UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
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 by Rule 14a-6(e) (2))
[X] Definitive Proxy Statement
[_] Definitive Additional materials
[_] Soliciting Material Pursuant to ss.240.14a-12
REGAN HOLDING CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i) (1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials:
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a) (2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
- --------------------------------------------------------------------------------
(3) Filing Party:
- --------------------------------------------------------------------------------
(4) Date Filed:
- --------------------------------------------------------------------------------
REGAN HOLDING CORP.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To be Held June 13, 2005
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 Monday, June 13, 2005 at 8:00 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 2006 and until their respective
successors are elected and qualify.
2. 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 26, 2005
are entitled to notice of and to vote at the Annual Meeting and any
adjournments.
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
/s/ R. Preston Pitts
----------------------------------------
R. Preston Pitts
Secretary
Dated: May 13, 2005
Petaluma, California
- --------------------------------------------------------------------------------
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.
- --------------------------------------------------------------------------------
2
REGAN HOLDING CORP.
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
To be held June 13, 2005
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 Monday, June 13, 2005 at 8:00 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 13, 2005, the Company is mailing its
Annual Report on Form 10-K for the year ended December 31, 2004 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 26, 2005. As of the
record date, the Company had outstanding 23,783,694 shares of Common
Stock-Series A, no par value (the "Series A Stock"), and 553,430 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 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 negative votes.
3
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 until their respective
successors are elected and qualify. Each of the nominees listed below is
currently a director of the Company.
Name and Age Principal Occupation Director Since
- ------------ -------------------- --------------
Lynda L. Regan Ms. Regan has served as Chairman of the Board and 1990
56 years old Chief Executive Officer of the Company since
1992. She was Senior Vice President and Treasurer
of the Company from 1990 to 1992.
R. Preston Pitts Mr. Pitts served as Chief Financial Officer of 1995
53 years old 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 a
financial officer for United Family Life
Insurance Company and American Security Insurance
Group, both Fortis-owned companies, and was an
Audit Manager for Ernst & Young.
Ute Scott-Smith Ms. Scott-Smith has run her own financial 1997
45 years old 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. Prior to 2000
62 years old 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 Tuesday, Inc.,
TBC Corporation and Citizens Trust Bank, and as a
Trustee of CIM High Yield Fund.
4
J. Daniel Speight, Jr. Mr. Speight is the Vice Chairman, Chief Financial 2000
48 years old Officer and a 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 Annual 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 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, 2004, the Board of
Directors held four meetings. During this period, all of the incumbent directors
attended or participated in more than 75% of the aggregate of (i) the total
5
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 two standing Committees: the Audit Committee and
Compensation 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 2004, the Audit Committee held six meetings. The Compensation Committee was
formed in December 2004 and consists of Ute Scott-Smith, Dr. Donald Ratajczak,
and J. Daniel Speight, Jr.
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 provide management,
including directors Lynda Regan and Preston Pitts, the right to nominate
directors for election at the Annual Meeting of Shareholders.
The Board of Directors has not established a formal process for
shareholders to send communications to the Board, nor does it have a policy with
regard to the consideration of any director candidates recommended by
shareholders. 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 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, 47 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.
Niranjan Vaswani ("Niju"), 42 years old, was appointed Chief Marketing
Officer of the Company in January 2005. Prior to his appointment as Chief
Marketing Officer, Mr. Vaswani served as Vice President of Distribution of
Legacy Marketing Group ("LMG"), a subsidiary of the Company, from October 2000
to December 2004, and as Director of Marketing/Life of LMG from January 1998 to
September 2000. Prior to 1998, Mr. Vaswani served as Business Development
Manager at Manulife Financial Corporation.
Finance Code of Professional Conduct
Regan Holding Corp. and its subsidiaries (RHC) have adopted a Finance
Code of Professional Conduct incorporating the provisions required by the SEC.
The Code applies to RHC's Chief Executive Officer (CEO), President, Chief
Financial Officer (CFO), Chief Information Officer (CIO), Chief Operations
Officer (COO), Chief Marketing Officer (CMO), Chief Actuary, Vice President LFS
Marketing, directors and the employees of the finance department. 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 26, 2005. No director or officer owns any Series B Stock.
