THE ALLSTATE CORPORATION
ALLSTATE PLAZA
NORTHBROOK, ILLINOIS 60062
March 28, 1997
Jerry D. Choate
Chairman of the Board
Dear Stockholder:
You are cordially invited to attend the Company's 1997 annual meeting
to be held on Tuesday, May 20, 1997 at 1:30 p.m., central time, in the Education
Center of the Chicago Botanic Garden, 1000 Lake Cook Road, Glencoe, Illinois.
The notice of meeting and proxy statement following this letter
describe the business expected to be transacted at the meeting. During the
meeting we will also report on the current activities of the Company, and you
will have an opportunity to ask questions.
Whether or not you plan to attend this meeting, we urge you to sign and
date the enclosed proxy card and return it as soon as possible so that your
shares will be represented. The vote of every stockholder is important. Please
note that mailing your completed proxy will not prevent you from voting in
person at the meeting if you wish to do so.
Your Board of Directors and management look forward to greeting
personally those stockholders who are able to attend.
Sincerely,
Jerry D. Choate
THE ALLSTATE CORPORATION
ALLSTATE PLAZA
NORTHBROOK, ILLINOIS 60062
MARCH 28, 1997
ROBERT W. PIKE
VICE PRESIDENT,
SECRETARY AND GENERAL COUNSEL
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
----------------------------------------
The annual meeting of stockholders of The Allstate Corporation (the
"Company") will be held in the Education Center of the Chicago Botanic Garden,
1000 Lake Cook Road, Glencoe, Illinois on Tuesday, May 20, 1997, at 1:30 p.m.,
central time, for the following purposes:
1. to elect nine (9) directors;
2. to vote on the recommendation of the Board of Directors that
Deloitte & Touche be appointed auditors of the Company for
1997; and
3. to transact such other business as may properly come before
the meeting.
By Order of the Board of Directors,
Robert W. Pike
Secretary
THE ALLSTATE CORPORATION
PROXY STATEMENT
MARCH 28, 1997
This proxy statement is furnished in connection with the solicitation
of proxies on behalf of the Board of Directors of The Allstate Corporation for
the annual meeting of stockholders to be held on May 20, 1997. Only stockholders
of record at the close of business on March 21, 1997 are entitled to notice of
and to vote at the meeting. There were 438,163,622 common shares outstanding and
entitled to vote on that date. Each stockholder will be entitled to one vote per
share on the election of directors and on each other matter to be voted on. The
holders of a majority of the total number of shares entitled to vote, present in
person or represented by proxy, constitute a quorum for the transaction of
business.
The Company is mailing its annual report for the year ended December
31, 1996 together with this proxy statement and the enclosed proxy on or about
March 28, 1997, to stockholders entitled to vote at the annual meeting.
When you sign and return the enclosed proxy, the shares represented
thereby will be voted for the nominees for director listed in this proxy
statement, and for the proposal set forth in Item 2. Returning your completed
proxy will not prevent you from voting in person at the meeting should you be
present and wish to do so. In addition, you may revoke your proxy any time
before it is voted by sending notice to the Secretary of the Company prior to
the meeting. If you submit more than one proxy, each later-dated proxy will
revoke all previous proxies.
Participants in The Savings and Profit Sharing Fund of Allstate
Employees (the "Fund") who received this proxy statement in their capacity as
such participants will be receiving a voting instruction form from the Fund
Trustee in lieu of a proxy card, to direct voting of the shares in which they
have beneficial interest.
Directors will be elected at the annual meeting by a plurality of the
votes cast at the meeting by the holders of shares represented in person or by
proxy and entitled to vote. Approval of the proposal set forth under Item 2
requires the affirmative vote of a majority of the votes cast at the meeting by
the holders of shares represented in person or by proxy and entitled to vote.
With respect to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on the
proposal set forth under Item 2 and will be counted as shares present for
determination of a quorum, and will have the effect of a negative vote on the
item voted upon. Broker non-votes with respect to Item 2 will not be counted in
determining the amount of shares voted on such item and will have no effect on
the outcome of the vote on the item.
In connection with all meetings of stockholders, all proxies, ballots
and vote tabulations
1
that identify the particular vote of a stockholder are kept confidential, except
that disclosure may be made (i) to allow the independent election inspectors to
certify the results of the vote; or (ii) as necessary to meet applicable legal
requirements, including the pursuit or defense of judicial actions. The
tabulator and the inspectors are independent of the Company, its directors,
officers and employees. Comments written on proxies, consents or ballots, may be
transcribed and provided to the Secretary of the Company with the name and
address of the stockholder without reference to the vote of the stockholder,
except where such vote is included in the comment or disclosure is necessary to
understand the comment. Information concerning which stockholders have not voted
and periodic status reports on the aggregate vote, including break-downs of vote
totals by different types of stockholders, provided that the Company is not able
to determine how a particular stockholder voted, may be made available to the
Company if the Company so requests.
The Board of Directors expects all nominees named below to be available
for election. In case any nominee is not available, the proxy holders may vote
for a substitute.
2
ITEM 1: ELECTION OF DIRECTORS
Nancy C. Reynolds is not standing for re-election since she will reach
the mandatory retirement age as a director in June 1997. Joshua I. Smith was
elected by the Board of Directors in February 1997 to fill a vacancy on the
Board, and is standing for election by the Company's stockholders for the first
time. Each other nominee was previously elected by the stockholders at the
Company's 1996 Annual Meeting on May 21, 1996, and has served continuously as a
director for the period succeeding the date of his or her election. The terms of
all directors will expire at this Annual Meeting. No person, other than the
directors of the Corporation acting solely in that capacity, is responsible for
the naming of the nominees.
Information as to each nominee follows. Unless otherwise indicated,
each nominee has served for at least 5 years in the business position currently
or most recently held.
3
NOMINEES FOR DIRECTOR
JAMES G. ANDRESS
President and Chief Executive Officer of Warner Chilcott PLC, a
pharmaceutical company, since November 1996. Mr. Andress served as Co-Chief
Executive Officer, Chief Operating Officer and President of Information
Resources, Inc.("IRI"), a market research and corporate software organization,
from May 1994 until September 1995. Previously, Mr. Andress had served as Vice
Chairman and Chief Executive Officer of IRI from June 1993 until May 1994. Mr.
