award liabilities assumed from
Fund American.
(b) Unless otherwise indicated, represents changes in the value of balances
under the Retirement Plans and, for Mr. Marto, deemed contributions
under the Deferred Benefit Plan.
(c) In addition to amounts identified in note (b), all other compensation
includes: (i) a housing allowance of $66,262, $66,528 and $66,429 paid
in 1996, 1995 and 1994, respectively, (such housing allowance has been
discontinued); (ii) directors' fees of $42,000, $40,000 and $37,500
received in 1996, 1995 and 1994, respectively, from a company in which
White River held an equity investment and (iii) a one-time
reimbursement of $21,030 paid in 1994 for excess state income taxes incurred
by Mr. Marto.
(d) Mr. Ciarrocchi's employment terminated with White River effective June
1996, when he accepted the position of Executive Vice President and
Chief Financial Officer of CCC.
(e) Mr. Corrigan's employment terminated with White River effective September
1996.
7
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Long-Term Incentive Plan - Awards in Last Fiscal Year
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Number of
performance Performance Estimated future payout in
units period for shares of Common Stock
Name awarded payout(a) Threshold Target Maximum
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert T. Marto 70,000 3 years 0 70,000 70,000
Bonnie B. Stewart 7,000 3 years 0 7,000 7,000
Brian P. Zwarych 10,000 3 years 0 10,000 10,000
===========================================================================================
</TABLE>
(a) All performance unit awards granted during 1996 cover the performance
period from September 1996, through September 1999. These awards are
payable in cash or in shares of Common Stock at the discretion of the
Compensation Committee. See "-- Report of the Compensation Committee on
Executive Compensation - Long-Term Incentive Awards" below.
Other Compensation Arrangements. White River has no formal severance policy and
has not entered into any employment contracts with its Named Executive Officers.
However, pursuant to the Incentive Plan, under certain circumstances, such as a
"Change in Control" or an "Unfriendly Change in Control", performance units
("Performance Units") will become partially or fully payable. Such circumstances
are more fully described in the Incentive Plan.
Report of the Compensation Committee on Executive Compensation
Compensation for all Named Executive Officers of White River is established by
the Compensation Committee. The Compensation Committee has responsibility for
developing, administering and monitoring the executive compensation policies of
White River. Such policies are intended to support the maximization of
stockholder value over the long term. The Compensation Committee believes that
this goal is best pursued by utilizing a pay-for-performance program which
serves to attract and retain superior executive talent. By providing management
with performance-based incentives linked to stockholder value, the Compensation
Committee seeks to maximize stockholder value by aligning the financial
interests of White River's management with those of its stockholders.
The White River Board believes that the most appropriate indicator of
stockholder investment return is the Company's annualized ROE, measured as the
change in book value per common and common equivalent share after considering
the potentially dilutive effects of incentive awards outstanding and other
adjustments necessary to reflect true economic value. Accordingly,
performance-based compensation awards granted to White River's executive
officers will be fully payable if the Company achieves its Performance Target.
Compensation of the Named Executive Officers consists primarily of three
components: base salary, annual cash bonus and long-term incentive awards. When
establishing each element of compensation, the Compensation Committee considers
the total compensation earned by or potentially available to each Named
Executive Officer.
Base Salary. Base salary for each Named Executive Officer is established
annually. When establishing base salaries for the Named Executive Officers, the
Compensation Committee primarily considers the Company's strategic goals for
which the executive has responsibility and the executive's performance since his
last salary adjustment. In addition, the Compensation Committee considers the
recommendations of Mr. Marto, for all
8
<PAGE>
executives except Mr. Marto. The Compensation Committee then establishes base
salaries which it believes are competitive.
Annual Cash Bonus. Annual cash bonuses are awarded by the Compensation Committee
based upon meeting the Performance Target measured over a given fiscal year.
Annual cash bonuses to individual executive officers are not awarded pursuant to
a formal plan; however, all corporate employees of White River generally
participate in a cash bonus pool (the "Bonus Pool") which, at the Performance
Target level, is an amount equal to 25% of the aggregate amount of eligible base
salaries (the "Target Bonus Pool"). Financial performance in excess of the
Performance Target may result in a Bonus Pool of up to 50% of the aggregate
amount of eligible base salaries (the "Maximum Bonus Pool"), and financial
performance which falls below the Performance Target will likely result in a
payout of only a portion of the Target Bonus Pool, or possibly no payout at all.