Name Position Total Percent
- ---- -------- ----- -------
Lynda L. Regan.................. Director, Chairman of the Board & 11,734,788 (1) 49.4%
Chief Executive Officer
R. Preston Pitts................ Director, President, Chief 1,576,652 (2) 6.6%
Operating Officer, and interim
Chief Financial Officer
Ute Scott-Smith................. Director 409,739 (3) 1.7%
J. Daniel Speight, Jr........... Director 45,000 (4) *
Donald Ratajczak................ Director 45,000 (4) *
John W. Abbott.................. Chief Information Officer 55,000 (5) *
Ted E. Johnson, Jr. (7)......... Chief Operations Officer 25,000 (6) *
All executive officers and
directors as a group......... 14,159,179 59.6%
<FN>
- ---------
(1) Includes 413,700 shares issuable pursuant to stock options that are
exercisable within 60 days.
(2) Includes 780,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(3) Includes 60,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(4) Includes 45,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(5) Includes 55,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(6) Includes 25,000 shares issuable pursuant to stock options that are
exercisable within 60 days.
(7) Mr. Johnson's employment was terminated April 26, 2005.
*Indicates that the percentage of the outstanding shares beneficially owned
is less than one percent (1%).
</FN>
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 and 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
7
ended December 31, 2004, all reporting persons timely filed the required
reports, except that Lynda Regan filed one Form 4 late on January 14, 2005 that
covered seven transactions and Preston Pitts filed one Form 4 late on January
14, 2005 that covered three transactions.
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 the
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.
Compensation Committee
The Compensation Committee, which was formed in December 2004, is
responsible for, among other things, (i) reviewing and approving the
compensation and benefits for the Company's officers, (ii) administering the
Company's stock purchase and stock option plans, and (iii) making
recommendations to the Board of Directors regarding such matters.
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 or committee meetings.
8
Executive Compensation
The following Summary Compensation Table sets forth the compensation of
(i) the Company's Chief Executive Officer, (ii) the three most highly
compensated executive officers other than the Chief Executive Officer, who, with
the Chief Executive Officer, were the only executive officers of the Company as
of December 31, 2004, and (iii) the former Chief Financial Officer, G. Steven
Taylor, whose employment was terminated prior to the end of 2004, who but for
such termination would have been one of the 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 2004, 2003
and 2002:
Summary Compensation Table
Long-Term
Compensation
Awards
Annual ----------------
Compensation Other Securities
----------------------- Annual Underlying
Name and Position Year Salary Bonus (1) Compensation Options
- ----------------- ---- ------ --------- ------------ -------
Lynda L. Regan, .......................... 2004 $581,824 $ -- $ 6,500(2) --
Chief Executive Officer
2003 $600,000 $150,000 $ 6,000(2) --
$ 6,827(4)
$ 14,126(3)
2002 $613,872 $180,000 $ 5,500(2) --
$ 18,316(4)
$ 11,427(3)
R. Preston Pitts, ........................ 2004 $436,370 $ -- $ 3,900(2) --
President and Chief Operating Officer $ 7,019(4)
2003 $450,000 $112,500 $ 3,600(2) --
$ 6,638(4)
2002 $460,414 $157,503 $ 3,428(2) 75,000
$ 15,110(4)
G. Steven Taylor, ........................ 2004 $ 79,262 $ -- $ 88,846(6) --
Former Chief Financial Officer (5) $ 2,600(2)
2003 $210,000 $ 31,500 $ 2,400(2) 50,000
$ 4,845(4)
2002 $210,000 $ 78,808 $ 2,975(2) 50,000
$ 6,581(4)
John W. Abbott, .......................... 2004 $186,635 $ 40,000 $ -- 50,000
Chief Information Officer
2003 $140,539 $ 20,000 $ -- 75,000
Ted E. Johnson, Jr., .................... 2004 $145,457 $ 23,000 $ 4,230(2) 50,000
Chief Operations Officer (7)
<FN>
- ---------
(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 $12,000.
(3) The Company paid interest on debt related to a split dollar life insurance
policy under which Ms. Regan was the beneficiary. This policy was cancelled
on December 31, 2003.
(4) The Company matches contributions made by certain employees to the
Company's non-qualified deferred compensation plan at a rate of 50% of
employee contribution, up to 6% of total annual compensation deferred less
amounts matched under the Company's 401(k) Plan.
(5) Mr. Taylor's employment was terminated April 16, 2004
(6) Amount represents cash paid to Mr. Taylor for severance.
(7) Mr. Johnson's employment was terminated April 26, 2005.
