SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
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The Seibels Bruce Group, Inc.
(Name of Registrant as Specified in its Charter)
The Seibels Bruce Group, Inc.
(Name of Person(s) Filing Proxy Statement)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
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THE SEIBELS BRUCE GROUP, INC.
COLUMBIA, SOUTH CAROLINA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 1995
TO THE SHAREHOLDERS OF THE SEIBELS BRUCE GROUP, INC.:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of The Seibels Bruce Group, Inc. ("SBIG" or the "Company"),
will be held at the offices of the Company at 1501 Lady Street,
Columbia, South Carolina 29201, at 11:00 a.m., on Wednesday, May 24,
1995 for the following purposes:
To elect three (3) Directors to serve until the 1996 Annual
Meeting of Shareholders, one (1) Director to serve until the 1997
Annual Meeting of Shareholders and three (3) Directors to serve
until the 1998 Annual Meeting of Shareholders (Proposal 1);
To consider a proposal to amend the articles of incorporation
to delete the current outdated provisions regarding
indemnification of officers and directors (Proposal 2);
To consider a proposal to ratify the selection of Arthur
Andersen LLP to audit the Company's books and records for the
fiscal year ending December 31, 1995 (Proposal 3); and
To consider and transact such other business as may properly
and lawfully come before the Meeting or any adjournment thereof.
All of the foregoing is more fully set forth in the Proxy Statement
accompanying this Notice.
The transfer books of the Company will close as of the end of
business on April 10, 1995 (the "Record Date") for purposes of
determining shareholders who are entitled to notice of and to vote at
the Meeting, but will not be closed for any other purpose.
All shareholders are cordially invited to attend the Meeting in
person. If you cannot attend the Meeting, please take the time to
promptly sign, date and mail the enclosed proxy in the envelope we
have provided. If you attend the Meeting and decide that you want to
vote in person, you may revoke your proxy. The Board of Directors
recommends that you vote in favor of the nominees for directors and
the described proposals to be considered at the meeting.
By Order of the Board of Directors
Priscilla C. Brooks
Corporate Secretary
April __, 1995THE ACCOMPANYING PROXY FORM IS SOLICITED BY THE BOARD OF
DIRECTORS AND IS REVOCABLE AT ANY TIME PRIOR TO BEING EXERCISED. THE
PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS THEREON. IF
A CHOICE IS NOT INDICATED, HOWEVER, THE PROXY WILL BE VOTED IN FAVOR
OF THE NOMINEES FOR DIRECTORS, IN FAVOR OF THE DESCRIBED PROPOSALS TO
BE CONSIDERED AT THE MEETING, AND IN THE BEST JUDGMENT OF THE PROXIES
CONCERNING ALL OTHER PROPOSALS CONSIDERED AT THE MEETING.
THE SEIBELS BRUCE GROUP, INC.
1501 Lady Street
Columbia, South Carolina 29201
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 24, 1995
General
This Proxy Statement is furnished to the holders of Common Stock,
par value $1.00 per share (the "Common Stock") of The Seibels Bruce
Group, Inc. ("SBIG" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors of the Company to be
voted at the Annual Meeting of Shareholders (the "Meeting") to be held
at the time and place and for the purposes specified in the
accompanying Notice of Annual Meeting of Shareholders and at any
adjournments thereof. It is anticipated that this Proxy Statement
will be mailed to shareholders on or about April 27, 1995.
When the enclosed proxy is properly executed and returned, the
shares which it represents will be voted at the Meeting in accordance
with the instructions thereon. In the absence of any such
instructions, the shares represented thereby will be voted in favor of
the nominees for Director and the described proposals to be considered
at the Meeting. Abstentions and "broker non-votes" are each included
in the determination of the number of shares present and voting, but
are not counted as votes for or against proposals presented to
stockholders. (A "broker non-vote" occurs when a nominee holding
shares for a beneficial owner votes on one proposal, but does not vote
on another proposal because the nominee does not have discretionary
voting power and has not received instructions from the beneficial
owner.)
