Loews Corp. Proxy Statement
667
Madison Avenue
New
York,
New York 10021-8087
NOTICE
OF ANNUAL MEETING OF SHAREHOLDERS
To
Be Held on May 8, 2006
The
Annual Meeting of Shareholders of Loews Corporation will be held at The Regency
Hotel, 540 Park Avenue, New York, New York, on Monday, May 8, 2006, at 11:00
A.M. New York City time, for the following purposes:
· To
elect
ten directors;
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To
ratify the appointment of independent auditors for
2006;
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· To
consider and act upon two shareholder
proposals; and
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To
transact such other business as may properly come before the meeting
or
any adjournment thereof.
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Shareholders
of record at the close of business on March 10, 2006 are entitled to notice
of
and to vote at the meeting and any adjournment thereof.
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By
order of the Board of Directors,
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GARY
W. GARSON
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Secretary
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Dated:
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April
3, 2006
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WE
URGE YOU 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.
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LOEWS
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CORPORATION
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PROXY
STATEMENT
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We
are
providing this Proxy Statement in connection with the solicitation by our Board
of Directors of proxies to be voted at our Annual Meeting of Shareholders ,
which will be held on May 8, 2006. We expect to mail proxy materials to our
shareholders on or about April 3, 2006. Our mailing address is 667 Madison
Avenue, New York, New York 10021-8087. Please note that throughout this Proxy
Statement we refer to Loews Corporation as “we,” “us,” “our,” or the
“Company.”
Voting
We
have
two classes of common stock which are outstanding and eligible to vote at the
meeting:
· Common
Stock; and
· Carolina
Group stock.
As
of
March 10, 2006, the record date for determination of shareholders entitled
to
notice of and to vote at the meeting, there were 185,886,159 shares of Common
Stock and 78,260,494 shares of Carolina Group stock outstanding. Each
outstanding share of Common Stock is entitled to one vote and each outstanding
share of Carolina Group stock is entitled to 1/10 of a vote on all matters
which
may come before the meeting.
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 ten nominees who receive the greatest number of votes cast
for
election as directors will be elected as our directors. 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 each of the other
proposals to be voted on at the meeting. Shares which are voted to abstain
on
these matters will be considered present at the meeting, but since they are
not
affirmative votes for a proposal they will have the same effect as votes against
the proposal. Broker non-votes are not counted as present. All properly executed
proxies in the accompanying form received by us prior to the meeting will be
voted at the meeting. You may revoke your proxy at any time before it is
exercised by giving notice in writing to our Corporate Secretary, by granting
a
proxy bearing a later date or by voting in person.
Our
Board
of Directors has adopted a policy of confidentiality regarding the voting of
shares. Under this policy, all proxies, ballots and voting tabulations that
identify how an individual shareholder has voted at the meeting will be kept
confidential from us, except where disclosure is required by applicable law,
a
shareholder expressly requests disclosure, or in the case of a contested proxy
solicitation. Proxy tabulators and inspectors of election will be employees
of
our transfer agent or another third party, and not our employees.
Principal
Shareholders
The
following table shows certain information, at February 28, 2006 unless otherwise
indicated, as to all persons who, to our knowledge, were the beneficial owners
of 5% or more of the outstanding shares of any class of our voting securities.
All shares reported were owned beneficially by the persons indicated unless
otherwise indicated below.
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Amount
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Percent
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Name
and Address
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Title
of Class
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Beneficially
Owned
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of
Class
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Joan
H. Tisch (1)
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Common
Stock
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26,307,927
(2)
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14.2
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%
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540
Park Avenue
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New
York, NY 10021-8087
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Davis
Selected Advisers, L.P. (3)
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Common
Stock
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15,484,309
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8.3
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2949
Elvira Road, Suite 101
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Tucson,
AZ 85706
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Dodge
& Cox (4)
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Common
Stock
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13,433,822
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7.2
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555
California Street, 40th Floor
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San
Francisco, CA 94104
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Wilma
S. Tisch (1) (5)
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Common
Stock
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10,784,321
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5.8
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980
Fifth Avenue
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New
York, N.Y. 10021-8087
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Morgan
Stanley (6)
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Carolina
Group Stock
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7,341,939
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9.4
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1585
Broadway
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New
York, N.Y. 10036
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FMR
Corp. (7)
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Carolina
Group stock
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4,204,930
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5.4
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82
Devonshire Street
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Boston,
MA 02109
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Citigroup,
Inc. (8)
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Carolina
Group Stock
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4,204,068
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5.3
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399
Park Avenue
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New
York, N.Y. 10043
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(1)
Wilma
S. Tisch was the wife of the late Laurence A. Tisch, former Co-Chairman of
the
Board of the Company. Joan H. Tisch was the wife of the late Preston R. Tisch,
former Co-Chairman of the Board of the Company. James S. Tisch, President and
Chief Executive Officer and a director of the Company, and Andrew H. Tisch,
Co-Chairman of the Board and Chairman of the Executive Committee of the Company,
are sons of Mrs. W.S. Tisch. Jonathan M. Tisch, Co-Chairman of the Board of
the
Company and Chairman and Chief Executive Officer of Loews Hotels, is the son
of
Mrs. J.H. Tisch. Each of Messrs. J.S. Tisch, A.H. Tisch and J.M. Tisch are
members of the Company’s Office of the President.
(2)
Includes 16,071,754 shares owned beneficially by Mrs. J.H. Tisch directly and
10,236,173 shares held by her as trustee of various trusts.
(3)
This
information is as of December 31, 2005 and is based on a Schedule 13G report
filed by Davis Selected Advisers, L.P., as an investment adviser.
(4)
This
information is as of December 31, 2005 and is based on a Schedule 13G report
filed by Dodge & Cox. According to the report, the shares covered by this
Schedule 13G are beneficially owned by clients of Dodge & Cox and Dodge
& Cox has sole dispositive power with respect to 13,433,822 shares, sole
voting power with respect to 12,715,272 shares and shared voting power with
respect to 133,400 shares.
(5)
This
information is as of February 27, 2006 and is based on a Schedule 13G report
filed by Mrs. W.S. Tisch.
(6)
This
information is as of December 31, 2005 and is based on a Schedule 13G report
filed jointly by Morgan Stanley and Morgan Stanley & Co. International
Limited. According to the report, Morgan Stanley has sole voting and dispositive
power with respect to 6,675,096 shares and shared voting and dispositive
power
with respect to 71,895 shares. Morgan Stanley filed the report solely in
its
capacity as the parent company of, and indirect beneficial owner of securities
held by, one of its business units. This report also discloses that Morgan
Stanley & Co. International Limited has beneficial ownership of 4,126,206
shares, representing 5.3% of the shares outstanding, including sole voting
and
dispositive power with respect to 3,695,104 shares.
(7)
This
information is as of December 31, 2005 and is based on a Schedule 13G report
filed jointly by FMR Corp. (“FMR”), Edward C. Johnson 3d and Fidelity Management
& Research Company (“Fidelity”). According to the report, FMR has sole
voting power with respect to 414,630 shares and sole dispositive power with
respect to 4,204,930 shares, and Mr. Johnson has sole dispostive power with
respect to 4,204,930 shares. Fidelity , a subsidiary of FMR, acts as an
investment advisor to various investment companies and is the beneficial owner
of 3,792,000 shares. Mr. Johnson is Chairman of FMR.
(8)
This
information is as of December 31, 2005 and is based on a Schedule 13G report
filed jointly by Citigroup, Inc. (“Citigroup”) and it subsidiaries, Citicorp
Holdings Inc. and Citibank, N.A. According to the report, the reporting persons
have shared voting and dispositive power with respect to 4,077,749 of the shares
reported, and Citigroup has shared voting and dispositive power with respect
to
all 4,204,068 of the shares reported.
Director
and Officer Holdings
The
following table shows certain information, at February 28, 2006, as to the
shares of our voting securities beneficially owned by each director and nominee,
each executive officer named in the Summary Compensation Table below and all
of
our executive officers and directors as a group, based on data furnished by
them.
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Amount
Beneficially
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Percent
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Name
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Title
of Class
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Owned
(1)
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of
Class
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Ann
E. Berman
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Common
Stock
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500
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*
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Joseph
L. Bower
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Common
Stock
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7,500
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(2)
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*
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John
Brademas
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Common
Stock
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9,720
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(3)
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*
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Charles
M. Diker
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Common
Stock
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5,700
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(4)
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*
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Paul
J. Fribourg
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Common
Stock
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20,700
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(5)
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*
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Walter
L. Harris
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Common
Stock
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3,000
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(6)
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*
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Peter
W. Keegan
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Common
Stock
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46,873
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(7)
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*
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Philip
A. Laskawy
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Common
Stock
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7,500
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(8)
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*
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Arthur
L. Rebell
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Common
Stock
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26,873
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(9)
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*
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Gloria
R. Scott
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Common
Stock
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5,500
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(10)
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*
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Andrew
H. Tisch
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Common
Stock
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3,016,609
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(11)
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1.6%
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James
S. Tisch
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Common
Stock
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3,217,608
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(12)
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1.7%
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Jonathan
M. Tisch
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Common
Stock
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1,085,972
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(13)
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*
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All
executive officers and directors as
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Common
Stock
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7,690,108
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(14)
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4.1%
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a
group (16 persons including those
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listed
above)
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*
Represents less than 1% of the outstanding shares.