Andress had also served as President and Chief Executive Officer of IRI from May
1990 until June 1993. Mr. Andress is also a director of IRI, Genetics Institute,
Inc., The Liposome Company, Inc., NeoRx Corporation, OptionCare, Inc., Sepracor,
Inc., and Xoma Corporation.
Member: Compensation and Nominating Committee.
Director since 1993. Age: 58.
Common shares: owned -- 1,312.
WARREN L. BATTS
Chairman and Chief Executive Officer of Tupperware Corporation, a consumer
products company, since June 1996. He served as Chairman and Chief Executive
Officer of Premark International, Inc. from September 1986 to June 1996. Mr.
Batts is also Chairman of the Board of Directors of Premark International, Inc.
and a director of Cooper Industries, Inc., Sears, Roebuck and Co., and Sprint
Corporation.
Chairman: Compensation and Nominating Committee.
Director since 1993. Age: 64.
Common shares: owned -- 7,675.
EDWARD A. BRENNAN
Chairman of the Board of Directors, President and Chief Executive Officer
of Sears, Roebuck and Co. from January 1989 until his retirement in August 1995.
Mr. Brennan is also a director of Dean Foods Company, Dean Witter, Discover &
Co., Minnesota Mining and Manufacturing Company, AMR Corporation, The SABRE
Group Holdings, Inc. and Unicom Corporation.
Member: Compensation and Nominating Committee.
Director since 1993. Age: 63.
Common shares: owned -- 217,520
4
JERRY D. CHOATE
Chairman of the Board and Chief Executive Officer of the Company since
January 1, 1995. Mr. Choate was elected President and Chief Executive Officer of
the Company and a member of the Board of Directors on August 10, 1994.
Previously, and since 1989, he served as Senior Executive Vice President of
Allstate Insurance Company ("AIC") and as President of AIC's personal property
and casualty business unit.
Director since 1994. Age: 58.
Common shares: owned-- 27,034
subject to option-- 296,191
JAMES M. DENNY
Managing Director of William Blair Capital Partners, L.L.C., a company
engaged in private equity investments, since September 1995. Mr. Denny served as
Vice Chairman of Sears, Roebuck and Co. from February 1992 until his retirement
in August 1995. Previously, Mr. Denny was Senior Vice President and Chief
Financial Officer of Sears from 1988 to 1992. He is also a member of the board
of directors of GATX Corporation and Gilead Sciences, Inc.
Member: Audit Committee.
Director since 1993. Age: 64.
Common shares: owned -- 85,863.
CHRISTOPHER F. EDLEY
President Emeritus of the United Negro College Fund, Inc., a non-profit
fund raising organization, since April 1991. From April 1973 until his
retirement in April 1991, Mr. Edley served as President and Chief Executive
Officer of the United Negro College Fund, Inc. Mr. Edley is also a director of
AMR Corporation, The Great Atlantic & Pacific Tea Company, Inc., and The Student
Loan Corporation.
Member: Compensation and Nominating Committee.
Director since 1993. Age: 69.
Common shares: owned -- 2,050.
5
MICHAEL A. MILES
Mr. Miles is Special Limited Partner of Forstmann Little & Co., an
investment banking company. Mr. Miles served as Chairman of the Board and Chief
Executive Officer of Philip Morris Companies Inc. from September 1991 until his
retirement in July 1994. He is also a director of Dean, Witter, Discover & Co.,
Dell Computer Corporation, Sears, Roebuck and Co. and Time Warner Inc.
Member: Audit Committee.
Director since 1995. Age 57
Common Shares: owned -- 9,649.
JOSHUA I. SMITH
Chairman and Chief Executive Officer of The MAXIMA Corporation, a company
engaged in technology systems support services. Mr. Smith is also a director of
Caterpillar, Inc., Federal Express Corporation and Inland Steel Industries, Inc.
Member: Audit Committee
Director since 1997. Age 55
Common Shares: owned -0-
MARY ALICE TAYLOR
Executive Vice President - Operations of Citicorp since January 1997. She
had served as Senior Vice President - United States and Canada, of Federal
Express Corporation from September 1994 to January 1997. Previously, she served
as Senior Vice President - Central Support Services of Federal Express from
September 1991 until September 1994. Ms. Taylor is also a director of Autodesk,
Inc. and Perrigo Company.
Member: Audit Committee.
Director since March 1996. Age: 46.
Common shares: owned: -- 768.
6
SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth certain information as to shares of
voting stock of the Company and beneficially owned by each director and nominee,
each executive officer named in the Summary Compensation Table below, and by all
executive officers and directors of the Company as a group, including shares
held as nontransferable restricted shares awarded under the Company's employee
benefit plans and subject to forfeiture under certain circumstances, and shares
subject to stock options exercisable on or prior to April 1, 1997. The
percentage of Company shares beneficially owned by any Company director or
nominee or by all directors and officers of the Company as a group, does not
exceed 1%. Unless indicated otherwise in the footnotes below, all shares are
directly owned as of January 31, 1997.
7
Amount and Nature
of Beneficial
Ownership of
Name Company Shares
- ---- --------------
James G. Andress 1,312
Warren L. Batts 7,675
Edward A. Brennan 217,520
Jerry D. Choate 323,225(a)
James M. Denny 85,863
Christopher F. Edley 2,050
Michael A. Miles 9,649
Joshua I. Smith -0-(b)
Mary A. Taylor 768
Robert W. Gary 79,099(c)
Edward M. Liddy 404,694(d)
Louis G. Lower, II 140,526(e)
Casey J. Sylla 22,258(f)
All directors and 1,822,625(g)
executive officers as
a group
- ----------------------------------------
(a) Includes 296,191 Company shares subject to option.
(b) Mr. Smith did not become a director until February 1997.
(c) Includes 71,837 Company shares subject to option.
(d) Includes 352,242 Company shares subject to option.
(e) Includes 130,888 Company shares subject to option.
(f) Includes 21,668 Company shares subject to option.
(g) Includes 1,336,971 Company shares subject to option.
