As filed with the Securities and Exchange Commission on April 28, 1995
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [x]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[X] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
SCOR U.S. CORPORATION
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(Name of Registrant as Specified In Its Charter)
SCOR U.S. CORPORATION
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11:(1)
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
[ ] 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:
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(1) Set forth the amount on which the filing fee is calculated and state how
it was determined.
SCOR U.S. CORPORATION
110 WILLIAM STREET
NEW YORK, NEW YORK 10038
April 28, 1995
Dear Stockholder:
Your Board of Directors joins us in extending to you a cordial invitation to
attend the Annual Meeting of Stockholders of SCOR U.S. Corporation, a Delaware
corporation ("SCOR U.S."), to be held at 10:30 a.m. (New York time) on June 16,
1995, at Morgan Guaranty Trust Company of New York, 60 Wall Street, 46th Floor,
New York, New York.
At this meeting you will be asked to consider and vote upon the election of
four Directors and the ratification of the appointment of KPMG Peat Marwick as
independent auditors of SCOR U.S. for 1995.
Please date, sign and return the enclosed proxy card in the postage paid
envelope provided as soon as possible whether or not you plan to attend the
meeting.
You are, of course, welcome to attend the Annual Meeting and vote in person.
The proceedings of the Annual Meeting will be summarized in our second quarter
report to stockholders.
Very truly yours,
/s/ JACQUES P. BLONDEAU
JACQUES P. BLONDEAU
Chairman of the Board of Directors
/s/ JEROME KARTER
JEROME KARTER
President and Chief Executive Officer
SCOR U.S. CORPORATION
110 WILLIAM STREET
NEW YORK, NEW YORK 10038
------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 16, 1995
------------
The Annual Meeting of the Stockholders of SCOR U.S. Corporation, a Delaware
corporation ("SCOR U.S."), will be held on June 16, 1995 at 10:30 a.m. (New York
time) at Morgan Guaranty Trust Company of New York, 60 Wall Street, 46th Floor,
New York, New York, for the following purposes:
(1) To elect four Directors, each for a term of three years;
(2) To ratify the appointment of KPMG Peat Marwick as independent
auditors of SCOR U.S. for 1995; and
(3) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
Only holders of record of shares of SCOR U.S. Common Stock, par value $.30
per share ("Shares") at the close of business on April 18, 1995, the record date
for the Annual Meeting, are entitled to notice of and to vote at the Annual
Meeting and at any adjournment or postponement thereof.
Whether or not you plan to attend the Annual Meeting, we ask you to sign,
date and return the enclosed proxy card in the postage paid envelope provided.
This will ensure representation of your Shares in the event that you are unable
to attend the Annual Meeting. Your proxy may be revoked in the manner described
in the accompanying Proxy Statement at any time before it has been voted at the
Annual Meeting.
By the Order of the Board of Directors
/s/ JOHN T. ANDREWS, JR.
JOHN T. ANDREWS, JR.
Corporate Secretary
April 28, 1995
PROXY STATEMENT
SCOR U.S. CORPORATION
------------
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 16, 1995
------------
This Proxy Statement is being furnished to stockholders of SCOR U.S.
Corporation, a Delaware corporation ("SCOR U.S." or the "Company"), in
connection with the solicitation of proxies by its Board of Directors (the
"Board") for use at its Annual Meeting of Stockholders to be held at 10:30 a.m.
(New York time) on June 16, 1995 at Morgan Guaranty Trust Company of New York,
60 Wall Street, 46th Floor, New York, New York, and at any adjournment or
postponement thereof (the "Annual Meeting"). This Proxy Statement and the
attached Notice of Annual Meeting of Stockholders and form of proxy are first
being mailed to stockholders of SCOR U.S. on or about April 28, 1995.
PURPOSE OF THE ANNUAL MEETING
At the Annual Meeting, stockholders of SCOR U.S. will be asked:
(1) To elect four Directors, each for a term of three years;
(2) To ratify the appointment of KPMG Peat Marwick as independent
auditors of SCOR U.S. for 1995; and
(3) To transact such other business as may properly come before the
meeting or any adjournment or postponement thereof.
GENERAL INFORMATION
DATE, TIME AND PLACE
The Annual Meeting will be held at 10:30 a.m. (New York time) on June 16,
1995 at Morgan Guaranty Trust Company of New York, 60 Wall Street, 47th Floor,
New York, New York.
RECORD DATE; VOTING RIGHTS
Stockholders of record at the close of business on April 18, 1995 (the
"Record Date") are entitled to notice of the meeting and to vote shares of
Common Stock, par value $.30 per share, of SCOR U.S. ("Shares") held on that
date at the Annual Meeting. Each Share is entitled to one vote. As of the Record
Date, a total of 18,164,620 Shares were outstanding, of which 14,547,756 were
owned beneficially or of record by SCOR S.A. This Proxy Statement and the
accompanying form of proxy are first being sent to stockholders on or about
April 28, 1995.
PROXY PROCEDURES
Proxies are solicited from stockholders by the Board in order to provide
every stockholder an opportunity to vote on all matters scheduled to come before
the Annual Meeting, whether or not such stockholder attends in person. When the
enclosed proxy card is properly executed and returned, the Shares represented
will be voted by the proxyholders named on the card in accordance with the
stockholder's directions. Stockholders are urged to indicate their vote on each
matter by marking the appropriate box on the card. If no choice is specified,
the Shares will be voted as recommended by the Board.
The Board and management know of no matters, other than those set forth on
the proxy card, that will be presented for consideration at the Annual Meeting.
Execution of a proxy, however, confers on the designated proxyholders
discretionary authority to vote the Shares represented in accordance with their
judgment on other business, if any, that may come before the Annual Meeting.
Any stockholder executing a proxy may revoke that proxy at any time before
it is voted by a later dated proxy, by written revocation addressed to the
Corporate Secretary of SCOR U.S. at 110 William Street, Suite 1800, New York,
New York, 10038, or by voting in person at the Annual Meeting.
The expense incurred in this solicitation of proxies will be borne by SCOR
U.S. Proxies will be solicited on behalf of the Board by Georgeson & Company,
Inc. for a fee which is not expected to exceed $6,000. Expenses incurred by
Georgeson & Company, Inc. will be reimbursed by SCOR U.S. Proxies may also be
solicited in person or by telephone by officers or other employees of SCOR U.S.
and its subsidiaries who will not be additionally compensated therefor.
VOTE REQUIRED; QUORUM
Under the Company's By-laws and the applicable provisions of the Delaware
General Corporation Law, the presence in person or by proxy of a majority of the
Shares outstanding on the Record Date shall constitute a quorum. The presence of
SCOR S.A. at the Annual Meeting will assure the presence of a quorum. Tabulation
of proxies and the votes cast at the Annual Meeting will be conducted by an
independent agent and certified to by independent election inspectors.
The election inspectors will treat abstentions and votes withheld as Shares
that are present and entitled to vote for purposes of determining the presence
of a quorum and as a non-affirmative vote for purposes of determining the
approval of any matter submitted to the stockholders for a vote. If a broker or
other nominee physically indicates on the proxy that it does not have
discretionary authority as to certain Shares to vote on a particular matter
("broker non-votes"), such Shares will be treated as present and entitled to
vote for purposes of determining the presence of a quorum but as not voted and
not present for purposes of determining the approval of any matter submitted to
the stockholders for a vote.
In the election of Directors, Shares present but not voting will be
disregarded (except for quorum purposes) and the candidates for election
receiving the highest number of affirmatives votes of the Shares entitled to be
voted for them, up to the number of nominees, will be elected. With regard to
the ratification of the appointment of the independent auditors of the Company,
such matter must be approved by the affirmative vote of the holders of a
majority of the Shares entitled to vote and present in
2
person or represented by proxy at the Annual Meeting. Broker non-votes will have
no effect on the outcome of either such vote.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the Record Date, SCOR S.A. owned 14,547,756 Shares or approximately
80% of the outstanding Shares. The address of SCOR S.A. is Immeuble SCOR-Cedex
39, 92074 Paris La Defense, France. HCS, a French societe anonyme whose address
is that of SCOR S.A., owns approximately 48.5% of the outstanding shares of SCOR
S.A. and, consequently, may be deemed to be the beneficial owner of the Shares
owned by SCOR S.A. SCOR U.S. is not aware of any other person or group of
persons that owns more than 5% of the Shares.
The following table reflects information, as of the Record Date, regarding
the beneficial ownership of the Company's equity securities individually for
each Director and Named Executive Officer and for all Directors and all
executive officers as a group:
AMOUNT OF BENEFICIAL OWNERSHIP
PERCENT
NUMBER OF SHARES OF OF SHARES
NAMED EXECUTIVE OFFICERS COMMON STOCK (1)(2) OUTSTANDING
- --------------------------------------------------------------- ------------------- -----------
Jacques P. Blondeau (3)(4)..................................... 75,999 *
Jerome Karter (3)(4)........................................... 105,998 *
Patrick Peugeot (3)(4)......................................... 105,689 *
John T. Andrews, Jr............................................ 31,999 *
Jeffrey Cropsey (5)............................................ 4,552 *
R. Daniel Brooks............................................... 38,314 *
Nolan Asch..................................................... 47,454 *
DIRECTORS
- ---------------------------------------------------------------
John Cox....................................................... 1,000 *
Raymond H. Deck................................................ 17,600 *
Michel Gudefin (6)............................................. 28,500 *
Jean Masse..................................................... 0 *
Richard M. Murray.............................................. 13,500 *
Serge M.P. Osouf............................................... 0 *
John W. Popp................................................... 11,500 *
Francois Reach................................................. 900 *
David J. Sherwood.............................................. 11,600 *
Directors and all executive officers as a group (22
individuals)................................................... 555,196 3.06%
- ------------
* Less than 1%
(1) Unless otherwise indicated, the persons named have sole voting and
investment power over the number of Shares shown as being beneficially owned
by them. The table includes (i) 75,999, 89,789, 105,998, 31,999, 28,332,
33,266 respectively, issuable to Messrs. Blondeau, Peugeot,
(Footnotes continued on following page)
3
(Footnotes continued from preceding page)
Karter, Andrews, Brooks, and Asch under stock options exercisable within
sixty days granted pursuant to the Stock Incentive Plan for Key Executives
("SIP") and the Stock Option Plan for Key Employees ("SOP"), (ii) 10,500
Shares issuable to each of Messrs. Deck, Gudefin, Murray, Popp and Sherwood
under stock options exercisable within sixty days granted pursuant to the
Stock Option Plan for Directors ("DP") and (iii) 462,153 Shares issuable to
all Directors and executive officers as a group under stock options
exercisable within 60 days granted pursuant to the SIP, SOP and DP, as the
case may be.
(2) The shares listed in the table exclude 14,547,756 Shares beneficially owned
by SCOR S.A. with respect to which Mr. Blondeau, a director and officer of
SCOR S.A., and Messrs. Osouf and Reach, officers of SCOR S.A., disclaim
beneficial ownership.