(1)
Except as otherwise indicated, the persons listed as beneficial owners of the
shares have sole voting and investment power with respect to those
shares.
(2)
Represents 7,500 shares issuable upon the exercise of options granted under
the
Loews Corporation 2000 Stock Option Plan (our “Stock Option Plan”) which are
currently exercisable.
(3)
Includes 7,500 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable.
(4)
Includes 4,700 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable.
(5)
Includes 12,000 shares owned by an affiliate of ContiGroup Companies, Inc.
(“ContiGroup”). Mr. Fribourg, an executive officer of ContiGroup, disclaims
beneficial ownership of these shares. Also includes 8,700 shares issuable upon
the exercise of options granted under our Stock Option Plan which are currently
exercisable.
(6)
Represents 3,000 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable. In addition, Mr. Harris
owns
beneficially 1,830 shares of CNA Financial Corporation, a 91% owned subsidiary
of the Company (“CNA”), and 2,000 common units of Boardwalk Pipeline Partners,
LP, an 85% owned subsidiary of the Company (“Boardwalk Pipeline”).
(7)
Represents 46,873 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable. In addition, Mr. Keegan
owns
beneficially 1,000 shares of Diamond Offshore Drilling, Inc., a 54% owned
subsidiary of the Company (“Diamond Offshore”).
(8)
Includes 5,500 shares issuable upon the exercise of options granted under our
Stock Option Plan which are currently exercisable and 2,000 shares owned
beneficially by Mr. Laskawy’s wife. In addition, Mr. Laskawy owns beneficially
10,000 common units of Boardwalk Pipeline.
(9)
Represents 26,873 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable. In addition, Mr. Rebell
owns
beneficially 5,368 shares of CNA, including 854 shares with respect to which
he
has shared voting and investment power, 36,000 common units of Boardwalk
Pipeline, including 30,000 common units with respect to which he has shared
voting and investment power, and 10,000 shares of Diamond Offshore issuable
upon
the exercise of options which are currently exercisable.
(10)
Represents 5,500 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable.
(11)
Includes 90,000 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable. Also includes 1,767,440
shares held by trusts of which Mr. A.H. Tisch is the managing trustee (inclusive
of 1,173,510 shares held in trust for his benefit), and 65,000 shares held
by a
charitable foundation as to which Mr. A.H. Tisch has shared voting and
investment power. In addition, Mr. A.H. Tisch is the managing trustee and
beneficiary of a trust which owns beneficially 6,100 shares of CNA, and is
a
trustee of a trust which owns beneficially a 25% interest in a general
partnership which owns 74,200 common units of Boardwalk Pipeline.
(12)
Includes 90,000 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable. Also includes 2,100,268
shares held by trusts of which Mr. J.S. Tisch is the managing trustee (inclusive
of 1,506,339 shares held in trust for his benefit), and 110,000 shares held
by a
charitable foundation as to which Mr. J.S. Tisch has shared voting and
investment power. In addition, Mr. J.S. Tisch owns beneficially 117,500 shares
of Diamond Offshore, including 112,500 shares of Diamond Offshore issuable
upon
the exercise of options which are currently exercisable, is the managing trustee
and beneficiary of a trust which owns beneficially 6,100 shares of CNA, and
is a
trustee of a trust which owns beneficially a 25% interest in a general
partnership which owns 74,200 common units of Boardwalk Pipeline.
(13)
Includes 90,000 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable. Also includes 750,972 shares
held by a trust of which Mr. J.M. Tisch is the managing trustee and beneficiary
and 145,000 shares held by a charitable foundation as to which Mr. J.M.
Tisch has shared voting and investment power.
(14)
Includes 442,199 shares issuable upon the exercise of options granted under
our
Stock Option Plan which are currently exercisable.
Section
16(a) Beneficial Ownership Reporting Compliance
Based
upon a review of filings with the Securities and Exchange Commission and
written
representations to us, we believe that during 2005 all of our directors and
executive officers complied with the reporting requirements of Section 16(a)
of
the Securities Exchange Act of 1934.
ELECTION
OF DIRECTORS
(Proposal
No. 1)
Our
Board
has fixed the number of directors constituting the full Board of Directors
at
ten, effective as of May 8, 2006. Accordingly, at the meeting shareholders
will
vote to elect a Board of ten directors to serve until the next annual meeting
of
shareholders and until their respective successors are duly elected and
qualified. It is the intention of the persons named in the accompanying form
of
proxy, unless you specify otherwise in your proxy, to vote for the election
of
the nominees named below, each of whom is now a director. Our Board of Directors
has no reason to believe that any of the persons named will be unable or
unwilling to serve as a director. If any nominee is unable or unwilling to
serve, we anticipate that either proxies will be voted for the election of
a
substitute nominee or nominees recommended by our Nominating and Governance
Committee and approved by our Board of Directors, or our Board of Directors
will
adopt a resolution reducing the number of directors constituting our full Board.
Set forth below is the name, age, principal occupation during the past five
years and other information concerning each nominee.
Ann
E. Berman, 53 -
Vice
President of Finance and Chief Financial Officer of Harvard University, since
2002. Ms. Berman has announced that she will retire from her position at Harvard
University effective April 1, 2006. Ms. Berman served as Senior Advisor to
the
Dean of Faculty of Arts and Sciences at Harvard University from 1999 until
2002.
She is also a director of Eaton Vance Corporation. She has been a director
of
the Company since January 2006.
Joseph
L. Bower,
67 -
Donald K. David Professor of Business Administration at Harvard University.
Professor Bower is also a director of Anika Therapeutics, Inc., Brown Shoe
Company, Inc., New America High Income Fund, Inc., Sonesta International Hotels
Corporation and T H Lee-Putnam EO Fund. He has been a director of the Company
since 2001.
Charles
M. Diker,
71 -
Managing Partner of Diker Management LLC, a registered investment adviser.
Mr.
Diker is also the Chairman of the Board of Cantel Medical Corp., a provider
of
infection prevention and control products and other medical devices. He has
been
a director of the Company since 2003.
Paul
J. Fribourg,
52 -
Chairman of the Board, President and Chief Executive Officer of ContiGroup,
a
producer of pork and poultry products and provider of cattle feeding services.
Mr. Fribourg is also a director of Premium Standard Farms, Inc., Vivendi
Universal, S.A. and Power Corporation of Canada. He has been a director of
the
Company since 1997.
Walter
L. Harris,
54 -
President and Chief Executive Officer of Tanenbaum-Harber Co., Inc., an
insurance brokerage firm. He has been a director of the Company since
2004.
Philip
A. Laskawy,
64 -
Retired Chairman and Chief Executive Officer of Ernst & Young. Mr. Laskawy
was Chairman and Chief Executive Officer of Ernst & Young until his
retirement in 2001. Mr. Laskawy is also a director of General Motors
Corporation, Henry Schein, Inc. and The Progressive Corporation. He has been
a
director of the Company since 2003.
Gloria
R. Scott,
67 -
Owner of consulting services firm G. Randle Services. Dr. Scott served as
President of Bennett College in Greensboro, North Carolina until 2001. She
has
been a director of the Company since 1990.
Andrew
H. Tisch,
56 -
Co-Chairman of the Board since January 2006, Chairman of the Executive Committee
and a member of the Office of the President of the Company. He is also a
director of CNA and of the general partner of Boardwalk Pipeline. He has
been a
director of the Company since 1985.
James
S. Tisch,
53 -
President and Chief Executive Officer and a member of the Office of the
President of the Company. He is also a director of CNA and Chairman of the
Board
and Chief Executive Officer of Diamond Offshore. He has been a director of
the
Company since 1986.
Jonathan
M. Tisch,
52 -
Co-Chairman of the Board of the Company since January 2006, Chairman and
Chief
Executive Officer of Loews Hotels and a member of the Office of the President
of
the Company. He has been a director of the Company since 1986.
Director
Independence
Our
Board
of Directors has determined that the following directors, constituting a
majority of our directors and nominees, are independent under the listing
standards of the New York Stock Exchange: Ann E. Berman, Joseph L. Bower,
Charles M. Diker, Paul J. Fribourg, Walter L. Harris, Philip A. Laskawy and
Gloria R. Scott. In addition, our Board has determined that John Brademas,
whose
term as a director will expire on the Annual Meeting date, is also an
independent director. We refer to these directors in this Proxy Statement as
our
“Independent Directors.” Our Board considered all relevant facts and
circumstances and applied the independence guidelines described below in
determining that none of our Independent Directors has any material relationship
with our subsidiaries or us.
Our
Board
has established guidelines to assist it in determining director independence.
