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
Filed by the Registrant |X|
Filed by a Party other than the Registrant |_|
Check the appropriate box:
|_| Preliminary Proxy Statement |_| Confidential, For Use of the
Commission Only (as permitted
|X| Definitive Proxy Statement by Rule 14a-6(e) (2))
|_| Definitive Additional materials
|_| Soliciting Material Under Rule 14a-12
REGAN HOLDING CORP.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
|_| Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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|_| 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:
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(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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REGAN HOLDING CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held June 10, 2004
NOTICE IS HEREBY GIVEN THAT the Annual Meeting of Shareholders of Regan
Holding Corp., a California corporation (the "Company"), will be held at 2090
Marina Avenue, Petaluma, California 94954 on Thursday, June 10, 2004 at 8:30
a.m., or at any adjournment thereof (the "Annual Meeting"). At the Annual
Meeting, the shareholders will be asked to consider and act upon the following
matters:
1. To elect five (5) directors to hold office until the Annual
Meeting of Shareholders in 2005 and until their successors shall
be elected and shall qualify.
2. To consider and act upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as independent auditors to examine the
financial statements and books and records of the Company for the
year 2004.
3. To consider and act upon such other business that properly comes
before the meeting or any adjournment or adjournments of the
meeting.
Only shareholders of record at the close of business on April 28, 2004
are entitled to notice of and to vote at the Annual Meeting.
It is very important that your shares are represented and voted at the
meeting. Your shares may be voted by returning the enclosed proxy card. If you
attend the meeting, you may vote in person even if you have previously mailed a
proxy card. We would appreciate your informing us on the proxy card if you
expect to attend the meeting so that we can provide adequate seating for
attendees.
The continuing interest of our shareholders in the business of the
Company is appreciated and we hope many of you will be able to attend the Annual
Meeting.
By Order of the Board of Directors
R. Preston Pitts
Secretary
Dated: May 10, 2004
Petaluma, California
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It is important that your shares be represented at the Annual Meeting regardless
of the number of shares you hold. Whether or not you plan to attend the Annual
Meeting, please complete and return your proxy in the enclosed envelope as soon
as possible.
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2
REGAN HOLDING CORP.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held June 10, 2004
The Annual Meeting of Shareholders of Regan Holding Corp., a California
corporation (the "Company") will be held at 2090 Marina Avenue, Petaluma,
California 94954 on Thursday, June 10, 2004 at 8:30 a.m., or at any adjournment
thereof (the "Annual Meeting") for the purposes set forth in the accompanying
Notice of Annual Meeting of Shareholders. This Proxy Statement is furnished in
connection with the solicitation by the Company of proxies to be used at the
Annual Meeting or at any and all adjournments (that take place within eleven
months from the issuance of such proxy) of such meeting. The enclosed proxy card
is solicited by the Board of Directors of the Company. By executing and
returning the enclosed proxy card or by following the enclosed voting
instructions, you authorize the persons named in the proxy card to represent you
and vote your shares on the matters described in the Notice of Annual Meeting of
Shareholders. The mailing address of the Company's principal executive offices
is 2090 Marina Avenue, Petaluma, California 94954.
Commencing approximately May 10, 2004, the Company is mailing its
Annual Report on Form 10-K for the year ended December 31, 2003 together with
this Proxy Statement and the enclosed proxy card to the Shareholders. If you
attend the Annual Meeting, you may vote in person. If you are not present, your
shares can be voted only if you have completed a properly executed proxy card.
If you have completed a properly executed proxy card, your shares will be voted
as you specify. If no specification is made, the shares will be voted in
accordance with the recommendations of the Board of Directors. You may revoke
the authorization given in your proxy card at any time before the shares are
voted at the Annual Meeting. To do this, send a written notice of revocation or
another signed proxy card dated at a later date to the Secretary of the Company
at the Company's principal executive offices prior to the date of the Annual
Meeting. You may also revoke your proxy by attending the Annual Meeting and
voting in person.
Voting Rights
The record date for determination of the shareholders entitled to vote
at the Annual Meeting is the close of business on April 28, 2004. As of the
record date, the Company had outstanding 23,403,889 shares of Common
Stock-Series A, no par value (the "Series A Stock"), and 553,637 shares of
Common Stock-Series B, no par value (the "Series B Stock"). As of the date of
this Proxy Statement, the Company is not in arrears in dividends. The shares of
Series A Stock and Series B Stock are collectively referred to herein as "Common
Stock" and the holders of shares of Common Stock vote together as a single
class.
The shares of Common Stock are the only outstanding voting securities
of the Company. A holder of Common Stock is entitled to cast one vote for each
share held of record by such holder on the record date on all matters to be
considered at the Annual Meeting. As explained under Item 1 of this Proxy
Statement, cumulative voting will be permitted with respect to the election of
Directors.
The person appointed by us to act as election inspector for the meeting
will count votes cast by proxy or in person at the Annual Meeting. The holders
of a majority of the votes entitled to be cast, present either in person or by
proxy, shall constitute a quorum for purposes of the Annual Meeting. Shares for
which a holder has elected to abstain on a matter and broker non-vote shares
will count for purposes of determining the presence of a quorum. For actions
requiring approval based on a percentage of votes cast, abstentions and broker
non-votes will not
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affect the outcome of the vote. For actions requiring approval based on the
number of shares outstanding, abstentions and broker non-votes will have the
same effect as a negative vote.
The proxy solicitor, the election inspector and the tabulators of all
proxies, ballots and voting tabulations that identify shareholders are
independent and are not employees of the Company.
ITEM 1
ELECTION OF DIRECTORS
The Board of Directors has fixed the number of Directors to be elected
at five (5) and has nominated the persons identified below to serve as Directors
until the next Annual Meeting of Shareholders and their respective successors
shall be elected and shall qualify. Each of the nominees listed below is
currently a Director of the Company.
Director
Name and Age Principal Occupation Since
- ------------ -------------------- -------
Lynda L. Regan Ms. Regan has served as Chairman of the 1990
55 years old Board and Chief Executive Officer of the
Company since 1992. She was Senior Vice
President and Treasurer from 1990 to
1992.
R. Preston Pitts Mr. Pitts served as Chief 1995
52 years old Financial Officer of the Company from
1994 to 1997, as President and Secretary
of the Company since 1997, and as
President, Secretary and Chief Operating
Officer of the Company since 1998. As of
April 19, 2004, he became interim Chief
Financial Officer of the Company. Prior
to joining the Company, he owned Pitts
Company, a CPA firm specializing in
services for insurance companies, served
as financial officer for United Family
Life Insurance Company and American
Security Insurance Group, both
Fortis-owned companies, and was Audit
Manager for Ernst & Young.
