1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
JOHN ADAMS LIFE CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ALVIN S. MILDER
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
COMMON STOCK
---------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
2,864,700
---------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
N/A
---------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
---------------------------------------------------------------------
(5) Total fee paid:
N/A
---------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
---------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
N/A
---------------------------------------------------------------------
(3) Filing Party:
N/A
---------------------------------------------------------------------
(4) Date Filed:
N/A
---------------------------------------------------------------------
2
JOHN ADAMS LIFE CORPORATION
11845 W. Olympic Boulevard
Los Angeles, California 90064
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
The Annual Meeting of Shareholders of John Adams Life Corporation (the
"Company") will be held at the Century Plaza Hotel, 2025 Avenue of the Stars,
Los Angeles, California, on June 5, 1997, at 11:00 a.m. for the following
purposes:
l. To elect five directors to hold office until the next annual meeting
or until their respective successors have been elected and
qualified;
2. To ratify the Board of Directors' selection of Ernst & Young LLP as
the Company's independent public accountants for the year ending
December 31, 1996;and
3. To consider and act upon such other matters as may properly come
before the meeting and any adjournment thereof.
Only shareholders of record at the close of business on April 11, 1997,
are entitled to notice of and to vote at the Annual Meeting and any adjournment
thereof.
Whether or not you presently plan to attend the meeting in person, please
date, sign and promptly return the enclosed proxy card. Your giving of such
proxy does not preclude your right to vote in person if you attend the meeting.
A postage prepaid return envelope is enclosed for your convenience in returning
the signed proxy card.
Your early attention to the proxy will be appreciated.
By Order of the Board of Directors
Alvin S. Milder
Secretary
Los Angeles, California
April 30, l997
3
JOHN ADAMS LIFE CORPORATION
11845 W. Olympic Boulevard
Los Angeles, California 90064
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of John Adams Life Corporation (the "Company") of
proxies, including the enclosed proxy, for use at the Company's Annual Meeting
of Shareholders to be held at the Century Plaza Hotel, 2025 Avenue of the Stars,
Los Angeles, California, at 11:00 a.m. on June 5, 1997, and at any adjournment
thereof. A shareholder may revoke the proxy at will at any time prior to the
voting of shares by voting in person at the Annual Meeting or, at any time
before the exercise of the proxy, by filing with the Secretary of the Company a
duly executed proxy bearing a later date or an instrument revoking the proxy.
The approximate date on which this Proxy Statement and accompanying form
of proxy is first being sent to shareholders is April 30, l997.
On the matters coming before the Annual Meeting, shares for which proxies
are received will be voted in accordance with choices specified by the
shareholders by means of the ballot on the proxy. If no choice is specified, the
shares will be voted for the election of the five nominees for director listed
in this Proxy Statement and for the other matters set forth in the accompanying
Notice of Annual Meeting. The Board of Directors knows of no matters to come
before the Annual Meeting other than the matters referred to in this Proxy
Statement. If, however, any matters properly come before the meeting, it is the
intention of the persons named in the accompanying proxy to vote such proxies in
accordance with their best judgment thereon.
VOTING
Only shareholders of record at the close of business on April 11, 1997,
the record date for the Annual Meeting, are entitled to notice of and to vote at
such meeting. On April 11, 1997, there were outstanding 2,864,700 shares of
Common Stock which constituted all of the outstanding voting securities of the
Company. Holders of record, on the record date, are entitled to one vote for
each share held by them. However, with respect to the election of directors
only, each shareholder may cumulate his or her votes with respect to candidates
whose names have been placed in nomination prior to the vote if, but only if,
any shareholder has given notice of his or her intention to cumulate his or her
votes. In the event there is cumulative voting for directors, each shareholder
(i) will have a number of votes equal to the number of directors to be elected
(five) multiplied times the number of shares owned by that shareholder and (ii)
may give all such votes to one nominee or divide such votes among the various
nominees in any manner. The proxy solicited by the Board of Directors confers
discretionary authority on the proxies to cumulate votes so as to elect the
maximum number of nominees. The presence at the Annual Meeting, in person or by
proxy, of the holders of a majority of the outstanding shares of the Common
Stock of the Company is necessary to constitute a quorum for the transaction of
business.
2
4
Proposal No. 1
ELECTION OF DIRECTORS
Five directors are to be elected to hold office until the next Annual
Meeting or until their successors are elected and qualified.