The Compensation Committee determines the level of payout to be made when actual
performance differs from the Performance Target. After establishing the
aggregate size of the Bonus Pool, the Compensation Committee then considers the
distribution of the Bonus Pool among the executive officers and certain other
employees of White River. Each participant's allocation of the Bonus Pool is
determined after considering the participant's individual achievements and the
recommendations of Mr. Marto. Mr. Marto's annual cash bonus is set by the
Compensation Committee.
During the year ended December 31, 1996, the Company's book value per common and
common equivalent share increased by 33.2% to $51.98 per share. As such, the
Performance Target was exceeded, and, accordingly, the Compensation Committee
established a Bonus Pool equal to the Maximum Bonus Pool.
Long-Term Incentive Awards. The Incentive Plan provides for granting to
executive officers and certain other key employees of White River various types
of stock-based incentive awards, including Performance Units, stock options
("Options") and stock appreciation rights ("SAR's").
Performance Units are conditional grants of a specified maximum number of shares
of Common Stock, or equivalent amount of cash, which are payable subject to the
achievement of the Performance Target at the end of specified periods as
determined by the Compensation Committee. Additional measure or measures of
individual performance, as the Compensation Committee may determine, may also be
included where appropriate. The Compensation Committee believes that Performance
Unit awards made pursuant to the Incentive Plan are an effective method of
providing incentive for management to maximize stockholder value over the long
term because of the following factors: (i) such awards vest or are earned over
multi-year periods; (ii) the value of such awards is determined by the market
value of Common Stock, which helps to align the interests of management with
those of White River's stockholders and (iii) Performance Unit awards under the
Incentive Plan are fully payable upon the achievement of the Performance Target.
Options are rights to purchase a specified number of shares of Common Stock at
or above the fair market value of such shares at the time the Options are
granted. Options vest over a specified period determined by the Compensation
Committee at the time of grant and expire no later than ten years after the date
on which they are granted. To date, no Options have been granted under the
Incentive Plan.
The Compensation Committee may grant SARs in conjunction with all or part of an
Option award. Upon the exercise of a SAR, a holder is entitled to receive
consideration with a value equal to the excess of the fair market value of one
share of Common Stock over the exercise price per share specified in the related
Option, multiplied by the number of shares with respect to which the SAR is
exercised. Such consideration may, at
9
<PAGE>
the election of the Compensation Committee, be in the form of cash, shares of
Common Stock, or a combination thereof. To date, no SARs have been granted under
the Incentive Plan.
Chief Executive Officer Compensation. Mr. Marto has been President and Chief
Executive Officer of White River since its formation in September 1993. The
Compensation Committee used a compensation policy similar to that described
above for all employees to determine Mr. Marto's 1996 compensation. The
Compensation Committee established Mr. Marto's compensation based upon an
overall assessment of Mr. Marto's leadership in achieving the Company's business
goals.
Deductibility of Executive Compensation. Under Section 162(m) ("Section 162(m)")
of the Internal Revenue Code of 1986, as amended, annual compensation in excess
of $1.0 million paid to the chief executive officer or any of the four other
highest compensated officers of any publicly-held corporation will not be
deductible in certain circumstances. Generally, "performance-based"
compensation, as defined in Section 162(m), is not subject to the limitation if
certain requirements are satisfied. Management believes that cash or stock
payments of Performance Unit awards under the Incentive Plan will be subject to
the limitation imposed by Section 162(m).
Compensation Committee
Gordon S. Macklin, Chairman
Patrick M. Byrne
Andrew Delaney
Compensation Committee Interlocks and Insider Participation
The Compensation Committee is comprised entirely of non-employee directors.
During 1996, Mr. Macklin was a member of the Fund American Board and served as
the Chairman of its Human Resources Committee.
10
<PAGE>
Performance Graph
Set forth below is a graph comparing the cumulative total return for a
stockholder who invested $100 in shares of Common Stock at the close of business
on the day after the commencement of the Distribution (December 23, 1993), with
the cumulative returns, assuming re-investment of dividends, indicated by the
Nasdaq Stock Market Index and the Nasdaq Financial Stocks Index.
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
Cumulative Total Return
(value of $100 invested December 23, 1993)
--------------------------------------------------------------
<S> <C> <C> <C> <C>
WHRC $100.00 $ 97.62 $122.22 $173.02
Nasdaq $100.00 $100.28 $145.09 $178.58
Nasdaq Financial $100.00 $102.01 $148.60 $190.43
--------------------------------------------------------------
</TABLE>
-------- White River Common Stock ("WHRC")
- - - - - Nasdaq Stock Market Index ("Nasdaq")
. . . . . . Nasdaq Financial Stocks Index ("Nasdaq Financial")
Retirement Plans
Through September 24, 1993, certain of White River's executive officers were
eligible for participation in the voluntary deferred compensation and deferred
benefit plans established by Fund American (the "Predecessor Plans"). Future
services performed by such officers of White River do not accrue benefits under
the Predecessor Plans, and benefits relating to service provided prior to
September 24, 1993, will remain the liability of Fund American. Notwithstanding
the foregoing, and with the concurrence of Fund American, White River may assume
such obligations at some future date, along with assets sufficient to cover
those obligations, if the White River Board deems it to be in the best interests
of White River to do so.
