SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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Check the appropriate box:
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14a-12
Loews Corporation
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(Name of Registrant as Specified in Its Charter)
Barry Hirsch, Senior Vice President and Secretary
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Payment of filing fee (Check the appropriate box):
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[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
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LOEWS CORPORATION
667 Madison Avenue
New York, New York 10021-8087
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 10, 1994
To the Shareholders:
The Annual Meeting of Shareholders of Loews Corporation (the "Company") will
be held at the Chemical Corporate Headquarters Auditorium, Third Floor, 270 Park
Avenue at 48th Street, New York, New York, on Tuesday, May 10, 1994, at 11:00
A.M. New York City Time, for the following purposes:
I To elect eleven directors;
II To consider and act upon a proposal to ratify the appointment by the
Board of Directors of Deloitte & Touche as independent certified
public accountants for the Company;
III To consider and act upon four shareholder proposals; and
IV To transact such other business as may properly come before the
meeting or any adjournment thereof.
Shareholders of record at the close of business on March 14, 1994, are
entitled to notice of and to vote at the meeting and any adjournment thereof.
By order of the Board of Directors,
BARRY HIRSCH
Secretary
Dated: March 24, 1994
SHAREHOLDERS ARE URGED TO COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND
MAIL IT PROMPTLY IN THE ACCOMPANYING ENVELOPE WHICH REQUIRES NO POSTAGE
IF MAILED IN THE UNITED STATES.
LOEWS CORPORATION
_________________________________
PROXY STATEMENT
_________________________________
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Loews Corporation (the "Company") of proxies to be voted
at the Annual Meeting of Shareholders of the Company to be held May 10, 1994.
All properly executed proxies in the accompanying form received by the Company
prior to the meeting will be voted at the meeting. Any proxy may be revoked at
any time before it is exercised by giving notice in writing to the Secretary of
the Company, by granting a proxy bearing a later date or by voting in person.
The Company expects to mail proxy materials to the shareholders on or about
March 24, 1994.
The mailing address of the Company is 667 Madison Avenue, New York, N.Y.
10021-8087.
As of March 14, 1994, the record date for determination of shareholders
entitled to notice of and to vote at the meeting, there were 61,519,700 shares
of Common Stock of the Company (the "Common Stock") outstanding. Each
outstanding share is entitled to one vote on all matters which may come before
the meeting. In accordance with the Company's by-laws and applicable law, the
election of directors will be determined by a plurality of the votes cast by the
holders of shares present in person or by proxy and entitled to vote.
Consequently, the eleven nominees who receive the greatest number of votes cast
for election as directors will be elected as directors of the Company. Shares
present which are properly withheld as to voting with respect to any one or more
nominees, and shares present with respect to which a broker indicates that it
does not have authority to vote ("broker non-votes") will not be counted. The
affirmative vote of shares representing a majority of the votes cast by the
holders of shares present and entitled to vote is required to approve the other
matters to be voted on at the Annual Meeting. Shares which are voted to abstain
will be considered present at the meeting, but since they are not affirmative
votes for the matter they will have the same effect as votes against the matter.
Broker non-votes are not counted as present.
Principal Shareholders
The following table contains certain information as to all persons who, to
the knowledge of the Company, were the beneficial owners of 5% or more of the
outstanding shares of Common Stock. This information is as of February 28, 1994
and each such person has sole voting and investment power with respect to the
shares set forth.
1
Amount
Name and Address Beneficially Percent
of Beneficial Owner Owned of Class
------------------- ------------ --------
Laurence A. Tisch . . . . . . . . . . . 9,449,956 15.4%
667 Madison Avenue
New York, N.Y. 10021-8087
Preston R. Tisch . . . . . . . . . . . 9,449,956 15.4%
667 Madison Avenue
New York, N.Y. 10021-8087
Laurence A. Tisch is Chairman of the Board and Co-Chief Executive Officer of
the Company and Preston R. Tisch is President and Co-Chief Executive Officer and
a director of the Company. Laurence A. Tisch and Preston R. Tisch are brothers.
Director and Officer Holdings
The following table sets forth certain information as to the shares of Common
Stock 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 at February 28, 1994, based on data
furnished by them.
Amount
Beneficially Percent
Name Owned(1) of Class
---- ------------ --------
Charles B. Benenson . . . . . . . . . . 77,775(2) *
John Brademas . . . . . . . . . . . . . 555(3) *
Bernard Myerson . . . . . . . . . . . . 15,750(4) *
Edward J. Noha . . . . . . . . . . . . 750(5) *
Lester Pollack . . . . . . . . . . . . 4,152(6) *
Gloria R. Scott . . . . . . . . . . . . 0
Andrew H. Tisch . . . . . . . . . . . . 1,000(7) *
James S. Tisch . . . . . . . . . . . . 40,000(8) *
Jonathan M. Tisch . . . . . . . . . . . 127,510(9) *
Laurence A. Tisch . . . . . . . . . . . 9,449,956 15.4%
Preston R. Tisch . . . . . . . . . . . 9,449,956 15.4%
All executive officers and directors as
a group (23 persons including those
listed above) . . . . . . . . . . . . 19,179,154 31.2%
*Represents less than 1% of the outstanding shares of Common Stock.
(1) Except as otherwise indicated the persons listed as beneficial owners of
the shares have sole voting and investment power with respect to such shares.