Ute Scott-Smith Ms. Scott-Smith has run her own 1997
44 years old financial services business since
January 2003. She also served as Senior
Vice-President of the Company from 1990
to April of 1997.
Dr. Donald Ratajczak Dr. Ratajczak is a consulting economist. 2000
61 years old Prior to April 1, 2003, he was the Chief
Executive Officer and Chairman of the
Board of Brainworks Ventures, Inc. prior
to its merger with Assurance America
Corp. Since then, he has served as a
director of the combined entity. He has
also served as a member of the board of
directors of Crown Craft since July
2001. From 1973 until his retirement in
June 2002, Dr. Ratajczak was Director of
the Economic Forecasting Center in the
J. Mack Robinson College of Business of
Georgia State University. Prior to
founding the Center in 1973, Dr.
Ratajczak was Director of Research for
the UCLA Business Forecasting Project.
Dr. Ratajczak also serves as a Director
of Ruby
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Tuesday, Inc., TBC Corporation and
Citizen Trust Bank, and as a Trustee of
CIM High Yield Fund. He is a member of
the American Economic Association.
J. Daniel Speight, Jr. Mr. Speight is the Vice Chairman, Chief 2000
47 years old Financial Officer and Director of Flag
Financial Corporation, a bank holding
company, and of Flag Bank, a wholly
owned subsidiary of Flag Financial. Mr.
Speight served as Chief Executive
Officer and a Director of Middle Georgia
Bankshares, Inc. from 1989 until its
merger with Flag Financial Corporation
in March 1998 and has served in various
positions as President, Chief Executive
Officer and a Director of Citizens Bank
and the resultant Flag Financial
Corporation since 1984. Mr. Speight
previously served as Chairman of The
Bankers Bank and is currently a member
of the State Bar of Georgia. He is past
Chairman of the Georgia Bankers
Association Community Banking Committee,
past President of the Community Bankers
Association of Georgia, and past
Director of the Independent Bankers
Association of America.
The Board of Directors recommends that shareholders vote "FOR" all the nominees.
Although it is not contemplated that any of the nominees will decline
or be unable to serve, the proxies will be voted by the proxy holders at their
discretion for another person if such a contingency should arise. Unless
otherwise directed in the accompanying proxy, or as specified above, the proxies
will be voted "FOR" the election of the nominees named above. Each nominee has
indicated approval of his or her nomination and his or her willingness to serve
if elected.
The Company's Bylaws provide that each shareholder is entitled to
cumulate such shareholder's votes and give one nominee a number of votes equal
to the number of directors to be elected multiplied by the number of votes to
which such shareholder's shares are normally entitled, or distribute the
shareholder's votes on the same principle among as many nominees as the
shareholder considers appropriate. This cumulative voting right may not be
exercised unless the nominee's name has been placed in nomination prior to the
voting and one or more shareholders has given notice at the meeting prior to the
voting of the shareholder's intent to cumulate such shareholder's vote. The
proxy holders may exercise this cumulative voting right at their discretion. The
candidates receiving the highest number of votes of the shares entitled to be
voted for them up to the number of directors to be elected by such shares are
elected.
The nomination of each of the foregoing nominees was based, in part,
upon the fact that such nominees intend to vote their respective shares of the
Company to elect themselves as Directors.
Under an insurance brokerage agreement among the Company, Lynda L.
Regan and Moody Insurance Group ("MIG"), Ms. Regan has agreed that, so long as
the brokerage agreement remains in effect, she will vote her shares in favor of
the election of Robert Moody, Jr., MIG's president and sole shareholder, as a
Director of the Company should he wish to be elected. However, at the present
time, MIG engages in business activities that compete with the Company.
Therefore, in order to avoid any issue as to the propriety of Mr. Moody's
serving on the Company's Board, Mr. Moody has agreed to relinquish his right to
serve on the Board for a period of one year in return for nominal consideration
from the Company. The termination of the
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brokerage agreement with MIG would not have a material effect on the financial
condition of the Company.
Board Committees and Meetings
During the fiscal year that ended on December 31, 2003, the Board of
Directors held five meetings. During this period, all of the incumbent directors
attended or participated in more than 75% of the aggregate of (i) the total
number of meetings of the Board of Directors and (ii) the total number of
meetings held by all Committees of the Board on which each such director served.
The Company has one standing Committee: the Audit Committee. The Audit
Committee consists of Ute Scott-Smith, Dr. Donald Ratajczak, and J. Daniel
Speight, Jr. Each member of the Audit Committee is "independent" as that term is
defined in the New York Stock Exchange listing standards. Dr. Ratajczak and Mr.
Speight qualify as "audit committee financial experts" under the U.S. Securities
and Exchange Commission rules. During fiscal year 2003, the Audit Committee held
seven meetings.
The Company currently has no nominating committee. Given the size of
the Company and its resources, the Board of Directors believes that this is
appropriate. The Amended and Restated Bylaws of the Company provides management
to nominate directors for election at the annual meeting of stockholders.
The Board of Directors has not established a formal process for
shareholders to send communications to the Board. Given the size of the Company
and its resources, the Board of Directors believes that this is appropriate.
Attendance at Annual Meetings
All directors are expected to attend the annual meeting of shareholders
and be available, when requested by the chair, to answer any questions
shareholders may have. All members of the Board of Directors attended last
year's annual meeting.
Executive Officers
In addition to the Directors who serve as executive officers of the
Company and who are identified above, the following individuals also serve as
executive officers of the Company:
John W. Abbott, 46 years old, was appointed Vice President and Chief
Information Officer of the Company in March 2003. From 1999-March 2003, Mr.
Abbott ran his own consulting firm, WOW Solutions. He was also Vice President of
Technology Architecture and Planning at SunAmerica Insurance Company from
1997-1999. Prior to 1997 he served as Vice President at Transamerica Life and
Annuity Company.
Ted E. Johnson, Jr., 46 years old, was appointed Chief Operations
Officer of the Company in October 2003. From 1984 to 2002, Mr. Johnson served in
various leadership positions at USAA Life Insurance Company. His last role was
that of Vice President, Business Process Management.
Finance Code of Professional Conduct
The Company has adopted a Finance Code of Professional Conduct
incorporating the provisions required by the SEC. The Code applies to the Chief
Executive Officer, Chief Financial Officer, Controller and other finance
organization employees. The Code is attached as Exhibit 14 to this proxy
statement.