(3) Messrs. Blondeau, Karter and Peugeot are also Directors of SCOR U.S.
(4) Messrs. Blondeau and Peugeot each served in the position of Chief Executive
Officer ("CEO") during the fiscal year ended December 31, 1994 and therefore
are included in the category of "Named Executive Officers". Mr. Peugeot held
the position of CEO during the period from January 1, 1994 to June 16, 1994,
when he resigned. Mr. Blondeau was elected and served as CEO from June 16,
1994 until he resigned on September 30, 1994. Mr. Karter was elected as CEO
of SCOR U.S. on September 30, 1994 and continues to serve in that position.
(5) Mr. Cropsey received a restricted stock award of 4,552 shares pursuant to
the SIP. The shares were awarded on December 16, 1993. One-quarter of the
shares (1,138) will vest on the second anniversary of the date of the grant
and each one-year anniversary thereafter, starting on December 16, 1995.
(6) Includes 10,000 Shares held by Mr. Gudefin's wife.
PROPOSAL ONE
ELECTION OF DIRECTORS
GENERAL
At the Annual Meeting, four Directors are to be elected to hold office until
the Annual Meeting in 1998.
The Board currently consists of 13 Directors including one vacancy due to
the resignation of Mr. Elios Pascual on January 1, 1995. The terms of office of
Messrs. Blondeau, Cox, Karter, Peugeot and the vacant seat expire at the Annual
Meeting. Each of Messrs. Blondeau, Cox, Karter, and Peugeot has been nominated
for election. Management knows of no reason why any of these nominees will be
unable to serve, but in such event the proxies received will be voted for such
substitute nominees as the Board may recommend. The Board intends to elect an
additional director to fill the vacant seat in accordance with the terms of the
Company's By-Laws.
The names, terms of office and certain other information with respect to the
persons nominated for election as Directors and other persons serving as
Directors are set forth below.
4
INFORMATION CONCERNING NOMINEES FOR TERMS EXPIRING IN 1998
NAME DIRECTOR SINCE:
- -------------------------------------------------------------- ---------------
Jacques P. Blondeau........................................... 1988
John R. Cox................................................... 1994
Jerome Karter................................................. 1989
Patrick Peugeot............................................... 1983
THE BOARD RECOMMENDS A VOTE FOR ALL NOMINEES.
DIRECTORS OF SCOR U.S.
The Directors of SCOR U.S. and their respective age and terms of office are
as follows:
POSITIONS, OFFICES AND PRINCIPAL TERM
NAME AGE OCCUPATIONS WITH SCOR U.S. EXPIRES
- ------------------------------------------- ---- -------------------------------- -------
Jacques P. Blondeau (1)(2)................. 50 Chairman of the Board 1995
Serge M.P. Osouf (1)(2).................... 51 Vice Chairman of the Board 1997
John R. Cox (1)(3)......................... 62 Director 1995
Raymond H. Deck (1)(2)(4).................. 72 Director 1997
Michel J. Gudefin (3)(4)................... 71 Director 1996
Director, President and Chief
Jerome Karter (1).......................... 57 Executive Officer 1995
Jean Masse (2)............................. 50 Director 1996
Richard M. Murray (3)...................... 72 Director 1997
Patrick Peugeot (2)........................ 57 Director 1995
John W. Popp (3)(4)........................ 72 Director 1996
Francois Reach (2)......................... 46 Director 1996
David J. Sherwood (1)(3)(4)................ 72 Director 1996
- ------------
(1) Executive Committee.
(2) Finance Committee.
(3) Audit Committee.
(4) Compensation Committee.
BIOGRAPHICAL SUMMARIES OF THE DIRECTORS OF SCOR U.S.
Jacques P. Blondeau has served as Chairman of the Board of SCOR U.S. since
September 30, 1994 and as a Director since 1988. Mr. Blondeau is also Chairman
of SCOR Reinsurance Company ("SCOR Re"), the Company's principal operating
subsidiary. Mr. Blondeau serves as a Trustee of the Voting Trust that holds the
stock of SCOR Re on behalf of SCOR U.S. From November, 1988 to September 30,
1994, Mr. Blondeau had been Vice Chairman and President of SCOR U.S. and Vice
Chairman of the Board of SCOR Re. He also served as Chief Operating Officer of
SCOR U.S. from November, 1988 to June, 1994. From June 16, 1994 to September 30,
1994, he served as Chief Executive Officer of SCOR U.S. He is Chairman of the
Board and Chief Executive Officer of SCOR S.A., a French-based global
reinsurance company. Prior to being elected to these positions in SCOR
5
S.A., he served as the President and Chief Operating Officer. Mr. Blondeau was
President-Operations of Societe Commercial de Reassurance ("SCOR Paris") from
1988 until 1990, when SCOR Paris was merged into SCOR S.A. From 1984 to 1988,
Mr. Blondeau was Chairman and President of Pechiney Australia and President of
Howmet Resources, Inc. (U.S.), a subsidiary of Pechiney Corporation. From
1980-1984, he held various top-level positions with the Pechiney Corporation.
Mr. Blondeau's business address is that of SCOR S.A.
Serge M.P. Osouf has served as Vice Chairman of the Board of Directors of
SCOR U.S. and SCOR Re since September 30, 1994, and has been a Director of SCOR
U.S. since September, 1993, and of SCOR Re since December, 1991. Mr. Osouf
serves as the General Manager of SCOR S.A. and prior to taking this position in
September, 1994, had been the President-Reinsurance Operations of SCOR S.A.
since 1993. He is currently Chairman of SCOR Vie and from 1987 to 1993 was
General Manager of SCOR Reassurance, two subsidiaries of SCOR S.A. Mr. Osouf's
business address is that of SCOR S.A.
Jerome Karter has served as a Director of SCOR U.S. since February, 1989,
and as its President and Chief Executive Officer since September 30, 1994. Prior
to September, 1994, he had served as Executive Vice President of SCOR U.S. since
December, 1989. Mr. Karter has also served as a Director, President and Chief
Executive Officer of SCOR Re since February, 1989. Prior to his employment at
SCOR, he held various management positions both in the United States and Europe
with major domestic and multinational insurance companies since 1961. He held
senior management positions for Factory Mutual International in London and
Affiliated F.M. Insurance Company in Paris from 1969 to 1978. He subsequently
served as General Manager-Europe for the Insurance Company of North America (now
CIGNA Corporation) and INA Reinsurance Company S.A. in Brussels from 1978 to
1984. Immediately prior to joining SCOR U.S., Mr. Karter was a Senior Vice
President and Manager of the International Department of Johnson & Higgins in
New York from 1984 to 1989. Mr. Karter's business address is that of SCOR U.S.
John R. Cox has served as a Director of SCOR U.S. and SCOR Re since June,
1994. Mr. Cox has also served as a Director of Firemark Global Insurance Fund
since 1993. Until February 3, 1995, he was a Director and a Member of the Audit
Committee of ACE Limited ("ACE") and its subsidiary companies. From 1990 to 1993
he was a Director of Bankers Insurance Company Limited. From 1985 to 1991 he was
Chairman of the Board and Chief Executive Officer of ACE. From 1983 to 1985, he
was Executive Vice President of American Can Company, subsequently known as
Primerica Corporation and now The Travelers Corporation, and Chairman and Chief
Executive Officer of Associated Madison Companies, Inc., its financial services
holding company subsidiary. From 1975 to 1983 Mr. Cox held various key executive
positions in CIGNA Corporation. Mr. Cox's business address is 44 Herbert
Terrace, West Orange, New Jersey.
Raymond H. Deck has been a Director of SCOR U.S. since 1986 and of SCOR Re
since 1985. He has been President of Chase Insurance Enterprises, Inc., a
division of Chase Enterprises, a private company with investments in real
estate, communications and the insurance industry, since 1986. He has also been
a Director of Accel International Corporation since 1990. Prior to 1986, he was
a Director and Executive Vice President of the Hartford Insurance Group. Mr.
Deck's business address is that of Chase Insurance Enterprises, Inc., One
Commercial Plaza, Hartford, Connecticut 06103.
Michel J. Gudefin has been a Director of SCOR U.S. since 1989 and of SCOR Re
since June 1990 and is a Voting Trustee of SCOR Re. Mr. Gudefin is retired. From
1988 to 1989 he was Vice Chairman
6
of Howmet Corporation, the principal operating subsidiary of Pechinery
Corporation. From 1976 to 1988, Mr. Gudefin was President and Chief Executive
Officer of Pechiney Corporation. Until December 31, 1993, he was a Director of
Pechiney Corporation and Howmet Corporation. He is currently a Director of
Southwire Corporation and a Vice President and Director of Intrend Corporation.
Mr. Gudefin's business address is that of SCOR U.S.
Jean P. Masse has been a Director of SCOR U.S. and SCOR Re since March 1995.
From June 16, 1994 until March 1995, he was Director Emeritus of SCOR Re after
having served as a Director of SCOR Re from 1990 to 1994. He served as a
Director and President of The Unity Fire and General Insurance Company from
December 1982 until 1990, and during that time also served as President and
Treasurer of the Rockleigh Management Corporation, which was merged with and
into the Company in 1990. Mr. Masse's business address is Tour Voltaire, 1 place
Des Dgres, Cedex 58, 92059 Paris La Defense, France.
Richard M. Murray has served as a Director of SCOR U.S. and SCOR Re since
1990. He was Chairman and executive advisor of The Nippon Management Corporation
from 1987 to 1991. Since 1990, he has been Vice Chairman of La Prov Corporation,
a wholly-owned U.S. subsidiary and liaison office of Grupo Nacional Provincial
S.A., a leading Mexican insurance company. He was a Vice President of The
Travelers Corporation from 1967 to 1987. Mr. Murray's business address is that
of La Prov Corporation, 80 Broad Street, New York, New York 10004-2203.
Patrick Peugeot has served as a Director of SCOR U.S. since 1983 and of SCOR
Re since 1985. Mr. Peugeot is also a Voting Trustee of SCOR Re. He served as
Chairman of the Board of SCOR U.S. from 1983 until September 30, 1994, and as
Chief Executive Officer of SCOR U.S. from December 1988 until June 16, 1994. He
was also Chairman of the Board of SCOR Re until September 1994. Mr. Peugeot had
served as Chairman of the Board and Chief Executive Officer of SCOR S.A. from
1989 until 1994 and of SCOR Paris from 1983 until 1990. Mr. Peugeot was Chairman
of Caisse Centrale de Reassurance ("CCR") from 1983 to 1985. He is Honorary
Chairman of CCR and has served as Honorary Chairman of SCOR S.A. since August
30, 1994. He is now Vice Chairman and President of La Mondiale, a French mutual
life insurance company. He is also Vice Chairman of Partner Europe. Mr.
Peugeot's business address is that of La Mondiale, located at 8 boulevard
Malesherbes 75008 Paris.