(2) These shares are owned by a partnership in which a revocable trust
created by Mr. Benenson has a 75% interest and of which Mr. Benenson is general
manager. In addition, 35,100 shares of Common Stock and 10,000 shares of common
stock of CNA Financial Corporation ("CNA"), an 83%-owned subsidiary of the
Company, are held by a charitable foundation. Mr. Benenson has shared voting and
investment power with respect to the
2
Common Stock and CNA common stock owned by such partnership and foundation.
(3) In addition, Mr. Brademas owns 78 shares of CNA common stock.
(4) In addition, Mr. Myerson's wife owns 1,250 shares of Common Stock as to
which Mr. Myerson disclaims any beneficial interest.
(5) In addition, Mr. Noha owns beneficially 450 shares of CNA common
stock.
(6) In addition, 5,192 shares of Common Stock are held by a charitable
foundation, as to which Mr. Pollack has shared voting and investment power.
(7) In addition, 186 shares of Common Stock are owned by Mr. Tisch's son, as
to which Mr. Tisch disclaims any beneficial interest and 30,000 shares of Common
Stock are held by a charitable foundation as to which Mr. Tisch has shared
voting and investment power.
(8) In addition, 29,000 shares of Common Stock are held by a charitable
foundation as to which Mr. Tisch has shared voting and investment power.
(9) In addition, 40,000 shares of Common Stock are held by a charitable
foundation as to which Mr. Tisch has shared voting and investment power.
ELECTION OF DIRECTORS
(Proposal No. 1)
Pursuant to the by-laws of the Company, the number of directors constituting
the full Board of Directors has been fixed by the Board at eleven. Accordingly,
action will be taken at the meeting to elect a Board of eleven directors to
serve until the next Annual Meeting of Shareholders and until their respective
successors shall be duly elected and shall qualify. It is the intention of the
persons named in the accompanying form of proxy, unless shareholders otherwise
specify by their proxies, to vote for the election of the nominees named below,
each of whom is now a director. The Board of Directors has no reason to believe
that any of the persons named will be unable or unwilling to serve as a
director. Should any of the nominees be unable or unwilling to serve, it is
intended that proxies will be voted for the election of a substitute nominee or
nominees selected by the Board of Directors.
Set forth below is the name, age, principal occupation during the past five
years and other information concerning each nominee.
Charles B. Benenson, 81 - Officer and Director, Benenson Realty Company (real
estate investments). Mr. Benenson has been a director of the Company since 1960
and is a member of the Audit Review Committee.
John Brademas, 67 - President Emeritus since 1992 and, prior thereto,
President of New York University. Mr. Brademas is also a director of Scholastic,
Inc., Texaco Inc. and NYNEX, Inc. Mr. Brademas has been a director of the
Company since 1982.
Bernard Myerson, 76 - Chairman Emeritus since 1990 of Loews Theatre
Management Corporation ("LTMC"), an unaffiliated company. Prior thereto Mr.
Myerson had served as Chairman and President of LTMC. Mr. Myerson has been a
director of the Company since 1963 and is a member of the Executive Committee.
Edward J. Noha, 66 - Chairman of the Board of Directors of CNA since 1992.
Prior thereto, Mr. Noha had been Chairman and Chief Executive Officer of the CNA
Insurance Companies. Mr. Noha has been a director of the Company since 1975.
Lester Pollack, 60 - General Partner of Lazard Freres & Co., investment
bankers, and Chief Executive Officer of Centre Partners, L.P. and Senior
Managing Director of Corporate Advisors, L.P., investment affiliates of Lazard
Freres & Co. Mr. Pollack is a director of Continental Cablevision, Inc., CNA,
Kaufman & Broad Home Corporation, Polaroid Corporation, Parlex Corporation,
Paramount Communications, Inc., Sphere Drake
3
Holdings Limited, SunAmerica Inc., Tidewater Inc. and Transco Energy Company.
Mr. Pollack has been a director of the Company since 1971 and is a member of the
Audit Review and Finance Committees.
Gloria R. Scott, 55 - President, Bennett College, Greensboro, North Carolina.
Dr. Scott has been a director of the Company since 1990.
Andrew H. Tisch, 44 - Chairman of the Board and Chief Executive Officer of
Lorillard Tobacco Company ("Lorillard"), a wholly owned subsidiary of the
Company, since 1989. Prior thereto, he had been President of Bulova Corporation
("Bulova"), a 97% owned subsidiary of the Company. Mr. Tisch, a son of Mr. L.A.
Tisch, is a director of Bulova and Zale Corporation. He has been a director of
the Company since 1985.
James S. Tisch, 41 - Executive Vice President of the Company. Mr. Tisch, a
son of Mr. L.A. Tisch, is a director of CNA and Champion International
Corporation. Mr. Tisch has been a director of the Company since 1986.
Jonathan M. Tisch, 40 - President and Chief Executive Officer of the
Company's Hotel Division. Mr. Tisch, a son of Mr. P.R. Tisch, is a director of
Individual Investor Group, Inc. He has been a director of the Company since
1986.
Laurence A. Tisch, 71 - Chairman of the Board and Co-Chief Executive Officer
of the Company. Mr. Tisch is also Chief Executive Officer of CNA and a director
of CNA and Bulova. In addition, he serves as Chairman, President and Chief
Executive Officer and a director of CBS Inc. ("CBS"),approximately 20% of the
common stock of which is owned by the Company, and as a director of Automatic
Data Processing, Inc., Petrie Stores Corporation and R.H. Macy & Co., Inc. He
has been a director of the Company since 1959 and is a member of the Executive
and Finance Committees.