Any shareholder who executes and delivers a proxy may revoke it
prior to its use by (i) giving written notice of such revocation to
the Corporate Secretary of SBIG at P.O. Box 1, Columbia, South
Carolina 29202, the Company's mailing address; or (ii) executing and
delivering to the Corporate Secretary of SBIG (by mail at P.O. Box 1,
Columbia, South Carolina 29202, or by delivery at 1501 Lady Street,
Columbia, South Carolina 29201) a proxy bearing a later date; or (iii)
appearing at the Meeting and voting in person.
Annual Report
The Annual Report on Form 10-K of the Company for the fiscal year
ending December 31, 1994, including Financial Statements, is enclosed
with this Proxy Statement. Shareholders may also obtain a
copy of the Annual Report on Form 10-K without charge upon written
request addressed to Priscilla Brooks, Corporate Secretary, The
Seibels Bruce Group, Inc., P.O. Box 1, Columbia, South Carolina 29202.
If the person requesting a copy of the Annual Report on Form 10-K is
not a shareholder of record, the request must include a representation
that he or she is a beneficial owner of the Company's Common Stock.
Expenses of Solicitation
The cost of soliciting proxies will be borne by the Company.
Officers, directors, employees, and agents of the Company may solicit
proxies by telephone, telegram or personal interview, without
additional compensation.
Voting
Only holders of record of issued and outstanding shares of Common
Stock, as of April 10, 1995 (the "Record Date") will be entitled to
notice of and to vote at the Meeting. On the Record Date, there were
16,717,686 shares of Common Stock outstanding. Each share of Common
Stock is entitled to one vote, except with respect to Proposal 1, as
described below.
In connection with Proposal 1, the election of Directors, each
shareholder is allowed to cumulate his or her votes and cast as many
votes as the number of shares he or she holds multiplied by the number
of Directors to be elected, the same to be cast for any one candidate
or distributed among any two or more candidates. For shares to be
voted cumulatively, a shareholder who has the right to cumulate his or
her votes shall either (1) give written notice of his or her intention
to the president or another officer of the Company not less than 48
hours before the time fixed for the Meeting, which notice must be
announced in the Meeting before the voting, or (2) announce his or her
intention in the Meeting before the voting for directors commences;
and all shareholders entitled to vote at the Meeting shall without
further notice be entitled to cumulate their votes. Directors will be
elected by a plurality of the votes cast.
For Proposal 2 to be approved, the affirmative vote of the holders
of two-thirds of the outstanding shares of Common Stock is required.
For Proposal 3 to be approved, the affirmative vote of a majority of
the votes cast in person or by proxy at the Meeting is required.
Participants in the Company's Dividend Reinvestment and Shareholder
Purchase Plan (the "DRSP Plan") who have shares of Common Stock
registered in their names and who vote those shares on any matter
submitted to the Meeting will have all shares credited to their
accounts under the Plan automatically added to that number and voted
in the same manner. If such participants do not vote shares
registered in their own names, the shares credited to their account in
the DRSP Plan will not be voted. An executed proxy will be deemed to
include any DRSP shares and will be voted with respect to those shares
credited to the participant's account. If a participant desires to
vote DRSP Plan shares in person at the Meeting, a proxy for the shares
credited to his or her account will be furnished upon written request
received by the Company, at the address set forth on the cover of this
Proxy Statement, at least fifteen (15) days prior to the date of the
Meeting.
ELECTION OF DIRECTORS (PROPOSAL 1)
One of the purposes of the Meeting is to elect three (3) Directors
to serve until the 1996 Annual Meeting of Shareholders, one (1)
Director to serve until the 1997 Annual Meeting of Shareholders and
three (3) Directors to serve until the 1998 Annual Meeting of
Shareholders.
Under Article 3, Section 2 of the Company's Bylaws, the Board of
Directors is divided into three classes which shall be as nearly equal
in number as possible, with the members of each class serving for
three year terms or until their successors are elected or qualified.