Under these guidelines, a director would not be considered independent if any
of
the following relationships exists:
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during
the past three years the director has been an employee, or an immediate
family member has been an executive officer, of the Company;
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the
director or an immediate family member received, during any twelve
month
period within the past three years, more than $100,000 in direct
compensation from the Company, excluding director and committee fees,
pension payments and certain forms of deferred compensation;
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the
director is a current partner or employee or an immediate family
member is
a current partner of a firm that is the Company’s internal or external
auditor, or an immediate family member is a current employee of such
a
firm and participates in the firm’s audit, assurance or tax compliance
(but not tax planning) practice or, within the last three years,
the
director or an immediate family member was a partner or employee
of such a
firm and personally worked on the Company’s audit within that time;
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the
director or an immediate family member has at any time during the
past
three years been employed as an executive officer of another company
where
any of the Company’s present executive officers at the same time serves or
served on that company’s compensation committee; or
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the
director is a current employee, or an immediate family member is
a current
executive officer, of a company that has made payments to, or received
payments from, the Company for property or services in an amount
which, in
any of the last three years, exceeds the greater of $1 million, or
2% of
the other company’s consolidated gross revenues.
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In
making
its determination, our Board also considered the commercial relationship between
certain insurance subsidiaries of CNA and Tanenbaum-Harber Co. Inc., of which
Walter L. Harris is President and Chief Executive Officer, and certain of its
affiliates, and determined that Mr. Harris meets all of the requirements
described above for Independent Directors and does not have a material
relationship with us.
Committees
of the Board
Our
Board
of Directors has a standing Audit Committee, Compensation Committee, Nominating
and Governance Committee, Executive Committee and Finance Committee. Our
Audit
Committee, Compensation Committee and Nominating and Governance Committee
have
written charters which can be found on our website at www.loews.com
and are
available in print to any shareholder who requests a copy by writing to our
Corporate Secretary.
Audit
Committee. The
primary function of our Audit Committee is to assist our Board of Directors
in
fulfilling its responsibility to oversee management’s conduct of our financial
reporting process, including review of our financial reports and other financial
information, our system of internal accounting controls, our compliance with
legal and regulatory requirements, the qualifications and independence of
our
independent auditors and the performance of our internal audit staff and
independent auditors. Our Audit Committee has
sole
authority to appoint, retain, compensate, evaluate and terminate our independent
auditors and to approve all engagement fees and terms for our independent
auditors.
The
members of our Audit Committee are Walter L. Harris (Chairman), Ann E. Berman,
Charles M. Diker, Paul J. Fribourg, Philip A. Laskawy and Gloria R. Scott,
each
of whom is an Independent Director and satisfies the additional independence
and
other requirements for Audit Committee members provided for in the listing
standards of the New York Stock Exchange. Our Board has determined that each
of
Ms. Berman and Mr. Laskawy is a “financial expert” under the rules of the
Securities and Exchange Commission and that Mr. Laskawy’s simultaneous service
on the audit committees of three public companies, in addition to our Audit
Committee, does not impair his ability to effectively serve on our Audit
Committee.
Compensation
Committee.
The
primary function of our Compensation Committee is to assist our Board of
Directors in discharging its responsibilities relating to compensation of our
executives. These responsibilities include reviewing our general compensation
philosophy for executive officers, overseeing the development and implementation
of compensation programs for executive officers and reviewing compensation
levels, including incentive and equity-based compensation, for executive
officers, directors and Board committee members. Our Compensation Committee
determines and approves compensation for our Chief Executive Officer and
administers our incentive and equity-based compensation plans. The members
of
our Compensation Committee are John Brademas (Chairman), Joseph L. Bower,
Charles M. Diker and Paul J. Fribourg, each of whom is an Independent Director.
Nominating
and Governance Committee. The
primary functions of our Nominating and Governance Committee are to identify
individuals qualified to become members of our Board of Directors, recommend
to
our Board a slate of director nominees for election at our next annual meeting
of shareholders and develop and recommend to our Board a set of corporate
governance principles. These corporate governance principles are set forth
in
our Corporate Governance Guidelines which can be found on our website at
www.loews.com
and
are
available in print to any shareholder who requests a copy by writing to our
Corporate Secretary.
The
members of our Nominating and Governance Committee are Paul J. Fribourg
(Chairman), Joseph L. Bower, Walter L. Harris and Gloria R. Scott, each of
whom
is an Independent Director.
Director
Nominating Process
In
evaluating potential director nominees, including those identified by
shareholders, for recommendation to our Board of Directors, our Nominating
and
Governance Committee seeks individuals with talent, ability and experience
from
a wide variety of backgrounds to provide a diverse spectrum of experience and
expertise relevant to a diversified business enterprise such as ours. A
candidate should represent the interests of all shareholders, and not those
of a
special interest group, have a reputation for integrity and be willing to make
a
significant commitment to fulfilling the duties of a director. Our Nominating
and Governance Committee will screen and evaluate all recommended director
nominees based on the criteria set forth above, as well as other relevant
considerations. Our Nominating and Governance Committee will retain full
discretion in considering its nomination recommendations to our
Board.
Executive
Sessions of Non-Management Directors
Our
non-management directors meet in regular executive sessions without management
participation. The Chairman of our Nominating and Governance Committee,
currently Paul J. Fribourg, serves as the presiding director at these meetings.
Director
Attendance at Meetings
During
2005 there were eight meetings of our Board of Directors, eight meetings
of our
Audit Committee, six meetings of our Compensation Committee and two meetings
of
our Nominating and Governance Committee. During 2005, each of our directors
attended not less than 75% of the total number of meetings of our Board of
Directors and committees of our Board on which that director served during
2005.
Our Board encourages all directors to attend our annual meetings of
shareholders, but recognizes that circumstances may prevent attendance from
time
to time. All but one of our directors attended our 2005 Annual Meeting of
Shareholders.
Director
Compensation
Each
director who is not an employee of ours receives the following annual
compensation:
· a
cash
retainer of $50,000, payable in equal quarterly installments of $12,500 each;
and
|
·
|
options
to purchase 2,000 shares of our Common Stock, awarded in equal quarterly
grants of 500 options each.
|
In
addition, members of our Audit Committee are paid $2,000 and members of our
Compensation Committee and Nominating and Governance Committee are paid $1,000
for each committee meeting attended.
Code
of Ethics
We
have a
Code of Business Conduct and Ethics which applies to all of our directors,
officers and employees, including our principal executive officer, principal
financial officer and principal accounting officer. This Code can be found
on
our website at www.loews.com
and
is
available in print to any shareholder who requests a copy by writing to our
Corporate Secretary. We intend to post changes to or waivers of this Code for
our principal executive officer, principal financial officer and principal
accounting officer on our website.
AUDIT
COMMITTEE REPORT
As
discussed above under the heading “Committees of the Board - Audit Committee,”
the primary role of the Board’s Audit Committee is to oversee the Company’s
financial reporting process and manage its relationship with the independent
auditors. In fulfilling its responsibilities, the Audit Committee has reviewed
and discussed the Company’s audited financial statements for the year ended
December 31, 2005 with the Company’s management and independent auditors. The
Audit Committee has also discussed with the Company’s independent auditors the
matters required to be discussed by Statement on Auditing Standards No. 61,
“Communication with Audit Committees,” as amended. In addition, the Audit
Committee has discussed with the independent auditors their independence in
relation to the Company and its management, including the matters in the written
disclosures provided to the Audit Committee as required by Independence
Standards Board Standard No. 1, “Independence Discussions with Audit
Committees,” and has determined that the provision of non-audit services
provided by the auditors is compatible with maintaining the auditors’
independence. For more information about services provided by the auditors,
please read “Audit Fees and Services,” below.
The
members of the Audit Committee rely without independent verification on the
information provided to them by management and the independent auditors and
on
management’s representation that the Company’s financial statements have been
prepared with integrity and objectivity. They do not provide any expert or
special assurance as to the Company’s financial statements or any professional
certification as to the independent auditors’ work. Accordingly, the Audit
Committee’s oversight does not provide an independent basis
to
determine that management has applied appropriate accounting and financial
reporting principles or internal controls and procedures, that the audit of
the
Company’s financial statements has been carried out in accordance with generally
accepted auditing standards, that the Company’s financial statements are
presented in accordance with generally accepted accounting principles, or that
the Company’s auditors are in fact “independent.”
Based
upon the reviews and discussions referred to above, the Audit Committee
recommended to the Board of Directors that the audited financial statements
be
included in the Company’s Annual Report on Form 10-K for the year ended December
31, 2005, which has been filed with the Securities and Exchange
Commission.
By
the
Audit Committee:
Walter
L. Harris, Chairman
|
Paul
J. Fribourg
|
Ann
E. Berman
|
Philip
A. Laskawy
|
Charles
M. Diker
|
Gloria
R. Scott
|
The
following table shows information for the years indicated regarding the
compensation of our Chief Executive Officer and each of our other four most
highly compensated executive officers as of December 31, 2005, who we refer
to
in this Proxy Statement as our “Named Executive Officers,” for services in all
capacities to us and our subsidiaries.