John W. Popp, a Director of SCOR U.S. since March 1990 and SCOR Re since
1989, is a business consultant. He was a Partner of Peat, Marwick, Mitchell &
Co. (now KPMG Peat Marwick LLP) from 1955 to 1982. Mr. Popp has been a Director
of Old Republic International Corporation since 1993. Mr. Popp's business
address is that of SCOR U.S.
Francois Reach has served as a Director of SCOR U.S. since March 1989 and of
SCOR Re since June 1994. Mr. Reach has served as Chairman and CEO of REAFIN, the
finance company subsidiary of SCOR S.A. since October 1994. He was Chief
Investment Officer and Treasurer of SCOR S.A. from 1983 until October, 1994,
when he became Deputy General Manager of SCOR S.A. From 1986 to 1994, he was
President of REAFIN. He is also Managing Director of Finimosa (Spain) and of
Finimo Kft (Hungary). Mr. Reach's business address is that of SCOR S.A.
David J. Sherwood has served as a Director of SCOR U.S. and of SCOR Re since
1987. He is also a Voting Trustee of SCOR Re. Mr. Sherwood has served as
Chairman of the Board of Governors of the New York Insurance Exchange since
1985. He was President of The Prudential Insurance Company of America from 1978
to 1984. Mr. Sherwood's business address is that of the New York Insurance
Exchange, c/o Willkie Farr & Gallagher, One Citicorp Center, 153 East 53rd
Street, New York, New York 10022.
7
EXECUTIVE OFFICERS
The executive officers of SCOR U.S. and their respective age and titles are
as follows:
NAME AGE OFFICE
- ---------------------------------- --- ---------------------------------------------------
Louis A. Adanio................... 41 Senior Vice President of SCOR Re
John T. Andrews, Jr............... 53 Senior Vice President, General Counsel and
Secretary of SCOR U.S. and SCOR Re
Nolan E. Asch..................... 45 Senior Vice President and Chief Actuary of SCOR
U.S. and SCOR Re
Jacques P. Blondeau............... 50 Chairman of the Board of Directors of SCOR U.S. and
SCOR Re
Jeffrey D. Cropsey................ 52 Senior Vice President and Chief Financial Officer
of SCOR U.S. and SCOR Re
John D. Dunn, Jr.................. 49 Senior Vice President of SCOR U.S. and SCOR Re
Francis J. Fenwick................ 39 Vice President and Controller of SCOR U.S. and SCOR
Re
Howard B. Fischer................. 35 Vice President, Finance/Planning and Analysis of
SCOR U.S. and SCOR Re
Linda J. Grant.................... 34 Vice President and Treasurer of SCOR U.S. and SCOR
Re
Jerome Karter..................... 57 President and Chief Executive Officer of SCOR U.S.
and SCOR Re
Dominique Lavallee................ 36 Senior Vice President of SCOR U.S. and SCOR Re
Serge M.P. Osouf.................. 51 Vice Chairman of the Board of Directors of SCOR
U.S. and SCOR Re
SELECTED BIOGRAPHICAL SUMMARIES
Louis A. Adanio has served as Senior Vice President and Facultative Manager
of SCOR Re since May 1994. From June 1990 to May 1994, Mr. Adanio had been
Senior Vice President and Facultative Property Manager of SCOR Re. From June
1989 to June 1990, Mr. Adanio had been Vice President and Facultative Property
Manager of SCOR Re. Mr. Adanio's business address is that of SCOR Re.
John T. Andrews, Jr. has been Senior Vice President, General Counsel and
Secretary of SCOR U.S. and SCOR Re since 1989. He was Senior Vice President and
General Counsel of Primerica Corporation now known as The Travelers Corporation
from 1987 to 1988, Senior Vice President and General Counsel of Associated
Madison Companies, Inc., a subsidiary of Primerica, from 1985 to 1987, and Vice
President and General Counsel of Prudential Reinsurance Company from 1977 to
1985. Mr. Andrews' business address is that of SCOR U.S.
Nolan E. Asch, a Fellow of the Casualty Actuarial Society, has been Senior
Vice President since 1990 and Chief Actuary of SCOR U.S. and SCOR Re since June
1994. Mr. Asch had been Actuary of SCOR U.S. since 1990 and of SCOR Re since
1989. He was Vice President and Actuary of SCOR Re from 1984 to 1989. Previously
he was Vice President, Casualty Underwriting of AFIA. Mr. Asch's business
address is that of SCOR U.S.
Jeffrey D. Cropsey, a certified public accountant, has been Senior Vice
President and Chief Financial Officer of SCOR U.S. and SCOR Re since November
1993. From 1990 through part of 1993, he was Chief Financial Officer of Phoenix
Re Corporation. From 1988 to 1990, he was a Vice President
8
in the individual insurance operations at The Equitable Life Assurance Society
of the United States. From 1984 to 1988, he was a partner with Peat Marwick Main
& Co. From 1970 to 1984 he held positions from staff accountant through partner
with Touche Ross & Co., except for 1980 to 1982 when, during a leave of absence
from Touche Ross, he was a Practice Fellow at the Financial Accounting Standards
Board. Mr. Cropsey's business address is that of SCOR U.S.
John D. Dunn, Jr. has been Senior Vice President of SCOR U.S. and Senior
Vice President and Treaty Manager of SCOR Re since July 1994. From September
1985 to 1994 he was Executive Vice President and a Director of Mercantile and
General Reinsurance Company of America and TOA Reinsurance Company of America.
He was a Vice President of Winterthur Insurance Company from April to September,
1985. He was a Senior Vice President and a Director of San Francisco Reinsurance
Company from 1983 to 1985 and of Buffalo Reinsurance Company from 1976 to 1983.
Mr. Dunn's business address is that of SCOR U.S.
Francis J. Fenwick has been Vice President and Controller of SCOR U.S. and
SCOR Re since October 1994. He was a Vice President and Financial Reporting
Manager of Signet Star Reinsurance Company from 1993 to 1994 and held various
offices at North Star Reinsurance Company, now known as Signet Star Reinsurance
Company from 1987 to 1993. He was a Senior Auditor at American International
Group and at Fireman's Fund Insurance Companies from 1986 to 1987 and 1984 to
1986, respectively. Mr. Fenwick's business address is that of SCOR U.S.
Howard B. Fischer has been Vice President, Finance/Planning and Analysis of
SCOR U.S. since January 1991 and of SCOR Re since October 1993. From November
1988, until January 1991, Mr. Fischer was Vice President/Assistant to the
President of SCOR U.S. Mr. Fischer's business address is that of SCOR U.S.
Linda J. Grant has served as Vice President and Treasurer of SCOR U.S. and
SCOR Re since November 1994. From 1989 to 1994, Ms. Grant was Vice President and
Assistant Treasurer of SCOR U.S. and SCOR Re. She also held various positions at
SCOR Re from 1984 to 1989. Ms. Grant's business address is that of SCOR U.S.
Dominique Lavallee has served as Senior Vice President of SCOR U.S. and SCOR
Re and as Manager of SCOR Re's Underwriting Services Department since September
1994. He was Vice President of SCOR Re from 1991 to 1994. From 1988 to 1991 he
was a Vice President of SCOR Reinsurance Company of Canada, and from 1984 to
1988 he was an Assistant Vice President of SCOR Paris. Mr. Lavallee's business
address is that of SCOR U.S.
BOARD OF DIRECTORS MEETINGS AND COMMITTEES
The Board held six meetings and acted by unanimous written consent on five
occasions during 1994. During 1994 all incumbent directors attended at least 75%
of the meetings of the Board and committees thereof on which they served except
for two former directors, Mr. David Dillard and Mr. Elios Pascual. Mr. Dillard
attended 50% of such meetings prior to his retirement from the Board of
Directors on June 16, 1994. Mr. Pascual attended 30% of such meetings, dating
from his election in June, 1994, until his resignation on January 1, 1995. For
the Board as a whole, including Messrs. Pascual and Dillard, average attendance
at the meetings was 87% during 1994.
The Board has four standing committees: the Audit Committee, the
Compensation Committee, the Executive Committee and the Finance Committee. Only
non-employee directors currently serve on the
9
Audit and Compensation Committees. The Board of Directors does not have a
nominating committee. The functions normally performed by a nominating committee
are performed by the Board.
The Audit Committee's functions include: (1) review of the scope and
findings of audits conducted by SCOR U.S.'s independent auditors, KPMG Peat
Marwick; (2) review of SCOR U.S.'s accounting policies and practices for
purposes of making recommendations to the Board and management of SCOR U.S.; (3)
review of the actuarial policies and practices of SCOR U.S.'s reinsurance and
insurance subsidiaries; and (4) review of significant transactions among SCOR
U.S. and its subsidiaries and SCOR S.A. and its other subsidiaries and
affiliates. The members of the Audit Committee are Messrs. Sherwood (Chairman),
Cox, Gudefin, Murray and Popp. Mr. Dillard retired from the Board and the Audit
Committee on June 16, 1994 and Mr. Cox was appointed to the Audit Committee on
that same date. The Audit Committee held four meetings during 1994.
The Compensation Committee's functions include reviewing compensation
policies and practices. Prior to June 16, 1994, the Committee was specifically
responsible for: (a) reviewing and approving the compensation of all senior
executive officers who do not serve on the Board; (b) reviewing and recommending
to the Board the compensation of senior executives who also serve on the Board;
(c) reviewing new executive compensation programs or modifications to existing
programs; and (d) administering the annual incentive, long-term performance
incentive and stock option plans of the Company. On June 16, 1994, the powers of
the Committee were amended to modify items (a) and (b) above to provide the
Compensation Committee would also be responsible for reviewing and approving the
compensation of all individuals at or to be elected to the rank of Vice
President or above and/or who have current or proposed salaries of $100,000 or
above. The members of the Compensation Committee are Messrs. Deck (Chairman),
Gudefin, Popp and Sherwood. Mr. Elios Pascual was elected to the Board and the
Compensation Committee upon Mr. Dillard's retirement there in June 1994. Mr.
Pascual served on the Board and the Compensation Committee until his resignation
on January 1, 1995. The Compensation Committee held eight meetings during 1994.
The Executive Committee has the authority to exercise all the powers of the
Board in the management of the business and affairs of the company except as
limited by applicable laws. The members of the Executive Committee are Messrs.
Blondeau (Chairman), Cox, Deck, Karter, Osouf and Sherwood. Mr. Peugeot resigned
as a member and Chairman of the Executive Committee on September 30, 1994, and
Mr. Blondeau was elected Chairman of the Committee on September 30, 1994.
Messrs. Deck and Cox were elected to the Committee on June 16, 1994. The
Executive Committee held eight meetings and acted by unanimous written consent
on one occasion during 1994.