8
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS(A)
Title of Name and Address Amount and Nature of Percent
Class of Beneficial Owner Beneficial Ownership of Class
- -------- ------------------- -------------------- --------
Common FMR Corporation
Edward C. Johnson 3d
Abigail P. Johnson
82 Devonshire Street
Boston, MA 02109-3614 41,843,925(a) 9.48%
Common The Northern Trust Company
50 S. LaSalle Street
Chicago, IL 60675 26,405,041(b) 6.03%
- --------------------
(a) Information is as of December 31,1996, and is based on information in Form
13G filed by FMR Corporation and its two controlling stockholders, Edward C.
Johnson 3d and Abigail P. Johnson (collectively, the "Group"), on February 14,
1997. Includes 41,841,145 shares over which each member of the Group has sole
dispositive power and 2,780 shares over which FMR Corporation and Edward C.
Johnson 3d have shared voting and dispositive power. FMR Corporation also has
sole voting power over 3,765,206 of the shares reported as beneficially owned
and Edward C. Johnson 3d has sole voting power over 3,817 of the shares reported
as beneficially owned.
(b) As of March 17, 1997, the date The Northern Trust Company became sole
trustee (the "Trustee") of The Savings and Profit Sharing Fund of Allstate
Employees Trust. The Trustee holds the shares on behalf of participants in the
Fund. Beneficial ownership may under certain circumstances include both voting
power and investment power. The information is provided for reporting purposes
only and should not be construed as an admission of actual beneficial ownership.
- -
FURTHER INFORMATION CONCERNING THE BOARD OF DIRECTORS
The Board of Directors held 6 meetings during 1996. Each director
attended at least 75% of the Board meetings and meetings of committees of which
he or she is a member. The standing committees of the Board of Directors and the
number of meetings held by each such committee in 1996 were as follows:
Committee Number of Meetings
Name Held During 1996
- --------- ------------------
Audit Committee 4
Compensation and Nominating
Committee 6
9
The Compensation and Nominating Committee recommends nominees for
election to the Board of Directors, to other committees of the Board and to fill
certain officer positions. The Committee will consider a nominee for election to
the Board recommended by a stockholder if the stockholder submits the
recommendation to the Committee. Stockholders may submit such recommendations by
addressing a letter to the Chairman of the Compensation and Nominating
Committee, The Allstate Corporation, 2775 Sanders Road, Suite F8, Northbrook,
Illinois 60062. Under the Company's By-Laws, if a stockholder wants to nominate
a person for election to the Board at the Company's annual meeting, he must
provide advance notice to the Company in order to place such person into
nomination. Such notice must be received by the Secretary, The Allstate
Corporation, 2775 Sanders Road, Suite F8, Northbrook, Illinois 60062, not less
than 90 nor more than 120 days prior to the first anniversary date of the
preceding year's annual meeting, and must set forth the name, age, principal
occupation, number of shares of Company stock beneficially owned, and the
business and residence addresses of both the proposed nominee and the
stockholder proposing to make such nomination. A copy of these By-Law provisions
is available upon request from the Secretary of the Company.
The Compensation and Nominating Committee also administers the
Company's executive compensation and benefit plans, and makes recommendations to
the Board of Directors concerning the proxy statement and form of proxy, plans
for the annual meeting and policies for stockholder voting, officers'
compensation, nominees for election to the Board, to Board committees and to
certain executive officer positions, and the composition of the Board.
The Audit Committee reviews with management, the Company's independent
public accountants and its internal auditors, upon completion of each audit, the
annual financial statements of the Company, the independent public accountants'
report thereon and the other relevant financial information to be included in
the Company's Annual Report on Form 10-K and its annual report to stockholders,
and reports to the Board of Directors on its review. The Committee also reviews
recommendations made by the independent accountants and internal auditors with
respect to the Company's accounting methods and system of internal control and
reports to the Board on such review. The Audit Committee examines and makes
recommendations to the Board of Directors with respect to the scope of audits
conducted by the Company's independent public accountants and internal auditors.
The Committee reviews reports from the independent accountants and internal
auditors concerning compliance by management with legal provisions and with the
Company's business conduct and ethics policies. The Audit Committee may meet
with the Company's independent accountants and/or internal auditors without
management present. The Committee reviews with the Company's General Counsel the
status of certain pending legal matters. The Committee recommends annually the
appointment of independent accountants. The Committee is authorized to conduct
or authorize special projects or investigations related to audit or financial
matters and to use independent professionals as well as the company's internal
auditors for assistance.
10
DIRECTORS' COMPENSATION AND BENEFITS
The following table lists the compensation and benefits provided in
1996 to directors who are not employees of the Company or its affiliates
("non-employee directors"). In 1996 the Board established new director
compensation arrangements which contained a significant equity component, and
terminated the Directors Retirement Plan. The new arrangements are intended to
align the compensation of directors more closely with the value produced for the
Company's stockholders.
NON-EMPLOYEE DIRECTORS' COMPENSATION AND BENEFITS
Cash Compensation Equity Compensation
----------------- -------------------
Annual Grant of Allstate Stock Option for
Retainer Fee (a) Shares(b) Allstate Shares (c)
---------------- ----------------- -------------------
Board Membership $25,000 500 shares 1,500 shares
Committee Chairmen:
Audit and Compensation
and Nominating
Committees $5,000
Committee Members:
Audit and Compensation
and Nominating
Committees -0-
(a) Under the Company's Deferred Compensation Plan for Directors, directors may
elect to defer directors' fees to an account which generates earnings based on:
1. The market value of and dividends on the Company's common shares
("common share equivalents").
2. The average interest rate payable on 90 day dealer commercial paper.
3. Standard & Poor's 500 Composite Stock Price Index (with dividends
reinvested).
4. A money market fund.
No director has voting or investment powers in common share equivalents,
which are payable solely in cash. Subject to certain restrictions, amounts
deferred under the plan (together with earnings thereon) may be transferred
between accounts and are distributed in a lump sum or over a period not to
exceed ten years.