6
Family Relationships
Lynda L. Regan, Chairman of the Board and Chief Executive Officer of
the Company, is married to R. Preston Pitts, President, Chief Operating Officer
and Director of the Company.
Security Ownership of Certain Beneficial Owners and Management
The following table shows the amount of Series A Stock of the Company
beneficially owned by the Company's directors, the executive officers of the
Company named in the Summary Compensation Table below and the directors and
officers of the Company as a group. The information set forth below is as of
April 28, 2004. No director or officer owns any Series B Stock.
Name Position Total Percent
- ---- -------- ----- -------
Lynda L. Regan Director, Chairman of the 11,736,382 (1) 50.1%
Board & Chief Executive Officer
R. Preston Pitts Director, President, Chief 1,503,773 (2) 6.4%
Operating Officer, and interim
Chief Financial Officer
Ute Scott-Smith Director 406,739 (3) 1.7%
J. Daniel Speight, Jr. Director 30,000 (4) *
Donald Ratajczak Director 30,000 (4) *
John W. Abbott Chief Information Officer 15,000 (5) *
All executive officers and 13,721,894 58.6%
directors as a group
- ---------------------
(1) Includes 417,260 shares issuable pursuant to stock options that are
exercisable within 60 days.
(2) Includes 745,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(3) Includes 45,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(4) Includes 30,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(5) Includes 15,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
* Indicates that the percentage of the outstanding shares beneficially
owned is less than one percent (1%).
Section 16(a) Beneficial Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors and persons who own more than 10%
of the Company's common stock to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. The rules of the
Securities Exchange Commission require reporting persons to supply the Company
with copies of these reports.
Based solely on its review of the copies of such reports received from
reporting persons, the Company believes that with respect to the fiscal year
ended December 31, 2003, all reporting persons timely filed the required
reports.
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Certain Shareholders
The Company knows of no person who is the beneficial owner of more than
five percent of any class of the Company's outstanding Common Stock other than
Lynda L. Regan, Chairman of the Board and Chief Executive Officer of the
Company, and R. Preston Pitts, President and Chief Operating Officer, whose
ownership is listed above. The address for Lynda L. Regan and R. Preston Pitts
is 2090 Marina Avenue, Petaluma, California 94954.
Audit Committee
The Company has a standing Audit Committee and has adopted a written
charter for the Audit Committee. The Audit Committee oversees the financial
reporting process, the system of internal controls, the audit process and the
process for monitoring compliance with laws and regulations. The Company's
independent auditors are responsible for performing an audit of the Company's
consolidated financial statements in accordance with auditing standards
generally accepted in the United States. The following functions are the key
responsibilities of the Audit Committee:
o Selecting, evaluating and, where appropriate, replacing the
independent auditors;
o Reviewing the terms of engagement of the independent auditors;
o Reviewing the Company's procedures with respect to appropriateness
of significant financial policies and accounting systems and
effectiveness of the Company's internal controls;
o Reviewing information from the independent auditors pertaining to
the independent auditors' independence;
o Reviewing the audited financial statements in the Annual Report
filed on Form 10-K with management, including a discussion of the
quality, not just the acceptability, of the accounting principles,
the reasonableness of significant adjustments, if any, and the
clarity of disclosures in the financial statements;
o Reviewing with the Company's independent auditors who are
responsible for expressing an opinion on the conformity of those
audited financial statements with generally accepted accounting
principles, their judgment as to the quality, not just the
acceptability, of the Company's accounting principles; and
o Reviewing and assessing the adequacy of the Audit Committee's
Charter annually and recommending revisions to the Board.
Directors' Compensation
The compensation for directors of the Company who are not officers or
employees of the Company currently consists of a $10,000 annual fee plus a
$1,500 attendance fee for each Board or committee meeting attended. Also,
outside directors of the Company are eligible to receive stock options.
Currently, Donald Ratajczak, Ute Scott-Smith and J. Daniel Speight, Jr. are the
only outside directors of the Company. The other directors are otherwise
employed by the Company and are not compensated for serving as directors or
attending Board of Directors' or committee meetings.
Executive Compensation
The following Summary Compensation Table sets forth the compensation of
(i) the Company's Chief Executive Officer, (ii) the three(1) most highly
compensated executive officers other than the Chief Executive Officer and (iii)
the former Chief Operations Officer, William J. Hrabik, whose employment was
terminated prior to the end of the fiscal year 2003, who but for such
termination would have been one of such four most highly compensated executive
officers of the Company (together, the "named executive officers") for services
in all capacities to the Company and its subsidiaries during 2003, 2002 and
2001:
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1 The Company is required to disclose the compensation of the four highest
compensated executive officers other than the Chief Executive Officer. However,
only three such executive officers were employed at the end of the fiscal year
2003.
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Summary Compensation Table
Annual Compensation Long-Term Compensation
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Name and Year Salary Bonus (1) Other
Position Annual Stock
Compensation Options
- ------------------------------------------------------------------------------------------------------
Lynda L. Regan, 2003 $600,000 $150,000 $6,000(2) 0
Chief Executive $6,827(4)
Officer $14,126(3)
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2002 $613,872 $179,999 $5,500(2) 0
$18,316(4)
$11,427(3)
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2001 $613,872 $118,169 $3,150(2) 0
$18,811(4)
$14,126(3)
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R. Preston 2003 $450,000 $112,500 $3,600(2) 0
Pitts, $6,638(4)
President and
Chief Operating
Officer
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2002 $460,414 $157,503 $3,428(2) 75,000
$15,110(4)
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2001 $460,414 $156,028 $3,150(2) 0
$15,343(4)
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G. Steven 2003(5) $210,000 $31,500 $2,400(2) 50,000
Taylor, Former $4,845(4)
Chief Financial
Officer
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2002 $210,000 $78,808 $2,975(2) 50,000
$6,581(4)
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2001 $197,019 $37,356 $5,100(2) 0
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John W. Abbott, 2003(6) $140,539 $20,000 75,000
Chief
Information
Officer
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William J. 2003(7) $122,804 $20,000 $4,284(2) 0
Hrabik, Former $80,769(8)
Chief
Operations
Officer
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2002 $200,000 $90,067 $5,500(2) 50,000
$3,202(4)
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2001 $189,615 $48,154 $4,960(2) 0
$2,173(4)
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(1) Includes bonuses in the year in which they were earned.
(2) The Company matches contributions made to its 401(k) Plan at a rate of 50%
of employee contribution, up to 6% of total annual compensation, or a total
deferral of $12,000.