It is the intention of the persons named in the enclosed proxy, unless
otherwise specifically instructed, to vote the proxies received by them for the
election of the nominees listed in the table below as directors of the Company.
In the event that there should be cumulative voting in the election of
directors, as set forth in this Proxy Statement under "Voting" above, it is the
intention of such persons to distribute the votes represented by each proxy
among such nominees in such proportion as they see fit, unless otherwise
specifically instructed. Directors will be elected by a plurality of the holders
of common stock entitled to vote at the Annual Meeting and present in person or
by proxy.
All nominees have consented to being named herein and have indicated their
intention to serve if elected. If any nominee named below becomes unavailable
for any reason or if any vacancy on the Company's Board of Directors should
occur before the election, the shares represented by any proxy voting for that
nominee will be voted for the person, if any, as may be designated by the Board
of Directors to replace that nominee or to fill that vacancy on the Board. The
Board has no reason to believe that any nominee will be unavailable or that any
vacancy on the Board of Directors will occur. A director of the Company holds
office until the next Annual Meeting of shareholders, or until his successor is
elected and qualified. The nominees for director listed below were designated by
the Board of Directors of the Company. The information with respect to each
nominee is as supplied or confirmed by such nominee.
The nominees for the Board of Directors, as set forth below, are all
presently directors of the Company.
NAME AGE POSITION DIRECTOR SINCE
Benjamin A. DeMotto 64 Chairman of the Board of Directors, 1976
Chief Executive Officer, President and a
Director of the Company
Nicholas Del Sesto 65 Executive Vice President and a Director 1985
of the Company
Alvin S. Milder 64 Vice President, General Counsel, 1984
Secretary and a Director of the Company
Robert E. Adams 66 Director of the Company 1994
L.E. Chenault 77 Director of the Company 1993
Benjamin A. DeMotto, Chairman of the Board of Directors, Chief
Executive Officer, and President of the Company, has served in those
capacities since January 1976. He is also Chief Executive Officer of
Firingline Corporation. Mr. DeMotto has more than 35 years of experience in
all phases of the life insurance business.
3
5
Nicholas Del Sesto is the Executive Vice President of the Company and
President of Firingline Corporation, positions he has held for more than five
years. Mr. Del Sesto received his CLU designation in 1972 and has more than 35
years of experience in the life insurance business, primarily in the area of
marketing.
Alvin S. Milder is Vice President, General Counsel and Secretary of the
Company. Mr. Milder has practiced law in California for more than 35 years.
Robert E. Adams, a director of the Company, was President and Chief
Executive Officer of Frankona America Life Reassurance Company from June 1983
until his retirement in April 1994. Mr. Adams has over 35 years of experience in
the life insurance business.
L. E. Chenault, a director of the Company, has been a private investor
for over five years and has broad business experience, primarily in the
broadcast industry.
SECURITY INTERESTS OF CERTAIN OWNERS AND MANAGEMENT
The following table sets forth information available to the Company as of
April 10, 1997, as to all shares of the Common Stock owned by (i) the persons
known to the Company to be the beneficial owners of more than five percent of
the Common Stock, (ii) directors and persons nominated to be directors of the
Company, and (iii) all officers and directors of the Company as a group. The
Company has only one outstanding class of equity securities, its Common Stock.
Amount and
Nature of
Beneficial Percentage
Name of Beneficial Owner Ownership(1) Ownership(2)
- ------------------------ ------------ ------------
Benjamin A. DeMotto (3) 1,530,000(4)(5) 50.8%
11845 W. Olympic Boulevard
Suite 905
Los Angeles, California 90064
Nicholas Del Sesto (3) 501,000 17.5%
11845 W. Olympic Boulevard
Suite 905
Los Angeles, California 90064
Patrick W. Hopper 200,000 7.0%
2624 Pebblegod Ave.
Henderson, Nevada 89041
Roger Adams and Joanne Evans Adams 150,000 5.2%
Co-Trustees of the Roger Adams and
Joanne Adams Living Trust
RR 10 Box 131
Santa Fe, New Mexico 87501
4
6
Alvin S. Milder (3) 50,000(6) 1.7%
11845 W. Olympic Boulevard
Suite 905
Los Angeles, California 90064
L.E. Chenault (3) 35,000(7) 1.0%
17642 Sumiya Dr.
Encino, California 91316
Robert E. Adams (3) 20,000(8) *
2 Wolcott Lane
Old Lyme, Connecticut 06371
All officers, nominees, and directors of
the Company and its subsidiaries
as a group (5 persons) 2,136,000(9) 68.8%
- ----------------
* Less than 1% of the class.