Summary
Compensation Table
|
|
|
|
Long
Term
|
|
|
|
|
Annual
Compensation
|
|
|
Compensation
|
|
|
|
|
|
Securities
|
|
|
|
|
|
Underlying
|
All
Other
|
Name
and Position
|
Year
|
Salary
(1)
|
Bonus
|
Options
|
Compensation
(2)
|
J.S.
Tisch
|
2005
|
|
$
|
1,283,600
|
(3)
|
|
|
$
|
1,250,000
|
(4)
|
|
20,000
|
(5)
|
|
$
|
58,065
|
(6)
|
|
Chief
Executive
|
2004
|
|
|
1,279,831
|
(3)
|
|
|
|
1,050,000
|
(4)
|
|
20,000
|
(5)
|
|
|
49,705
|
(6)
|
|
Officer,
Office
|
2003
|
|
|
1,108,619
|
(3)
|
|
|
|
250,000
|
(4)
|
|
20,000
|
(5)
|
|
|
48,711
|
(6)
|
|
of
the President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.H.
Tisch
|
2005
|
|
|
981,600
|
|
|
|
|
1,250,000
|
(4)
|
|
20,000
|
|
|
|
9,750
|
|
|
Co-Chairman
of
|
2004
|
|
|
979,831
|
|
|
|
|
1,050,000
|
(4)
|
|
20,000
|
|
|
|
7,641
|
|
|
the
Board, Chairman
|
2003
|
|
|
808,619
|
|
|
|
|
250,000
|
(4)
|
|
20,000
|
|
|
|
8,368
|
|
|
of
the Executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Committee,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office
of the
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.M.
Tisch
|
2005
|
|
|
981,742
|
|
|
|
|
1,250,000
|
(4)
|
|
20,000
|
|
|
|
9,411
|
|
|
Co-Chairman
of
|
2004
|
|
|
979,831
|
|
|
|
|
1,050,000
|
(4)
|
|
20,000
|
|
|
|
7,524
|
|
|
the
Board, Chairman
|
2003
|
|
|
808,619
|
|
|
|
|
250,000
|
(4)
|
|
20,000
|
|
|
|
8,276
|
|
|
and
Chief Executive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Officer
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loews
Hotels,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office
of
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
the
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.L.
Rebell
|
2005
|
|
|
980,162
|
|
|
|
|
1,184,630
|
(7)
|
|
15,000
|
(8)
|
|
|
8,400
|
|
|
Senior
Vice
|
2004
|
|
|
980,144
|
|
|
|
|
2,000,000
|
(7)
|
|
15,000
|
(8)
|
|
|
6,900
|
|
|
President
|
2003
|
|
|
981,696
|
|
|
|
|
200,000
|
(7)
|
|
15,000
|
(8)
|
|
|
8,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W.
Keegan
|
2005
|
|
|
994,614
|
|
|
|
|
1,184,139
|
(9)
|
|
15,000
|
|
|
|
8,400
|
|
|
Senior
Vice
|
2004
|
|
|
995,253
|
|
|
|
|
500,000
|
(9)
|
|
15,000
|
|
|
|
6,877
|
|
|
President,
Chief
|
2003
|
|
|
995,322
|
|
|
|
|
150,000
|
(9)
|
|
15,000
|
|
|
|
8,000
|
|
|
Financial
Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Salary includes payments to each Named Executive Officer based on benefit
choices under our flexible benefits plan.
(2)
Except as otherwise noted, represents the annual contribution under our
Employees Savings Plan and any related allocation under our Benefit Equalization
Plan.
(3)
Includes annual compensation for services as Chief Executive Officer of Diamond
Offshore of $300,000.
(4)
Represents unfunded supplemental retirement credits of $250,000 each (exclusive
of interest and pay-based credits) in 2004 and 2003 pursuant to a supplemental
retirement agreement and payouts of $1,250,000 and $800,000 for each of 2005
and
2004, respectively, under our Incentive Compensation Plan for Executive Officers
(our “Incentive Compensation Plan”). For more information about supplemental
retirement agreements, please read “Employment Agreements” and “Pension Plan,”
below.
(5)
In
addition, Mr. J.S. Tisch was awarded 30,000 options to purchase Diamond
Offshore’s
common stock under Diamond Offshore’s stock option plan.
(6)
Also
includes director’s fees paid by CNA amounting to $33,000, $35,000 and $33,000
for 2005, 2004 and 2003, respectively, and insurance premiums and retirement
plan contributions paid by Diamond Offshore of $11,636, $7,181 and $7,434 for
2005, 2004 and 2003, respectively.
(7)
Represents unfunded supplemental retirement credits of $34,630, $1,000,000
and
$200,000 (exclusive of interest and pay-based credits) in 2005, 2004 and 2003,
respectively, pursuant to a supplemental retirement agreement, and payouts
of
$1,150,000 and $1,000,000 for 2005 and 2004, respectively, under our Incentive
Compensation Plan.
(8)
In
addition, in connection with his service as a director of Diamond Offshore,
Mr.
Rebell was awarded 2,000 options to purchase Diamond Offshore’s common
stock
under Diamond Offshore’s stock option plan.
(9)
Represents unfunded supplemental retirement credits of $569,139, $500,000 and
$150,000 (exclusive of interest based credits) in 2005, 2004 and 2003,
respectively, pursuant to a supplemental retirement agreement, and a payout
of
$615,000 for 2005 under our Incentive Compensation Plan.
Stock
Option Plans
The
following table shows information regarding grants of options to acquire shares
of Common Stock under our Stock Option Plan that were made during the year
ended
December 31, 2005 to each of our Named Executive Officers.
Option
Grants In Last Fiscal Year (1)
(Loews
Common Stock)
|
|
|
|
|
Potential
Realizable Value
|
|
No.
of
|
Percent
of
|
|
|
at
Assumed Rates of Stock
|
|
Securities
|
Total
Options
|
|
|
Price
Appreciation for
|
|
Underlying
|
Granted
to
|
Exercise
|
|
Option
Term
|
|
Options
|
Employees
|
Price
Per
|
Expiration
|
|
Name
|
Granted
|
In
Fiscal Year
|
Share
(2)
|
Date
|
5%
|
10%
|
|
|
|
|
|
|
|
J.S.
Tisch
|
5,000
|
|
|
|
|
$
|
71.05
|
|
1/20/2015
|
$
|
210,261
|
|
$
|
545,233
|
|
|
5,000
|
|
6.28%
|
|
|
72.95
|
|
1/20/2015
|
|
234,683
|
|
|
589,747
|
|
|
5,000
|
|
|
|
|
77.73
|
|
1/20/2015
|
|
243,972
|
|
|
618,695
|
|
|
5,000
|
|
|
|
|
91.63
|
|
1/20/2015
|
|
253,250
|
|
|
623,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.H.
Tisch
|
5,000
|
|
|
|
|
71.05
|
|
1/20/2015
|
|
210,261
|
|
|
545,233
|
|
|
5,000
|
|
6.28
|
|
|
72.95
|
|
1/20/2015
|
|
234,683
|
|
|
589,747
|
|
|
5,000
|
|
|
|
|
77.73
|
|
1/20/2015
|
|
243,972
|
|
|
618,695
|
|
|
5,000
|
|
|
|
|
91.63
|
|
1/20/2015
|
|
253,250
|
|
|
623,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
J.M.
Tisch
|
5,000
|
|
|
|
|
71.05
|
|
1/20/2015
|
|
210,261
|
|
|
545,233
|
|
|
5,000
|
|
6.28
|
|
|
72.95
|
|
1/20/2015
|
|
234,683
|
|
|
589,747
|
|
|
5,000
|
|
|
|
|
77.73
|
|
1/20/2015
|
|
243,972
|
|
|
618,695
|
|
|
5,000
|
|
|
|
|
91.63
|
|
1/20/2015
|
|
253,250
|
|
|
623,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
A.L.
Rebell
|
3,750
|
|
|
|
|
71.05
|
|
1/20/2015
|
|
157,696
|
|
|
408,924
|
|
|
3,750
|
|
4.68
|
|
|
72.95
|
|
1/20/2015
|
|
176,012
|
|
|
442,310
|
|
|
3,750
|
|
|
|
|
77.73
|
|
1/20/2015
|
|
182,979
|
|
|
464,021
|
|
|
3,750
|
|
|
|
|
91.63
|
|
1/20/2015
|
|
189,938
|
|
|
467,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W.
Keegan
|
3,750
|
|
|
|
|
71.05
|
|
1/20/2015
|
|
157,696
|
|
|
408,924
|
|
|
3,750
|
|
4.68
|
|
|
72.95
|
|
1/20/2015
|
|
176,012
|
|
|
442,310
|
|
|
3,750
|
|
|
|
|
77.73
|
|
1/20/2015
|
|
182,979
|
|
|
464,021
|
|
|
3,750
|
|
|
|
|
91.63
|
|
1/20/2015
|
|
189,938
|
|
|
467,359
|
|
(1)
Options granted in 2005 to each of our Named Executive Officers become
exercisable at a rate of 25% per year beginning on January 20,
2006.