(b) Granted December 1, 1996, and to be granted each December 1 under the Equity
Incentive Plan for Non-Employee Directors (the "Equity Plan") and subject to
restrictions on transfer until the earliest of 6 months after grant, death or
disability or termination of service. Grants are accompanied by cash payment to
offset the increase in the director's federal, state and local tax liabilities
(assuming the maximum prevailing individual tax rates) resulting from the grant
of shares. In addition, the following directors received grants in 1996 in the
following amounts as part of the transition to the Equity Plan from the Stock
Plan for Non-Employee Directors, which was terminated May 31, 1996: Mr.
Andress--100 shares, Mr. Brennan--183 shares, Mr. Denny--183 shares, Mr.
Edley--150 shares, Mr. Miles--150 shares, and Ms. Taylor--33 shares. Also, Mr.
Batts received a grant in 1996 of 200 shares under the Stock Plan for
Non-Employee Directors prior to its termination.
(c) Granted June 1 at exercise prices equal to 100% of value on the date of
grant. The options become exercisable in 3 equal annual installments, expire 10
years after grant, and permit the optionee to exchange owned shares or to have
option shares withheld to satisfy all or part of the exercise price. The options
also include a "reload" feature which gives the optionee the right to purchase
for the remaining term of the original grant the same number of shares tendered
in payment of the exercise price at a price equal to the fair market value on
the exercise date.
As a result of the termination of the Directors Retirement Plan on May
31, 1996, directors received a one-time lump sum cash payment equal to the
present value of their respective accrued benefits under the plan. Such cash
payments were made in June 1996 to non-employee directors Andress, Batts,
Brennan, Denny, Edley, Miles and Taylor in the aggregate amount of $493,874.
11
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth information on
compensation earned in 1994, 1995 and 1996 by Mr. Choate and by each of the four
most highly compensated executive officers (the "Named Executives") of the
Company, Allstate Insurance Company ("AIC"), AIC's property and casualty
business unit ("PP&C"), and Allstate Life Insurance Company ("ALIC").
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
------------------------------- ------------------------------------------
Awards Payouts
------------------------------
Securities
Other Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Name and Salary Bonus sation Award(s) SARs Payouts sation
Principal Position Year ($) ($)(1) ($)(2) ($)(3) (#)(4) ($) ($)(5)
- ------------------ ---- ------ ------ ----------- ---------- --------- ------- --------
Jerry D. Choate......... 1996 770,000 405,713 5,684 -0- 39,615 -0- 5,250
(Chairman and Chief
Executive Officer) 1995 700,000 757,969 8,288 -0- 326,277 520,635 5,250
1994 523,478 6,59 13,764 -0- 112,228 -0- 1,890
Robert W. Gary......... 1996 391,500 188,243 9,848 -0- 16,887 -0- 5,250
(President of PP&C)
1995 353,167 321,575 9,713 -0- 101,760 20,126 5,250
1994 283,167 7,518 7,696 -0- 9,816 -0- 1,890
Edward M. Liddy....... 1996 655,000 345,120 2,767 -0- 33,699 -0- 5,250
(President and Chief
Operating Officer) 1995 600,000 649,688 6,854 -0- 170,328 226,173 5,250
1994(6) 522,205 200,000 1,202 -0- 75,000 -0- 1,890
Louis G. Lower, II...... 1996 436,800 246,781 10,246 -0- 18,258 -0- 5,250
(President of ALIC)
1995 416,000 286,650 17,044 -0- 89,359 411,122 5,250
1994 389,050 3,97 26,990 -0- 11,529 -0- 1,890
Casey J. Sylla....... 1996 353,500 228,829 649 -0- 12,378 -0- 5,206
(Senior Vice President
and Chief Investment 1995 151,389 176,738 -0- -0- 65,000 -0- -0-
Officer of AIC)
- -----------------------------------------------------
(1) The 1995 bonuses shown for Messrs. Gary, Lower and Sylla include Peer Group
Adjustments for 1995, which were not certified and paid until mid-year 1996, in
the respective amounts of $26,074, $20,475 and $12,427.
(2) Represents tax gross-up payments attributable principally to income taxes
payable on certain travel benefits, tax preparation fees and the exercise of
stock options.
(3) On December 31, 1996, Mr. Liddy held 3,002 of restricted common shares of
the Company valued at $173,740.75 based on the year-end closing price of $57.875
per share.
12
(4) These awards are set forth below in detail in the table titled "Option/SAR
Grants in Last Fiscal Year."
(5) Each of the Named Executives participated in The Savings and Profit Sharing
Fund of Allstate Employees, a qualified defined contribution plan sponsored by
the Company. The amounts shown represents the value of the 1994, 1995 and 1996
allocations to the executive officer's account derived from employer
contributions to the Profit Sharing Fund and to its predecessor, The Savings and
Profit Sharing Fund of Sears Employees.
(6) Mr. Liddy was an executive officer of Sears until August 1994, when he was
employed by the Company. The 1994 data reflect compensation paid to him by the
Company and by Sears in 1994.
STOCK OPTIONS
The following table is a summary of all Company stock options granted
to the Named Executives during 1996. Individual grants are listed separately for
each Named Executive. In addition, this table shows the potential gain that
could be realized if the fair market value of the Company's common shares were
not to appreciate, or were to appreciate at either a 5% or 10% annual rate over
the period of the option term. All of the options are non-qualified options, all
permit the optionee to exchange shares owned or to have option shares withheld
to satisfy all or part of the exercise price and all, as indicated below,
contain tax withholding rights and reload rights.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
Individual Grants Potential Realizable Value at
- ---------------------------------------------------------------------- Assumed Annual Rates of Stock
Price Appreciation for Option Term
---------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise
Options/ All Employees or Base Expiration
SARs(1) in 1996 Price ($/SH) Date 0% 5%($) 10%($)
--------- ----------------- ------------ -------- ------ ----------- ---------
Jerry D. Choate 39,615 5.13 45.25 8/15/06 -0- 1,127,343 2,856,909
Robert W. Gary 16,887 2.19 45.25 8/15/06 -0- 480,562 1,217,837
Edward M. Liddy 33,699 4.36 45.25 8/15/06 -0- 958,989 2,430,266
Louis G. Lower, II 18,258 2.36 45.25 8/15/06 -0- 519,577 1,316,709
Casey J. Sylla 12,378 1.60 45.25 8/15/06 -0- 352,247 892,662
(1)These options are exercisable in three equal annual installments, were
granted with an exercise price equal to the fair market value of the Company's
common shares on the date of grant, expire ten years from the date of grant, and
include tax withholding rights and a "reload" feature. Tax withholding rights
permit the optionee to elect to have shares withheld to satisfy federal, state
and local tax withholding requirements. The reload feature permits payment of
the exercise price by tendering Company common stock, which in turn gives the
optionee the right to purchase the same number of shares tendered, at a price
equal to the fair market value on the exercise date.