The Finance Committee's functions include: (1) supervising the investment
policies and practices of the Company as directed by the Board; (2) providing
advice to the Boards of the Company's operating subsidiaries concerning their
investment decisions; and (3) designating the officers of the Company who have
the authority to effect investment decisions as approved by the Board. The
members of the Finance Committee are Messrs. Reach (Chairman), Blondeau, Deck,
Osouf, Peugeot and Masse. Upon Mr. Peugeot's resignation from the Board and
Committee on September 30, 1994, Mr. Reach was elected Chairman of the
Committee. Messrs. Jolivet and Pascual resigned from the Committee and the Board
on January 1, 1995, and Messrs. Osouf and Masse were elected to the Committee on
September 30, 1994, and March 24, 1995, respectively. The Finance Committee held
four meetings during 1994.
10
BOARD OF DIRECTORS RETIREMENT POLICY
In June 1992, the Board voted to amend the Company's By-Laws to provide that
no individual shall be elected or re-elected as member of the Board subsequent
to his or her attaining the age of 72.
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth, for the fiscal years ended December 31,
1992, 1993 and 1994, the cash compensation paid by the Company and its
subsidiaries, as well as certain other compensation paid or accrued by such
entities for those years, to or with respect to the Chief Executive Officer and
each of the persons who were the four most highly compensated executive officers
of the Company during its most recent fiscal year (the "Named Officers"), for
services rendered in all capacities as executive officers during such period:
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION:
ANNUAL COMPENSATION AWARDS
------------------------------------------ -------------------------
OTHER SECURITIES
NAME AND ANNUAL RESTRICTED UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY ($)(1) BONUS ($) COMPENSATION ($) STOCK ($)(2) OPTIONS (#) COMPENSATION ($)(3)
- ------------------------ ---- ------------- --------- ---------------- ------------ ----------- -------------------
Jacques Blondeau (4).... 1994 $ 175,000 $ -- $-- $ -- 10,000 -$-
Chairman of the 1993 175,000 -- -- -- 24,000 --
Board and Former 1992 174,692 -- -- -- -- --
Chief Executive Officer
Jerome Karter........... 1994 $ 301,641 $ -- $ 46,243(5) $ -- 38,000 $43,364
President and Chief 1993 289,112 75,000 39,348(5) -- 33,000 52,044
Executive Officer 1992 290,910 25,000 109,598(5) -- -- 53,367
Patrick Peugeot (4)..... 1994 $ 153,750 $ -- $-- $ -- 3,000 -$-
Former Chief 1993 205,000 -- -- -- 24,000 --
Executive Officer 1992 205,846 -- 57,993(6) -- -- --
John T. Andrews, Jr..... 1994 $ 240,913 $ -- $ 48,833(7) $ -- 57,000 $32,799
Senior Vice President, 1993 230,072 65,000 244,883(7) -- 30,000 35,135
General Counsel and 1992 229,787 20,000 -- -- -- 34,251
Secretary
Nolan E. Asch........... 1994 $ 180,685 $ -- $ 8,771(8) $ -- 15,071 $12,678
Senior Vice President 1993 172,554 40,000 24,335(8) -- -- 7,703
and Chief Actuary 1992 172,341 -- 27,689(8) -- -- 9,825
R. Daniel Brooks........ 1994 $ 216,300 $ -- $-- $ -- 8,000 $14,669
Senior Vice President 1993 214,846 35,000 -- -- 22,000 13,851
1992 218,711 16,000 -- -- -- 17,779
Jeffrey D. Cropsey 1994 $ 216,544 $ -- $-- $ -- 13,000 $25,980
(9)..................... 1993 36,346 90,000 -- $ 58,607 -- --
Senior Vice President 1992 N/A N/A N/A N/A N/A N/A
and Chief Financial
Officer
- ------------
(1) Company executives, including the Named Officers, are paid bi-weekly. As a
result of this cycle, the Named Officers received 27 payments of base salary
in 1992 rather than the usual 26. The data in the table includes the extra
payments and, accordingly, overstates the 1992 base salary by 1/26th or
3.8%.
(2) Except for that made to Mr. Cropsey, no restricted stock awards were made to
any of the Named Officers during the last three fiscal years and none of
them owns any shares of restricted stock of the Company. Mr. Cropsey
received a restricted stock award of 4,552 shares pursuant to the SIP. The
shares were awarded on
(Footnotes continued on following page)
11
(Footnotes continued from preceding page)
December 16, 1993. One-quarter of the shares (1,138) will vest on the second
anniversary of the date of the grant and each one-year anniversary
thereafter, starting on December 16, 1995.
(3) The amounts shown in this column are derived from the following figures: (A)
For 1994: (i) Mr. Karter: $22,016--amount accrued by the Company pursuant to
the retirement provisions of Mr. Karter's employment contract with the
Company; $21,347--Company contributions and credits to the SCOR U.S. Group
Savings Plan ("GSP") and the SCOR U.S. Group Supplemental Retirement Plan
("SRP"), which is provided to certain executives whose benefits under the
GSP are capped by federal law; (ii) Mr. Andrews: $15,561-- amount accrued by
the Company pursuant to the retirement provisions of Mr. Andrews' employment
contract with the Company; $17,238--Company contributions and credits to the
GSP and SRP; (iii) Mr. Cropsey: $21,274--amount accrued by the Company
pursuant to the retirement provisions of Mr. Cropsey's Special Severance and
Pension Benefits Agreement with the Company; $4,733--Company contributions
and credits to the GSP; (iv) Mr. Brooks: $14,669--Company contributions and
credits to the GSP and SRP; and (v) Mr. Asch: $12,679--Company contributions
and credits to the GSP and SRP; (B) for 1993: (i) Mr. Karter: $33,197 -
amount accrued by the Company pursuant to the retirement provisions of Mr.
Karter's employment contract with the Company; $18,847-- Company
contributions and credits to the GSP and the SRP; (ii) Mr. Andrews:
$20,131--amount accrued by the Company pursuant to the retirement provisions
of Mr. Andrews' employment contract with the Company; $15,004--Company
contributions and credits to the GSP and SRP; (iii) Mr. Cropsey:
Not-applicable; (iv) Mr. Brooks: $13,851--Company contributions and credits
to the GSP and SRP; and (v) Mr. Asch: $7,703--Company contributions and
credits to the GSP and SRP; and (C) for 1992: (i) Mr. Karter:
$29,374--amount accrued by the Company pursuant to the retirement provisions
of Mr. Karter's employment contract with the Company; $23,993--Company
contributions and credits to the GSP and the SRP; (ii) Mr. Andrews:
$15,320--amount accrued by the Company pursuant to the retirement provisions
of Mr. Andrews' employment contract with the Company; $18,931--Company
contributions and credits to the GSP and SRP; (iii) Mr. Cropsey:
Not-applicable; (iv) Mr. Brooks: $17,779--Company contributions and credits
to the GSP and SRP; and (v) Mr. Asch: $9,825--Company contributions and
credits to the GSP and SRP.
(4) Mr. Peugeot and Mr. Blondeau did not participate in the Company's Annual
Incentive Plan, Pension Plan, GSP or SRP due to their participation in
equivalent plans at SCOR S.A.
(5) Other Annual Compensation for Mr. Karter includes forgiven interest on loans
from the Company and certain tax reimbursement payments related thereto of
$22,785 and $15,190, respectively, in 1994, $22,400 and $2,682,
respectively, in 1993, an adjusted tax reimbursement payment in 1994 of
$8,269 relating to 1993, and certain tax reimbursement payments in
connection with the exercise of stock options of $109,598 in 1992.
(6) Other Annual Compensation for Mr. Peugeot includes $57,993 for certain tax
reimbursement payments in 1992 in connection with the exercise of stock
options.
(7) Other Annual Compensation for Mr. Andrews includes forgiven interest on
loans from the Company and certain tax reimbursement payments related
thereto of $29,300, and $19,533, respectively, in 1994, and $26,512 and
$10,738, respectively in 1993, and certain tax reimbursement payments in
connection with the exercise of stock options of $198,423 in 1993.
(8) Other Annual Compensation for Mr. Asch includes forgiven interest on loans
from the Company and certain tax reimbursement payments related thereto of
$5,262 and $3,508, respectively, in 1994, and $5,764 and $2,334,
respectively, in 1993. In addition, Mr. Asch received $16,235 and $27,689 in
1993 and 1992 respectively, for tax reimbursement payments in connection
with the exercise of stock options.
(9) The 1993 figure reflects Mr. Cropsey's pro-rata salary due to a November 1,
1993 date of hire.
12
STOCK OPTIONS
The following table contains information regarding the grant of stock
options under the Company's SOP and the SIP to the Named Officers during the
year ended December 31, 1994. In addition, in accordance with rules of the
Commission, the following table sets forth the hypothetical grant date present
value with respect to the referenced options, using the Black-Scholes Option
Pricing Model.
OPTION GRANTS IN 1994
INDIVIDUAL GRANTS (1)
----------------------------------------------------------------------------
NUMBER % OF TOTAL
OF SECURITIES OPTIONS GRANT
UNDERLYING GRANTED TO EXERCISE OR DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED (#) FISCAL YEAR (2) ($/SH) (3) DATE VALUE $ (4)
- ------------------------------- ------------- --------------- ----------- ---------- -----------
Jacques Blondeau............... 10,000 2.35% $ 9.00 11/30/2004 $ 3,600.00
Chairman of the Board
of Directors and Former
Chief Executive Officer
Jerome Karter.................. 13,000 8.94% $ 9.00 11/30/2004 $ 4,680.00
President and Chief 25,000 $11.125 12/02/2004 $ 7,745.00
Executive Officer
Patrick Peugeot (5)............ None N/A N/A N/A N/A
Former Chief Executive
Officer
John T. Andrews, Jr............ 13,000 13.41% $ 9.00 11/30/2004 $ 4,680.00
Senior Vice President, 44,000 $11.125 12/02/2004 $ 13,631.20
General Counsel and
Corporate Secretary
Nolan E. Asch.................. 6,000 3.54% $ 9.00 11/30/2004 $ 2,160.00
Senior Vice President 9,071 $11.125 11/30/2004 $ 2,810.20
Chief Actuary
R. Daniel Brooks............... 8,000 2.81% $ 9.00 11/30/2004 $ 2,880.00
Senior Vice President 3,929 $11.125 12/02/2004 $ 1,217.20
Jeffrey Cropsey................ 13,000 3.06% $ 9.00 11/30/2004 $ 4,680.00
Senior Vice President
and Chief Financial Officer
- ------------
(1) The option shown in the above table represent options granted under both the
SIP and SOP, respectively. The options were granted on November 30, 1994
under the SOP and November 2, 1994 under the SIP.
The SOP is administered by the Board's Compensation Committee. The Compensation
Committee determines the eligibility of employees, the number of shares to be
granted and the terms of such grants. All stock options granted in fiscal
year 1994 are non-qualified options receiving no special tax benefit, have an
exercise price equal to the fair market value on the date of grant, vest at a
rate of approximately 33.33 percent per year, on the, second, third and
fourth anniversary of the grant date and have a term of ten years. No
incentive stock options or stock appreciation rights were granted in 1994
pursuant to the SOP.