(3) The Company pays interest on debt related to a split dollar life insurance
policy under which Ms. Regan is the beneficiary. This policy was cancelled
on December 31, 2003.
(4) The Company matches contributions made by certain employees to the
Company's non-qualified deferred compensation plan at a rate of 50% of
employee contribution, up to 6% of total annual compensation deferred less
amounts matched under the Company's 401(k) Plan.
9
(5) Mr. Taylor's employment was terminated April 16, 2004
(6) Mr. Abbott's employment commenced March 12, 2003.
(7) Mr. Hrabik's employment was terminated July 1, 2003.
(8) Amount represents cash paid to Mr. Hrabik for severance.
Stock Option Grants in Last Fiscal Year
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(a) (b) (c) (d) (e) (f)
Name % of Total Exercise or Expiration Date Grant Date
Stock Options Base Price Present Value
Number of Granted to ($/Sh) (1) ($)
Stock Options Employees in
Granted Fiscal Year
- -------------------------------------------------------------------------------------------------------------
Lynda L. Regan 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
R. Preston Pitts 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
G. Steven Taylor 50,000 6% $1.69 6/9/13 8,712
- -------------------------------------------------------------------------------------------------------------
John W. Abbott 75,000 10% $1.68 3/12/13 15,014
- -------------------------------------------------------------------------------------------------------------
William J. Hrabik 0 0 0 0 0
- -------------------------------------------------------------------------------------------------------------
(1) The present value on the grant date was estimated using the minimum
value method with the following assumptions; a risk free interest rate
of 2.20% - 2.57%, an expected life of 5 years, and no dividend yield.
Aggregated Stock Options Exercises in Last Fiscal Year
And Fiscal Year-end Stock Option Values
The following table sets forth certain information concerning the
exercise of options by each of the named executive officers during fiscal 2003
and the number and value of unexercised options held by each of the named
executive officers as of December 31, 2003.
- -------------------------------------------------------------------------------------------------------------
Number of Value of Unexercised
Shares Stock Options in-the-money Stock Options
Acquired on Value at Fiscal year End at Fiscal Year End ($)
Name Exercise Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- -------------------------------------------------------------------------------------------------------------
Lynda L. Regan 125,000 $75,000 312,945/187,055 $ 40,362/$26,693
- -------------------------------------------------------------------------------------------------------------
R. Preston Pitts 30,000 $38,100 605,000/265,000 $277,200/$45,100
- -------------------------------------------------------------------------------------------------------------
G. Steven Taylor -- -- 100,000/150,000 $ 14,500/$10,000
- -------------------------------------------------------------------------------------------------------------
John W. Abbott -- -- --/75,000 $ --/$750
- -------------------------------------------------------------------------------------------------------------
William J. Hrabik -- -- --/-- $ --/$--
- -------------------------------------------------------------------------------------------------------------
10
Stock Options and Stock Awards
The Company currently sponsors two stock-based compensation plans.
Under both plans, the exercise price of each option equals the estimated fair
value of the underlying common stock on the date of grant, as estimated by
management, except for incentive stock options granted to shareholders who own
10% or more of the Company's outstanding stock, where the exercise price equals
110% of the estimated fair value. Both plans are administered by committees,
which are appointed by the Company's Board of Directors.
Producer Option Plan -- Under the Regan Holding Corp. Producer Stock
Option and Award plan (the "Producer Option Plan"), the Company may grant to
Legacy Marketing producers and Legacy Financial registered representatives
shares of the Company's common stock and non-qualified stock options (the
"Producer Options") to purchase the Company's common stock. A total of 12.5
million shares have been reserved for grant under the Producer Option Plan.
Total stock options granted to Producers for 2003, 2002, and 2001 were 15,000,
10,000, and 265,000. Total expenses recorded for Producer stock option grants
were $10,000, $4,000, and $96,000 during 2003, 2002 and 2001. The Producer stock
options granted for each of the three years ended December 31, 2003 vested
immediately upon the grant date. The fair value of the Producer options were
estimated using the Black-Scholes option-pricing model with the following
assumptions:
2003 2002 2001
------------ ------------ ------------
Risk-free interest rates 3.19% 4.78% 5.13%-6.80%
Volatility 27% 27% 27%-31%
Dividend yield None None None
Expected life 6 years 6 years 6-10 years
The following table summarizes information with respect to shares of
Series A common stock awarded to non-employees:
2001
-------------
Share grants 48,000
Fair value per share $ 1.53-$1.65
Expense recorded $ 75,000
There were no shares of Series A common stock awarded to non-employees
during 2003 and 2002. The share grant for 2001 listed above includes 15,000
shares of Series A common stock that the Company was obligated to award to a
service provider, but had not been issued as of December 31, 2003.
Employee Option Plan -- Under the Regan Holding Corp. 1998 Stock Option
Plan (the "Employee Option Plan"), the Company may grant to employees and
directors incentive stock options and non-qualified options to purchase the
Company's common stock (collectively referred to herein as "Employee Options").
A total of 8.5 million shares have been reserved for grant under the Employee
Option Plan. The Employee Options generally vest over four or five years and
expire in ten years, except for incentive stock options granted to shareholders
who own 10% or more of the outstanding shares of the Company's stock, which
expire in five years. The Company uses the intrinsic value method of accounting
for stock-based awards granted to employees and, accordingly, does not recognize
compensation expense for its stock-based awards to employees.