Preston R. Tisch, 67 - President and Co-Chief Executive Officer of the
Company. Mr. Tisch served as Postmaster General of the United States from August
15, 1986 to February 26, 1988. Prior thereto he had served as President and
Chief Operating Officer of the Company since 1969 and as a director of the
Company since 1960. He is a director of Bulova, CNA, CBS, Hasbro, Inc., and Rite
Aid Corporation. He was re-elected a director of the Company in March 1988 and
is Chairman of the Executive Committee.
Committees
The Company has an Audit Review Committee, a Finance Committee and an
Executive Committee. The Company has no nominating committee or compensation
committee. The functions of the Audit Review Committee include recommendation to
the Board of Directors with respect to the engagement of the Company's
independent certified public accountants, review of the scope and effectuation
of the audit engagement and of the Company's internal audit procedures, approval
of each service performed by the independent accountants, and review of the
Company's internal accounting controls.
Attendance at Meetings
During 1993 there were eight meetings of the Board of Directors and two
meetings of the Audit Review Committee. Each director of the Company, with the
exception of Messrs. Brademas, Myerson and Pollack, attended not less than 75%
of the total number of meetings of the Board of Directors and committees of the
Board on which such director serves.
Director Compensation
Each director who is not an employee of the Company is paid an annual
retainer of $20,000 for serving as a director. In addition, members of the Audit
Review Committee are paid $500 for each meeting attended.
4
Pursuant to a Continuing Service Agreement with CNA expiring on September 30,
2002, Mr. Noha serves as Chairman of the Board of Directors of CNA and provides
consulting and other specified services to CNA. Under this Agreement Mr. Noha
(or his estate in the event of his death) is paid a fee at the rate of
$1,570,000 per annum, reduced by retirement benefits paid to Mr. Noha under his
former employment agreement and CNA's retirement plan.
EXECUTIVE COMPENSATION
The following table sets forth information for the years indicated regarding
the compensation of the co-chief executive officers and each of the other three
most highly compensated executive officers of the Company as of December 31,
1993, for services in all capacities to the Company and its subsidiaries.
SUMMARY COMPENSATION TABLE
Annual Compensation
---------------------------
Name and Other Annual All Other
Principal Position Year Salary(1) Compensation Compensation
------------------ ---- ------ ------------ ------------
L.A. Tisch 1993 $ 570,296 $43,058(3)
Chairman of the 1992 356,257 41,572
Board and Co-Chief 1991 309,331
Executive Officer (2)
P.R. Tisch 1993 1,517,296 $380,810(4) 43,058(5)
President and Co-Chief 1992 1,303,258 388,743 41,572
Executive Officer 1991 1,266,296
J.S. Tisch 1993 552,527 24,447(6)
Executive Vice President 1992 505,873 23,953
1991 458,795
A.H. Tisch 1993 551,527 3,701(7)
Chairman of the Board 1992 504,873 3,108
and Chief Executive 1991 456,796
Officer of Lorillard
J.M. Tisch 1993 551,527 2,946(7)
President and Chief 1992 504,873 2,451
Executive Officer of 1991 456,796
Loews Hotels
(1) Salary includes payments to the named individual based on benefit choices
under the Company's flexible benefits plan.
(2) Mr. Tisch's salary has been reduced for so long as he is devoting a
principal amount of his time to CBS. See "Employment Agreements" below. Mr.
Tisch received a salary and bonus from CBS of $1,025,065 and $900,000,
respectively, for 1993, $973,012 and $600,000, respectively, for 1992 and
$927,885 and $455,000,
5
respectively, for 1991.
(3) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan aggregating
$21,558, and $20,072 for 1993 and 1992, respectively. Also includes director's
fees paid by CNA amounting to $21,500 per year for 1993 and 1992.
(4) Represents the incremental cost of personal benefits provided by the
Company, including $315,000 for each of 1993 and 1992 for the use by Mr. Tisch
of an apartment at a Company operated hotel in New York City for the convenience
of the Company and its Hotel Division.
(5) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan aggregating
$21,558 and $20,072 for 1993 and 1992, respectively. Also includes director's
fees paid by CNA amounting to $21,500 per year for 1993 and 1992.
(6) Includes the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan aggregating
$2,947 and $2,453 for 1993 and 1992, respectively. Also includes director's fees
paid by CNA amounting to $21,500 per year for 1993 and 1992.
(7) Represents the annual contribution under the Company's Employees Savings
Plan and related allocation under the Benefits Equalization Plan.
Employment Agreements
An employment agreement with Laurence A. Tisch expiring October 31, 1994,
provides for remuneration at the rate of $1,500,000 per annum, subject to such
increases as the Board of Directors may from time to time determine in its sole
discretion. The agreement also provides for a reduction of such remuneration to
an annual rate of $550,000 for so long as Mr. Tisch is devoting a principal
amount of his time to CBS. Mr. Tisch has served as President and Chief Executive
Officer of CBS since January 1987 and receives related CBS employee benefits.
Mr. Tisch's employment agreement with the Company also provides for the payment
of supplemental retirement benefits in an amount equal to the excess, if any, of
(i) the retirement benefits payable under the Company's Retirement Plan without
giving effect to benefit limitations imposed by the Plan and the Internal
Revenue Code, over (ii) retirement benefits actually paid under the Plan as
limited by such provisions. These supplemental benefits are equivalent to the
benefits provided under the Benefits Equalization Plan (see "Pension Plan,"
below). The reduction in Mr. Tisch's remuneration from the Company is not
considered for purposes of determining his supplemental retirement and other
salary related benefits; however, the supplemental retirement benefits will be
reduced by any retirement benefits actually paid to Mr. Tisch under the
retirement plans of CBS.