To the extent not already exercisable and not expired upon a Change in Control
(as defined), the options become exercisable upon the later of (i) six months
after their grant date or (ii) the date of a Change in Control.
(Footnotes continued on following page)
13
(Footnotes continued from preceding page)
The SIP is also administered by the Compensation Committee. The Committee
determines the eligibility of employees, the number of shares to be granted
and the terms of such grants. All stock options granted in the fiscal year
1994 are non-qualified stock options, have an exercise price equal to the
fair market value on the date of grant, vest on the six month anniversary of
the grant date, and have a term of ten years and one month. At the
Compensation Committee's discretion, an individual may be eligible for a tax
bonus upon the exercise of a stock option grant.
(2) Options to purchase an aggregate of 425,175 shares were granted in fiscal
year 1994 under the SOP and SIP plans, with 343,175 granted to employees
under the SOP and 82,000 granted to key executives under the SIP.
(3) Under the SOP, the exercise price may be paid either (i) in cash, (ii)
through the delivery of Shares with a Fair Market Value (as defined) on the
immediately preceding Trading Day (as defined) equal to the total option
price or (iii) by a combination of the methods described in (i) and (ii) for
the full purchase price therefor; provided that, in the case of payment
pursuant to methods described in (ii) or (iii) above, the Shares delivered
to SCOR U.S. shall have been held by the optionee for at least six months
and shall not secure any obligation of the optionee to SCOR U.S. If so
provided under the terms of a stock option, the Compensation Committee may,
at its sole discretion, permit an optionee, in lieu of the methods of
payment set forth above, to pay for any portion of the purchase price of the
Shares to be issued or transferred that exceeds the par value of such
Shares, by delivery of a full-recourse promissory note of the optionee in
such form as the Compensation Committee may approve. Under the SOP, any such
promissory note shall be secured by Shares having a Fair Market Value on the
Trading Day immediately prior to the date of delivery of the note equal to
at least two times the principal amount of the note. Under both the SOP and
SIP, any such promissory note shall have a maturity of five years or less,
as the Compensation Committee may determine in its sole discretion, and
shall be payable in equal installments of principal and interest at least
annually, or more frequently as the Compensation Committee may determine in
its sole discretion. The Compensation Committee shall determine in its sole
discretion the interest rate to be charged by SCOR U.S. with respect to the
loan evidenced by the promissory note, but such rate shall in no event cause
the loan to be considered a below-market loan to which Section 7872 of the
Internal Revenue Code of 1986 (the "Code") applies. Payment of the exercise
price under the SIP may be made by the same methods as apply to the SOP,
except that under the SIP any promissory note shall be secured by shares
having a Fair Market Value on the Trading Day immediately prior to the date
of delivery of the note that is equal to the principal amount of the note.
(4) The estimated fair value of stock options is measured at the grant date in
accordance with the Black-Scholes Option Pricing Model. The assumptions used
in such option pricing model are: expected volatility, 27.89%; expected
dividend yield, 2.01%; expected option term, 10 years; and risk-free rate of
return, 7.84%. No adjustments have been made for non-transferability or risk
of forfeiture. The actual value, if any, a Named Officer may realize will
depend on the excess of the stock price over the exercise a price on the
date the option is exercised. Consequently, there is no assurance the value
realized by a Named Officer will be at or near the value estimated above.
These amounts should not be used to predict stock performance.
(5) Mr. Peugeot did not receive any stock options under the SOP or SIP for the
fiscal year ended December 31, 1994. He did however receive a non-qualified
stock option grant of 3,000 shares under the DP on September 30, 1994, at an
grant price of $11.25 per share. The options will vest at a rate of 50% per
year, on the first and second anniversary of the grant date, and have a term
of ten years. For a more complete description of the DP, see "COMPENSATION
OF DIRECTORS".
14
STOCK OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table shows stock option exercises by the Named Officers
during the fiscal year ended December 31, 1994, including the aggregate value of
gains on the date of exercise. In addition, this table includes the number of
shares covered by both exercisable and non-exercisable stock options as of
December 31, 1994. Values for "in-the money" options represent the positive
spread between the exercise price of any such existing stock options and the
year-end price of the Common Stock. The market price of the Common Stock as of
the close of business on December 31, 1994, was $8.375 per share.
AGGREGATED OPTION EXERCISES IN 1994 AND YEAR-END VALUES
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED STOCK IN-THE-MONEY STOCK
NUMBER OF VALUED OPTIONS
SHARES ACQUIRED REALIZED OPTIONS AT 12/31/94 (#) AT 12/31/94($) (2)
UPON EXERCISE OF UPON ------------------------------- ---------------------------
NAME OPTION (#) EXERCISE (1) EXERCISABLE UNEXERCISABLE (2) EXERCISABLE UNEXERCISABLE
- ------------------------ ---------------- ------------ ----------- ----------------- ----------- -------------
Jacques Blondeau........ -- -- 75,999 26,000 -- --
Chairman and Former
Chief Executive Officer
Jerome Karter........... -- -- 105,998 60,002 -- --
President and Chief
Executive Officer
Patrick Peugeot......... -- -- 89,789 19,001 -- --
Former Chief
Executive Officer
John T. Andrews, Jr..... -- -- 31,999 77,001 -- --
Senior Vice President,
General Counsel
and Secretary
Nolan E. Asch........... -- -- 33,266 28,405 -- --
Senior Vice President
and Chief Actuary
R. Daniel Brooks........ -- -- 28,332 26,597 -- --
Senior Vice President
Jeffrey D. Cropsey...... -- -- -- 13,000 -- --
Senior Vice President
and Chief Financial
Officer
- ------------
(1) Market value of underlying securities at exercise, minus the exercise price.
(2) Based on the December 31, 1994 stock price which was $8.375 per share, there
were no "in-the-money" stock options.
LONG-TERM INCENTIVES
The Company granted no awards to the Named Officers during 1994 under the
Performance Incentive Plan, a long-term incentive plan ("PIP"). Participation in
the PIP is limited to select senior
15
executives of the Company, including the Named Officers. Under the PIP, grants
of performance units ("Units") are made every other year to eligible senior
executives. At the time when an award of Units is made, the Compensation
Committee must determine a Performance Period (as defined) of at least five
years with respect to such Units and must determine a minimum threshold of
annual compound appreciation of the adjusted book value per share of the
Company's Common Stock.
A Unit vests at the end of the applicable Performance Period. If such
appreciation exceeds the threshold rate, each Unit has a value, subject to
adjustment in certain events, equal to the difference between (i) the adjusted
book value per share of Common Stock at the end of the Performance Period plus
the dividends paid on a share of Common Stock at the commencement of the
Performance Period and (ii) the adjusted book value per share of Common Stock at
the commencement of the Performance Period.
Participants may receive any payments under the Performance Plan at the end
of the applicable Performance Period. They may elect to receive such payments in
a lump sum or in periodic installments.
Units are non-transferable except to a designated beneficiary at the death
of a Participant. Participants leaving the employ of SCOR U.S. for any reason
other than death, disability or retirement may receive payments pursuant only to
Units that have vested prior to the termination of employment. Participants or
their designated beneficiaries may receive partial payment before the end of a
Performance Period in the event of death, disability or retirement. In the event
of a Change of Control (as defined), Units vest immediately and Participants
become entitled to receive awards pursuant thereto. See also, "REPORT OF THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON EXECUTIVE
COMPENSATION--PERFORMANCE INCENTIVE PLAN".
COMPENSATION OF DIRECTORS
Compensation of Directors who are not employees of SCOR U.S. currently
consists of an annual retainer of $13,000, a fee of $2,000 for attendance at
each quarterly meeting of the Board, $1,500 for attendance at other meetings of
the Board (provided that if such a meeting is held jointly with the Board of any
subsidiary of which such person is also a Director, the fee is $2,000) and a fee
of $1,000 for attendance at each meeting of a committee of the Board. The
Chairman of a committee of the Board receives an annual retainer of $1,000. The
fees that a Director can receive for attending Board and committee meetings on
any one day may not exceed $3,000. Directors who are employees of SCOR U.S. or
any of its subsidiaries receive no additional compensation for their services as
Directors.
In June 1991, the stockholders of the Company approved the DP, which
provided for the automatic annual grant to each SCOR U.S. Director who is not an
employee of SCOR U.S. or its subsidiaries or affiliates (including SCOR S.A., or
any of its respective subsidiaries or affiliates) of a non-statutory stock
option to purchase 3,000 shares of SCOR U.S. Common Stock, as of the date which
is three business days following the date of each Annual Meeting of
Stockholders. In June 1994, the stockholders of the Company approved an
amendment to the DP. The DP now provides for the automatic grant to each
Eligible Director of a non-statutory option to purchase 3,000 Shares of SCOR
U.S. Common Stock as of the following dates: (1) an annual grant on the date
that is three business days following the date of each Annual Meeting of
Stockholders; and (2) a grant on the date the individual becomes an Eligible
Director (unless he or she becomes a Director on the date of the Annual
Meeting). An Eligible Director is now defined as a member of the Board of SCOR
U.S. or its subsidiaries, who is not an employee of SCOR U.S. or its
subsidiaries, but may be a employee or director of SCOR S.A., its subsidiaries,
or affiliates.
16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The members of the Compensation Committee during 1994 were: Raymond H. Deck
(Chairman), Michel J. Gudefin, Elios Pascual, John W. Popp, and David J.
Sherwood. Mr. Dillard resigned from the Board and the Compensation Committee,
effective June 16, 1994, and was replaced by Mr. Pascual on that same date. Mr.
Pascual subsequently resigned from the Board and the Committee, effective
January 1, 1995. No current officer of the Company serves on the Compensation
Committee and there are no "interlocks" as defined by the Commission.
CERTAIN AGREEMENTS
Effective February 27, 1989, SCOR Re entered into a five-year employment
agreement with Mr. Karter which provides for a base salary of not less than
$240,000. Pursuant to a modification of the agreement in 1991, Mr. Karter agreed
to terminate his right to receive annual and long-term bonuses set forth in the
agreement in exchange for participation in the SCOR U.S. Annual Incentive Plan
and the PIP, plus a payment of $13,332 representing the long-term bonus accrued
under the agreement. Under the agreement, SCOR Re is also obligated to provide
supplemental retirement benefits to Mr. Karter under a formula that, among other
factors, gives Mr. Karter pension credit for five years of service with his
prior employer. The agreement is terminable upon death, or by SCOR Re upon
disability (exceeding six months), or with or without "Cause" (as defined in the
agreement) at any time. In the case of termination by SCOR Re without Cause or
if SCOR Re elects not to renew or further renew the agreement, Mr. Karter is
entitled to a severance payment equal to (i) his full salary through the date of
termination, plus (ii) any annual or long-term bonus payable if not yet paid,
plus (iii) an amount equal to the salary payable for the remaining balance of
the employment period or, if greater, an amount equal to twice the then annual
salary. If payments under the agreement would constitute "excess parachute
payments" under the Code, such payments shall be reduced if and to the extent
that such a reduction would yield a greater payment to Mr. Karter after payment
of all taxes than if such reduction were not made. SCOR Re would also be
obligated to provide supplemental pension benefits based on a maximum of ten
years' service credit. The agreement is automatically renewable for successive
periods of one year, unless Mr. Karter or SCOR Re gives six months' advance
notice of intention not to renew.