11
<PAGE>
White River has established the Retirement Plans under the Employee Retirement
Income Security Act of 1974, as amended, for the purpose of providing deferred
compensation benefits for certain management employees. The Retirement Plans
became effective on December 31, 1993. The Retirement Plans are unfunded, and
each participating employee's right to receive future payments thereunder
represents an unsecured claim against the general assets of White River. In the
event that a "Change in Control" occurs, the Retirement Plans require the White
River Board to cause the creation and funding by White River of a trust with
cash payments, shares of Common Stock or a combination thereof sufficient to
cover the value of existing plan balances.
The Deferred Compensation Plan. The Deferred Compensation Plan is an unfunded,
non-qualified plan which provides the Named Executive Officers a means of
deferring the receipt of a part or all of their compensation, including but not
limited to base salary, annual cash bonus and compensation earned under the
Incentive Plan. A participant may, within the prescribed times established by
the Deferred Compensation Plan, make an irrevocable election to defer eligible
compensation that would otherwise be payable to such participant in subsequent
years.
At the election of the participant, amounts deferred earn an investment return
at a rate equal to either: (i) the Prime Rate Option or (ii) Phantom Share
Option. Amounts deferred under the Deferred Compensation Plan are subject to the
general claims of creditors of White River. Payments made pursuant to the
Deferred Compensation Plan from the Prime Rate Option account will be made in
cash and, for amounts paid from the Phantom Share Option account, in either cash
or shares of Common Stock, at the discretion of the Compensation Committee.
White River has reserved one million shares of Common Stock for such purpose.
The Deferred Benefit Plan. The Deferred Benefit Plan is a non-contributory,
unfunded, non-qualified plan which provides retirement benefits for Mr. Marto,
and provided benefits for Messrs. Ciarrocchi and Corrigan while they were
employed by White River. The Deferred Benefit Plan is a defined contribution
retirement plan, and the amount of annual deemed contributions under the plan
are determined using actuarial assumptions applied to specified benefit levels.
At the election of the participant, amounts deferred earn an investment return
at a rate equal to either: (i) the Prime Rate Option or (ii) the Phantom Share
Option. Amounts deferred under the Deferred Benefit Plan are subject to the
general claims of creditors of White River. Payments made pursuant to the
Deferred Benefit Plan from the Prime Rate Option account will be made in cash
and, for amounts paid from the Phantom Share Option account, in either cash or
shares of Common Stock, at the discretion of the Compensation Committee. White
River has reserved one million shares of Common Stock for such purpose.
As of December 31, 1996, Mr. Marto had 24 whole years of credited service, for
purposes of computing the deemed contribution under the Deferred Benefit Plan.
Deductibility of Retirement Plans. Management believes that compensation arising
from the post- employment payment of benefits from the Retirement Plans will not
be subject to the limitation imposed by Section 162(m) and, therefore, will be
fully deductible by White River.
12
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Stock Ownership of Directors, Nominees and Executive Officers
The following table sets forth, as of the Record Date, information concerning
the beneficial ownership of shares of Common Stock by each director, nominee and
Named Executive Officer of White River individually and by all current directors
and executive officers as a group. As of the Record Date, White River had
4,874,756 outstanding shares of Common Stock.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Number of shares of Common Stock
---------------------------------------------------------------------
Rights to
Name of Shares acquire Ownership
beneficial owner (a) owned (b) shares (c) Total percentage (b)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Patrick M. Byrne (d) -- -- -- --
Andrew Delaney 500 -- 500 (g)
Gordon S. Macklin 5,000 -- 5,000 (g)
Robert T. Marto 16,505 294,432 310,937 6.4%
Leonard L. Ciarrocchi (e) 2,701 -- 2,701 (g)
John P. Corrigan (f) 105 -- 105 (g)
Bonnie B. Stewart 1,178 -- 1,178 (g)
Brian P. Zwarych -- -- -- --
All current directors and executive officers as a group 23,183 294,432 317,615 6.5%
=========================================================================================================================
</TABLE>
(a) All current directors and Named Executive Officers may be contacted at
White River's principal executive office at 777 Westchester Avenue,
Suite 201, White Plains, NY 10604.