(1) Except as otherwise indicated in notes to the table, and subject to
applicable community property laws and similar statutes, the persons listed
as beneficial owners of shares have, to the best of the Company's knowledge,
sole voting and investment power with respect to the shares.
(2) Percentages are stated to include exercisable stock options accounted for in
the column listing Beneficial Ownership for those persons holding
exercisable stock options.
(3) Director of the Company.
(4) Includes 250,000 shares of restricted shares, which were issued pursuant to
Mr. DeMotto's employment agreement with the Company (see "Employment
Contracts").
(5) Includes options to purchase 150,000 shares, which are currently
exercisable.
(6) Includes 3,000 shares owned by a retirement trust of which Mr. Milder is
sole trustee and options to purchase 45,000 shares, which are currently
exercisable.
(7) Includes options to purchase 25,000 shares, which are currently exercisable.
(8) Includes options to purchase 20,000 shares, which are currently exercisable.
(9) Includes options to purchase 240,000 shares, which are currently
exercisable.
INFORMATION REGARDING THE BOARD OF DIRECTORS
AND ITS COMMITTEES
The standing committees of the Board of Directors include the Audit
Committee and the Compensation and Stock Option Committee. The Board of
Directors does not have a nominating committee; this function is handled by the
Executive Committee.
AUDIT COMMITTEE. The Board of Directors has delegated certain of its
authority to an Audit Committee. This Committee makes recommendations to the
Board of Directors concerning the selection of the Company's independent
accountants, discusses with such accountants their plans for the annual audits
of the Company and its subsidiaries and approves such plans, reviews with
management the fees to be charged by the independent accountants, reviews with
the independent accountants and with management the scope and results of the
accountants' reports, and reviews and monitors the implementation of suggestions
made by the independent accountants. The Audit Committee is currently
5
7
comprised of Messrs. Adams, Chenault and DeMotto. The Audit Committee had one
meeting during the fiscal year ended December 31, 1996.
COMPENSATION AND STOCK OPTION COMMITTEE. The Compensation and Stock Option
Committee makes recommendations to the Board of Directors with respect to the
compensation and benefits to be paid to certain officers and options to be
granted under the Company's 1990 Stock Option Plan. The current members of this
committee are Messrs. Adams and Chenault. The members of the Compensation and
Stock Option Committee held one meeting during the fiscal year that ended
December 31, 1996.
EXECUTIVE COMMITTEE. The functions of a nominating committee are handled
by the Company's Executive Committee. Except for certain powers which, under
California law and under the Company's Bylaws may be exercised by only the full
Board of Directors, the Executive Committee may excersise all powers and
authority of the Board of Directors in the management of the business of the
Company. The Committee, currently comprised of Messrs. Del Sesto, DeMotto and
Milder, communicated frequently and held one meeting during the fiscal year
ended December 31, 1996. This Committee recommends nominees for election to the
Board of Directors and other Committees of the Board. The Committee will
consider a nominee for election to the Board recommended by a shareholder if the
shareholder submits the nomination to the Company. Any such nomination must be
sent as set forth below in this Proxy Statement under "Shareholder Proposals."
The request must include all information relating to the proposed nominee
required by law to be disclosed in solicitations of proxies for election of
directors.
DIRECTORS MEETINGS. The Board of Directors communicated frequently during
the fiscal year ended December 31, 1996, and held seven formal meetings. Mr.
Adams was unable to attend three of the seven meetings of the Board held in
1996; he attended both meetings of the committees on which he served in 1996.
All other directors attended at least 75% of the aggregate of (1) the total
number of meetings of the Board of Directors held during the period; and (2) the
total number of meetings held by all committees of the Board on which he served
during the period.
COMPLIANCE WITH SECTION 16 (a) OF THE SECURITIES EXCHANGE ACT
Section 16 (a) of the Securities Exchange Act of 1934 requires that the
Company's directors and executive officers and persons who own more than ten
percent of the Company's Common Stock file with the Securities and Exchange
Commission initial reports of ownership and reports of changes in their
ownership of the Company's Common Stock. Executive officers, directors and
greater than ten-percent shareholders are required by SEC regulations to furnish
the Company with copies of all Section 16 (a) forms they file. Based upon review
of the copies of such reports furnished to the Company and written
representations that no other reports were required, the Company believes that
its officers, directors, and greater than ten-percent beneficial owners were in
compliance with all applicable Section 16 (a) filing requirements during the
fiscal year ended December 31, 1996.