The shares represented by the proxies solicited hereby will be voted
in favor of the election of the persons named below unless
authorization to do so is withheld in the proxy. In the event any of
the nominees should be unavailable to serve as a Director, which
contingency is not presently anticipated, it is the intention of the
persons named in the proxies to select and cast their votes for the
election of such other person or persons as the Board of Directors may
designate.
Pursuant to the Stock Purchase Agreement dated as of December 22,
1993 (the "Alissa Purchase Agreement") between the Company and
Abdullatif Ali Alissa Est. and Saad A. Alissa (the "Alissa Group"),
the Alissa Group is entitled to designate up to four persons, who are
reasonably acceptable to the Company, to be included in the slate of
nominees recommended by the Board of Directors to the shareholders for
election as directors. The Alissa Group has designated Mr. Michael M.
Ameen, Jr., Mr. William M. Barilka, Dr. Albert H. Cox, Jr., and John
C. West, all incumbent directors, to serve as the four directors who
may be designated by the Alissa Group to serve on the Board of
Directors.
All other nominees for election to the Board of Directors are
considered and recommended by a Nominating Committee of the Board of
Directors. (See "Committees of the Board of Directors.") The full
Board of Directors considers the recommendations of that Committee and
recommends the nominees to the shareholders. The Company has no
procedure whereby nominations are solicited or accepted from
shareholders, but the Nominating Committee will consider nominees
whose names and business experience are submitted in writing by
stockholders to the Corporate Secretary of the Company.
In October 1994, Sterling E. Beale, the Company's Chief
Executive Officer, and W. Thomas Reichard, III, its President and
Chief Operating Officer, resigned from their positions with the
Company, including their membership on the Board of Directors.
In November 1994, Ernst Csiszar, an attorney and former merchant
banker who had been serving as an advisor to the Company, was
appointed President and Chief Operating Officer and Terry E.
Fields, the Chief Financial Officer at the time, was named Senior
Executive Vice President. Both men were elected to the Company's
Board of Directors. A new office of the Chief Executive was also
created comprised of the Chairman, the President and the Senior
Executive Vice President. Effective January 9, 1995, the Board
selected Robert D. Brooks to head South Carolina Insurance
Company, a wholly owned subsidiary of the Company ("SCIC") and to
the office of Chief Executive. Ernst Csiszar (January 1995),
Robert H. Branche (March 1995) and Terry E. Fields (April 1995)
resigned from their positions with the Company, including their
membership
on the Board of Directors. None of the Directors who resigned
had disagreements with the Company on any matter relating to the
Company's operations, policies or practices.
The Board of Directors recommends a vote FOR each of the nominees
The following information is set forth with respect to the seven (7)
nominees for election to be Directors as well as the other members of
the Board of Directors.
Director
Name, Age and Principal Employment for Past Five
Years Since
Nominees for Election to Hold Office until the 1996
Annual
Meeting of Shareholders:
Robert D. Brooks, 52, has been President of SCIC and
its subsidiaries, 1995
a Director of the Company and a member of the Office of
Chief Executive since January 1995. Prior to 1995, Mr.
Brooks was President and Chief Executive Officer of
Shelby Insurance Group from February 1993 to December
1994 and Executive Vice President and Chief Operating
Officer of Shelby Insurance Group from September 1989
to February 1993.
Roy L. Faulks, 69, is currently a Director of the
Company, Policy 1962*
Management Systems Corporation, a former subsidiary of
the Company ("PMSC"), and certain Company subsidiaries.
Mr. Faulks served as Executive Vice President and
Treasurer of the Company and certain Company
subsidiaries until April 1986.
Claude E. McCain, 70, is currently a Director of the
Company. He is also 1995
Chairman of H.C. McCain Agency, Inc., President of
McCain Realty, Inc. and President of Insurance Finance
Company, Inc. He was formerly a member of the State
Insurance Commission for 15 years, 10 of which he
served as Chairman. Mr. McCain has been in the
insurance business since 1946.