13
The following table shows Company stock options that were exercised during 1996
and the number of shares and value of grants outstanding as of December 31, 1996
for each Named Executive.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY- END OPTION/SAR VALUES
Value of Unexercised
Number of Securities Underlying In-The-Money Options/SARs
Unexercised Options/SARs at 12/31/96(#) at 12/31/96($)(1)
--------------------------------------- ----------------------------
Shares
Acquired Value
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
--------------- ------------ ------------- ------------- ----------- -------------
Jerry D. Choate 0 0 291,571 294,542 $9,845,129 $7,897,429
Robert W. Gary 0 0 59,645 87,999 1,809,415 2,264,144
Edward M. Liddy 0 0 395,340 172,251 14,958,447 4,536,199
Louis G. Lower, II 0 0 115,592 81,673 4,142,492 2,102,342
Casey J. Sylla 0 0 21,668 55,710 595,762 1,347,686
- -------------------
(1)Value is based on the closing price of Company common stock ($57.875) on
December 31, 1996, minus the exercise price.
LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
The Company made no awards in 1996 under its Long-Term Executive
Incentive Compensation Plan.
14
PENSION PLANS
The following table indicates the estimated total annual benefits
payable upon retirement to the Named Executives under the specified compensation
and years of service classifications, pursuant to the combined current benefit
formulas of the Allstate Retirement Plan and the unfunded Supplemental
Retirement Income Plan (the "Excess Benefits Plan.") The Excess Benefits Plan
will pay the portion of the benefits shown below which exceeds Internal Revenue
Code limits or is based on compensation in excess of Internal Revenue Code
limits. Annual salary and annual bonus amounts such as are reflected in the
Summary Compensation Table are considered in determining retirement benefits. As
of December 31, 1996, Messrs. Choate, Gary, Lower and Sylla had 35, 35, 20 and 1
years of service, respectively, with Allstate; and Mr. Liddy had 9 years of
combined Allstate/Sears service. As a result of Mr. Liddy's prior Sears service,
a portion of his retirement benefit will be paid from the Sears Plan. Benefits
are computed on the basis of a participant's years of credited service
(generally, limited to 28) and average annual compensation over the
participant's highest five successive calendar years of earnings out of the 10
years immediately preceding retirement. Benefits shown below are based on
retirement on December 31, 1996 at age 65 and selection of a straight life
annuity. Annual retirement benefits are generally payable monthly, and benefits
accrued from January 1, 1978 through December 31, 1988 are reduced by a portion
of the participants estimated social security benefits. Effective January 1,
1989 the retirement benefit calculation was integrated with the social security
wage base for the employee.
PENSION PLAN TABLE
YEARS OF SERVICE
- ------------------------------------------------------------------------------------------------------------
Remuneration 15 20 25 30 35
- ------------ -------- -------- ---------- ---------- --------
$800,000 $261,000 $348,000 $435,000 $487,000 $487,000
$1,100,000 $360,000 $480,000 $600,000 $672,000 $672,000
$1,400,000 $459,000 $612,000 $765,000 $857,000 $857,000
$1,600,000 $525,000 $700,000 $875,000 $980,000 $980,000
$1,800,000 $591,000 $788,000 $985,000 $1,103,000 $1,103,000
$2,000,000 $657,000 $876,000 $1,095,000 $1,227,000 $1,227,000
15
EMPLOYMENT CONTRACTS, TERMINATION OF EMPLOYMENT AND CHANGE-IN-CONTROL
ARRANGEMENTS
AIC agreed to provide Mr. Sylla or his beneficiary a basic
retirement or death benefit if his employment is terminated within 5 years of
his hiring (July 26, 1995) for any reason other than termination pursuant to
AIC's written policy. The amount of the benefit would be calculated under the
Allstate retirement plan, assuming Mr. Sylla had 5 years of service under the
plan, and would be reduced by Mr. Sylla's actual years of service. The agreement
terminates no later than July 26, 2000.
In general, (i) the Company may terminate options granted under
the Company's Employees Replacement Stock Plan in the event of a merger,
consolidation, reorganization, sale or exchange of substantially all assets, or
dissolution of the Company (an "extraordinary corporate transaction") and, in
the case of certain options the Board of Directors may provide adjustments to
the optionee, and in the case of other options the Company shall make
appropriate and equitable provision with respect to participants' rights, by one
of the following means in the case of options which have been outstanding for at
least six months: (a) acceleration of all outstanding rights prior to the
extraordinary corporate transaction, (b) appropriate and equitable provision for
the continuation and adjustment of all outstanding rights, or (c) payment in
cash of the value of all outstanding rights, and (ii) in the event of a "change
in control" of the Company, all rights under certain options under the Employees
Replacement Stock Plan which have been outstanding for at least six months will
immediately become exercisable. A change in control means, in general (and
subject to certain exceptions such as acquisitions by or from the Company or by
employee benefit plans of the Company, and transactions in which existing
shareholders maintain effective control), any acquisition of 20% or more of the
Company's outstanding common shares, a change in the majority of the directors
of the Company which is not approved by a majority of the incumbent directors,
or approval by the shareholders of an extraordinary corporate transaction. In
addition, some options granted under the Company's Employees Replacement Stock
Plan include limited stock appreciation rights exercisable during the period of
sixty days following a change in control of the Company (but not less than six
months after the date of grant).
Replacement Awards in the form of restricted shares were granted
to certain officers and key employees under the Company's Employees Replacement
Stock Plan. Generally, restricted shares become unrestricted in five years after
original grant by Sears, upon normal retirement at age 65 and upon early
retirement after age 60 with Company approval. In addition, restricted shares
become unrestricted upon a change in control, subject to a minimum vesting
period of six months.