</FN>
9
Stock Option Grants in Last Fiscal Year
Number of % of Total
Securities Stock Options
UnderlyingStock Granted to Exercise or Grant Date
Options Employees in Base Price Expiration Present Value
Name Granted Fiscal Year ($/Sh) Date (1) ($)
- ---- ------- ----------- ------ ---- -------
John W. Abbott................ 50,000 19% $1.69 5/1/2014 15,415
Ted E. Johnson, Jr............ 50,000 19% $1.69 5/1/2014 15,415
<FN>
- ---------
(1) The present value on the grant date was estimated using the minimum value
method with the following assumptions: a risk free interest rate of 4.11%,
an expected life of 5 years, and no dividend yield.
</FN>
Aggregated Stock Option Exercises in Last Fiscal Year
And Fiscal Year-end Stock Option Values
The following table sets forth certain information concerning the
exercise of options by each of the named executive officers during fiscal 2004
and the number and value of unexercised options held by each of the named
executive officers as of December 31, 2004.
Shares Number of Securities Value of Unexercised
Acquired Underlying Stock Options in-the-money Stock Options
on Value at Fiscal Year End at Fiscal Year End ($)
Name Exercise Realized($) Exercisable/Unexercisable Exercisable/Unexercisable
- ---- -------- ----------- ------------------------- -------------------------
Lynda L. Regan.......... 86,300 $25,890 330,960/ 82,740 $ 6,619/$1,655
R. Preston Pitts........ 60,000 $75,000 685,000/125,000 $159,600/$1,600
John W. Abbott.......... -- -- 15,000/110,000 $ -- /$ --
Ted E. Johnson, Jr...... -- -- 15,000/110,000 $ -- /$ --
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 2004, 2003, and 2002 were 15,000,
15,000, and 10,000. Total expenses recorded for Producer stock option grants
were $12,000, $10,000, and $4,000 during 2004, 2003 and 2002. The Producer stock
options granted for each of the three years ended December 31, 2004 vested
immediately upon the grant date and expire six years from the date of grant. The
fair value of the Producer options were estimated using the Black-Scholes
option-pricing model with the following assumptions:
2004 2002 2001
---- ---- ----
Risk-free interest rates............. 3.71% 3.19% 4.78%
Volatility........................... 27% 27% 27%
Dividend yield....................... None None None
Expected life........................ 6 years 6 years 6 years
10
There were no shares of Series A common stock awarded during 2004, 2003
and 2002.
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.
Stock option activity under both plans was as follows:
Total Weighted
Shares Average Exercise Price
------ ----------------------
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
Granted........................................................ 327,000 $ 1.69
Exercised...................................................... (841,000) $ 1.12
Forfeited...................................................... (6,482,000) $ 1.29
Outstanding at December 31, 2004............................... 8,789,000 $ 1.50
Exercisable at December 31, 2002............................... 12,407,000 $ 1.32
Exercisable at December 31, 2003............................... 13,106,000 $ 1.35
Exercisable at December 31, 2004............................... 7,365,000 $ 1.48
The following table summarizes information about stock options
outstanding at December 31, 2004 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-$1.03 524,000 2.7 $ 0.74 524,000 $ 0.74
$1.27 671,000 0.5 $ 1.27 671,000 $ 1.27
$ 1.39-$1.53 3,754,000 2.6 $ 1.53 3,541,000 $ 1.53
$1.61 1,913,000 2.7 $ 1.61 1,838,000 $ 1.61
$ 1.65-$1.68 1,232,000 5.9 $ 1.67 658,000 $ 1.66
$ 1.69-$1.70 695,000 8.6 $ 1.69 133,000 $ 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
11
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. As of December 31, 2004, the Company
believes that 125% of the fair market value of the shares owned by Ms. Regan was
equal to $26.0 million. The Company has purchased four life insurance policies
with a combined face amount of $33 million for the purpose of funding this
potential obligation upon Ms. Regan's death.
Report on Executive Compensation
Executive Compensation
Through 2004, The Board of Directors developed and administered the
Company's executive compensation policies and programs. In December 2004, a
Compensation Committee was formed, which will develop and administer the
Company's executive compensation policies and programs in 2005. 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. In
2004, Ms. Regan did not vote on matters relating to her own compensation or that
of Mr. Pitts. Additionally, Mr. Pitts did not vote on matters relating to his
own compensation or that of Ms. Regan. The Company's executive compensation
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 in 2004, the Board
considered a number of factors, including: (i) the financial condition and
performance of the Company; (ii) the compensation levels of executives in
comparable positions with 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.
In 2004, the Board of Directors reviewed the Company's executive
compensation policies and programs to ensure that executive compensation was
linked to the creation of shareholder value and to assess the competitiveness of
the compensation programs. Compensation for executives during 2004 consisted of
base pay and incentive bonuses. Base pay for executives is determined based on
the factors set forth above.