Director continuing in office until the 1996 Annual
Meeting of Shareholders:
John P. Seibels, 53, is currently a Director of the
Company, PMSC and certain 1969*
subsidiaries of the Company. Mr. Seibels has been an
investor based in Columbia, South Carolina since March
1963.
Nominee for Election to Hold Office until the 1997
Annual Meeting of Shareholders:
John C. West, 72, is currently Chairman of the Board
of Directors of the 1994
Company and a member of the Office of Chief Executive.
He was the Governor of the State of South Carolina from
1971 to 1975 and currently serves as Professor at the
University of South Carolina and as a practicing
attorney. Mr. West also serves as a director of the
Alliance International, Global, New Europe
and Environment Funds, and on the Advisory Board for
Donaldson, Lufkin & Jenrette, Inc.
Director
Name, Age and Principal Employment for Past Five
Years Since
Directors continuing in office until the 1997 Annual
Meeting of Shareholders:
George R.P. Walker, Jr., 62, is currently a Director
of the Company and 1969*
certain Company subsidiaries and has been the owner and
operator of Middlefield Farm (Hanoverian horse farm),
Blythewood, South Carolina, for more than the past five
years.
Nominees for Election to Hold Office until the 1998
Annual Meeting of Shareholders
Michael M. Ameen, Jr., 70, is currently a Director of
the Company. He has 1994
served since 1988 as a consultant on the Middle East
and OPEC affairs to domestic corporations. From 1976
to 1988, Mr. Ameen served as President, Mobil Middle
East Development Corp., and Middle East Regional
Director, London, England. Mr. Ameen serves as a
director of Harken Energy Corp.
William M. Barilka, 46, is currently a Director of
the Company. He has 1994
served since 1991 as Chief Financial Officer of AGGAD
Investment Company, Riyadh, Saudi Arabia. From 1986 to
1991, Mr. Barilka was employed by the National
Commercial Bank, Riyadh, Saudi Arabia, in a variety of
corporate finance positions.
Albert H. Cox, Jr., 62, is currently a Director of
the Company. He currently 1994
serves as Chief Economist of Feltman & Co., an Atlanta
based investment banking firm. From 1985 to 1993, he
held various executive positions, including Board
Member and Senior Economic Advisor, with BIL
Management, Inc., a subsidiary of the Bank in
Liechtenstein. Prior to 1985, he held a number of
positions with Merrill Lynch & Co.
__________
(*) Each present director of the Company with election dates prior to
October 1978 (when the Company became the parent of SCIC) was formerly
a Director of SCIC and the information set forth as to periods prior
to 1978 reflects positions with SCIC and the year such Director was
first elected to the SCIC Board of Directors.
Security Ownership of the Company
The following table sets forth, as of March 28, 1995, information
regarding the beneficial ownership of the Company's Common Stock by
the directors and nominees of the Company, each executive officer
named in the Summary Compensation Table that appears under "Executive
Compensation -- Summary
Compensation Table," all directors and executive officers as a group
and each person known to the Company to own 5% or more of its Common
Stock.
Number of Percent of
Shares of Shares of
Common Common
Name of Beneficial Owner Stock Stock
John C. West..................................................
32,000 *
Robert D. Brooks...........................................
96,000(1) *
Roy L. Faulks.................................................
9,692 *
John P. Seibels................................................
596,908(2)(3) 3.57
George R.P. Walker, Jr...................................
496,858(3)(4) 2.90
Michael M. Ameen......................................... 15,000
*
William M. Barilka.........................................
130,000(5) *
Albert H. Cox, Jr.............................................
24,200 *
Sterling E. Beale..............................................
12,883(6) *
W. Thomas Reichard, III.................................
0 0
Claude E. McCain...........................................
64 *
Saad A. Alissa.................................................