Effective November 13, 1989, SCOR U.S. entered into a three-year employment
agreement with Mr. Andrews, which provides for a base salary of at least
$200,000, and participation in SCOR U.S.'s bonus and benefit plans. Under the
agreement, SCOR U.S. is also obligated to provide supplemental retirement
benefits to Mr. Andrews under a formula that, among other factors, gives Mr.
Andrews pension credit for an additional five years of service with the Company.
The agreement is terminable upon death, or by SCOR U.S. upon disability
(exceeding six months), or with or without "Good Cause" (as defined in the
Agreement) at any time. In the case of termination by SCOR U.S. without Good
Cause, Mr. Andrews is entitled to a severance payment of his monthly salary
immediately prior to such termination for the shorter of one year or the balance
of the term of the agreement and continued participation in SCOR U.S.'s death
and medical insurance plans for such period. The agreement is automatically
renewable for successive periods of one year, unless Mr. Andrews or SCOR U.S.
gives six months' advance notice of intention not to renew.
Effective November 1, 1993, SCOR U.S. entered into a Special Severance and
Pension Benefits agreement with Mr. Jeffrey D. Cropsey, Senior Vice President
and Chief Financial Officer. Under the
17
agreement, if Mr. Cropsey's employment with SCOR U.S. is terminated for any
reason other than death, disability (exceeding six months) or "Good Cause" (as
defined in the agreement) prior to November 1, 1996, Mr. Cropsey is entitled to
a severance payment of his monthly salary immediately prior to such termination
for a period of one year or less depending upon the date of such termination.
Under the agreement, SCOR U.S. is also obligated to provide supplemental
retirement benefits to Mr. Cropsey under a formula that, among other factors,
gives Mr. Cropsey pension credit for five years of service with his former
employer.
Effective July 25, 1994, SCOR U.S. entered into a two year employment
agreement with John Dunn, Jr., which provides for a base salary of at least
$215,000 and participation in SCOR U.S.'s bonus and benefit plans. Under the
agreement, SCOR U.S. is also obliged to provide supplemental retirement benefits
to Mr. Dunn under a formula that, among other factors, gives Mr. Dunn pension
credit for an additional five years of service with the company. The agreement
is terminable upon death, or by SCOR U.S. upon disability (exceeding six
months), or with "Good Cause" (as defined in the Agreement) at any time. In the
case of termination by SCOR U.S. without Good Cause, Mr. Dunn is entitled to a
severance payment equal to his monthly salary immediately prior to such
termination for the longer of one year or the balance of the term of the
agreement and continued participation in SCOR U.S.'s death and medical insurance
plans for such period. The agreement is automatically renewable for successive
periods of one year each, unless Mr. Dunn or SCOR U.S. gives at least three
months' advance notice of intention not to renew.
PENSION PLANS
The following table shows the estimated pension benefits payable to a
covered participant at normal retirement age under the Company's Pension Plan,
as well as its Supplemental Retirement Plan that provides benefits that would
otherwise be denied participants by reason of certain Code limitations on
qualified plan benefits, based on remuneration that is covered under the plans
and years of service with the Company and its subsidiaries:
PENSION PLAN TABLE
GROSS ANNUAL BENEFITS
AVERAGE PENSIONABLE COMPENSATION ---------------------------------
FOR 5 HIGHEST PAID CONSECUTIVE 15 OR MORE
YEARS IN LAST 10 YEARS OF SERVICE 5 YEARS 10 YEARS YEARS
- ------------------------------------------------------------- ------- -------- ----------
$ 50,000........................................... $ 7,667 $ 15,333 $ 23,000
75,000............................................. 11,500 23,000 34,000
100,000............................................ 15,333 30,667 46,000
125,000............................................ 19,167 38,333 57,500
150,000............................................ 23,000 46,000 69,000
200,000............................................ 30,667 61,333 92,000
250,000............................................ 38,333 76,667 115,000
300,000............................................ 46,000 92,000 138,000
350,000............................................ 53,667 107,333 161,000
400,000............................................ 61,333 122,667 184,000
450,000............................................ 69,000 138,000 207,000
500,000............................................ 76,667 153,333 230,000
A participant's remuneration covered by the Pension Plan is his or her
average base salary (as reported in the Summary Compensation Table) for the five
highest paid consecutive calendar plan years
18
during the last ten years of the participant's career. Covered Compensation for
Named Officers as of the end of the last calendar year is: Mr. Karter: $376,641;
Mr. Andrews: $304,913; Mr. Cropsey: $231,544; Mr. Brooks: $251,300 and Mr. Asch:
$223,162. Estimated credited years of service for purposes of the Pension Plan
and Supplemental Retirement Plan for each of the named executives is as follows:
Mr. Karter: 5; Mr. Andrews: 5; Mr. Cropsey: 1; Mr. Brooks: 18; and Mr. Asch: 10.
Benefits shown are computed as a straight single life annuity beginning at age
65.
CERTAIN TRANSACTIONS AND RELATIONSHIPS WITH DIRECTORS AND EXECUTIVE OFFICERS
On November 2, 1994, SCOR S.A., the majority stockholder of the Company,
acquired directly from certain of its Named Executive Officers, 82,000 Shares at
the then prevailing market price of $11.125 per Share, specifically: 44,000
Shares from John T. Andrews, Jr., Senior Vice President, General Counsel and
Secretary; 9,071 Shares from Nolan E. Asch, Senior Vice President and Chief
Actuary; 3,929 Shares from R. Daniel Brooks, Senior Vice President; and 25,000
Shares from Jerome Karter, President and CEO. Each of these senior officers had,
at the request of the Company, voluntarily agreed not to sell any Shares held by
them in connection with the privately placed offering of convertible
subordinated debentures of SCOR U.S. in 1993, and were prevented from selling
during certain other periods thereafter in accordance with Company policy. The
proceeds from these sales to SCOR S.A. were applied exclusively to reduce
indebtedness of the sellers to SCOR U.S. described below. In addition, on
November 2, 1994, under the SIP, SCOR U.S. granted to each of such officers
options to purchase a corresponding number of Shares at an exercise price of
$11.125 per Share, which was equal to the per share market price on that date.
Mr. Karter, President and Chief Executive Officer, is indebted to SCOR U.S.
in respect of a promissory note executed in connection with his purchase of a
new residence. The largest aggregate amount of indebtedness outstanding on the
note at any time during 1994 was $100,000. Partial payment has been made and
$64,125 is the amount outstanding as of April 18, 1995. The note is due in 1996.
He was also indebted to SCOR U.S. in respect of a promissory note executed in
connection with the exercise of stock options. The largest amount of
indebtedness outstanding on the note at any time during 1994 was $242,250, which
amount has been paid in full as of December 31, 1994. Mr. Karter is also
indebted to SCOR U.S. in respect of a promissory note executed in connection
with certain personal financial requirements. The largest amount of outstanding
indebtedness on this note at any time during 1994 was $126,465, which is also
the amount outstanding as of April 18, 1995. The note is due in 1996. No
interest is charged by the Company on any of the above loans.
Mr. Andrews, Senior Vice President, General Counsel and Corporate Secretary,
was indebted to SCOR U.S. in respect of two promissory notes executed during
1993 in connection with the exercise of stock options. The largest amount of
outstanding indebtedness on the notes at any time during 1994 was $523,000,
which amount has been paid in full as of December 31, 1994. Mr. Andrews is also
indebted to SCOR U.S. in respect of a promissory note executed in connection
with certain personal financial requirements. The largest amount outstanding on
these notes at any time during 1994 was $80,000, which is also the amount
outstanding as of April 18, 1995. The note is due in 1996. Mr. Andrews is also
indebted to SCOR U.S. in respect of a promissory note in the principal amount of
$33,800, executed in connection with certain personal financial requirements.
The largest amount outstanding on this note at any time during 1994 was $33,800,
which is also the amount outstanding as of April 18, 1995. The note is due in
1996. No interest is charged by the Company on any of the above loans.
19
Mr. Asch, Senior Vice President and Actuary, was indebted to SCOR U.S. in
respect of various promissory notes executed in connection with the exercise of
stock options. The largest aggregate amount outstanding on the notes at any time
during 1994 was $108,909, which amount was paid in full as of December 31, 1994.
In connection with the relocation to the United States of Sylvain Boueil, a
Senior Vice President of the Company until September 30, 1994, the Company
serves as guarantor on a primary residence mortgage loan, payable on demand,
from Banque Francaise du Commerce Exterieur to Mr. Boueil in the principal
amount of $765,000. Also in connection with the purchase of this residence, Mr.
Boueil was indebted to SCOR U.S. during 1994 in respect of a demand promissory
note in favor of SCOR U.S. The largest amount of indebtedness outstanding on the
note at any time during 1994 was $102,408. The amount outstanding as of April
18, 1995 was $103,496. The note bears interest at 5.12%.
In connection with the relocation to the United States of Dominique
Lavallee, a Senior Vice President of the Company, SCOR Services, Inc., a
wholly-owned subsidiary of the Company, is guarantor of a 30-year term home
mortgage loan from The Bank of New York to Mr. Lavallee in the principal amount
of $224,000. Also in connection with the purchase of this residence, Mr.
Lavallee is indebted to SCOR U.S. in respect of a demand promissory note in
favor of SCOR U.S. The largest amount of indebtedness outstanding on the note at
any time during 1994 was $24,000. The amount outstanding as of April 18, 1995
was $12,469.20. The note bears interest at 7.82%.
Mr. Michael Walsh, Senior Vice President and Treasurer until his resignation
on November 18, 1994, was indebted to SCOR U.S. in respect of various promissory
notes executed in connection with the exercise of stock options. The largest
aggregate amount outstanding on the notes at any time during 1994 was $171,289.
The amount of the indebtedness was paid in full as of December 31, 1994.
Pursuant to a service agreement, SCOR U.S. and SCOR S.A. have agreed to
reimburse the other for services provided by various personnel. The amount of
the reimbursement for the services provided is determined by allocation of the
actual costs, including salary and related expenses. Such payments were
immaterial during 1994.
SCOR U.S.'s operating subsidiaries assume reinsurance from SCOR S.A. and
other affiliated companies primarily on a quota share or surplus share basis.
Written premiums assumed from these companies (and the percentage of gross
written premiums) were approximately $7,845,000 (2.6%), for the year ended
December 31, 1994. Of this amount, approximately $6,959,000 was assumed from
SCOR S.A.