11
Stock option activity under both the Producer and Employee plans was as follows:
Total
Weighted average
Shares Exercise Price
------ --------------
Outstanding at December 31, 2000 13,376,000 $ 1.28
Granted 2,976,000 $ 1.62
Exercised -- $ --
Forfeited (788,000) $ 1.25
Outstanding at December 31, 2001 15,564,000 $ 1.35
Granted 1,153,000 $ 1.68
Exercised -- $ --
Forfeited (768,000) $ 1.22
Outstanding at December 31, 2002 15,949,000 $ 1.38
Granted 788,000 $ 1.69
Exercised (155,000) $ 1.27
Forfeited (797,000) $ 1.38
Outstanding at December 31, 2003 15,785,000 $ 1.39
Exercisable at December 31, 2001 11,512,000 $ 1.31
Exercisable at December 31, 2002 12,407,000 $ 1.32
Exercisable at December 31, 2003 13,106,000 $ 1.35
The following table summarizes information about stock options
outstanding at December 31, 2003 under both plans:
Options Outstanding Options Exercisable
----------------------------------------- ----------------------
Weighted Weighted Weighted
Average Average Average
Remaining Exercise Exercise
Range of exercise prices Shares Contractual Life Price Shares Price
- ------------------------ ------ ---------------- ----- ------ -----
$ 0.73-$0.84 1,449,000 1.6 $ 0.73 1,449,000 $ 0.73
$ 1.03 120,000 1.1 $ 1.03 120,000 $ 1.03
$ 1.27-$1.40 5,601,000 1.5 $ 1.27 5,556,000 $ 1.27
$ 1.53 4,119,000 3.7 $ 1.53 3,507,000 $ 1.53
$ 1.61 1,987,000 3.8 $ 1.61 1,798,000 $ 1.61
$ 1.65-$1.68 1,810,000 7.3 $ 1.67 661,000 $ 1.66
$ 1.69-$1.70 699,000 9.2 $ 1.69 15,000 $ 1.69
Certain Relationships and Related Transactions
During 2003, the Company amended its Shareholder Agreement with Lynda
L. Regan, Chief Executive Officer of the Company and Chairman of the Company's
Board of Directors. Under the terms of the amended agreement, upon the death of
Ms. Regan, the Company would have the option (but not the obligation) to
purchase from Ms. Regan's estate all shares of common stock that were owned by
Ms. Regan at the time of her death, or were transferred by her to one or more
trusts prior to her death. In addition, upon the death of Ms. Regan, her heirs
would have the option (but not the obligation) to sell their inherited shares to
the Company. The purchase price to be paid by the Company shall be equal to 125%
of the fair market value of the shares. The Company has purchased two life
insurance policies with a combined face amount of $29 million for the purpose of
funding this potential obligation upon Ms. Regan's death.
12
Report on Executive Compensation
The Board of Directors develops and administers the Company's executive
compensation policies and programs. Lynda L. Regan is the Company's Chairman of
the Board of Directors and Chief Executive Officer and R. Preston Pitts is the
Company's President and Chief Operating Officer. Ms. Regan does not vote on
matters relating to her own compensation or that of Mr. Pitts. Mr. Pitts does
not vote on matters relating to his own compensation or that of Ms. Regan. These
policies and programs are generally intended to: (i) relate the compensation of
the Company's executives to the success of the Company and to the creation of
shareholder value; and (ii) attract, motivate and retain highly qualified
executives. In establishing a level of compensation, the Board considers a
number of factors, including; (i) the financial condition and performance of the
Company; (ii) the compensation levels of executives in comparable positions of
companies in industries in which the Company competes for executives, primarily
the financial services and insurance industries; and (iii) the abilities of the
executives and their contributions to the Company's strategic goals and
performance.
Each year, the Board of Directors reviews the Company's executive
compensation policies and programs to ensure that executive compensation is
linked to the creation of shareholder value and to assess the competitiveness of
the compensation programs. Compensation for executives during 2003 consisted of
base pay and incentive bonuses. Base pay for executives is determined based on
the factors set forth above.
In 2003, the Board of Directors approved the following two bonus
policies (i) the Executive Officer Personal Performance Bonus policy (the
"Performance Bonus"), and (ii) the Executive Officer Net Income Bonus policy
(the "Net Income Bonus"). These bonus policies provide compensation for the
following executive officer positions: Chief Executive Officer, President/Chief
Operating Officer, Chief Financial Officer, Chief Information Officer and Chief
Operations Officer (collectively, the "Executive Officers").
The Performance Bonus will be calculated as follows: Each Executive
Officer is entitled to an annual Personal Performance bonus that is to be based
on a percentage of annual salary (the "Bonus Percentage"). The maximum Bonus
Percentage will be established by the Chief Executive Officer, President and the
Board of Directors no later than the first quarter of the year in which the
bonus can be earned (the "Bonus Year"). Payment of the maximum Bonus Percentage
will be contingent upon achievement of personal performance goals during the
Bonus Year. Each respective Executive Officer and his or her superior officer
will agree upon personal performance goals no later than the first quarter of
each Bonus Year. Calculation of the personal performance bonus to be paid will
be based on the percentage of personal performance goals achieved. Payment of
the Personal Performance Bonus will be made during the first quarter of the year
following the Bonus Year.
In addition to the Performance Bonus, Executive Officers can earn the
Net Income Bonus. Each Executive Officer's Net Income Bonus will be calculated
as follows: A percentage of Regan Holding Corp. consolidated net income (defined
below) during the Bonus Year will be allocated to each Executive Officer. The
percentage to be allocated to each Executive Officer will be established by the
Chief Executive Officer, the President and the Board of Directors. For purposes
of this calculation, Net Income is defined as consolidated net income from
operations, prepared in accordance with accounting principles generally accepted
in the United States, excluding all Executive Officer bonuses and net of
applicable income taxes.
Respectfully submitted,
Lynda L. Regan
R. Preston Pitts
Donald Ratajczak
Ute Scott-Smith
J. Daniel Speight, Jr.
13
Performance Data
The Company's Common Stock became subject to the Securities Exchange
Act of 1934 in November 1991 as a result of the issuance of shares of Common
Stock in connection with the acquisition of LifeSurance Corporation. There has
never been an active public trading market for the Common Stock. Prior to
December 31, 1992, the Company issued 5,935,094 shares of Series A Redeemable
Common Stock at prices ranging from $1.00 to $2.25 per share. This stock was
issued in accordance with the terms of the 701 Asset Accumulator Program (the
"701 Plan") between the Company, its independent insurance producers and
employees, and the Confidential Private Placement Memorandum and Subscription
Agreement (the "Subscription Agreement") between the Company and certain
accredited investors. Under the terms of the 701 Plan and the Subscription
Agreement, the Series A Redeemable Common Stock may be redeemed at the option of
the holder after being held for two consecutive years, at a redemption price
based upon current market value, subject to the Company's ability to make such
purchases under applicable corporate law. In connection with the merger in 1991
between the Company and LifeSurance Corporation, 615,242 shares of Series B
Redeemable Common Stock were authorized and issued in exchange for all of the
outstanding stock of LifeSurance Corporation. Under the merger agreement, the
Series B Redeemable Common Stock may be redeemed by the holder in quantities of
up to 10% per year, at a redemption price based upon current market value,
provided that the redemption is in accordance with applicable corporate law.
In 1996, the Company began repurchasing shares of its Series A and
Series B Redeemable Common Stock (collectively referred to as "Redeemable Common
Stock") and began voluntarily repurchasing shares of its Common Stock that are
not redeemable at the option of the holder ("Non-Redeemable Common Stock"). The
repurchase prices of the Redeemable and Non-Redeemable shares of Common Stock
are based on an independent appraisal of the fair market value of the shares.