(2)
Represents 100% of the fair market value of our Common Stock on the grant
date.
The
following table shows information regarding the exercise of stock options
granted under our Stock Option Plan during the year ended December 31, 2005
by
each of our Named Executive Officers.
Aggregated
Option Exercises In Last Fiscal Year And
Fiscal
Year End Option Values
(Loews
Common Stock)
|
|
|
Number
of Securities
|
|
|
|
|
Shares
|
|
Underlying
Unexercised
|
|
Value
of Unexercised
|
|
Acquired
|
Value
|
Options
at Fiscal
|
|
In-the-Money
Options
|
Name
|
On
Exercise
|
Realized
|
Year-End
|
|
at
Fiscal Year-End (1)
|
|
|
|
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|
|
|
|
|
|
|
|
J.S.
Tisch
|
0
|
|
--
|
70,000
|
50,000
|
$3,452,500
|
|
$
|
1,545,800
|
|
|
|
|
|
|
|
|
|
|
|
|
A.H.
Tisch
|
0
|
|
--
|
70,000
|
50,000
|
3,452,500
|
|
|
1,545,800
|
|
|
|
|
|
|
|
|
|
|
|
|
J.M.
Tisch
|
0
|
|
--
|
70,000
|
50,000
|
3,452,500
|
|
|
1,545,800
|
|
|
|
|
|
|
|
|
|
|
|
|
A.L.
Rebell
|
15,000
|
|
$694,458
|
|
22,498
|
37,502
|
899,925
|
|
|
1,159,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
P.W.
Keegan
|
15,000
|
|
962,100
|
|
37,498
|
37,502
|
1,620,375
|
|
|
1,159,425
|
|
(1)
Fair market value of underlying securities as of December 31, 2005, minus the
exercise price.
The
following table shows information provided by Diamond Offshore regarding grants
of options to acquire shares of Diamond Offshore’s common stock under its stock
option plan that were made during the year ended December 31, 2005 to each
of
Messrs. J.S. Tisch and A.L. Rebell.
Option
Grants In Last Fiscal Year (1)
(Diamond
Offshore Common Stock)
|
No.
of
|
Percent
of
|
|
|
|
|
|
Securities
|
Total
Options
|
|
|
|
|
|
Underlying
|
Granted
to
|
Exercise
|
|
|
|
|
Options
|
Employees
|
Price
|
Expiration
|
|
Present
Value at
|
Name
|
Granted
|
In
Fiscal Year
|
Per
Share (2)
|
Date
|
|
Grant
Date (3)
|
J.S.
Tisch
|
7,500
|
|
$
|
45.77
|
4/19/2015
|
|
$163,425
|
|
|
7,500
|
16.96%
|
53.60
|
7/01/2015
|
|
181,800
|
|
|
7,500
|
|
61.90
|
10/03/2015
|
|
207,300
|
|
|
7,500
|
|
69.38
|
12/31/2015
|
|
164,700
|
|
|
|
|
|
|
|
|
|
A.L.
Rebell
|
500
|
|
40.12
|
1/03/2015
|
|
9,180
|
|
|
500
|
1.12
|
49.68
|
4/01/2015
|
|
12,040
|
|
|
500
|
|
53.60
|
7/01/2015
|
|
12,120
|
|
|
500
|
|
61.90
|
10/03/2015
|
|
13,820
|
|
(1)
Options granted in 2005 to Mr. J.S. Tisch become exercisable at a rate of 25%
per year beginning on the anniversary of their grant date. Options granted
in
2005 to Mr. A.L. Rebell became exercisable on the grant date.
(2)
Represents 100% of the fair market value of Diamond Offshore’s common stock on
the grant date.
(3)
The
per share weighted-average fair value of stock options granted to Mr. J.S.
Tisch
during 2005 on April 19, July 1, October 3 and December 31 was $21.79, $24.24,
$27.64 and $21.96 per share, respectively. The per share weighted-average fair
value of stock options granted to Mr. A.L. Rebell during 2005 on January 1,
April 1, July 1 and October 3 was $18.36, $24.08, $24.24 and $27.64 per share,
respectively. The fair value of each stock option granted was estimated by
Diamond Offshore on the date of grant using the Binomial Option Pricing Model.
Assumptions used in the model included a weighted average risk-free interest
rate of 4.16%, and an expected dividend yield on Diamond Offshore’s common stock
of 1.06%.
The
following table shows information provided by Diamond Offshore regarding the
exercise of stock options granted under Diamond Offshore’s stock option plan
during the year ended December 31, 2005 by each of Messrs. J.S. Tisch and A.L.
Rebell.
Aggregated
Option Exercises In Last Fiscal Year And
Fiscal
Year End Option Values
(Diamond
Offshore Common Stock)
|
|
|
Number
of Securities
|
|
|
|
|
Shares
|
|
Underlying
Unexercised
|
|
Value
of Unexercised
|
|
Acquired
|
Value
|
Options
at Fiscal
|
|
In-the-Money
Options
|
Name
|
On
Exercise
|
Realized
|
Year-End
|
|
at
Fiscal Year-End (1)
|
|
|
|
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|
|
|
|
|
|
|
|
J.S.
Tisch
|
0
|
|
--
|
90,000
|
75,000
|
$3,511,850
|
|
$
|
1,970,025
|
|
|
|
|
|
|
|
|
|
|
|
|
A.L.
Rebell
|
2,000
|
|
$49,057
|
9,000
|
0
|
348,035
|
|
|
--
|
|
(1)
Fair
market value of underlying securities as of December 31, 2005, minus the
exercise price.
Employment
Agreements
In
2005
our employment agreements with each of Messrs. A.H. Tisch, J.S. Tisch and J.M.
Tisch were amended to extend their terms to March 31, 2007, with a base salary
of $975,000 per annum. These agreements also provide the right to participate
in
our Incentive Compensation Plan. In addition, we maintain unfunded supplemental
retirement accounts for each Named Executive Officer pursuant to individual
supplemental retirement agreements. In 2005, the account maintained for Mr.
Rebell received a credit of $34,630 (excluding the applicable pay-based credit),
and the account maintained for Mr. Keegan received a credit of $569,139. For
information about our supplemental retirement accounts for each Named Executive
Officer, please read “Pension Plan,” below.
Pension
Plan
We
provide a funded, tax qualified, non-contributory retirement plan for salaried
employees, including executive officers (our “Retirement Plan”) and an unfunded,
non-qualified, non-contributory Benefit Equalization Plan (our “Benefit
Equalization Plan”) which provides for the accrual and payment of benefits which
are not available under tax qualified plans such as our Retirement Plan. The
following description of our Retirement Plan gives effect to benefits provided
under our Benefit Equalization Plan.
Our
Retirement Plan is structured as a cash balance plan. A cash balance plan is
a
form of non-contributory, defined benefit pension plan in which the value of
each participant’s benefit is expressed as a nominal cash balance account
established in the name of the participant. Under the cash balance plan we
increase each participant’s account annually by a “pay-based credit” based on a
specified percentage of annual earnings (based on the participant’s age) and an
“interest credit” based on a specified interest rate, which we set annually for
all participants. At retirement or termination of employment, a vested
participant is entitled to receive the cash balance account in a lump sum or
to
convert the account into a monthly annuity. Compensation covered under our
Retirement Plan consists of salary paid by us and our subsidiaries included
under the heading “Salary” in the Summary Compensation Table above. In addition,
awards under our Incentive Compensation Plan are deemed compensation for
purposes of our Benefit Equalization Plan. Pension benefits are not subject
to
reduction for Social Security benefits or other amounts.
Participants
in our Retirement Plan who met certain age and years of service requirements
at
January 1, 1998 (the year that our Retirement Plan was converted into a cash
balance plan) are entitled to a minimum retirement benefit (“Minimum Benefit”)
equal to the benefit they would have earned under our Retirement Plan before
its
conversion to a cash balance plan. This Minimum Benefit is based upon 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
us.
The
following table shows estimated annual benefits upon retirement under our
Retirement Plan, based on the Minimum Benefit, for various average compensation
and credited service based upon normal retirement at January 1, 2005 and a
straight life annuity form of pension. Each of our Named Executive Officers
qualifies for the Minimum Benefit except for Messrs. Rebell and Keegan. We
currently estimate that the balance of the account maintained under our
Retirement Plan for Messrs. Rebell and Keegan will be approximately $1,309,988
and $1,534,917, respectively, when
each
reaches the normal retirement age of 65, based on actual interest credits of
4.5% and 4.2% for
2006
and 2005, respectively, and assuming annual interest credits of 5.0% for 2007
and later and no increases in the amount of each executive’s earnings.