SCOR U.S.'s operating subsidiaries also retrocede reinsurance to SCOR S.A.
and other affiliated companies, primarily on a quota share or surplus share
basis. The total written premiums written ceded by SCOR U.S.'s subsidiaries
under retrocession agreements to affiliated companies in 1994 were $35,644,000.
Pursuant to a Net Aggregate Excess of Loss Retrocessional Agreement dated as
of July 1, 1986 ("the 1986 Retrocessional Agreement"), SCOR S.A. reinsured SCOR
Re for adverse loss development from pre-1986 business that exceeded the total
of loss reserves established as of June 30, 1986, and premiums earned after June
30, 1986, from such pre-1986 business. The 1986 Retrocessional Agreement
provided protection to the Company for business underwritten by SCOR Re only and
did not provide coverage for pre-1986 business underwritten by General Security
Assurance Corporation of
20
New York ("General Security"). However, business underwritten by General
Security and The Unity Fire and General Insurance Company ("Unity Fire") is
protected against adverse development by a separate net aggregate excess of loss
retrocessional agreement, as described below. The 1986 Retrocessional Agreement
terminated on December 31, 1993, at which time SCOR S.A.'s liability to SCOR Re
was $16,224,000. This amount is the actuarially determined expected ultimate
loss from the pre-1986 business in excess of the "aggregate deductible" (which
is defined as the total of net outstanding loss and loss expense reserves, net
incurred but not reported loss reserves and net unearned premium reserves
established as of June 30, 1986 for the pre-1986 business, plus all net premiums
and future net premium adjustments earned after June 30, 1986 under
retrospectively rated treaties for such business). During the first quarter of
1994, SCOR Re received $16.2 million from SCOR S.A. in settlement of its
liability under this agreement.
SCOR Re and SCOR S.A. entered into a new Net Aggregate Excess of Loss
Agreement (the "1994 Retrocessional Agreement") effective January 1, 1994, which
protects the same business covered under the 1986 Retrocessional Agreement.
Under this Agreement, SCOR Re is responsible for any further adverse development
up to $8,800,000, at which point the 1994 Retrocessional Agreement attaches and
provides coverage for up to $10,000,000 of any additional adverse development.
SCOR Re paid a premium of $2,000,000 for this coverage, which expires on
December 31, 2004. At December 31, 1994, no recovery was recognized under this
Agreement. In addition, based on the experience under the 1994 Retrocessional
Agreement, SCOR Re is eligible to receive a contingent commission of up to
27.75% of the premium.
SCOR S.A. entered into a Net Aggregate Excess of Loss Retrocessional
Agreement (the "1990 Retrocessional Agreement") with each of Unity Fire and
General Security, pursuant to which SCOR S.A. agreed to reinsure those companies
to the extent that their net ultimate incurred losses (as defined in the
agreements) arising in 1989 and prior accident years exceed an aggregate
deductible. As a result of the January 1, 1991 assumption by General Security of
the rights, liabilities and obligations of Unity Fire, the Net Aggregate Excess
of Loss Retrocessional Agreement with Unity Fire was terminated and the Net
Aggregate Excess of Loss Retrocessional Agreement with General Security was
amended (as so amended, the "Agreement") to include the protection formerly
provided to Unity Fire by its retrocessional agreement with SCOR S.A. As a
result of the merger of General Security into SCOR Re, the protection under the
Agreement is now for the benefit of SCOR Re. The aggregate deductible is defined
as the sum of net outstanding loss and loss expense reserves and net incurred
but not reported loss reserves as of December 31, 1989, for 1989 and prior
accident years, as documented in the 1989 statutory financial statements of
Unity Fire and General Security. This amount has been established at a combined
aggregate of $93,830,000. The annual premium for this protection is $210,000
through 2004. The Agreement continues in force until all covered losses are
settled. At December 31, 1994, SCOR S.A.'s estimated liability under the
Agreement was approximately $11.7 million.
SCOR S.A. provides letters of credit in favor of SCOR U.S.'s operating
subsidiary in amounts equal to its estimated liability under its reinsurance
agreements with such companies (as re-estimated on a quarterly basis). The
amount of letters of credit provided by SCOR S.A. at December 31, 1994 was
approximately $134,500,000.
21
COMPENSATION POLICIES AND PERFORMANCE GRAPH
The disclosure contained in this section of the Proxy Statement shall not be
deemed incorporated by reference into any prior filing by the Company pursuant
to the Securities Act of 1933 or the Securities Exchange Act of 1934 that
incorporates future filings or portions thereof (including this Proxy Statement
or any part thereof).
REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
ON EXECUTIVE COMPENSATION
During 1994, the Compensation Committee (the "Committee") of the Board of
Directors of SCOR U.S. was composed of five non-employee directors who have
never served as officers of or been employed by the Company. The Committee met
eight times during 1994. Mr. Karter, the Chief Executive Officer, and certain
other executive officers of the Company may attend meetings of the Committee,
but are not present during discussions or deliberations regarding their own
compensation.
The Compensation Committee reviews compensation policies and practices and
prior to June 16, 1994 was specifically responsible for (a) reviewing and
approving the compensation of all senior executive officers who do not serve on
the Board; (b) reviewing and recommending to the Board the compensation of
senior executives who also serve on the Board; (c) reviewing new executive
compensation programs or modifications to existing programs; and (d)
administering the annual incentive, long-term performance incentive and stock
option plans of the Company. On June 16, 1994, the powers of the Committee were
amended to modify items (a) and (b) above to provide that it is responsible for
reviewing and approving the compensation of all individuals at or to be elected
to the rank of Vice President or above and/or who have current or proposed
salaries of $100,000 or above.
The Committee approved base salary levels, annual incentive awards and stock
option grants for all executive officers, except the CEO, prior to June 16,
1994. Subsequent to that date, the Committee assumed the responsibility of
approving all actions relating to the compensation of all executives officers,
including the CEO. Prior to the amendment of the Committee's powers on June 16,
1994, the Board approved without modification all compensation recommendations
of the Committee in 1994 relating to the CEO.
COMPENSATION PHILOSOPHY. The overall compensation program is designed to
motivate executives to achieve short and long-term business objectives, reward
executives for their achievements and align the interests of executives and
shareholders. As such, the total compensation package emphasizes variable
incentive pay contingent on Company and individual performance. As the
executive's responsibility level within the Company increases, the portion of
the total compensation package based on Company performance and long-term equity
based awards increases.
Compensation opportunities provided to executive officers are competitive
with similar positions in the industry in order to attract and retain executives
of superior talent who are critical to the Company's success. The Committee
reviews the results of an annual comparison of company performance and executive
compensation levels of a group of domestic publicly-held professional
reinsurance companies (the "Peer Group") and other companies in the
property/casualty industry.
The Peer Group of ten reinsurance companies used in 1994 for compensation
comparisons is identical to the group of companies included in the peer index of
the shareholder return performance
22
graph included in this proxy statement. This Peer Group may change as the
Company or its competitors change their focus, merge or are acquired, or as new
competitors emerge. The Peer Group used in 1994 is identical to the Peer Group
used in the 1993 review.
As a matter of Company policy, Jacques P. Blondeau, Chairman, and Serge
Osouf, Vice Chairman, do not participate in the Company's Annual Incentive,
Pension, Savings and Supplemental Retirement Plans due to their participation in
similar plans at SCOR S.A., the principal shareholder of the Company. For other
officers of the Company, the executive compensation program at present comprises
base salary, annual incentive awards and stock options. In addition, certain
senior executives receive long-term performance unit incentives.
BASE SALARY. To attract and retain superior talent, salaries are managed at
a percentile level above the median of the Peer Group and broader industry
market data. The Committee reviews and approves (or recommends to the Board as
noted above) base salaries annually and considers competitive salary levels,
individual contributions and individual responsibility levels. The total
compensation program is designed to limit fixed base salary increases and place
greater emphasis on performance-based incentives. The Committee approved or
recommended a base salary level to be effective April 1, 1994 for each executive
officer.
ANNUAL INCENTIVES. The 1994 Annual Incentive Plan (the "Plan") was designed
to reward participating executives for annual company performance and individual
contribution towards the Company's success. Company performance factors upon
which the Plan is based include return on equity, combined ratio and expense
control. These factors are weighted 45%, 45% and 10%, respectively, in
determining an overall company performance award factor. Specific threshold,
target and superior performance levels are defined for each of these three
measures at the beginning of each annual performance period. Individual
performance is based on predetermined criteria relative to business/functional
goals and individual position responsibilities. Company and individual
performance components of the annual incentive award are weighted according to
the participant's level and function. The more senior executive levels are
rewarded relatively more on the basis of Company performance. The corresponding
Company and individual performance weightings for the Named Officers annual
incentive awards were 80% and 20%, respectively.
Target awards, representing the pre-established guideline amount to be paid
each year if annual goals are achieved, are set to reflect competitive peer
group and industry practices. The target award for the Named Officers is 35% of
base salary. Actual annual incentive payments may range from 0% to 150% of
target awards to the extent that Company and individual performance meet the
identified goals. Awards under the annual incentive plan are made in March of
each year for performance in the prior year.
The 1994 Annual Incentive Plan provides that if the Company has no net
income for the year under generally accepted accounting principles ("GAAP") no
payments will be made under the Plan design. Since the Company had a net loss
for 1994, no payments were made under the Plan to any participant, including the
Named Officers.
LONG-TERM INCENTIVE PROGRAM. SCOR's Long-Term Incentive Program consists of
stock options and a long-term performance incentive plan. Stock option awards
constitute 100% of the long-term incentive compensation for all participants,
except certain senior executives. Such senior executives,
23
including the Named Officers, receive 50% of long-term incentive compensation
opportunity in stock options and 50% in performance incentive units.
Target award guidelines for all long-term plans have been established so
that the total long-term incentive award opportunities for senior executives are
competitive with peer group levels, with actual award values varying with
Company performance.
STOCK OPTION PLANS. Stock option awards are intended to reinforce the
importance of shareholder value creation and allow key employees to accumulate
equity ownership in the Company. Target option award guidelines reflect
competitive peer group practices and have been established as a percentage of
base salary representing a targeted gain from options. The targeted gain amount
is divided by the projected gain in value per option (based on an assumed stock
price growth rate) to determine the target number of options to award the
executive. The Committee may also consider Company and individual performance
assessments when determining the actual number of shares granted and increase or
decrease individual awards accordingly. The number of options previously awarded
to and currently held by executive officers is reviewed but is not an important
factor in determining the size of current grants.
Stock option grants were made in 1994 to select senior executives, including
the Named Officers, under the SIP, adopted in 1986. The term of each option is
ten years and one month. Options from the 1994 grant vest is six months from the
date of grant. The exercise price of each option is equal to 100% of the fair
market value of a share of the Company's common stock on the business day
immediately prior to the date of the option grant.