8,356,200(7) 49.98
All Directors, Nominees for Director and....... 1,415,594
8.47
Eecutive Officers as a Group (15 persons)
__________
(*) Less than 1% of issued and outstanding shares of Common
Stock of the Company.
(1) Such shares may be acquired within 60 days of the record
date upon the exercise of options granted to Mr. Brooks pursuant
to his employment agreement.
(2) Excludes 9,012 shares of Common Stock held by Mr. Seibels'
wife, of which shares he holds neither sole nor shared voting or
dispositive power and, therefore, disclaims beneficial ownership.
(3) George R.P. Walker, Jr. and John P. Seibels are cousins.
(4) Excludes 45,557 shares of Common Stock held by Mr. Walker's
wife, of which shares he holds neither sole nor shared voting or
dispositive power and, therefore, disclaims beneficial ownership.
(5) Includes 100,000 shares jointly owned by Mr. Barilka with
his wife.
(6) Includes 9,600 shares which may be acquired within 60 days
of the record date upon the exercise of options granted to Mr.
Beale pursuant to the Company's Stock Option Plan.
(7) Includes 4,175,000 shares owned by General Investors Limited
("GIL"), which is wholly owned by Mr. Alissa and 4,175,000 shares
of Common Stock owned by Financial Investors Limited ("FIL"),
which is wholly owned by Abdullatif Ali Alissa Est. (the
"Establishment"). Mr. Alissa is President of the Establishment.
The Establishment, Mr. Alissa and FIL share the investment and
voting power of the 4,175,000 shares of Common Stock owned by
FIL. Mr. Alissa and GIL share the investment and voting power of
the 4,175,000 shares of Common Stock owned by
GIL. Mr. Alissa's business address is P.O. Box 192, Alkhobar
81962, Saudi Arabia.
Transactions With The Alissa Group
In June 1994, the Company issued 7 million shares of Common
Stock to the Alissa Group, representing approximately 48% of the
Company's outstanding shares of Common Stock. The closing of
such transaction was subject to the approval of the shareholders,
and such approval was granted at a meeting of shareholders held
on June 28, 1994. Pursuant to the transaction, four designees of
the Alissa Group, Michael M. Ameen, Jr., William M. Barilka,
Albert H. Cox, Jr., John C. West, were elected to the Board of
Directors. In late 1993, the Alissa Group had purchased a $24.9
million note from the Company's term loan lender. Subsequently,
the Alissa Group agreed to the cancellation of such original
indebtedness in exchange for the issuance of a $10 million
secured note due June 30, 1994. In exchange for the issuance of
the 7 million shares of Common Stock, the Alissa Group canceled
the principal amount of the $10 million note and received a note
in the principal amount of approximately $440,000 (bearing
interest at 8 1/2%) in respect of interest payable on the $10
million note from the period December 28, 1993 to June 28, 1994.
Section 16(a) compliance
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's officers, directors and persons who own more than
ten percent of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and
Exchange Commission and to furnish the Company with all such
forms they file. Based on the Company's review of the forms it
has received and on written representations from certain
reporting persons that no such forms were required for them, the
Company believes that for the fiscal year ended December 31,
1994, the Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial
owners were complied with, except that Saad A. Alissa failed to
include in his beneficial ownership reports 6,200 shares of the
Company's Common Stock held as custodian of accounts for his five
minor children since March 1994; these shares were subsequently
reported.
Committees of the Board of Directors
The Company has five standing committees: Executive, Audit,
Compensation, Investment and Nominating.
The Executive Committee is currently composed of John C. West
(Chairman), John P. Seibels, Robert D. Brooks and George R.P.
Walker, Jr. The Executive Committee possesses the same powers as
the Board of Directors, except as otherwise limited by specific
prohibitions in South Carolina statutes. The Committee's
function is to act in the place of the Board on any matters which
require Board action and occur between meetings of the Board.
The Executive Committee of the Company met six times during 1994.