Average
Final
|
|
Estimated
Annual Pension for
|
|
Compensation
|
|
Representative
Years of Credited Service
|
|
|
|
|
|
|
|
20
|
|
|
|
25
|
|
|
|
30
|
|
|
|
35
|
|
|
|
40
|
|
|
|
45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
|
1,000,000
|
|
$
|
|
240,000
|
|
$
|
|
304,000
|
|
$
|
|
384,000
|
|
$
|
|
464,000
|
|
$
|
|
544,000
|
|
$
|
|
624,000
|
|
|
|
1,250,000
|
|
|
|
300,000
|
|
|
|
380,000
|
|
|
|
480,000
|
|
|
|
580,000
|
|
|
|
680,000
|
|
|
|
780,000
|
|
|
|
1,500,000
|
|
|
|
360,000
|
|
|
|
456,000
|
|
|
|
576,000
|
|
|
|
696,000
|
|
|
|
816,000
|
|
|
|
936,000
|
|
|
|
1,750,000
|
|
|
|
420,000
|
|
|
|
532,000
|
|
|
|
768,000
|
|
|
|
812,000
|
|
|
|
952,000
|
|
|
|
1,092,000
|
|
|
|
2,000,000
|
|
|
|
480,000
|
|
|
|
608,000
|
|
|
|
768,000
|
|
|
|
928,000
|
|
|
|
1,088,000
|
|
|
|
1,248,000
|
|
|
|
2,250,000
|
|
|
|
540,000
|
|
|
|
686,000
|
|
|
|
864,000
|
|
|
|
1,044,000
|
|
|
|
1,224,000
|
|
|
|
1,404,000
|
|
|
|
2,500,000
|
|
|
|
600,000
|
|
|
|
760,000
|
|
|
|
960,000
|
|
|
|
1,160,000
|
|
|
|
1,360,000
|
|
|
|
1,560,000
|
|
|
|
2,750,000
|
|
|
|
660,000
|
|
|
|
836,000
|
|
|
|
1,056,000
|
|
|
|
1,276,000
|
|
|
|
1,496,000
|
|
|
|
1,716,000
|
|
|
|
3,000,000
|
|
|
|
720,000
|
|
|
|
912,000
|
|
|
|
1,152,000
|
|
|
|
1,392,000
|
|
|
|
1,632,000
|
|
|
|
1,872,000
|
|
|
|
3,250,000
|
|
|
|
780,000
|
|
|
|
988,000
|
|
|
|
1,248,000
|
|
|
|
1,508,000
|
|
|
|
1,768,000
|
|
|
|
2,028,000
|
|
|
|
3,500,000
|
|
|
|
840,000
|
|
|
|
1,064,000
|
|
|
|
1,344,000
|
|
|
|
1,624,000
|
|
|
|
2,904,000
|
|
|
|
2,184,000
|
|
The
years
of credited service of Messrs. A.H. Tisch, J.M. Tisch and J.S. Tisch are
thirty-two, twenty-six and twenty-eight, respectively.
Amounts
paid to Mr. J.S. Tisch by Diamond Offshore included in the Summary Compensation
Table are not covered by our Retirement Plan. Diamond Offshore maintains a
tax
qualified defined contribution retirement plan under which it contributes 3.75%
of each participant’s defined compensation and matches 25% of the first 6% of
compensation voluntarily contributed by each participant. Participants are
fully
vested immediately upon enrollment in the plan. Diamond Offshore’s contribution
on behalf of Mr. J.S. Tisch was $7,875 in 2005.
We
also
maintain a supplemental retirement account for each Named Executive Officer
pursuant to supplemental retirement agreements with each such individual. We
credit each such account annually with the interest credit established under
our
Retirement Plan, which was 4.2% for 2005. Upon retirement, each Named Executive
Officer will receive the value of his account in the form of an annuity or,
subject to certain conditions, in a single lump sum payment. As of December
31,
2005, the balance of each account maintained for our Named Executive Officers
was as follows: $917,968 for Mr. J.S. Tisch, $923,511 for Mr. A.H. Tisch,
$917,968 for Mr. J.M. Tisch, $4,356,015 for Mr. A.R. Rebell and $1,608,237
for
Mr. P.W. Keegan.
COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
General
The
overall objective of the Company’s executive compensation policy is to attract
and retain highly qualified executive officers and motivate them to provide
a
high level of performance for the benefit of the Company and its shareholders
within the Company’s rigorous ethical standards. We believe that to accomplish
these objectives compensation packages should provide executive officers with
market competitive base salaries and the opportunity to earn additional
compensation based upon the Company’s financial performance and the performance
of its Common Stock. In considering compensation for executive officers, we
rely
primarily on the assessment of the individual’s performance and contribution to
the Company, in addition to qualitative factors such as the Company’s
performance and compensation trends generally. In this regard we review surveys
of executive compensation and information concerning compensation at the peer
group companies referred to in the stock price performance graph, below. The
principal components of the Company’s compensation policy for executive officers
are:
· base
salary;
· incentive
compensation awards;
· grants
of
stock options and stock appreciation rights; and
· benefits.
The
primary component of the Company’s compensation for executive officers is base
salary. Base salary levels for the Company’s executive officers are determined
based upon an evaluation of a number of factors, including the individual’s
level of responsibility, experience, performance and competitive market
practices as determined by the Company’s participation in and analysis of
management compensation surveys, and a review of other published data relating
to executive compensation. The Company targets base salary levels for its
executive officers (as well as salaried employees generally) between the 50th
and 75th percentiles of those paid by companies with comparable revenues.
However, as a result of job performance evaluations and length of service,
the
base salary levels of a majority of the Company’s executive officers fall above
these parameters.
The
second principal component of the Company’s compensation policy for executive
officers consists of awards under its Incentive Compensation Plan. Under this
plan, cash awards may be granted to the highest paid executive officers based
on
the attainment of specified performance goals in relation to the Company’s net
income. For information about awards earned by and paid to the Chief Executive
Officer and the other Named Executive Officers, see the Summary Compensation
Table, above.
The
third
principal component of the Company’s compensation policy for executive officers
consists of grants under its Stock Option Plan. Under this plan executive
officers may be granted stock options and stock appreciation rights at exercise
prices equal to not less than the fair market value of the Company’s Common
Stock as of the date of grant. This element of the Company’s compensation policy
provides the opportunity for its executive officers to be compensated based
upon
increases in the market price of its Common Stock and more closely aligns the
interests of the executive officers with those of the Company’s shareholders.
Information with respect to stock options granted under this plan to the
Company’s Chief Executive Officer and the other Named Executive Officers in 2005
is described under “Stock Option Plan,” above.
The
Company’s executive officers also participate in benefit programs available to
salaried employees generally, including the Company’s Employees Savings Plan,
Retirement Plan and Benefit Equalization Plan, discussed above. In addition,
from time to time, the Company’s compensation of executive officers has included
unfunded supplemental retirement benefits pursuant to supplemental retirement
agreements. Supplemental retirement benefits granted to the Named Executive
Officers in 2005 are described in the Summary Compensation Table,
above.
Chief
Executive Officer
In
determining the compensation of the Company’s Chief Executive Officer for 2005,
the Compensation Committee took into account the overall objectives of the
Company’s executive compensation policy and other factors described above in
relation to the total value of each of the various components of our executive
compensation: base salary, incentive compensation under the Incentive
Compensation Plan, and equity-based compensation under the Stock Option Plan,
as
well as retirement and other benefits. Based upon the foregoing, in 2005 the
Company amended its employment agreement with Mr. J.S. Tisch to provide him
with
a base salary of $975,000 per annum through March of 2007. In addition, Mr.
Tisch’s 2005 compensation included a grant of 20,000 options under the Stock
Option Plan and a $1,250,000 award under the Incentive Compensation Plan.
Internal
Revenue Code
Under
the
Internal Revenue Code, the amount of compensation paid to or accrued for the
Chief Executive Officer and the four other most highly compensated executive
officers which may be deductible by the Company for federal income tax purposes
is limited to $1 million per person per year, except that
compensation
which is considered to be “performance-based” under the Internal Revenue Code
and the applicable regulations is excluded for purposes of calculating the
amount of compensation.
To
the
extent the Company’s compensation policy can be implemented in a manner which
maximizes the deductibility of compensation paid by the Company, the Board
of
Directors seeks to do so. Accordingly, we have designed both the Incentive
Compensation Plan and the Stock Option Plan so that compensation in the form
of
awards or grants made under either plan will be considered to be
“performance-based” under the applicable provisions of the Internal Revenue
Code.
By
the
Compensation Committee:
John
Brademas, Chairman
Joseph
L. Bower
Charles
M. Diker
Paul
J. Fribourg
CERTAIN
TRANSACTIONS
We
provided an apartment at a hotel in New York City owned by a subsidiary for
use
by the late Mr. Preston R. Tisch, who served as our Chairman of the Board,
and
his wife, for our convenience and that of our subsidiary. The incremental cost
to us in 2005 was approximately $694,000. When Mr. Tisch died in November 2005
the lease for that apartment with Mr. Tisch’s widow, Joan H. Tisch, commenced.
That lease, which had been signed in 2001 following the approval of our Audit
Committee, provides for rent of $660,000 per year, with increases commencing
in
2007 based upon inflation. Mrs. Tisch also rents an additional room at that
hotel for a market based rent of $4,209 a month.