16
REPORT OF THE COMPENSATION AND NOMINATING COMMITTEE CONCERNING EXECUTIVE
COMPENSATION
The Company's Compensation and Nominating Committee (the
"Committee"), which is composed entirely of independent, non-employee directors,
makes recommendations to the Board of Directors regarding the administration of
compensation for executive officers of the Company and its principal
subsidiaries. The Committee also administers the Company's executive
compensation plans, its Equity Incentive Plan and its Employees Replacement
Stock Plan. The Company's executive compensation philosophy is to pay
competitive levels of compensation for competitive levels of financial
performance, and to provide for superior pay opportunities for superior levels
of performance.
The compensation program consists of the following: base salaries,
annual incentives based on achieving pre-set yearly financial goals, long-term
cash incentives based on achieving financial goals over 3-year periods, and
equity incentive awards based on increases in the price of the Company's common
stock.
In order to ensure that the Company's executive compensation
program continues to be consistent in its practice of paying for performance,
peer groups of companies in the insurance industry have been established for
compensation and financial comparison purposes. A peer group (the "Peer Group")
of large insurance companies has been established for comparison with the
Company.
BASE SALARIES
The base salaries of executive officers, including the Named
Executives, are reviewed annually by the Committee. Each year the Committee
reviews a survey of base salaries for executive officers at the Peer Group of
companies in the insurance industry. The Committee attempts to set base salaries
for executive officers, including Mr. Choate, at a level comparable to the
median level of base salaries paid to officers holding similar positions at the
Peer Group companies.
ANNUAL INCENTIVE OPPORTUNITIES
The Company's Annual Executive Incentive Compensation Plan (the
"Plan") is designed to provide Plan participants with a potential cash award
based on the achievement of annual financial objectives. Each year objectives
are approved by the Committee during the first quarter of the year. A
performance threshold benchmark is established, which must be attained before
any award can be paid, and a performance maximum benchmark is established which
provides a limit on the award payable. Each participant's award opportunity is
based on that individual's potential contribution to the achievement of a
particular financial goal.
Awards are paid in cash in the year after the year of performance.
The Committee has the authority to adjust the amount of awards, but has no
authority to increase an award payable under the terms of the Plan for any year
to the Chief Executive Officer or to any of the other Named Executives during
such year.
Award opportunities under the 1996 Plan for Messrs. Choate and
Liddy were based on the Company's degree of achievement of targeted amounts of
1996 operating earnings per share (the "Company
17
Goal"). The 1996 performance goals for participants, including Mr. Gary, whose
efforts were closely linked to the Company's personal property and casualty
insurance unit ("PP&C") were based 50% on the Company Goal and 50% on two
equally weighted PP&C goals - (i) a specified ratio of the sum of claims, claim
expenses and operating expenses to net earned premiums, and (ii) a specified
rate of growth in premiums written. The performance goal for participants,
including Mr. Lower, whose efforts were closely linked to the Company's life
insurance subsidiary's ("ALIC") performance was based 50% on the Company Goal
and 50% on three ALIC goals - (i) a specified rate of growth in invested assets,
weighted 12.5%, (ii) a specified rate of growth in ALIC policies in force,
weighted 12.5%, and (iii) a specified amount of ALIC operating income, weighted
25%. The performance goal for Mr. Sylla, whose efforts were linked to the
performance of the Company's investment unit, was based 50% on the Company Goal
and 50% on the degree of achievement of the investment unit goal. All goals have
threshold, target and maximum levels of performance, and the amount of awards
are dependent upon performance reaching these levels. Specified extraordinary
items are excluded in calculating the goals. No award will be payable with
respect to a goal if the threshold level of performance is not attained. No
award will be payable to any participant if the Company sustains a net loss for
the year, and awards for all participants will be reduced by 50% if the
Company's return on average equity for the year is less than a targeted rate.
Payment of awards is made after the Committee has certified
attainment of the Company and business unit goals.
LONG-TERM INCENTIVE OPPORTUNITIES
The Company's long-term incentive program consists of a Long-Term
Executive Incentive Compensation Plan designed to provide cash award
opportunities based on achievement of Company performance goals over three-year
cycles, and an Equity Incentive Plan designed to encourage equity ownership and
to align the interests of management with those of stockholders.
LONG-TERM EXECUTIVE INCENTIVE COMPENSATION PLAN
The Company's Long-Term Executive Incentive Compensation Plan (the
"LTIP"), provides award opportunities for the executive officers of the Company
and its subsidiaries, including each of the Named Executives, based on
achievement of Company financial goals over a three year period. The financial
goals for each cycle are established by the Committee at the beginning of the
cycle. Threshold, target and maximum levels of achievement of the financial
goals are established on which individual award opportunities, stated as a
specified percentage of aggregate base salary over the period, are based. A new
cycle commences every two years. In years in which performance cycles overlap,
50% of participants' salaries are applied to each cycle. The Committee must
certify in writing that the goals have been met before awards may be paid.
Awards are payable in the year following the end of the cycle.
The current cycle under the LTIP covers the years 1995 - 1997 and
the financial objectives for this cycle are based upon Company achievement of
targets related to return on average equity. Adjustments will be made, in
specified calibrations, depending on the relative performance of the Company in
relation to its goal compared with the performance of a selected peer group of
insurers regarding the same objective over the same period. Awards, if any,
under the 1995-1997 LTIP will be made in 1998.
18
EQUITY INCENTIVE PLAN
The Company's Equity Incentive Plan provides for the grant of
stock options, and restricted or unrestricted common stock of the Company to
plan participants. All stock option grants under this plan have been made in the
form of nonqualified stock options at exercise prices equal to 100% of the fair
market value of the Company's common stock on the date of grant. Options which
have been granted are not fully exercisable until 3 years after the date of
grant, and expire in 10 years.
Stock options were granted under the Equity Incentive Plan on
August 15, 1996 to a number of key employees of the Company and its
subsidiaries, including each of the Named Executives. The size of each grant to
a Named Executive was determined based on a target stock option incentive
opportunity, expressed as a percentage of base salary.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Choate's 1996 base salary, annual incentive plan award and
stock option grant follow the policies and plan provisions described above.