(b) Determined based on the beneficial ownership provisions specified in
Rule 13d-3(d)(1) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). Accordingly, reported amounts exclude balances,
accrued under the Phantom Share Option contained within the Retirement
Plans, which can be paid in cash or shares of Common Stock at the
discretion of the Compensation Committee. Unless otherwise noted, the
indicated beneficial ownership represents sole voting and investment
powers.
(c) Represents shares of Common Stock deliverable upon exercise of options
to purchase shares of Common Stock issued by Fund American. Such
options expire in 1998 and were issued, concurrent with the purchase
and other transfer of selected assets and the assumption of certain
liabilities from Fund American, to replace then outstanding employee
options to purchase Fund American common stock.
(d) Patrick M. Byrne, has no voting or investment power with respect to
15,000 shares of Common Stock held in trust for his benefit and he
disclaims any beneficial ownership of such shares of Common Stock. In
addition, he is the son of John J. Byrne, who is the beneficial owner
of 835,112 shares of Common Stock, representing 17.1% of the total
outstanding shares of Common Stock. Patrick M. Byrne disclaims any
beneficial ownership of shares of Common Stock held by John J. Byrne.
(e) Mr. Ciarrocchi's employment terminated with White River effective June
1996, when he accepted the position of Executive Vice President and
Chief Financial Officer of CCC.
(f) Mr. Corrigan's employment terminated with White River effective
September 1996.
(g) Represents less than 1.0% of the total outstanding shares of Common
Stock.
13
<PAGE>
Principal Stockholders
To the knowledge of White River, no person or entity beneficially owns more than
5% of the outstanding Common Stock, except as follows:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Shares of
Name and address Common Ownership
of beneficial owner Stock owned(a) percentage (a)
- --------------------------------------------------------------------------------------
<S> <C> <C>
Fund American Enterprises Holdings, Inc. (b) 1,014,750 20.8%
80 South Main Street
Hanover, NH 03755
John J. Byrne (c) 835,112 17.1%
c/o Fund American Enterprises Holdings, Inc.
80 South Main Street
Hanover, NH 03755
Southeastern Asset Management, Inc. (d) 603,911 12.4%
6075 Poplar Avenue, Suite 900
Memphis, TN 38119
Robert T. Marto (e) 310,937 6.4%
777 Westchester Avenue, Suite 201
White Plains, NY 10604
======================================================================================
</TABLE>
(a) Determined based on the beneficial ownership provisions specified in
Rule 13d-3(d)(1) of the Exchange Act.
(b) According to filings made by Fund American with the Commission, Fund
American reported that it and John J. Byrne believe that they do not
constitute a group with respect to shares of Common Stock owned by Fund
American. In addition, Fund American disclaims any beneficial ownership
of shares of Common Stock owned by John J. Byrne. See note (c).
(c) John J. Byrne is Chairman, President and Chief Executive Officer of
Fund American. According to a filing made by John J. Byrne with the
Commission, he believes that he and Fund American do not constitute a
group with respect to shares of Common Stock owned by him, and he
disclaims any beneficial ownership of shares of Common Stock owned by
Fund American. John J. Byrne has sole voting and investment power with
respect to shares of Common Stock for which he claims beneficial
ownership. See note (b).
(d) According to a filing with the Commission made by Southeastern Asset
Management, Inc. ("SAM"), Longleaf Partners Small-Cap Fund (together
with SAM, "Southeastern"), and O. Mason Hawkins, Chairman of the Board
and C.E.O. of SAM, shares of Common Stock held by Southeastern are
owned legally by investment advisory clients of Southeastern.
Southeastern has reported sole investment discretion with respect to
238,211 shares of Common Stock and shared or no investment discretion
with respect to 365,700 shares of Common Stock. Southeastern has also
reported sole voting authority with respect to 208,211 shares of Common
Stock, shared voting authority with respect to 365,700 shares and no
voting authority with respect to 30,000 shares. Mr. Hawkins
specifically disclaims any beneficial ownership of the shares of Common
Stock held by Southeastern.
(e) According to a filing made by Mr. Marto with the Commission, the shares
of Common Stock to which Mr. Marto claims beneficial ownership include
options to purchase 294,432 shares of Common Stock issued by Fund
American. Such options expire in 1998 and were issued at the time of
the Capitalization to replace then outstanding employee options to
purchase Fund American common stock.