TFMG
LLC,
an entity affiliated with Messrs. A.H. Tisch, J.S. Tisch and J.M. Tisch, who
are
the members of our Office of the President, and certain related persons,
occupies space and utilizes certain services and facilities of ours, the cost
of
which is reimbursed to us. In addition, from time to time the Messrs. Tisch
and
members of their immediate families have chartered our aircraft for personal
travel. For the use of our owned aircraft the charterer pays us a charter rate
at the same rate we charge to unaffiliated third parties, which rate equals
or
exceeds our out-of-pocket operating costs, and for an aircraft in which we
hold
a fractional interest, at a rate equal to our incremental costs. In addition,
a
member of the Tisch family rented an apartment at a hotel owned by a subsidiary
at a market-based rent through June 2005. Our cost for these items and the
reimbursement methodology and procedures have been reviewed and approved by
our
Audit Committee. The total amount paid to us in 2005 in connection with the
foregoing was approximately $1,387,500.
COMPENSATION
COMMITTEE
INTERLOCKS
AND INSIDER PARTICIPATION
The
members of the Compensation Committee are John Brademas, Joseph L. Bower,
Charles M. Diker and Paul J. Fribourg, each of whom is an Independent Director
and, consequently, none of whom is or has been an officer or employee of the
Company or its subsidiaries. None of our executive officers has served on the
board of directors or compensation committee of any other entity that has or
has
had an executive officer who served as a member of our Board of Directors or
Compensation Committee during 2005.
STOCK
PRICE
PERFORMANCE
GRAPHS
The
following graph compares the total annual return of our Common Stock, the
Standard & Poor’s 500 Composite Stock Index (“S&P 500 Index”) and our
peer group (“Loews Peer Group”)* for the five years ended December 31,
2005. The graph assumes that the value of the investment in our Common Stock,
the S&P 500 Index and the Loews Peer Group was $100 on December 31, 2000 and
that all dividends were reinvested.
*
The
Loews Peer Group consists of the following companies that are industry
competitors of our principal operating subsidiaries: Ace Limited, American
International Group Inc., The Chubb Corporation, Cincinnati Financial
Corporation, Hartford Financial Services Group, Inc., Safeco Corporation, The
St. Paul Travelers Companies, Inc., XL Capital Ltd., Altria Group, Inc., UST
Inc. and Reynolds American, Inc.
Our
Carolina Group stock commenced trading on February 1, 2002. Accordingly, the
following graph compares the total return of the Carolina Group stock, the
S&P 500 Index and the Standard & Poor’s Tobacco Index (“S&P
Tobacco”) for the period from February 1, 2002 to December 31, 2005. The
graph assumes that the value of the investment in our Carolina Group stock
and
each index was $100 on February 1, 2002 and that all dividends were reinvested.
RATIFICATION
OF THE APPOINTMENT
OF
OUR INDEPENDENT AUDITORS
(Proposal
No. 2)
Our
Audit
Committee has selected Deloitte & Touche LLP to serve as our independent
auditors for 2006. Although it is not required to do so, our Board of Directors
wishes to submit the selection of Deloitte & Touche LLP for ratification by
our shareholders at the Annual Meeting. Even if this selection is ratified
by
our shareholders at the Annual Meeting, our Audit Committee may in its
discretion change the appointment at any time during the year if it determines
that such a change would be in the best interests of us and our shareholders.
If
our shareholders do not ratify the selection of Deloitte & Touche LLP, our
Audit Committee will reconsider its selection. Representatives of Deloitte
&
Touche LLP are expected to be at the Annual Meeting to answer appropriate
questions and, if they choose to do so, to make a statement.
Audit
Fees and Services
The
following table shows fees billed by Deloitte & Touche LLP and its
affiliates for professional services rendered to us and our subsidiaries in
2005
and 2004, by category as described in the notes to the table.
|
|
2005
|
|
2004
|
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
Audit
Fees (1)
|
$18,849
|
|
$17,230
|
|
|
|
|
|
|
|
|
Audit
Related Fees (2)
|
1,781
|
|
3,309
|
|
|
|
|
|
|
|
|
Tax
Fees (3)
|
407
|
|
1,165
|
|
|
|
|
|
|
|
|
All
Other Fees (4)
|
270
|
|
490
|
|
|
|
|
|
|
|
|
Total
|
$21,307
|
|
$22,194
|
|
(1)
Includes the aggregate fees and expenses for the audit of our annual financial
statements and internal control over financial reporting, and the reviews of
our
quarterly financial statements.
(2)
Includes the aggregate fees and expenses for services that were reasonably
related to the performance of the audit or reviews of our financial statements
and not included under “Audit Fees” above, including, principally, consents and
comfort letters, accounting consultations and the audit of employee benefit
plans.
(3)
Includes the aggregate fees and expenses for tax compliance and tax planning
services.
(4)
Includes the aggregate fees and expenses for products and services provided,
other than the services described above, related to human capital advisory
services and other consulting services.
Auditor
Engagement Pre-Approval Policy
In
order
to assure the continued independence of our independent auditors, currently
Deloitte & Touche LLP, our Audit Committee has adopted a policy requiring
pre-approval of all audit and non-audit services performed by our independent
auditors. Under this policy, our Audit Committee annually pre-approves certain
limited, specified recurring services which may be provided by Deloitte &
Touche LLP, subject to maximum dollar limitations. All other engagements for
services to be performed by Deloitte & Touche LLP must be specifically
pre-approved by our Audit Committee, or a designated committee member to whom
this authority has been delegated. Our Audit Committee, or a designated member,
pre-approves all engagements by us and our subsidiaries, other than CNA, Diamond
Offshore and, since its initial public offering in November of 2005, Boardwalk
Pipeline, for services of Deloitte & Touche LLP, including the terms and
fees thereof, and our Audit Committee has concluded that all such engagements
have been compatible with the continued independence of Deloitte & Touche
LLP in serving as our independent auditors. Engagements of Deloitte & Touche
LLP by CNA, Diamond Offshore and, since its initial public offering, Boardwalk
Pipeline are reviewed and approved by the independent audit committees of those
subsidiaries pursuant to pre-approval policies adopted by those
committees.
The
Board of Directors recommends a vote FOR Proposal No. 2.
SHAREHOLDER
PROPOSALS
We
have
been advised that the two shareholder proposals described below will be
presented at the Annual Meeting. For the reasons set forth below, our Board
of
Directors recommends a vote against each proposal.
SHAREHOLDER
PROPOSAL RELATING TO
CUMULATIVE
VOTING
(Proposal
No. 3)
Evelyn
Y.
Davis, 2600 Virginia Avenue, N.W., Washington, D.C. 20037, owner of 244 shares
of our Common Stock, has notified us in writing that she intends to present
the
following resolution at the Annual Meeting for action by our
shareholders:
“RESOLVED:
That the stockholders of Loews, assembled in Annual Meeting in person and by
proxy, hereby request the Board of Directors to take the necessary steps 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:
Many states have mandatory cumulative voting, so do National Banks.
“In
addition, many corporations have adopted cumulative voting.
“Last
year the owners of 42,597,174 shares representing approximately 25% of shares
voting, voted FOR this proposal.
“If
you
AGREE, please mark your proxy FOR this resolution.”
Our
Board of Directors recommends a vote AGAINST Proposal No.
3.
Our
Board
of Directors believes that the present system of voting for directors provides
the best assurance that the decisions of our Board will be in the interests
of
all shareholders, rather than those of any particular group. Cumulative voting
could make it possible for a special interest group, which may not represent
the
interests of all shareholders, to elect one or more directors beholden only
to
that special interest group. The aims of such special interest group may be
adverse to us and our shareholders as a whole and therefore could impede our
Board’s power to act on our behalf and on behalf of all of our shareholders.
Furthermore, our Board believes that cumulative voting may interfere with the
continuing efforts of our Nominating and Governance Committee to develop and
maintain a diverse Board of Directors comprised of individuals with the wide
range of knowledge, experience and expertise necessary to best serve us.
Accordingly, our Board of Directors recommends a vote against this
proposal.
SHAREHOLDER
PROPOSAL RELATING TO
LAWS
RESTRICTING TOBACCO USE
(Proposal
No. 4)
The
following shareholders have notified us in writing that they intend to present
the resolution set forth below at the Annual Meeting for action by our
shareholders: the Sinsinawa Dominicans, Inc., 7200 W. Division, River Forest,
Illinois 60305, owner of 80 shares of our Common Stock; and Catholic Health
Initiatives, 1999 Broadway, Suite 2600, Denver, Colorado 80202, owner of 100
shares of our Common Stock:
“WHEREAS,
this Company has publicly said that using its tobacco products is a danger
to
peoples’ health;
“According
to Market
Wire
(August
25, 2005), the American Lung Association (ALA), has noted an increasing number
of states are taking aggressive action to reduce tobacco use. For instance,
‘during the first half of 2005, several states went completely smokefree, others
moved to strengthen existing restrictions on smoking in public places, and
new
increases in state tobacco taxes are bringing the national average to nearly
$1.00 a pack.’