An employment agreement with Preston R. Tisch expiring October 31, 1994,
provides for remuneration at the rate of $1,500,000 per annum, subject to such
increases as the Board of Directors may from time to time determine in its sole
discretion. The agreement also provides for the payment of supplemental
retirement benefits in an amount equal to the excess, if any, of (i) the
retirement benefits payable under the Company's Retirement Plan without giving
effect to benefit limitations imposed by the Plan and the Internal Revenue Code,
over (ii) retirement benefits actually paid under the Plan as limited by such
provisions. These supplemental benefits are equivalent to the benefits provided
under the Benefits Equalization Plan (see "Pension Plan," below). Retirement
benefits payable to Mr. Tisch under the Plan will be adjusted pursuant to the
Plan to account for retirement benefits paid to him when he retired from the
Company to serve as Postmaster General of the United States.
Pension Plan
The Company provides a funded, tax qualified, non-contributory retirement
plan for salaried employees, including executive officers (the "Retirement
Plan") and an unfunded, non-qualified, non-contributory Benefits Equalization
Plan (the "Benefits Equalization Plan") which provides for the accrual and
payment of benefits which are not available under tax qualified plans such as
the Retirement Plan. The following description of the Retirement Plan gives
effect to benefits provided under the Benefits Equalization Plan.
6
The Retirement Plan provides for pensions upon retirement based upon average
final compensation (i.e., the highest average annual salary during any period of
five consecutive years of the ten years immediately preceding retirement) and
years of credited service with the Company. Compensation under the Retirement
Plan consists of salary paid by the Company and its subsidiaries included under
the heading "Salary" in the Summary Compensation Table above. Pension benefits
are not subject to reduction for Social Security benefits or other amounts. The
following table shows estimated annual benefits upon retirement under the
Retirement Plan for various average compensation and credited service, based
upon normal retirement in 1994 and a straight life annuity form of pension.
Other forms of pension payment are also available under the Retirement Plan.
Average Final Estimated Annual Pension for
Compensation Representative Years of Credited Service
- ------------- ----------------------------------------
10 15 20 25 30 35
-- -- -- -- -- --
$ 400,000 $ 48,000 $ 76,800 $108,800 $140,800 $172,800 $ 204,800
600,000 72,000 115,200 163,200 211,200 259,200 307,200
800,000 96,000 153,600 217,600 281,600 345,600 409,600
1,000,000 120,000 192,000 272,000 352,000 432,000 512,000
1,200,000 144,000 230,400 326,400 422,400 518,400 614,400
1,400,000 168,000 268,800 380,800 492,800 604,800 716,800
1,600,000 192,000 307,200 435,200 563,200 691,200 819,200
1,800,000 216,000 345,600 489,600 633,600 777,600 921,600
2,000,000 240,000 384,000 544,000 704,000 864,000 1,024,000
The years of credited service of Messrs. A.H. Tisch, J.M. Tisch, J.S. Tisch,
L.A. Tisch and P.R. Tisch are sixteen, fourteen, sixteen, thirty-three and
thirty-one, respectively.
BOARD OF DIRECTORS REPORT ON EXECUTIVE COMPENSATION
General
The Company's policy regarding executive compensation has been adopted by the
Board of Directors. The Board of Directors has no compensation committee. The
members of the Audit Review Committee have from time to time acted as a special
compensation committee for purposes of recommendation to the Board of Directors.
See "Co-Chief Executive Officers," below. The Company's executive compensation
consists solely of base annual salary. There is no bonus, stock option or long-
term incentive program. Executive officers participate, along with other
salaried employees, in the Company's Employees Savings Plan and Retirement Plan.
The overall objective of the Company's executive compensation policy is to
attract and motivate a high level of performance by the Company's executive
officers. To accomplish this objective, compensation levels are based upon an
evaluation of the individual's performance and cash salaries paid to executives
in similar positions by companies with comparable revenues. In determining
comparable salaries the Company participates in and analyses two management
compensation surveys. These surveys have been selected primarily because of the
broad range of companies of various sizes included in them, the manner in which
the information is presented and, with respect to one suchsurvey, the
consistency of the data presented because of the significantnumber of companies
which have participated in the survey for a number ofyears. One survey includes
two of the ten companies included in the Standard& Poors Financial Miscellaneous
Index and the other survey includes one of thecompanies included in that index
(see "Stock Price Performance Graph," below). In most cases, the
7
Company seeks to maintain compensation levels for executive officers (as well as
salaried employees generally) between the 50th and 75th percentiles of cash
compensation paid by companies with comparable revenues. However, as a result of
evaluation of job performance as well as length of service, the compensation
levels of a majority of the Company's executive officers fall above these
parameters.
Co-Chief Executive Officers
The compensation of the Company's co-chief executive officers has been
established pursuant to employment agreements negotiated between the Company and
the co-chief executive officers. These agreements were most recently amended in
October 1992. These amendments were approved by the Board of Directors at that
time based upon the recommendation of Messrs. Charles B. Benenson and Lester
Pollack, who had been appointed by the Board of Directors to act as a special
compensation committee. Each employment agreement, as amended in October 1992,
provides for compensation at the rate of $1,500,000 per annum for a two year
period which will expire in October 1994. In addition, the employment agreement
with Mr. L. A. Tisch provides for a reduction in compensation to an annual rate
of $550,000 for so long as he is devoting a principal amount of his time to CBS.