EXECUTIVE COMPENSATION
The Securities and Exchange Commission has promulgated new rules
significantly revising the disclosure requirements regarding executive
compensation. The following table and notes set forth information regarding
compensation paid or accrued as required by said rules.
SUMMARY COMPENSATION TABLE
LONG TERM
NAME AND COMPENSATION
PRINCIPAL OTHER ANNUAL AWARDS
POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION($)(2) OPTIONS/SARS (#)(3)
- -------- ---- --------- ----------- ------------------ -------------------
Benjamin A. DeMotto 1996 210,365 109,627 2,884
Chief Executive 1995 211,380 18,051 2,459
Officer 1994 194,105 2,884 150,000
6
8
(1) Pursuant to Mr. DeMotto's employment agreement (see "Employment Contracts"),
his bonuses are determined in accordance with the formula set forth in the
agreement.
(2) These amounts represent commissions paid to Mr. DeMotto in accordance with
the Company's regular commission schedule on policies purchased by him or
his immediate family (see "Certain Transactions").
(3) In 1994, Mr. DeMotto was granted options to purchase 150,000 shares of the
Company's common stock under the terms of his employment agreement (see
"Employment Contracts"). During the 1991 fiscal year, Mr. DeMotto was
granted 250,000 shares of the Company's common stock under the terms of his
1991 employment agreement (see "Employment Contracts"). These shares were
restricted stock when issued; pursuant to the agreement, these shares vested
on July 1, 1996. These 250,000 shares had a value of $156,250 on July 1,
1996, based on a $.625 per share bid price as reported on the OTC Bulletin
Board.
EMPLOYMENT CONTRACTS
The Company entered into an employment agreement with its Chief Executive
Officer, Benjamin A. DeMotto, in 1994 upon the expiration of his 1991 employment
agreement. The new agreement, which became effective July 1, 1994, is for a
five-year term. The agreement provides for a base compensation of $210,000 per
year and for incentive compensation bonus based upon the attainment of goals.
The 1994 employment agreement also provides for a grant of options to Mr.
DeMotto on July 1, 1994, for 150,000 shares of the Company's common stock. The
agreement may be terminated for cause by the Company, and by Mr. DeMotto in the
event of a material breach of the agreement by the Company or in the event of a
merger or transfer of substantially all of the assets of the Company. In the
event of a change of control, the agreement remains binding on the Company and
any successor. During the 1991 fiscal year, Mr. DeMotto was granted 250,000
shares of the Company's common stock under the terms of his 1991 employment
agreement; these shares vested, pursuant to the employment agreement, on July 1,
1996 (see "Executive Compensation").
COMPENSATION OF DIRECTORS
The directors who are not officers or employees of the Company are
currently compensated for services as directors at the rate of $500 for each
meeting of the Board of Directors attended. In addition, in 1990 the Company
established a Non-Employee Director Stock Option Plan. Pursuant to such plan,
non-employee directors receive options of 10,000 shares of the Company's common
stock at the time of his or her initial election or appointment to the Board and
additional options of 5,000 shares of the Company's common stock each time he or
she is re-elected as a non-employee member of the Board. During 1996, the
Company made no other payments to directors with respect to participation on the
Board or Board committees.
CERTAIN TRANSACTIONS
The Company's officers, directors and key employees have in the past and
may in the future purchase insurance policies sold by the Company in the normal
course of its business. Those officers of the Company who are duly licensed
agents are paid commissions in accordance with the Company's regular commission
schedule on policies purchased by such officers and members of their immediate
families (see "Executive Compensation"). In addition to the compensation paid to
Alvin S. Milder as an officer of the Company, the Company paid fees aggregating
approximately $60,000 to him in 1996 for legal services rendered to the Company.
PROPOSAL NO. 2
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors, subject to ratification by the shareholders, has
appointed Ernst & Young LLP as the Company's independent accountants for the
fiscal year ending December 31, 1996. The
7
9
persons named in the accompanying form of proxy intend to vote proxies in such
form to ratify the appointment. If the appointment is not ratified, or if Ernst
& Young LLP declines to act or becomes incapable of action, or if its employment
is discontinued, the Board will appoint public accountants whose continued
employment after the next Annual Meeting of Shareholders shall be subject to
ratification by shareholders. Representatives of Ernst & Young LLP are expected
to be available at the Annual Meeting and will have an opportunity to make a
statement, if they so desire, and to respond to appropriate questions raised.