The fair market value of the Non-Redeemable Common Stock is typically lower than
that of the Redeemable Common Stock. This difference in fair market values
reflects the fact that the Company is not obligated to repurchase the
Non-Redeemable Common Stock. The prices paid for the Redeemable and
Non-Redeemable Common Stock since December 31, 1996 are set forth in the
following table:
- --------------------------------------------------------------------------------
Appraisal Date Price Per Share
- --------------------------------------------------------------------------------
Redeemable Common Redeemable
Stock Common Stock Non-Redeemable
Series A Series B Common Stock
- --------------------------------------------------------------------------------
December 31, 1996 $0.78 $0.78 $0.70
- --------------------------------------------------------------------------------
June 30, 1997 $0.84 $0.84 $0.84
- --------------------------------------------------------------------------------
December 31, 1997 $0.96 $0.96 $0.73
- --------------------------------------------------------------------------------
June 30, 1998 $1.35 $1.35 $1.03
- --------------------------------------------------------------------------------
December 31, 1998 $1.66 $1.66 $1.27
- --------------------------------------------------------------------------------
June 30, 1999 $1.81 $1.81 $1.39
- --------------------------------------------------------------------------------
December 31, 1999 $1.99 $1.99 $1.53
- --------------------------------------------------------------------------------
June 30, 2000 $2.00 $2.00 $1.53
- --------------------------------------------------------------------------------
December 31, 2000 $2.10 $2.10 $1.61
- --------------------------------------------------------------------------------
June 30, 2001 $2.16 $2.16 $1.65
- --------------------------------------------------------------------------------
December 31, 2001 $2.19 $2.19 $1.68
- --------------------------------------------------------------------------------
June 30, 2002 $2.19 $2.19 $1.68
- --------------------------------------------------------------------------------
December 31, 2002 $2.20 $1.82 $1.69
- --------------------------------------------------------------------------------
June 30, 2003 $2.22 $1.83 $1.70
- --------------------------------------------------------------------------------
December 31, 2003 $2.21 $1.82 $1.69
- --------------------------------------------------------------------------------
14
Compensation Committee Interlocks and Insider Participation
As noted above, the Company does not have a compensation committee. The
compensation of executive officers is determined by the Board of Directors.
Lynda L. Regan, who is Chief Executive Officer of the Company, is also Chairman
of the Board of Directors and R. Preston Pitts, who is President and Chief
Operating Officer, is also a director. None of the executive officers of the
Company serves as a director or member of the compensation committee of any
entity that has one or more executive officers serving as a director of the
Company.
Audit Committee Report
During 2003, at each of its meetings, the Audit Committee met with
senior members of management and the Company's independent auditors. Management
reviewed the audited financial statements in the Annual Report on Form 10-K with
the Audit Committee. The Audit Committee discussed with management and the
independent auditors the quality, not just the acceptability, of the accounting
principles, the reasonableness of significant judgments, and the clarity of
disclosures in the financial statements. During 2003, (i) Seven Audit Committee
meetings where held, and (ii) the members of the Audit Committee maintained
their independence (as such term is defined in the Sarbanes-Oxley Act of 2002)
from the Company.
The Audit Committee also discussed with its independent auditors the
matters required to be discussed by Statement Of Auditing Standards No. 61
(Communications with Audit Committees, as amended). The Audit Committee also
received from its independent auditors the written disclosures required by
Independence Board Standard No. 1 and discussed with them their independence
from management and the Company, and considered the compatibility of non-audit
services with the auditors' independence.
In performing these functions, the Audit Committee acts in an oversight
capacity, relying on the work and assurances of the Company's management which
has the primary responsibility for the financial statements, and or the
independent auditors, who, in their report, express an opinion on the conformity
of the Company's annual financial statements to generally accepted accounting
principles.
In reliance on these reviews and discussions, the Audit Committee has
recommended to the Board of Directors that the audited consolidated financial
statements be included in the Company's Annual Report on Form 10-K for the year
ended December 31, 2003 for filing with the Securities and Exchange Commission.
Respectfully submitted by the Audit Committee,
Ute Scott-Smith, Chairperson
Dr. Donald Ratajczak
J. Daniel Speight, Jr.
15
Audit Fees
The aggregate fees billed for each of the fiscal years ended December 31, 2003
and 2002 for professional services rendered by PricewaterhouseCoopers LLP
("PwC") for the audit of the Company's annual financial statements and review of
the financial statements included in the Company's Form 10-Q or for services
that are normally provided by PwC in connection with statutory and regulatory
filings or engagements totaled $296,148 and $246,168.
Audit-Related Fees
The aggregate fees billed for each of the fiscal years ended December 31, 2003
and 2002 for audit-related fees totaled $56,869 and $83,938. The audit related
services performed by PwC in 2003 and 2002 consisted primarily of review of
amendments to a registration statement filed with the Securities and Exchange
Commission.
Tax Fees
No aggregate fees were billed in each of the last two years for professional
services rendered by PwC for tax compliance, tax advice and tax planning.
All Other Fees
No aggregate fees were billed in each of the last two years for other services
rendered by PwC.
Audit Committee Pre-Approval Policies and Procedures
All services to be performed for the Company by PwC must be pre-approved by the
Company's Audit Committee.
ITEM 2
RATIFICATION OF APPOINTMENT OF PRINCIPAL INDEPENDENT AUDITORS
The Board of Directors recommends that the shareholders vote "FOR"
ratification of the appointment of PricewaterhouseCoopers LLP as principal
independent auditors for the year ending December 31, 2004, and your proxy will
be so voted unless you specify otherwise.
The Board of Directors has appointed PricewaterhouseCoopers LLP, as
principal independent auditors for the Company for the year ending December 31,
2004.
Representatives of PricewaterhouseCoopers LLP are expected to be
present at the Annual Meeting and will be available to respond to appropriate
questions. Those representatives will have the opportunity to make a statement
if they desire to do so.
The approval of this appointment requires the affirmative vote of the
holders of a majority of the outstanding shares of Common Stock.
16
ITEM 3
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors knows of
no matters which will be presented for consideration at the Annual Meeting other
than the proposals set forth in this proxy statement. If any other matters
properly come before the Annual Meeting, it is intended that the persons named
in the proxy will act in respect thereof in accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any shareholder who intends to present a proposal at the 2005 Annual
Meeting of Shareholders for inclusion in the Company's Proxy Statement and proxy
form relating to such meeting must submit such proposal in writing, along with
proof of eligibility, to the Company's Secretary (2090 Marina Avenue, Petaluma,
CA 94954). Such proposals must be received by the Company no later than November
22, 2004.