See "Employment Agreements," above. Each such employment agreement provides for
increases in remuneration as the Board of Directors may from time to time
determine in its sole discretion. During 1993 neither Mr. L. A. Tisch nor Mr. P.
R. Tisch requested the Board to consider an increase in compensation, and the
Board did not initiate consideration of an increase in such compensation.
The amendment to the Internal Revenue Code enacted in 1993 which eliminates
the tax deduction for compensation in excess of $1,000,000 per year to certain
executive officers of public companies is not applicable to the Company's co-
chief executive officers, since the amendment does not apply to compensation
payable pursuant to binding contracts in effect on February 17, 1993.
Accordingly, the Company has not as yet established a policy with respect to
qualifying executive compensation in excess of $1,000,000 for deductibility in
accordance with that amendment to the Internal Revenue Code.
By the Board of Charles B. Benenson Lester Pollack Jonathan M. Tisch
Directors: John Brademas Gloria R. Scott Laurence A. Tisch
Bernard Myerson Andrew H. Tisch Preston R. Tisch
Edward J. Noha James S. Tisch
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. A.H. Tisch, J.M. Tisch, J.S. Tisch, L.A. Tisch, and P.R. Tisch, each
of whom are directors of the Company, also serve as officers of the Company or
its subsidiaries. In addition, Messrs. B. Myerson, E.J. Noha and L. Pollack,
each of whom are directors, have formerly served as officers of the Company or
its subsidiaries. Messrs. P.R. Tisch and L.A. Tisch also serve as directors of
CBS, of which L.A. Tisch is also an executive officer.
CERTAIN TRANSACTIONS
Messrs. L.A. Tisch and P.R. Tisch and their affiliates reimbursed to the
Company approximately $2,077,000 in the aggregate for the utilization by them of
the services of certain employees and facilities of the Company during 1993. In
addition, during 1993 Mr. P. R. Tisch expended approximately $2,475,000 for all
of the capital improvements to an apartment maintained for his use at a Company
operated hotel in New York City for the convenience of the Company and its Hotel
Division.
Subsidiaries of the Company, primarily insurance subsidiaries of CNA, have
made expenditures for advertising on CBS owned and affiliated broadcast
stations, at customary rates. During 1993 such expenditures
8
amounted to approximately $4,093,000. It is anticipated that such transactions
will occur in the future.
During 1993 insurance subsidiaries of CNA provided CBS with certain property
and casualty insurance and surety bonds, for which CBS paid premiums at
customary rates amounting to approximately $230,000. In addition, during 1993
insurance subsidiaries of CNA provided CBS with group life insurance coverage
for active employees and retirees for which CBS paid premiums (a portion of
which is represented by employee contributions) aggregating approximately
$4,160,000, and group long term care coverage for which participating employees
paid premiums aggregating approximately $270,000.
CBS has agreed to reimburse the Company for certain consulting services with
respect to real estate matters provided and to be provided to CBS by the
Company's personnel. Approximately $25,000 has been accrued for reimbursement
relating to services provided in 1993. In addition CNA leased space at a CBS
owned office building in New York City for approximately one month in 1993 at a
rental of $110,950.
Mr. Pollack is a general partner of Lazard Freres & Co. ("Lazard"). In the
ordinary course of business the Company and certain of its subsidiaries have
from time to time engaged in securities transactions with Lazard. During 1993
CNA and its subsidiaries paid approximately $16,800 in brokerage commissions to
Lazard and the Company and its subsidiaries, including CNA, engaged in various
principal and other securities transactions with Lazard involving securities
valued at approximately $49,700,000 in the aggregate. Similar transactions may
be expected to occur in the future.
See "Compensation Committee Interlocks and Insider Participation," above, for
information with respect to relationships between certain members of the Board
of Directors and the Company.
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the total annual return of the Company's Common
Stock, the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the
Standard & Poor's Financial Miscellaneous Stock Index ("S&P Financial
Miscellaneous") for the five years ended December 31, 1993. The graph assumes
that the value of the investment in the Company's Common Stock and each Index
was $100 on December 31, 1988 and that all dividends were reinvested.
S & P
Measurement Period Loews S & P 500 Financial
(Fiscal Year Covered) Corporation Index Miscellaneous
Measurement Point - December 31, 1988 $100.00 $100.00 $100.00
Fiscal Year Ended December 31, 1989 159.03 131.69 139.82
Fiscal Year Ended December 31, 1990 126.85 127.60 112.68
Fiscal Year Ended December 31, 1991 142.92 166.47 178.77
Fiscal Year Ended December 31, 1992 158.17 179.15 210.23
Fiscal Year Ended December 31, 1993 123.74 197.21 251.14
9
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
An officer of the Company, Kenneth Abrams, failed to timely file a report
under Section 16 of the Securities Exchange Act of 1934, as amended, in relation
to two transactions by him in the Common Stock in August 1993.
RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(Proposal No. 2)
Upon the recommendation of the Audit Review Committee of the Board of
Directors, none of whose members is an officer of the Company, the Board of
Directors of the Company has selected the firm of Deloitte & Touche, independent
certified public accountants, as the principal independent auditors of the
Company for the year ending December 3l, 1994, subject to ratification by the
shareholders. Deloitte & Touche served as the Company's independent auditor
during 1993. If the appointment of the firm of Deloitte & Touche is not approved
or if that firm shall decline to act or their employment is otherwise
discontinued, the Board of Directors will appoint other independent auditors.