14
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED MATTERS
During 1996, Mr. Macklin was a member of the Fund American Board and served as
the Chairman of its Human Resources Committee.
Pursuant to a registration rights agreement (the "Registration Rights
Agreement") dated May 23, 1995, between White River and certain shareholders
identified therein (the "Selling Stockholders"), White River has filed a shelf
registration statement (the "Registration Statement") for 490,000 shares of
Common Stock of which 475,000 are beneficially owned by John J. Byrne and 15,000
shares are held in trust for the benefit of Patrick M. Byrne. In accordance with
the terms of the Registration Rights Agreement, the out-of-pocket costs incurred
by White River in connection with the Registration Statement have been borne by
the Selling Stockholders. In addition, White River and the Selling Stockholders
have agreed under certain circumstances to indemnify each other with respect to
certain claims relating to the Registration Statement.
Patrick M. Byrne, is the son of John J. Byrne, Chairman, President and Chief
Executive Officer of Fund American. John J. Byrne is the beneficial owner of
17.1% of the total outstanding shares of Common Stock as of the Record Date.
OTHER MATTERS
Compliance with Section 16(a) of the Exchange Act
Section 16(a) of the Exchange Act ("Section 16(a)") requires White River's
officers and directors, and persons who own more than ten percent of the total
outstanding shares of Common Stock, to file initial reports of ownership and
reports of changes in ownership of shares of Common Stock with the Commission.
Officers, directors and greater than ten percent stockholders are required by
Commission regulations to furnish White River with copies of all Section 16(a)
forms they file.
To White River's knowledge, based solely on its review of the copies of such
reports received by White River, and written representations from certain
reporting persons that no other reports were required for those persons, during
1996 all Section 16(a) filing requirements applicable to White River's officers,
directors and greater than ten percent stockholders were complied with, except
as follows.
As reported by Mr. Marto on Form 5, filed with the Commission during February
1997, the total number of derivative shares reported on a previous Form 4, filed
with the Commission during September 1996, was incorrect. The Form 4
inadvertently omitted shares totalling 294,432. These shares, which relate to
outstanding options to purchase Common Stock, were however included in all
previous reports on Form 4 and Form 5 and had been reported in White River's
proxy statements for 1994 and 1995.
Inspectors of Election
First Chicago Trust Company of New York ("First Chicago"), Post Office Box 8125,
Edison, New Jersey 08818- 9064, has been appointed as Inspectors of Election for
the Annual Meeting. Representatives of First Chicago will attend the Annual
Meeting to receive votes and ballots, supervise the counting and tabulating of
all votes and ballots, and determine the results thereof.
15
<PAGE>
Proposals by Stockholders for the 1998 Annual Meeting of Stockholders
If any stockholder that is a qualified holder of record of shares of Common
Stock wishes to present a proposal for action at the Company's 1998 Annual
Meeting of Stockholders (the "1998 Annual Meeting"), such proposal must be
received no later than December 8, 1997, by the Corporate Secretary at White
River's principal executive office at 777 Westchester Avenue, Suite 201, White
Plains, New York 10604, in order to be considered for inclusion in the Company's
1998 Proxy Statement. White River's management suggests that proposals be
submitted by certified mail, return-receipt requested. Under the By-laws, a
stockholder proposal shall include (in addition to any requirements of Delaware
Law): (i) a brief description of the proposal and the reasons for action upon it
at the 1997 Annual Meeting (and in the event that the proposal includes an
amendment to the Certificate of Incorporation, the language of the proposed
amendment); (ii) the name and address of the stockholder making the proposal;
(iii) a representation that the stockholder is a qualified holder of record of
shares of Common Stock; (iv) a representation that the stockholder intends to
appear at the 1998 Annual Meeting, either in person or by proxy and (v) whether
the stockholder has a material interest in such proposal.
Available Information
The Annual Report is being mailed to stockholders concurrently herewith. The
Annual Report does not form any part of the material for the solicitation of
proxies.
White River is subject to the informational reporting requirements of the
Exchange Act. In accordance therewith, White River files reports, proxy
statements and other information with the Commission. White River will provide
to each person to whom a copy of this Proxy Statement is delivered, upon request
and without charge, copies of all documents (excluding exhibits) filed with the
Commission. Copies of exhibits will be provided upon request for a nominal
charge. Written or telephone requests should be directed to the Investor
Relations Department, White River Corporation, 777 Westchester Avenue, Suite
201, White Plains, New York 10604, telephone number (914) 251-0237.
By Order of the Board of Directors,
Robert T. Marto
----------------------
President and Chief Executive Officer
April 7, 1997
16