SOLICITATION OF PROXIES
The cost of soliciting proxies in the accompanying form has been or
will be paid by the Company. In addition to solicitation by mail, arrangements
may be made with brokerage houses and other custodians, nominees and fiduciaries
to send proxy material to their principals, and the Company may reimburse them
for their expenses in doing so. To the extent necessary in order to assure
sufficient representation, officers and regular employees of the Company may
engage (without additional compensation) in the solicitation of proxies
personally, by telephone, electronic mail or facsimile.
ANNUAL REPORT AND FORM 10-K
Without charge, beneficial owners of our Common Stock as of the record
date of April 28, 2004 may obtain copies of our Annual Report on Form 10-K,
including financial statements and financial statement schedules, required to be
filed with the SEC for 2003 by submitting a written request to R. Preston Pitts,
President, at 2090 Marina Avenue, Petaluma, California 94954.
17
Exhibit 1
REGAN HOLDING CORP. BOARD OF DIRECTORS
AUDIT COMMITTEE CHARTER
PURPOSE
The Audit Committee of the Regan Holding Corp. (the "Company's") Board of
Directors (the "Board") shall review and report to the Board regarding:
o the appropriateness of the Company's accounting policies,
o the adequacy of the Company's internal controls and reliability of the
Company's financial information reported to the public,
o the Company's compliance with legal and regulatory requirements, and
o the independence and performance of the Company's internal auditors and
independent accountants.
COMPOSITION
That the Audit Committee shall be appointed by the Board and shall have at least
three members, including one Chairperson. All members of the Audit Committee
shall meet independence and expertise requirements as follows:
o No member shall have been employed by the Company, or any of its
affiliates, within the past three (3) years;
o No member shall conduct a business relationship, or be an executive
officer, partner or controlling shareholder of an organization that has a
business relationship, with the Company which is deemed by the Board to
interfere with such member's independence;
o No member shall be an immediate family member of a person who is, or has
been in the past three years, an executive officer of the Company or any
of its affiliates;
o No member shall be an executive of another company if any executive of
the Company serves on the Compensation Committee of such other company;
o Each member of the Audit Committee must be financially literate (i.e.,
able to read and understand financial statements) or must become
financially literate within a reasonable period of time after appointment
to the Committee; and,
o At least one member of the Audit Committee must have accounting or
financial management experience.
MEETINGS
The Audit Committee shall meet formally at least two times each fiscal year.
The Audit Committee will hold separate private meetings at least once each
fiscal year with each of: (i) internal auditors; (ii) a representative of the
independent accountants; and, (iii) general counsel.
KEY RESPONSIBILITIES
Oversight of Independent Accountants
The independent accountants shall have ultimate accountability to the Audit
Committee and the Board of Directors.
The Audit Committee shall:
o Select, evaluate and, where appropriate, replace the independent
accountants;
o Review the terms of the engagement of the independent accountants,
including the scope of their audit, proposed fees and personnel
qualifications;
o Periodically review information from the independent accountants
pertaining to the independent accountants' independence, discuss such
information with the independent accountants and, if so determined by the
Audit Committee, recommend that the Board take appropriate action to
satisfy itself of such independence;
o Review with the independent accountants and management the results of the
independent accountants' year-end audit;
o Review with the independent accountants and management the independent
accountants' report relating to reportable conditions in the internal
control structure and financial reporting practices; and,
o Receive and review required communications from the independent
accountants.
Oversight of Internal Auditors
The Audit Committee shall:
o Review with internal auditors, or with management in the absence of
internal auditors, the Company's major financial and business risk
exposures and steps taken to monitor and control such exposures;
o Review with internal auditors, if any, the planned internal audit
activities and the results of such activities
Oversight of the Company's Financial Reporting Process
The Audit Committee shall:
o Review with the independent accountants and management the Company's
Annual Report on Form 10-K and, if satisfied, recommend its approval to
the Board for filing with the Securities and Exchange Commission; and,
o Through its Chairperson or his or her designee, review with management
and the independent accountants the Company's quarterly reports on Form
10-Q prior to filing with the Securities Exchange Commission;
o Review with management the Company's annual proxy statement and related
materials and, if satisfied, recommend their approval to the Board for
filing with the Securities and Exchange Commission;
o Prepare the report required by the rules of the Securities and Exchange
Commission to be included in the Company's annual proxy statement;
o Review changes in the Company's accounting policies and practices and
significant judgments that may affect the financial results;
o Review the nature of any unusual or significant commitments or contingent
liabilities together with the underlying assumptions and estimates of
management; and,
o Review the effect of changes in accounting standards that may materially
affect the Company's financial reporting practices.
Assist the Board in Oversight of the Company's Compliance with Policies and
Procedures Addressing Legal and Ethical Concerns
The Audit Committee shall:
o Review with management and internal auditors, if any, the adequacy and
effectiveness of the Company's internal controls; and,
o Review the Company's procedures with respect to appropriateness of
significant accounting policies and adequacy of financial controls.
o Review and monitor the Company's compliance program; and,
o Review with the Company's general counsel material litigation and other
legal matters as appropriate
OTHER MATTERS
In order to effectively carry out its duties, the Audit Committee shall have
authority as it deems necessary to (i) retain special legal, accounting or other
consultants to advise the Committee; (ii) to confer with the Company's
independent accountants, internal auditors, general counsel and Officers; and,
(iii) to conduct or authorize investigations into any matters within the scope
of the Committee's responsibilities.
While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Company's financial statements are complete and accurate
and are in accordance with generally accepted accounting principles. This is the
responsibility of management and the independent accountants. Nor is it the duty
of the Audit Committee to conduct investigations, to resolve disagreements, if
any, between management and the independent accountants or to assure compliance
with laws and regulations.
The Audit Committee shall reassess the adequacy of its charter annually and
recommend any proposed changes to the Board for approval.