Amounts paid and granted under these policies and plans are disclosed in the
Summary Compensation Table.
Mr. Choate's base salary was increased by 10% from $700,000 to
$770,000 on January 1, 1996. In determining this increase the Committee reviewed
the levels of base salaries paid in 1995 to chief executives of Peer Group
companies, and also considered the results of Mr. Choate's efforts in furthering
Company initiatives in 1996. No specific weight was assigned to either factor in
determining the amount of Mr. Choate's increase.
Mr. Choate's 1996 Plan award was based on the Company's
achievement of levels of performance in 1996 that exceeded the threshold level
of the Company Goal but did not attain the target level of the Company Goal.
Mr. Choate received a stock option under the Company's Equity
Incentive Plan on August 15, 1996 for 39,615 shares of Company common stock,
pursuant to the terms described above. The amount of the grant was determined,
pursuant to a valuation of each option share based on a Black-Scholes valuation
formula, to be equal to a specified percentage of Mr. Choate's 1996 base salary.
Details of Mr. Choate's grant, and those of all the Named Executives, are
disclosed in the Option/SAR Grants in Last Fiscal Year table.
STOCK OWNERSHIP GUIDELINES
In keeping with the Company's philosophy of developing a mutual
commitment between stockholders and management, the Committee recently approved
stock ownership guidelines for 57 members of the management team. The target
levels of ownership range from three times base salary for the Chairman and
Chief Executive Officer and the President and Chief Operating Officer, to two
times base salary for members of the Company's senior management team, composed
of the most senior officers of the Company and its subsidiaries, and one times
base salary for the remainder of the management team.
19
Individuals affected by these guidelines have been given a period of five years
to acquire sufficient shares to meet these guidelines.
$1,000,000 LIMIT ON TAX DEDUCTIBLE COMPENSATION
Section 162(m) of the Internal Revenue Code, enacted as part of
the Omnibus Budget Reconciliation Act of 1993, limits to $1,000,000 the
deductibility, for any year beginning after December 31, 1993, of compensation
paid by a public corporation to the chief executive officer and the next four
most highly compensated executive officers unless such compensation is
performance-based within the meaning of Section 162(m) and the regulations
thereunder.
The Committee intends to continue to utilize performance-based
compensation in order to minimize the effect of the limits imposed by Section
162(m), and seeks to assure the maximum tax deductibility of all compensation it
authorizes. However, the Committee believes that its primary responsibility is
to provide a compensation program that will attract, retain and reward the
executive talent necessary to the Company's success. Consequently, the Committee
recognizes that the loss of a tax deduction may be unavoidable in some
circumstances.
COMPENSATION AND NOMINATING COMMITTEE
WARREN L. BATTS (CHAIRMAN) EDWARD A. BRENNAN
JAMES G. ANDRESS CHRISTOPHER F. EDLEY
20
PERFORMANCE GRAPH
The following performance graph compares the performance of the
Company's common stock since its initial public offering on June 2, 1993 with
the performance of the S&P 500 index, the S&P Property-Casualty Insurance Index
and with the performance of a composite of two published indices - the S&P
Property-Casualty Insurance Index and the S&P Multi-Line Insurance Index (the
"Composite Index"). Returns of the composite of the two indices have been
weighted according to their respective aggregate market capitalizations at the
beginning of each period shown on the graph. The graph plots the changes in
value of an initial $100 investment over the indicated time periods, assuming
all dividends are reinvested quarterly.
The Company plans to use the S&P Property-Casualty Insurance Index
in lieu of the Composite Index in future years because the Company is now
included in the S&P Property/Casualty Insurance Index instead of the S&P
Multi-Line Insurance Index. The Company believes that comparing its performance
to the performance of the companies included in the S&P Property/Casualty
Insurance Index is more relevant and meaningful to its stockholders.
21
[A line graph indicating the stock price of the Registrant's common stock, the
S&P 500 index, the Insurance Composite index and the S&P Property/Casualty index
was inserted here. The index indicates returns as of the following dates, from
a base of 100 at 6/2/93 - 12/31/93, 12/31/94, 12/31/95, and 12/31/96]
22
INSURANCE COMPOSITE WEIGHTING
The Insurance Composite is a market value weighted composite of
the S&P Multi-Line and S&P Property- Casualty indices. The components of the
Insurance Composite have been weighted in accordance with the respective
aggregate market capitalizations of the companies in each index as of the date
of Allstate's initial public offering and at the beginning of each period shown
on the graph, as indicated below:
INDEX 06/02/93 12/31/93 12/31/94 12/31/95 12/31/96
- ----- -------- -------- -------- -------- --------
S&P Multi-line 63.36% 62.87% 60.96% 58.58% 55.10%
S&P Property
/Casualty 36.64% 37.13% 39.04% 41.42% 44.90%
------- ------- ------- ------- --------
Total 100.00% 100.00% 100.00% 100.00% 100.00%
23
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the Company's Compensation and Nominating Committee
consisted of Warren L. Batts, Chairman, James G. Andress, Edward A. Brennan
and Christopher F. Edley. Mr. Donald H. Rumsfeld also served on the Committee
for part of the year. There were no committee interlocks with other companies
in 1996 within the meaning of the Securities and Exchange Commission's proxy
rules.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers, directors and persons who beneficially own more
than ten percent of a registered class of the Company's equity securities to
file reports of securities ownership and changes in such ownership with the SEC.
Based solely upon a review of copies of such reports, or written
representations that all such reports were timely filed, the Company believes
that each of its officers, directors and greater than ten-percent beneficial
owners complied with all Section 16(a) filing requirements applicable to them
during 1996, with the exception of Ronald D. McNeil, an executive officer of the
Company, who inadvertently made one late filing to report one exercise of a
Company stock option.
ITEM 2: APPROVAL OF AUDITORS
Item 2 concerns the recommendation of the Audit Committee and the
Board of Directors that Deloitte & Touche be appointed auditors for 1997, which
is being presented to stockholders for approval. Representatives of Deloitte &
Touche will be present at the meeting, will be available to respond to questions
and may make a statement if they so desire.
