The Financial Sector Adjustment Company (FINSAC) has agreed to pay Dennis Lalor a substantial compensation package for giving up his job as executive chairman of Life of Jamaica, it emerged last week.
The condition is one of a number of points that need to be agreed before November 28, when FINSAC hopes to ratify a deal to inject $2 billion into the company and take a 76 per cent controlling stake in the country's largest life insurance operation.
An extraordinary general meeting of shareholders will be held at the Life of Jamaica Centre Auditorium in Kingston on Tuesday, 28 November 2000, at 10.00 a.m. where a number of key resolutions will be put to LoJ shareholders.
But in order for investors to vote on the new FINSAC deal several conditions have to be met.
According to documents sent to shareholders last week explaining the plan, the "conditions precedent to FINSAC's obligation to proceed" includes a section that reads: "The Hon. Dennis Lalor, O.J. shall have resigned as executive chairman and the compensation payable to him by LoJ in connection with his engagement as executive chairman coming to an end shall have been agreed in writing with FINSAC".
Mr. Lalor, LoJ founder Danny Williams and Milverton Reynolds are the three existing directors who will remain on the board.
FINSAC plans to pack the new board of LoJ with friendly faces and Government employees.
Among the new board members proposed for LoJ is Ministry of Finance financial regulation unit director Brigette Wilks, FINSAC senior insurance analyst Michelle Lindo and former FINSAC consultant Desmond Sutherland, head of Sutherland Capital and ex-actuary with First Life Insurance Company and a Fellow of the Society of Actuaries (FSC).
In all, six new board members are expected to be ushered in, including former Planning Institute of Jamaica executive director Marjorie Hen-riques, who was previously a special adviser on projects to Finance Minister Dr. Omar Davies and trade unionist Las Perry.
The final member is FINSAC's current Union Bank chairman and attorney Dennis Morrison, Q.C. two weeks ago. LoJ said FINSAC planned to appoint a new board to run LoJ under the leadership of Mr. Morrison.
Mr. Morrison is set to be appointed non-executive chairman as FINSAC acquires a majority stake in the country's largest life insurer. He is likely to give up his Union Bank role, as the banking institution is set to be sold to Royal Bank of Trinidad and Tobago.
The new board will replace accountant Jack Ashenheim, Capital Options consultant Oliver Holmes, attorney Noel Levy, Neal & Massy Jamaica boss Brian Young and Diane Schwartz, Manulife International chairman and Mr. Lalor's wife.
FINSAC insurance consultant Kurtis Bray has also been tipped to take an executive role as "FINSAC plans to appoint a chief operating officer of LoJ to oversee the transition", according to LoJ recently.
In order to ratify the FINSAC restructuring of the insurance giant investors will be asked to vote on five resolutions:
1. To increase the share capital of LoJ by J$111,543,262.50.
2. For the directors to issue and allot as fully paid up shares to FINSAC $1,115,432,625 ordinary shares in exchange for promissory notes totalling $111,543,262.50.
3. To appoint to the board of LoJ as directors, Michelle Lindo, Desmond Sutherland, Bridget Wilks, Las Perry, Marjorie Henriques and C. Dennis Morrison, Q.C.
4. To convert the existing 12.5 cumulative redeemable preference shares of $1.00 each into perpetual non-cumulative preference shares having no preferred rights to a dividend ahead of the ordinary shares and with automatic conversion rights into ordinary shares at the rate of three ordinary shares to 10 preference shares when LoJ has achieved 100 per cent of Minimum Continuing Capital and Surplus Requirements (MCCSR).
5. To delete Article 79 of the company's Articles of Association.
If the meeting votes in favour of the resolutions FINSAC will apply to the Jamaica Stock Exchange to have the currently suspended shares relisted.