Exhibit 14
RHC Holding Corp. Finance Code of Professional Conduct
Regan Holding Corp. and its subsidiaries (RHC) strongly promote a high
degree of professional conduct in the practice of financial management. RHC's
Chief Executive Officer (CEO), President, Chief Financial Officer (CFO), Chief
Information Officer (CIO), Chief Operations Officer (COO), and Legacy Marketing
Group's Vice President of Marketing, Vice President of Distribution, Vice
President of Product Development, Vice President, LFS Marketing (collectively
"the Officers"), and employees of the finance organization hold an important and
elevated role in corporate governance in that they are uniquely capable and
empowered to ensure that all shareholders' interests are appropriately balanced,
protected and preserved. This Finance Code of Professional Conduct embodies
principles to which we are expected to adhere and advocate. These tenets for
ethical business conduct encompass rules regarding both individual and peer
responsibilities, as well as responsibilities to RHC employees and shareholders.
RHC expects the Officers and Finance organization employees to abide by this
Code as well as all applicable RHC business conduct standards and policies or
guidelines in RHC's employee handbook relating to areas covered by this Code.
Any violations of the RHC Finance Code of Professional Conduct may result in
disciplinary action, up to and including termination of employment.
All employees covered by this Finance Code of Professional Conduct
will:
o Act with honesty and integrity, avoiding actual or apparent
conflicts of interest in their personal and professional
relationships.
o Provide shareholders with information that is accurate,
complete, objective, fair, relevant, timely and
understandable, including in our filings with, and other
submissions to, the U.S Securities and Exchange Commission.
o Comply with rules and regulations of federal, state, and local
governments, and other appropriate private and public
regulatory agencies.
o Act in good faith, responsibly, with due care, competence and
diligence, without misrepresenting material facts or allowing
one's independent judgment to be subordinated.
o Respect the confidentiality of information acquired in the
course of one's work except when authorized or otherwise
legally obligated to disclose.
o Not use confidential information acquired in the course of
one's work for personal advantage.
o Share knowledge and maintain professional skills important and
relevant to shareholder' needs.
o Proactively promote and be an example of ethical behavior as a
responsible partner among peers and others in the work
environment.
o Achieve responsible use, control, and stewardship over all RHC
assets and resources that are employed or entrusted to us.
o Not unduly or fraudulently influence, coerce, manipulate, or
mislead any authorized audit or interfere with any auditor
engaged in the performance of an internal or independent audit
of RHC's financial statements or accounting books and records.
If you are aware of any suspected or known violations of this Code of
Professional Conduct, the Standards of Business Conduct or other RHC policies or
guidelines, you have a duty to promptly report such concerns either to your
manager, another responsible member of
management, or a Human Resources representative or the 24-hour Business Conduct
Line. The procedures to be followed for such a report are outlined in the
Standards of Business Conduct and the Whistleblowing Reporting Procedure and
Guidelines in the Employee Handbook.
If you have a concern about a questionable accounting or auditing
matter and wish to submit the concern confidentially or anonymously, you may do
so by calling the Ethics Hotline 24-hour number at 1-866-277-3142 or by logging
on to www.ceridianethicshotline.com and filling out a report. An independent
third party staffs the Ethics Hotline and the web site and will forward
concerns, confidentially and anonymously if requested, to RHC's audit committee
or its designated representative.
RHC will handle all inquiries discretely and make every effort to
maintain, within the limits allowed by law, the confidentiality of anyone
requesting guidance or reporting questionable behavior and/or a compliance
concern.
It is RHC's intention that this Code of Professional Conduct be its
written code of ethics under Section 406 of the Sarbanes-Oxley Act of 2002
complying with the standards set forth in Securities and Exchange Commission
Regulation S-K Item 406.
- --------------------------------------------------------------------------------
Proxy - Regan Holding Corp.
- --------------------------------------------------------------------------------
PROXY FOR THE ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Regan Holding Corp. (the "Company") hereby
appoints Lynda L. Regan and R. Preston Pitts or any one of them (with full
power to act alone and to designate a substitute) Proxies of the undersigned,
with authority to vote and act with respect to all shares of Common Stock of
the Company which the undersigned would be entitled to vote at the Annual
Meeting of Shareholders to be held on Thursday, June 10, 2004 at 8:30 a.m.,
Pacific Time, at the Regan Holding Corp. headquarters, 2090 Marina Ave.,
Petaluma, California, 94954, and any adjournment thereof, with all the powers
the undersigned would possess if personally present, upon matters noted on the
reverse side of this card (each of which is being proposed by the Company) and
upon such other matters as may properly come before the meeting. The shares
represented by this Proxy shall be voted as follows:
THIS PROXY CONFERS AUTHORITY TO VOTE "FOR" EACH PROPOSITION LISTED ON THE
REVERSE UNLESS OTHERWISE INDICATED. The Proxy is solicited on behalf of the
Board of Directors of Regan Holding Corp. and may be revoked prior to its
exercise.
YOUR VOTE IS IMPORTANT!
PLEASE SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE WHICH REQUIRES NO POSTAGE.
(Continued and to be signed on reverse side.)
Regan Holding Corp. 000000 0000000000 0 0000
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
MR A SAMPLE 000000000.000 ext
DESIGNATION (IF ANY) 000000000.000 ext
ADD 1 000000000.000 ext
ADD 2 000000000.000 ext
ADD 3
ADD 4 C 1234567890 JNT
ADD 5
ADD 6 [BAR CODE OMITTED]
[ ] Mark this box with an X
[BAR CODE OMITTED] if you have made changes
to your name or address
details above.
- --------------------------------------------------------------------------------
Annual Meeting Proxy Card
- --------------------------------------------------------------------------------
A Election of Directors
The Board of Directors recommends a vote FOR the listed nominees.
1. Re-election of the following directors to serve until the next annual
election of directors.
For Withhold
01 - Ute Scott-Smith [ ] [ ]
02 - J. Daniel Speight, Jr. [ ] [ ]
03 - Dr. Donald Ratajczak [ ] [ ]
04 - R. Preston Pitts [ ] [ ]
05 - Lynda L. Regan [ ] [ ]
B Issues
The Board of Directors recommends a vote FOR the following resolution.
For Against Abstain
[ ] [ ] [ ]
2. Ratification of the appointment of
PricewaterhouseCoopers LLP as the
Company's independent auditors for
the year ended December 31, 2004.
Mark this box with an X if you plan to [ ]
attend the Annual Meeting.
In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting, or any adjournment or adjournments
thereof.
C Authorized Signatures - Sign Here - This section must be completed for your
instructions to be executed.
Note: Please sign exactly as your name appears hereon. When shares are held by
joint tenants, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name be authorized person.
Signature 1 - Please keep signature within the box
__________________________________________________
__________________________________________________
Signature 2 - Please keep signature within the box
__________________________________________________
__________________________________________________
Date (mm/dd/yyyy)
__________________________________________________
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