In 2004, the Board of Directors approved the Executive Officer Personal
Performance Bonus policy (the "Performance Bonus") for the year ended December
31, 2004. This bonus policy was created 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 was calculated as follows: Each Executive Officer
was entitled to an annual Personal Performance bonus based on a percentage of
annual salary (the "Bonus Percentage"). The maximum Bonus Percentage was
established by the Chief Executive Officer, President and the Board of Directors
in the first quarter of 2004 (the "Bonus Year"). Payment of the maximum Bonus
Percentage was contingent upon achievement of personal performance goals during
the Bonus Year. Each respective Executive Officer and his or her superior
officer agreed upon personal performance goals in the first quarter of the Bonus
Year. Performance goals varied among executive officers, but were primarily
based upon achievement of individual business objectives and progress in key
Company initiatives. Calculation of the personal performance bonuses to be paid
was based on the percentage of personal performance goals achieved.
Chief Executive Officer Compensation
The annual base salary for the Chief Executive Officer ("CEO") is
reviewed and approved annually by the Board of Directors. Ms. Regan is the
12
Company's Chairman of the Board of Directors, but did not vote on matters
relating to her own compensation. In setting Ms. Regan's compensation for 2004,
the Board of Directors considered several factors, including the Company's
financial condition and past performance, the compensation levels of CEO's with
companies in comparable industries, in addition to Ms. Regan's individual
performance and continuing contributions to the Company. In addition to her base
salary, Ms. Regan participated in the 2004 Performance Bonus program discussed
above. Ms. Regan was eligible to receive an annual incentive bonus, up to a
maximum of 80% of base salary, based upon the achievement of operating and
financial goals. Ms. Regan was not awarded a bonus for 2004.
Respectfully submitted,
Lynda L. Regan
R. Preston Pitts
Donald Ratajczak
Ute Scott-Smith
J. Daniel Speight, Jr.
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:
Price Per Share
-------------------------------------------------------------
Redeemable Common Redeemable Common
Stock Stock Non-Redeemable
Appraisal Date 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
June 30, 2004............................... $2.20 $1.81 $1.68
December 31, 2004........................... $2.03 $1.67 $1.55
13
Compensation Committee Interlocks and Insider Participation
The Company's Compensation Committee was formed in December 2004 and,
as of the date hereof, is comprised of Ute Scott-Smith, Dr. Donald Ratajczak,
and J. Daniel Speight, Jr. No members of the Compensation Committee were also
employees of the Company or its subsidiaries during 2004 or at any time prior to
2004, except that Ute Scott-Smith served as Senior Vice-President of the Company
from 1990 to April of 1997. None of the Company's executive officers serves on
the board of directors or compensation committee of any entity that has one or
more executive officers serving as a member of the Company's Board of Directors
or Compensation Committee.
Audit Committee Report
During 2004, 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 2004, (i) six Audit Committee
meetings were held, and (ii) the members of the Audit Committee maintained their
independence (as such term is defined in the New York Stock Exchange listing
standards) 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 for 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, 2004 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.
14
Change in Registrant's Certifying Accountant
On March 18, 2005, the Company was informed by its independent
registered public accounting firm, PricewaterhouseCoopers LLP ("PwC"), that PwC
has declined to stand for re-election as the Company's independent registered
public accounting firm and will resign upon the completion of procedures by PwC
on the financial statements of the Company as of and for the year ended December
31, 2004 and on the Form 10-K in which said financial statements will be
included; provided, however, that PwC's role as the Company's independent
registered public accounting firm will not cease until PwC performs procedures
on the financial statements of the Company as of and for the quarter ending
March 31, 2005 and on the Form 10-Q in which such financial statements will be
included in the event that the Company has not appointed another accounting firm
to replace PwC as the independent registered public accounting firm prior to the
filing of the March 31, 2005 Form 10-Q.
PwC's reports on the Company's financial statements for the fiscal
years ended December 31, 2003 and 2002 did not contain any adverse opinion or
disclaimer of opinion, nor were they qualified or modified as to uncertainty,
audit scope, or accounting principle.
During the years ended December 31, 2003 and 2002 and through March 18,
2005, there were no disagreements with PwC on any matter of accounting
principles or practices, financial statement disclosure, or auditing scope or
procedure, which disagreements, if not resolved to the satisfaction of PwC,
would have caused it to make reference thereto in their reports on the financial
statements for such time periods.