THE BOARD UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPOINTMENT OF
DELOITTE & TOUCHE AS AUDITORS FOR 1997, AS PROPOSED IN ITEM 2.
STOCKHOLDER PROPOSALS
Proposals which stockholders intend to be included in the Company's
proxy material for presentation at the 1998 annual meeting of stockholders must
be received by the Secretary of the Company, Robert W. Pike, The Allstate
Corporation, 2775 Sanders Road (F8), Northbrook, Illinois 60062 by November 28,
1997, and must otherwise comply with rules promulgated by the Securities and
Exchange Commission in order to be eligible for inclusion in the proxy material
for the 1998 annual meeting.
The federal proxy rules specify what constitutes timely and
appropriate submission for a stockholder proposal to be included in the proxy
statement. If a stockholder desires to bring business before the meeting which
is not the subject of a proposal meeting the proxy rule requirements for
inclusion in the proxy statement, the stockholder must follow procedures
outlined in the Company's By-Laws in order to personally present such
24
proposal for a vote at the meeting. A copy of these procedures is available upon
request from the Secretary of the Company. One of the procedural requirements in
the By-Laws is timely notice in writing of the business the stockholder proposes
to bring before the meeting. Such notice must be received by the Secretary, The
Allstate Corporation, 2775 Sanders Road, Suite F8, Northbrook, Illinois 60062,
not less than 90 nor more than 120 days prior to the first anniversary date of
the preceding year's annual meeting, and must describe the business proposed to
be brought before the annual meeting, the reasons for bringing it, any material
interest of the stockholder in such business, the stockholder's name and address
and the number of shares of Company stock beneficially owned by the stockholder.
It should be noted that those By-Law procedures govern proper submission of
business to be put before a stockholder vote at the Annual Meeting and do not
preclude discussion by any stockholder of any matters properly brought before
the Annual Meeting.
The Company does not know of any other business that may be presented
for consideration at the Annual Meeting other than proposals submitted by a
stockholder to require the Board to adopt cumulative voting for directors and to
avoid taking certain actions which may impair such cumulative voting. These
proposals were eliminated from the Company's proxy materials in accordance with
the rules of the Securities and Exchange Commission. If these proposals or any
other business should properly come before the meeting, the shares represented
by the proxies solicited hereby shall be voted on such proposals or other
business at the discretion of the proxy holders.
OTHER MATTERS
Officers and other employees of the Company and its subsidiaries may
solicit proxies by personal interview, telephone and telegram, in addition to
the use of the mails. None of these individuals will receive special
compensation for these services which will be performed in addition to their
regular duties, and some of them may not necessarily solicit proxies. The
Company has also made arrangements with brokerage firms, banks, nominees and
other fiduciaries to forward proxy solicitation materials for shares held of
record by them to the beneficial owners of such shares. The Company will
reimburse them for reasonable out-of-pocket expenses. Corporate Investors'
Communications, Inc., 111 Commerce Road, Carlstadt, New Jersey 07072 will assist
in the distribution of proxy solicitation materials, for a fee estimated at
$7,500, plus out-of-pocket expenses. The Company will pay the cost of all proxy
solicitation.
By order of the Board of Directors,
Robert W. Pike
Secretary
Dated: March 28, 1997
25
THE ALLSTATE CORPORATION
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING TO BE HELD MAY 20, 1997
THE UNDERSIGNED HEREBY APPOINTS JAMES G. ANDRESS, WARREN L. BATTS, EDWARD A.
BRENNAN AND CHRISTOPHER F. EDLEY, AND EACH OF THEM, OR IF MORE THAN ONE IS
PRESENT AND ACTING THEN A MAJORITY THEREOF, PROXIES, WITH FULL POWER OF
SUBSTITUTION AND REVOCATION, TO VOTE THE SHARES OF THE ALLSTATE CORPORATION
WHICH THE UNDERSIGNED IS ENTITLED TO VOTE AT THE ANNUAL MEETING OF STOCKHOLDERS,
AND AT ANY ADJOURNMENT THEREOF, WITH ALL THE POWERS THE UNDERSIGNED WOULD
POSSESS IF PERSONALLY PRESENT, INCLUDING AUTHORITY TO VOTE ON THE MATTERS SHOWN
ON THE REVERSE IN THE MANNER DIRECTED, AND UPON ANY OTHER MATTER WHICH MAY
PROPERLY COME BEFORE THE MEETING. DISCRETIONARY AUTHORITY WILL NOT BE USED IN
CONNECTION WITH VOTING ON ADJOURNMENT OF THE MEETING IN ORDER TO SOLICIT FURTHER
PROXIES. THE UNDERSIGNED HEREBY REVOKES ANY PROXY PREVIOUSLY GIVEN TO VOTE SUCH
SHARES AT THE MEETING OR AT ANY ADJOURNMENT.
PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
THE ALLSTATE CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. 0
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL NOMINEES LISTED.
1. ELECTION OF DIRECTORS -- Nominees: James G. Andress, Warren L. Batts,
Edward A. Brennan, Jerry D. Choate, James M. Denny, Christopher F. Edley,
Michael A. Miles, Joshua I. Smith and Mary A. Taylor. (Instruction: To withhold
authority for one or more nominees write the nominee(s) name on the space
provided below.)
FOR ALL
FOR WITHHOLD EXCEPT
___________________________________________ 0 0 0
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSAL 2.
FOR AGAINST ABSTAIN
2. Approval of Deloitte & Touche as
auditors for 1997. 0 0 0
THE PROXIES ARE DIRECTED TO VOTE AS SPECIFIED ABOVE AND IN THEIR DISCRETION ON
ALL OTHER MATTERS COMING BEFORE THE MEETING. EXCEPT AS SPECIFIED TO THE
CONTRARY ABOVE, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR
ALL NOMINEES LISTED ABOVE AND FOR PROPOSAL 2.
Dated: , 1997
----------------------------
Signature(s):
-------------------------------------------------
-------------------------------------------------
Please sign exactly as name appears hereon.
Joint Owners should each sign. Where applicable,
indicate official position or representative
capacity.