Representatives of Deloitte & Touche are expected to be present at the Annual
Meeting, at which time they will be available to respond to appropriate
questions from shareholders and be given an opportunity to make a statement if
they desire to do so.
SHAREHOLDER PROPOSALS
The Company has been advised that four shareholder proposals described below
will be presented at the Annual Meeting. For the reasons set forth below, the
Board of Directors recommends a vote against each proposal. The names and
addresses of the shareholders submitting these proposals and information
concerning their share ownership will be furnished by the Company to any person
requesting such information. Any such request should be directed to the
Secretary of the Company.
SHAREHOLDER PROPOSAL RELATING TO CUMULATIVE VOTING
(Proposal No. 3)
"RESOLVED: That the stockholders of Loews Corporation, assembled in
annual meeting in person and by proxy, hereby request the Board of
Directors to take the steps necessary to provide for cumulative voting in
the election of directors, which means each stockholder shall be entitled
to as many votes as shall equal the number of shares he or she owns
multiplied by the number of directors to be elected, and he or she may
cast all of such votes for a single candidate, or any two or more of them
as he or she may see fit.
"REASONS: Continued strong support along the lines we suggest were
shown at the last annual meeting when 17.2%, an increase over the previous
year, 606 owners of 8,962,576 shares, were cast in favor of this proposal.
The vote against included unmarked proxies.
"A law enacted in California provides that all state pension holding,
as well as state college funds, invested in shares, must be voted in favor
of cumulative voting proposals, showing increasing recognition of the
importance of this democratic means of electing directors.
"Also, the National Bank Act has provided for cumulative voting.
Unfortunately, in so many cases companies get around it by forming holding
companies without cumulative voting. Thus, with so many banking failures
the result is that taxpayers have to make up the losses. Banking
authorities have the right to question the capability of directors to be on
banking boards. Unfortunately, in so many cases authorities come in after and
say the director or directors were not qualified. So there is no reason why
this could not be done for corporations under the SEC and banking authorities.
10
"Because of the normal need to find new directors on the board to see
that the name and address of the proponents are included in the proxy
statement; as it is highly unfair to have to call the company,
particularly, as it can be an employee stockholder, as well as an
institutional one; and the need for directors on the compensation
committee, we think cumulative voting is the answer. In addition, some
recommendations have been made to carry out the Valdez 10 points. The
11th, in our opinion, should be to have cumulative voting
and to end the stagger system of electing directors.
"Alaska took away cumulative voting, over our objections, when it
became a state. Perhaps, if the citizens had insisted on proper
representation the disastrous Valdez oil spill might have been prevented
if environmental directors were elected through cumulative voting.
"Many successful corporations have cumulative voting. For example,
Pennzoil having cumulative voting defeated Texaco in that famous case.
Another example, in spite of still having a stagger system of electing
directors, Ingersoll-Rand, which has cumulative voting, won two awards. In
FORTUNE magazine it was ranked second as "America's Most Admired
Corporations" and the WALL STREET TRANSCRIPT noted "on almost any criteria
used to evaluate management, Ingersoll-Rand excels." We believe Loews
should follow their example.
"If you agree, please mark your proxy for this resolution; otherwise it
is automatically cast against it, unless you have marked to abstain."
The Board of Directors recommends a vote AGAINST Proposal No. 3.
This is the fourteenth submission since 1960 by the same proponents of this
proposal. Each time it has been overwhelmingly rejected by the shareholders.
The Board of Directors continues to believe that cumulative voting is
undesirable because it can result in one or more directors representing a
special group of shareholders. The Board believes that the directors should
administer the affairs of the Company for the benefit of all shareholders and
that no director should be elected without the vote of a majority of the shares.
SHAREHOLDER PROPOSAL RELATING TO ANNUAL MEETING LOCATION
(Proposal No. 4)
"RESOLVED: That the stockholders of Loews recommend that the Board of
Directors take the necessary steps to rotate the annual meeting each year
between cities where there is a large concentration of shares and/or where
Loews and/or its subsidiaries have business locations."
"REASONS: Many corporations such as I.T.T., UAL, A.T.T., Xerox, IBM,
Time Warner, Paramount, Bell Atlantic, Pacific Bell, U.S. West, Ameritech,
Chrysler, General Motors, General Electric, Cap Cities/ABC, American
Express, Martin Marietta, Safeway, Sears and many, many others rotate on a
regular basis.
"Stockholders who for business or geographic reasons cannot attend the
New York meeting, are nevertheless entitled to meet management and
directors and to pose questions at annual meetings if they so wish.
"Loews could meet in cities such as Los Angeles, Chicago, Miami,
Washington, D.C., Richmond, Baltimore, Atlanta and other places, as well
as from time to time in New York City.
"If you AGREE, please mark your proxy FOR this proposal."
The Board of Directors recommends a vote AGAINST Proposal No. 4.
11
Under the Company's by-laws, the Board of Directors may designate the place
for the Annual Meeting of Shareholders at an appropriate location. The Board
believes that at the present time it is preferable to hold the Annual Meeting in
New York City, where the Company's executive offices are located. This allows
the Company's directors and personnel to attend and handle arrangements for the
meeting without having to take substantial time away fromthe performance of
their regular responsibilities. Changing the location ofthe Annual Meeting has
from time to time been considered, and may be considered again. The Board
believes, however, that adopting a formal program requiring rotation of the
Annual Meeting would be unduly restrictive. Accordingly, the Board of Directors
recommends a vote against this proposal.