SHAREHOLDER PROPOSALS FOR 1998 ANNUAL MEETING
Shareholders who wish to have their proposals considered for inclusion in the
Company's Proxy Statement for the 1998 Annual Meeting should deliver such
proposals in writing to the Company at 11845 W. Olympic Boulevard, Suite 905,
Los Angeles, California 90064, Attention: Secretary. Such proposals must be
received by the Company at the foregoing address no later than March 1, 1998, to
be considered for inclusion in the Company's Proxy Statement and form of proxy
relating to that Meeting.
EXPENSES OF SOLICITATION
The expense of printing and mailing proxy material will be borne by the Company.
In addition to the solicitation of proxies by mail, solicitation may be made by
certain directors, officers and other employees of the Company by personal
interview, telephone, telefax or other types of communication. No additional
compensation will be paid for such solicitation. Copies of solicitation material
will be furnished to brokerage houses, fiduciaries and custodians to forward to
beneficial owners of Common Stock held in their names. The Company will
reimburse such persons for their reasonable expenses in forwarding solicitation
material to such beneficial owners.
AVAILABILITY OF ANNUAL REPORT ON FORM 10-KSB
THE COMPANY WILL FURNISH WITHOUT CHARGE TO SHAREHOLDERS A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996, AS
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. REQUESTS MUST BE IN WRITING
AND SHOULD BE ADDRESSED TO THE COMPANY AT 11845 W. OLYMPIC BOULEVARD, SUITE 905,
LOS ANGELES, CALIFORNIA 90064, ATTENTION: SECRETARY.
OTHER MATTERS
The Board of Directors is not aware of any other matter that may be presented
for action at the Annual Meeting, other than the matters set forth herein. In
the event any other matter requiring a vote of the shareholders should arise, it
is intended that the proxy holders, given discretionary authority in the
proxies, will vote the proxies in a manner which they deem, in their judgment,
to be in the best interests of the Company.
You are urged to vote the accompanying proxy and sign, date and return it in the
enclosed envelope at your earliest convenience, whether or not you presently
plan to attend the meeting in person.
By Order of the Board of Directors
Alvin S. Milder
Secretary
Los Angeles, California
April 30, 1997
8
10
PROXY JOHN ADAMS LIFE CORPORATION
11845 W. Olympic Boulevard
Los Angeles, California 90064
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Benjamin A. DeMotto, Nicholas Del Sesto and
Alvin S. Milder as Proxies, each with the power to appoint his substitute, and
hereby authorizes them to represent and to vote, as designated below, all the
shares of common stock of John Adams Life Corporation which the undersigned is
entitled to vote at the annual meeting of shareholders to be held on June 5,
1997, or any adjournment thereof.
1. ELECTION OF DIRECTORS [ ] FOR all nominees listed below [ ] WITHHOLD AUTHORITY to
(except as marked to the contrary vote for all nominees listed below
below)
Robert E. Adams, L.E. Chenault, Nicholas Del Sesto, Benjamin A. DeMotto,
Alvin S. Milder
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE WRITE
THAT NOMINEE'S NAME ON THE SPACE PROVIDED BELOW.)
- --------------------------------------------------------------------------------
2. TO RATIFY THE BOARD OF DIRECTORS' SELECTION OF ERNST & YOUNG LLP as the
independent public accountants of the Company.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(CONTINUED, AND TO BE SIGNED AND DATED, ON THE OTHER SIDE)
11
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR ALL NOMINEES FOR
DIRECTOR AND FOR THE ABOVE PROPOSALS.
Dated:_____________, 1997
-------------------------
Signature
-------------------------
Signature, if held
jointly
Please sign exactly as
name appears below. When
Shares are held by joint
tenants, both should
sign. When signing as
attorney, as executor,
administrator, trustee or
guardian, please give
full title as such. If a
corporation, please sign
in full corporate name by
President or other
authorized officer. If a
partnership, please sign
in partnership name by
authorized person.
-------------------------
PLEASE MARK, SIGN, DATE
AND
RETURN THE PROXY CARD
PROMPTLY
USING THE ENCLOSED
ENVELOPE.
-------------------------