“The
report noted: ‘While states are making it harder for people to smoke in public
places, higher cigarette taxes are also making smoking more expensive. Since
January 1, 2005, tobacco taxes have increased in 11 states, including the
tobacco-growing states of North Carolina and Kentucky, as of August 15, the
average state cigarette tax was $0.89 cents per pack. It will increase to $0.92
per pack when tax increases in
Maine
and
North Carolina take effect. Texas is considering a $1.00 increase in its
cigarette tax, which would push the nationwide average even
higher.’
“According
to John L. Kirkwood, President and CEO of the ALA, ‘Higher cigarette taxes mean
significant drops in smoking rates. Studies show that a 10 percent increase
in
the price of cigarettes reduces consumption by 7 percent for youth and 4 percent
for adults. Raising the cigarette tax is one of the most effective ways to
reduce adult smoking and stop kids from ever starting.’
“The
Company has publicly said it does not want youth to start smoking. It has been
running ads to help people to stop smoking. However, it has not demonstrated
that such efforts have reduced smoking for young people and/or
adults.
“The
report took note of preemption of smokefree laws: ‘Illinois became only the
second state (after Delaware) to repeal preemption of local smokefree air
ordinances. This action will allow any local community in Illinois to adopt
smokefree air ordinances that are stronger than state law. Once the Illinois
law
goes into effect on January 1, 2006, 19 states will have total or partial
preemption. Preemption is a major priority for the tobacco industry and its
front groups because they have less influence at the local level and prefer
to
lobby for weak statewide smokefree air laws that cannot be replaced by stronger
local ordinances.’
“RESOLVED
that, since a combination of laws against smoking in public places as well
as
tax increases has been shown to demonstrably reduce smoking, especially among
young people, the shareholders request that the Company make as public policy
a
commitment to support legislation at all levels of local, regional, state,
and
federal government which is geared to that end. Furthermore, the Company shall
also support all efforts to repeal existing preemption laws limiting local
smokefree air ordinances.
“Supporting
Statement: This Company needs to clearly and publicly support efforts that
will
reduce, if not eliminate, the nation’s number one cause of preventable disease:
smoking. If you agree, please vote ‘yes’ for this proposal.”
Our
Board of Directors recommends a vote AGAINST proposal No.
4.
As
noted
by the proponent, the pace at which governmental agencies and bodies, at all
levels of government, are adopting laws and regulations intended to prohibit
or
restrict smoking in public places and workplaces, to give local county and
municipal governments the power to enact more stringent anti-smoking ordinances,
and to increase taxes on the sale of tobacco products, appears to be growing.
In
light of the foregoing, our subsidiary, Lorillard Tobacco Company (“Lorillard”),
continues to believe that any new or additional legislation or regulations
restricting or permitting restriction on the use, or imposing additional taxes
on the sale, of tobacco products should be considered by the appropriate
governmental bodies capable of enacting a comprehensive framework of regulation
in a consistent manner. Furthermore, as the scope of the “support” required by
this proposal is not defined, it would be difficult to determine when the
requirements of the proposal, if adopted, would be satisfied. Accordingly,
our
Board of Directors believes that this proposal would not be in our best
interest, and recommends a vote against this proposal.
OTHER
MATTERS
We
know
of no other matters to be brought before the Annual 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.
We
will
bear all costs in connection with the solicitation of proxies for the meeting.
We intend to request brokerage houses, custodians, nominees and others who
hold
our voting stock in their names to solicit proxies from the persons who
beneficially own such stock, and we will reimburse these brokerage houses,
custodians, nominees and others for their out-of-pocket expenses and reasonable
clerical expenses. We
have
engaged Innisfree M&A Incorporated (“Innisfree”) to solicit proxies for us,
at an anticipated cost of
approximately $8,000.
In
addition to the use of the mails, solicitation may be made by Innisfree or
our
employees personally or by telephone, facsimile or electronic
transmission.
Communications
with Us by Shareholders and Others
If
you or
any other interested party wish to communicate directly with the presiding
director, other non-management directors or our Board as a whole, you or the
other interested party may do so by writing to our Corporate Secretary. All
communications will be delivered to the director or directors to whom they
are
addressed.
If
you
wish to propose an individual to be considered by our Nominating and Governance
Committee for possible recommendation to our Board of Directors, you must do
so
by writing to our Corporate Secretary. Your recommendation must include the
candidate’s name, a brief biographical description, a statement of the
candidate’s qualifications, a description of any relationship between the
candidate and either the recommending shareholder or the Company, and the
candidate’s signed consent to serve as a director, if elected. We must receive
your recommendations for director nominees for our 2007 Annual Meeting not
later
than October 1, 2006.
If
you
wish to submit a proposal for the 2007 Annual Meeting, it must be received
by us
not later than December 4, 2006 in order to be included in our proxy materials.
Proxies solicited by us for the 2007 Annual Meeting may confer discretionary
authority to vote on any proposals submitted after February 17, 2007 without
a
description of them in the proxy materials for that meeting. Your proposals
should be addressed to our Corporate Secretary.
You
should address all communications directed to our Corporate Secretary regarding
the matters discussed above to Loews Corporation, 667 Madison Avenue, New York,
New York 10021-8087.
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By
order of the Board of Directors,
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GARY
W. GARSON
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Secretary
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Dated: April
3, 2006
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PLEASE
COMPLETE, DATE, SIGN AND
RETURN
YOUR PROXY PROMPTLY
COMMON STOCK
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LOEWS
CORPORATION
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Proxy
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This
Proxy is Solicited on Behalf of the Board of
Directors
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The
undersigned hereby constitutes and appoints Gary W. Garson, Peter W. Keegan
and
Kenneth J. Zinghini 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 Regency Hotel, 540 Park Avenue, New York, New York, on May
8, 2006,
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 and
4.
THIS
PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE
SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
Address
Change/Comments (Mark the corresponding box on the reverse
side)
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Mark
Here
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for
Address
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Change
or
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Comments
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PLEASE
SEE REVERSE SIDE
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The
Board of Directors recommends a vote FOR
Items 1 and 2
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The
Board of Directors recommends a vote AGAINST Items 3 and 4
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Item
1-ELECTION OF DIRECTORS
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FOR
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AGAINST
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ABSTAIN
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Nominees:
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WITHHELD |
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04)
P.J. Fribourg
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09)
J.S.
Tisch
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FOR
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FOR
ALL
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Item
3-SHAREHOLDER
PROPOSAL-
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08)
A.H. Tisch
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10)
J.M. Tisch
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CUMULATIVE
VOTING
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06)
P.A.
Laskaway
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WITHHELD
FOR: (Write that Nominee’s name in the space
provided.)
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Item
4-SHAREHOLDER
PROPOSAL-
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LAWS
RESTRICTING
TOBACCO USE
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FOR
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AGAINST
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ABSTAIN
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Item
2-RATIFY DELOITTE & TOUCHE
LLP AS INDEPENDENT
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AUDITORS
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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.
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Signature(s)
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Dated:
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COMMON STOCK
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CAROLINA
GROUP STOCK
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LOEWS
CORPORATION
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Proxy
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This
Proxy is Solicited on Behalf of the Board of
Directors
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The
undersigned hereby constitutes and appoints Gary W. Garson, Peter W. Keegan
and
Kenneth J. Zinghini 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 Carolina Group
Stock
of the undersigned in Loews Corporation at the Annual Meeting of Shareholders
to
be held at The Regency Hotel, 540 Park Avenue, New York, New York, on May
8,
2006, 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 and
4.
THIS
PROXY IS CONTINUED ON THE REVERSE SIDE
PLEASE
SIGN ON THE REVERSE SIDE AND RETURN PROMPTLY
Address
Change/Comments (Mark the corresponding box on the reverse
side)
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Mark
Here
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for
Address
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Change
or
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Comments
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PLEASE
SEE REVERSE SIDE
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The
Board of Directors recommends a vote FOR
Items 1 and 2
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The
Board of Directors recommends a vote AGAINST Items 3 and 4
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Item
1-ELECTION OF DIRECTORS
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FOR
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AGAINST
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ABSTAIN
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Nominees:
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WITHHELD |
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04)
P.J. Fribourg
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09)
J.S.
Tisch
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FOR
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FOR
ALL
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Item
3-SHAREHOLDER
PROPOSAL-
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o
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o
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o
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08)
A.H. Tisch
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10)
J.M. Tisch
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o
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CUMULATIVE
VOTING
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06)
P.A.
Laskaway
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WITHHELD
FOR: (Write that Nominee’s name in the space
provided.)
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Item
4-SHAREHOLDER
PROPOSAL-
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o
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o
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o
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LAWS
RESTRICTING
TOBACCO USE
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FOR
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AGAINST
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ABSTAIN
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Item
2-RATIFY DELOITTE & TOUCHE
LLP AS INDEPENDENT
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AUDITORS
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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.
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Signature(s)
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Dated:
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CAROLINA
GROUP STOCK
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