SHAREHOLDER PROPOSAL RELATING TO CIGARETTE WARNING STATEMENT
(Proposal No. 5)
"WHEREAS: Our Company's Newport brand is the leading menthol cigarette
among teenagers;
"Our Company actively pursues customers for its cigarettes by spending
hundreds of millions of dollars in advertising and promotions. Efforts
include:
"Conventional advertising using billboards, magazines, newspapers, bus
signs, and placards;
"Promotional advertising using items bearing our Company's cigarette
logos and symbols. Items include caps, beach balls, tube socks, t-shirts,
plastic mugs with model Newport race cars, photo frames, and lighters.
These sorts of items are popular with children. For instance, 39% of tenth
graders in Perth Amboy, New Jersey reported owning promotional items
connected with tobacco products.
"With increasing restrictions on conventional advertising, the Company
has shifted advertising dollars into promotions to convey the images,
symbols, and other advertising messages of its cigarette brands to impress
the image of the brands on potential consumers' psyches. For instance:
"Advertising for Newport cigarettes has appeared on a basketball-like
game in family-oriented amusement areas and on banners towed by airplanes
flying over public beaches. Items such as t-shirts which say,
"Newport/Alive with Pleasure," bear no warning about the miseries Newport
cigarettes often cause, including addiction, lung cancer and early death.
A person wearing one of these t-shirts is a walking billboard for Newport.
Such t-shirts are free advertising of our Company's brands and invite use
by young people and other consumers without warning of the diseases
cigarettes cause;
"The Federal Trade Commission requires that advertising for brands of
chewing tobacco and moist snuff on items such as caps and t-shirts carry
prominent warning labels;
"RESOLVED: That shareholders request the Board to adopt the following
policy to be put into effect by January 1, 1995: All advertising and
promotion for our Company's tobacco products shall include clear,
effective and prominent warnings about the dangers of addiction, disease,
and death caused by smoking cigarettes.
"SUPPORTING STATEMENT: On the one hand, our Company says smoking is an
adult custom and that it tries to discourage children from smoking. At the
same time, we believe it encourages young people to smoke by distributing
clothing and other gear promoting its cigarette brands. The symbols and
logos on these items invade their consciousness with no parallel warnings
about the damage caused by smoking. We believe there should be warnings
wherever ourads and promotions appear; they should be at least as easily
readable andconspicuous as the images and symbols connected to our
cigarette brands.
"Our Company has been relatively free of damages connected to
litigation from plaintiffs because of
12
smoking, arguing that cigarette packages contained warnings. Similar
warnings should be placed on any ads or promotional symbols connected to
our cigarettes because it may be argued that these attracted people to use
our products to the detriment of their health. We believe that placing
warnings beside all uses of our cigarette logos, just as is already
required for moist snuff and chewing tobacco brands, is appropriate. If
you agree, please vote "yes" for this resolution."
The Board of Directors recommends a vote AGAINST Proposal No. 5.
This proposal is similar to a proposal which was overwhelmingly defeated by
the shareholders last year. The Board of Directors continues to believe that the
adoption of this proposal would not be in the interest of the Company or its
shareholders. Were Lorillard to adopt a new undefined warning statement in
addition to the warnings now mandated by federal law, Lorillard could be subject
to the risk of further litigation and controversy.
Warning statements on cigarette packages and advertising have been required
under federal law since 1985; a warning statement on cigarette packages has been
required for over 25 years. In addition, the cigarette industry has adopted a
voluntary code on cigarette advertising. Lorillard has a long standing
comprehensive procedure to review all of its advertising in relation to
compliance with these legal requirements and the industry's voluntary code.
Accordingly, the Board of Directors recommends a vote against this proposal.
SHAREHOLDER PROPOSAL RELATING TO TOBACCO AND INSURANCE
(Proposal No. 6)
"WHEREAS: Cigarette smoking is the leading cause of preventable death
and disease in the United States, causing an estimated 430,000 deaths last
year, with 53,000 more dying from effects of passive smoking;
"An estimated $23.7 billion was spent in 1985 to treat diseases caused
by smoking. $10.2 billion was lost because of smoking-induced disability.
$18.5 billion more was lost to the economy because of premature deaths;
"Fires caused by smoking are the leading cause of death from
residential fires;
"Through its Lorillard Division, our Company manufactures, promotes and
advertises its cigarettes targeting African-Americans and low-income
persons. Yet, through its CNA Division, our Company also insures persons
against disease, premature death, and property loss from cigarette-related
causes;
"Recognizing the health-hazards related to smoking as well as its
lethal power, our Company gives preferred rates to those it insures who do
not smoke;
"Such conflicting approaches to health by divisions of Loews leads many
to believe our Company's methods undermine health through the promotion of
cigarettes while giving preferential rates for insurance to those who are
cigarette-free. On the one hand, advertisements for our Newport brand of
cigarettes imply it makes users "Alive with Pleasure." However, our ads in
cigarette trade publications have declared Newport to be "Alive with
Profits." This may aptly describe why we continue this apparent
contradiction.