Stock option grants under the SOP, adopted in 1991, were also made in 1994
to all employees of SCOR U.S., including the Named Officers. The term of each
option is ten years and options from the 1994 grant vest over a four year
period. The exercise price of each option is equal to 100% of the fair market
value of a share of the Company's common stock on the date of the option grant.
These option grants were awarded to promote a stronger relationship between
key employees and the Company's strategic business goals, as well as shareholder
value creation.
PERFORMANCE INCENTIVE PLAN. The performance incentive plan is limited in
participation to select senior executives, including the Named Officers, whose
decisions have the greatest potential to impact long-term Company performance.
Performance units are designed to link a portion of executive compensation to
the Company's growth in book value over a five year period. The target award
guidelines for this group of executives reflect competitive compensation
practices and represent a targeted gain from the performance units of 42.5% of
base salary. This percentage amount of salary is divided by a targeted 5 year
growth in book value per share and accrued dividends to determine the target
number of units to be awarded to the executive. The Committee may also consider
Company and individual performance assessments when determining the actual
number of units granted and increase or decrease individual awards accordingly.
The number of performance units previously awarded to and currently held by
executive officers is reviewed but is not an important factor in determining the
size of current awards.
Grants are made every other year with a unit base value equal to the book
value per share of Company common stock on December 31 of the preceding year.
Depending on actual growth in book value at the end of the five year performance
period, targeted gains may or may not be realized. A
24
minimum threshold growth in book value that is established by the Committee at
the beginning of the performance period must be reached in each performance
period before any cash awards are made, and executives must remain with the
Company until the end of the five year period (excluding death, disability or
normal retirement).
Since the inception of the plan in 1991, grants have been made to
executives, including the Named Officers, in 1991 and 1993, and the first plan
payout, if any, would be for the performance period ending December 31, 1995.
Total executive compensation is highly dependent upon achievement of
performance goals and actual Company performance and, thus, may fall above or
below the targeted levels.
CEO COMPENSATION. On September 30, 1994, Mr. Jerome Karter became Chief
Executive Officer and President of SCOR U.S. Prior to that appointment, Mr.
Karter was Executive Vice President of SCOR U.S.
Prior to Mr. Karter being named CEO, Mr. Patrick Peugeot and Mr. Jacques
Blondeau, currently Chairman of the Board of SCOR S.A., each held the position.
Mr. Peugeot served as CEO of the Company until his resignation therefrom on June
16, 1994. Mr. Blondeau then served as CEO from June 16, 1994 to September 30,
1994. Mr. Peugeot remained as Chairman of the Board until September 30, 1994
when he resigned from that position. Mr. Blondeau was elected Chairman of the
Board on September 30, 1994. During the time in 1994 when Mr. Peugeot and Mr.
Blondeau served as CEO, no compensation actions were taken with respect to Mr.
Peugeot. Mr. Blondeau's base salary was increased to $205,000 in September,
1994, representing a 17% increase from 1992. This increase was made in
consideration of his responsibilities with the Company, as well as the fact that
his base salary had not been increased since April, 1992.
The compensation of the Company's current Chief Executive Officer, Mr.
Karter, consists of base salary, annual incentive, stock options and performance
incentive units, and is based on the policies and programs as described above.
In 1994, Mr. Karter's annual base salary was $304,623, representing a 4.4%
increase from 1993 that reflected his responsibilities as Executive Vice
President, prior to being named CEO. No action was taken with respect to Mr.
Karter's base salary at the time of his appointment as CEO. As previously
described, Mr. Karter did not receive an annual incentive award for 1994
performance.
Under the SIP, Mr. Karter was awarded a stock option grant on November 2,
1994 of 25,000 shares of Common Stock with an exercise price of $11.125 . Mr.
Karter also received a stock option grant on November 30, 1994 under the SOP of
13,000 shares of Common Stock with an exercise price of $9.00. This award was a
part of the option grants made by the Company to all employees. Both stock
option grants were awarded to align the CEO's interests with the shareholders of
the Company and increase the CEO's stake in long term company success.
The Compensation Committee believes that compensation decisions made with
respect to the current CEO, Mr. Karter, and the other executive officers,
including the Named Officers, are consistent with the Company's compensation
philosophy and appropriately tie 1994 compensation to Company business
objectives, absolute and relative Company performance and competitive market
practices, as defined by the Peer Group and broader property/casualty insurance
industry data.
25
Section 162(m) of the Code, enacted in 1993, generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
Company's Chief Executive Officer and four other most highly compensated
executive officers. Qualifying performance based compensation will not be
subject to the deduction limit if certain requirements are met. It is the intent
of the Committee to have the Company provide compensation, to the extent
possible, that is tax deductible in compliance with the new section 162(m) of
the Internal Revenue Code. At this time the Committee is not amending any
compensation plans to maintain deductibility under the definition of
"performance based compensation" as none of the SCOR U.S. executives, including
the CEO, are expected to receive non-qualifying performance based compensation
above the $1 million cap.
COMPENSATION COMMITTEE
Raymond H. Deck, Chairman (1)
Michel J. Gudefin
John W. Popp
David J. Sherwood
- ------------
(1) Appointed Committee Chairman on September 30, 1993.
26
CORPORATE PERFORMANCE GRAPH
The following graph compares the Company's Common Stock performance with the
performance of the Standard & Poor's 500 Stock Index ("S&P 500"), and the
current Peer Group Index (" Peer Group"), by measuring the changes in common
stock prices from December 31, 1989 plus reinvested dividends. The Current Peer
Index includes the following publicly traded reinsurance companies: American Re
Corporation, General Re Corporation, NAC Re Corporation, National Re
Corporation, PXRE Corporation (name changed from Phoenix Re Corporation in
1994), Piedmont Management Company, Inc., Re Capital Corporation, Transatlantic
Holdings Inc., Trenwick Group Inc. and Zurich Reinsurance Centre Holdings, Inc.
Total return indices reflect reinvested dividends and are weighted on a market
capitalization basis at the beginning of each relevant time period.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL SHAREHOLDER RETURN
AMONG SCOR U.S., S&P 500 AND PEER GROUP
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
SCOR U.S. $100 $89 $113 $130 $99 $66
S&P 500 $100 $97 $126 $135 $149 $150
Peer Group* $100 $107 $123 $148 $135 $153
* Market capitalization weightings for peer group companies were made as of
the beginning of each year, per SEC regulations.
The graph assumes $100 invested on 12/31/89 in the Company's Common Stock,
S&P 500 Index, and the Peer Group Index. Values are as of December 31 of
specified year assuming that dividends are reinvested.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
While stockholder approval is not required, the Board has determined to
submit to stockholders for their ratification the appointment of KPMG Peat
Marwick as independent auditors of SCOR U.S. for the year 1995. In the event of
a negative vote on this proposal, the Board may nevertheless appoint
27
KPMG Peat Marwick as independent auditors of SCOR U.S. for the year 1995 unless
the Board finds other compelling reasons for making a change. Disapproval of
this resolution will be considered as advice to the Board to select other
independent auditors for the year 1996. Representatives of KPMG Peat Marwick
will be present at the Annual Meeting and will be given an opportunity to make a
statement and answer any questions at such time.
THE BOARD RECOMMENDS A VOTE FOR RATIFICATION.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than 10% of a registered class
of the Company's common stock, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and the New York Stock
Exchange.
Based on the Company's review of all insider's filings and written
representations from reporting persons, the Company believes there were no
Section 16(a) violations for 1994, except for Mr. R. Daniel Brooks, who at the
time of the filing was a Section 16(a) officer and on whose behalf one report on
Form 4, reporting one transaction, was inadvertently not timely filed by the
Company.
STOCKHOLDERS PROPOSALS
Any holder of Shares desiring to make a proposal for inclusion in proxy
material for the Annual Meeting of SCOR U.S. stockholders to be held in June
1996 must ensure that such proposal is received by the Secretary of SCOR U.S. at
the address set forth above no later than December 29, 1995.
OTHER BUSINESS
The Board does not intend to bring any other business before the Annual
Meeting and does not know of any matters to be brought before the Annual Meeting
by others. If any other matter should come before the Annual Meeting, it is the
intention of the persons named in the accompanying proxy to vote the proxy on
behalf of the stockholders they represent in accordance with their judgment.
By Order of the Board of Directors
/s/ JOHN T. ANDREWS, JR.
JOHN T. ANDREWS, JR.
Corporate Secretary
April 28, 1995
PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY AND MAIL IT PROMPTLY. NO POSTAGE
STAMP IS NECESSARY IF MAILED IN THE UNITED STATES.
28
PROXY
1995 ANNUAL MEETING OF STOCKHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby authorizes John T. Andrews, Jr., Jeffrey D.
Cropsey and Maxine H. Verne, or any one of them, with full power of
substitution, to represent the undersigned and to vote all Common Stock of
SCOR U.S. Corporation, a Delaware corporation ("SCOR U.S."), owned by the
undersigned at the Annual Meeting of Stockholders of SCOR U.S. to be held at
10:30 a.m., New York time, on June 16, 1995, at Morgan Guaranty Trust Company
of New York, 60 Wall Street, 47th floor, New York, New York, and any
adjournment thereof, as provided on the reverse side hereof.
The Board of Directors favors the appointment of proxies with authority
to vote FOR the election as directors of all nominees named in the proxy
statement and FOR proposal (2).
This proxy will be voted in accordance with any specification made on the
reverse side hereof. Where no contrary specification is made hereon, this
proxy will be voted FOR the election as directors of all nominees named on the
reverse side hereof, FOR approval of proposal (2), and in accordance with the
discretion of the proxy holders on any other matters or proposals (not known
at the time of solicitation) which may properly come before the meeting or any
adjournment thereof.
The undersigned hereby revokes any proxies heretofore given by the
undersigned.
(Continued and to be dated and signed on the reverse side.)
SCOR U.S. CORPORATION
P.O. BOX 11286
NEW YORK N.Y. 10203-0286
(1) Election of Directors FOR all nominees WITHHOLD AUTHORITY to vote *EXCEPTIONS
listed below listed below for all nominees
listed below
Jacques P. Blondeau, John R. Cox, Jerome Karter, Patrick Peugeot
(INSTRUCTION: To withhold authority to vote for any individual nominee mark the "EXCEPTION" box
and write that nominee's name on the line provided below.)
EXCEPTIONS
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(2) Proposal to ratify the appointment of KPMG Peat FOR AGAINST ABSTAIN
Marwick as independent Auditors of the Corporation
for the fiscal year ending December 31, 1995
Address Change
and/or Comments
Signature should conform exactly to the
name shown on this proxy. Executors,
administrators, guardians, trustees,
attorneys, officers signing for
corporations should give full titles.
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Dated , 1995
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(Signature of Shareholder)
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(Signature of Shareholder)
Votes must be indicated X
(x) in Black or Blue ink.
Sign, Date and Return the Proxy Card Promptly Using the Enclosed Envelope.