During the years ended December 31, 2003 and 2002 and through March 18,
2005, there were no reportable events (as defined in Regulation S-K Item
304(a)(1)(v)), except that the Company, in consultation with PwC, identified
deficiencies in the Company's internal controls over financial reporting. These
deficiencies resulted in two restatements of the Company's financial statements
during fiscal year 2003. One of the deficiencies resulted in the amendment of
the Company's Form 10-Q for the quarter ended March 31, 2003, to restate the
Company's consolidated financial statements. The other deficiency resulted in
the amendment of the Company's Form 10-Q for the period ended September 30,
2003, again to restate the Company's consolidated financial statements. Members
of the Company's management and PwC discussed the deficiencies with the Audit
Committee of the Company's Board of Directors. PwC stated that these
deficiencies result in a "material weakness" under standards established by the
American Institute of Certified Public Accountants. The material weakness was
identified as a breakdown in communication between the financial and operational
management of the Company and a breakdown in the processes by which transactions
are reviewed. The Company has authorized PwC to respond fully to the inquiries
of any successor accountant concerning such deficiencies.
To remedy these weaknesses, the Board of Directors of the Company
approved the formation of a disclosure committee (the "Disclosure Committee")
and appointed seventeen executives of the Company to serve on the Disclosure
Committee. The Disclosure Committee, among other things, meets quarterly as part
of the closing process and reviews each financial statement line item and
footnote disclosure to ensure the impacts of all business activity and
transactions have been appropriately accounted for and disclosed in the
financial statements of the Company. The Disclosure Committee also reviews
detailed analytics of the Company's performance and assesses the need for any
additional disclosures based on the relevant reporting period's activity. The
Disclosure Committee began reviewing the disclosures made by the Company in its
filings with the U.S. Securities and Exchange Commission starting with the
Company's Form 10-K for the year ended December 31, 2003.
PwC has furnished the Company with a letter addressed to the U.S.
Securities and Exchange Commission (the "SEC") stating that it agrees with the
15
above statements. A copy of such letter, dated March 24, 2005, was attached as
Exhibit 16.1 to the Form 8-K/A that was filed with the SEC on March 25, 2005.
The Company anticipates appointing a successor independent accountant
in the near future and will file the required Current Report on Form 8-K
concurrent with that event.
Audit Fees
The aggregate fees billed for each of the fiscal years ended December
31, 2004 and 2003 for professional services rendered by 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 $244,500 and $296,148.
Audit-Related Fees
The aggregate fees billed for each of the fiscal years ended December
31, 2004 and 2003 for audit-related fees totaled $28,159 and $56,869. The
audit-related services performed by PwC in 2004 and 2003 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 either of the last two years for
professional services rendered by PwC for tax compliance, tax advice or tax
planning.
All Other Fees
No aggregate fees were billed in either 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 separately
pre-approved by the Company's Audit Committee. All services provided by our
independent accountant in 2003 and 2004 were approved in advance by the Audit
Committee.
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 2006 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 January
13, 2006.
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
16
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.
AUDITORS
Representatives of PwC 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.
ANNUAL REPORT AND FORM 10-K
Without charge, beneficial owners of our Common Stock as of the record
date of April 26, 2005 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 2004 by submitting a written request to R. Preston Pitts,
President, at 2090 Marina Avenue, Petaluma, California 94954.
17
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), Chief Marketing
Officer (CMO), Chief Actuary, Vice President LFS Marketing (collectively "the
officers"), directors and the employees of the finance department 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, the public and other shareholders. RHC expects the Officers,
Directors 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, provincial
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's 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 Whistle blowing Reporting Procedure and Guidelines in the Employee Handbook.
18
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 Business Conduct Line 24-hour number at 1-888-555-3456. An
independent third party staffs the business conduct line 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.
19
- --------------------------------------------------------------------------------
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 Monday, June 13, 2005 at 8:00 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.
MMMMMMMMMMMM
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
000000000.000 ext
MR A SAMPLE
DESIGNATION (IF ANY)
ADD 1
ADD 2
ADD 3
ADD 4
ADD 5
ADD 6
C 1234567890 J N T
[_] Mark this box with an X 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 [_] [_]
Mark this box with an X if you plan to attend the [_]
Annual Meeting.
[B] 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 by authorized person.
Signature 1 - Please keep signature within the box
------------------------------------------------
| |
| |
------------------------------------------------
Signature 2 - Please keep signature within the box
------------------------------------------------
| |
| |
------------------------------------------------
Date (mm/dd/yyyy)
------------------------------------------------
| / / |
| / / |
------------------------------------------------
I U P X H H H P P P P 005624