"RESOLVED: That shareholders request a Special Report on Loews tobacco
and insurance businesses be prepared for requesting shareholders. This
Report, prepared at reasonable cost and omitting any proprietary
information, shall describe the following:
"1. The rationale between the apparent contradiction between
advertising and promoting cigarettes yet giving preferential insurance
rates for persons who do not smoke;
"2. A summary of any research done by our Company or CNA related to the
health hazards of smoking among the insured population of CNA;
13
"3. The annual estimated impact smoking has on our Company's insurance
payments for smoking-attributable deaths, diseases, or property loss
between 1988 and 1993 compared with the annual estimated earnings our
Company has realized from its tobacco operations in the same period.
"The findings and conclusions of this Report shall be made available to
requesting shareholders by November 1, 1994.
"SUPPORTING STATEMENT: Our Company's insurance subsidiary insures health
and life. Yet another division manufactures products and generates the
majority of the Company's profits from a product which kills. We reward
people for not using cigarettes, yet we manufacture them. A vote for this
resolution will invite our Board and management to review this apparent
contradiction and provide a rationale, if possible, for it. Hopefully the
conclusions will make it evident that we cannot ethically continue in one
or the other businesses.
"If you agree, please vote "yes" for this shareholder resolution."
The Board of Directors recommends a vote AGAINST Proposal No. 6.
This proposal is similar to a proposal included in last year's Proxy
Statement which was overwhelmingly defeated by the shareholders. The Board of
Directors continues to believe that the adoption of this proposal would not be
in the interest of the Company or its shareholders. The information the
requested report seeks, assuming such information would be available, relates to
the ordinary business operations of the Company, including those of its 83%
owned subsidiary, CNA, and in the opinion of the Board of Directors is not an
appropriate subject for shareholder action, or more importantly, a public
report. Accordingly, the Board of Directors recommends a vote against this
proposal.
OTHER MATTERS
The Company knows of no other matters to be brought before the meeting. If
other matters should properly come before the meeting, proxies will be voted on
such matters in accordance with the best judgment of the persons appointed by
the proxies.
The Company will bear all costs in connection with the solicitation of
proxies for the meeting. The Company intends to request brokerage houses,
custodians, nominees and others who hold stock in their names to solicit proxies
from the persons who own stock, and such brokerage houses, custodians, nominees
and others, will be reimbursed for their out-of-pocket expenses and reasonable
clerical expense. In addition to the use of the mails, solicitation may be made
by employees of the Company and its subsidiaries personally or by mail or
telephone.
Shareholder Proposals for the 1995 Annual Meeting
Shareholder proposals for the 1995 Annual Meeting must be received by the
Company at its principal executive offices set forth above not later than
November 25, 1994, in order to be included in the Company's proxy materials.
By order of the Board of Directors,
BARRY HIRSCH
Dated: March 24, 1994 Secretary
PLEASE COMPLETE, DATE, SIGN AND RETURN YOUR PROXY PROMPTLY
14
LOEWS CORPORATION Proxy
- -------------------------------------------------------------------------------
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby constitutes and appoints Bernard Myerson, Roy E.
Posner and Barry Hirsch and each of them, each with full power of substitution,
true and lawful attorneys, agents and proxies with all the powers the
undersigned would possess if personally present, to vote all shares of Common
Stock of the undersigned in Loews Corporation at the Annual Meeting of
Shareholders to be held at the Chemical Corporate Headquarters Auditorium, Third
Floor, 270 Park Avenue at 48th Street, New York, New York, on May 10, 1994, at
11:00 A.M., New York City Time, and at any adjournments thereof, upon the
matters set forth in the Notice of Meeting and accompanying Proxy Statement and,
in their judgment and discretion, upon such other business as may properly come
before the meeting.
This Proxy when properly executed will be voted in the manner directed by
the undersigned shareholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF DIRECTORS, "FOR" PROPOSAL 2 AND "AGAINST" PROPOSALS 3, 4,
5 AND 6.
THIS PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
[ X ] Please mark
your votes
like this
------------
COMMON
Item 1-ELECTION OF DIRECTORS WITHHELD
Nominees: C.B. Benenson, J. Brademas, FOR FOR ALL
B. Meyerson, E.J. Noha, FOR AGAINST ABSTAIN
L. Pollack, G. R. Scott, Item 3-SHAREHOLDER PROPOSAL CONCERNING
A.H. Tisch, J.S. Tisch CUMULATIVE VOTING [ ] [ ] [ ]
J.M. Tisch, L.A. Tisch [ ] [ ]
and P.R. Tisch Item 4-SHAREHOLDER PROPOSAL CONCERNING
WITHHELD FOR: (Write that nominee's ANNUAL MEETING LOCATION [ ] [ ] [ ]
name in the space provided below.)
Item 5-SHAREHOLDER PROPOSAL CONCERNING
CIGARETTE WARNING STATEMENT [ ] [ ] [ ]
- --------------------------------------------------------
Item 2-RATIFY DELOITTE & FOR AGAINST ABSTAIN Item 6-SHAREHOLDER PROPOSAL CONCERNING
TOUCHE AS TOBACCO AND INSURANCE [ ] [ ] [ ]
INDEPENDENT
ACCOUNTANTS [ ] [ ] [ ]
__________
|
| Please sign EXACTLY as name appears on this
| Proxy. When shares are held by joint
| tenants, both should sign. When signing as
attorney, executor, administrator, trustee
or guardian, please give full title as
such. Corporate and partnership proxies
should be signed by an authorized person
indicating the person's title.
Signature(s)____________________________________________________________________________ Date___________________________