The Audit Committee is currently composed of Michael M. Ameen,
John P. Seibels, Roy L. Faulks and Albert H. Cox, Jr., none of
whom is an officer or employee of the Company. The Committee's
functions include recommending independent public accountants to
be employed by the Company, reviewing with the independent public
accountants their reports and audits, and
reporting to the full Board of Directors on their findings. The
Audit Committee of the Company met one time during 1994.
The Compensation Committee is currently composed of John P.
Seibels (Chairman), Michael M. Ameen, William M. Barilka and
George R.P. Walker, Jr., none of whom is an officer or employee
of the Company. The Committee's functions are to recommend to
the full Board the remuneration arrangements for senior executive
officers and for members of the Board of Directors, the adoption
of compensation plans in which Officers and Directors are
eligible to participate and the granting of stock options or
other benefits under such plan. The Compensation Committee met
twice in 1994.
The Investment Committee is currently composed of Roy L. Faulks
(Chairman), William M. Barilka and John P. Seibels. The
Committee's functions are to advise the Board of Directors and
officers of the Company with respect to investment of the
Company's assets and to periodically review, evaluate and report
on the performance of the investments and the investment managers
and advisors of the Company and its subsidiaries. The Investment
Committee met twice in 1994.
The Nominating Committee is currently composed of George R.P.
Walker, Jr. (Chairman), Albert H. Cox, Jr. and John C. West. The
Committee's functions include selecting and recommending nominees
for election as new, additional, and replacement Directors and
reviewing the performance of incumbent Directors for nomination
for reelection. The Nominating Committee did not meet in 1994.
Robert H. Branche served on the Audit Committee, Compensation
Committee, Investment Committee and Nominating Committee prior to
his resignation in March 1995. Terry E. Fields served on the
Executive Committee and Investment Committee prior to his
resignation in March 1995.
The Board of Directors met fourteen times in 1994. In 1994,
each of the incumbent Directors attended at least 75% of the
meetings of the Board and of the Committee(s) of which he was a
member held during the period for which he served.
Compensation of Directors and Executive Officers
Directors' Compensation
In 1994, the Company paid quarterly to each Director who was
not a full-time employee of the Company a retainer fee of $175
per month plus $656.25 for each meeting of the Board at which the
Director was present, a fee of $175 for each meeting of a Board
Committee which he attended on the same day and in the same
general location as a Board meeting or by telephone, and a fee of
$262.50 for attending a Committee meeting otherwise. The
Chairman of the Board of Directors, John C. West, does not
receive any additional compensation in connection with his
position of Chairman of the Board of Directors.
Compensation of Executive Officers
The following table sets forth, for the years ended December
31, 1994, 1993 and 1992, the cash compensation paid by the
Company and its subsidiaries, as well as certain other
compensation paid or accrued for those years, to each of the
executive officers of the Company whose compensation was in
excess of $100,000, including the Chief Executive Officer (the
"Executive Group"), in all capacities in which they serve:
SUMMARY COMPENSATION TABLE
Annual Compensation Awards
(a) (b) (c) (d) (g) (i)
Number of
Name and Principal Stock Options All
Other
Position ` Year Salary($) Bonus
Granted Compensation
Sterling E. Beale 1994 137,813
2,438 -0- 359,206(1)
Chairman of the Board and 1993 182,483 -0- -0-
2,765
Chief Executive Officer 1992 196,246 -0- -0-
4,707
W. Thomas Reichard, III 1994 102,476 1,813
- - -0- 252,279(2)
President 1993 135,659 -0- -0- 2,199
1992 146,116 -0- -0- 3,724
__________
(1) Amounts shown for 1994 for Mr. Beale include a payment of
$355,500 pursuant to a certain retirement agreement (See
"Employment Agreements"), matching contributions of $3,052 by the
Company under its 401(k) stock purchase savings plan and the
value of premiums for term life insurance paid during 1994 by the
Company in the amount of $654.
(2) Amounts shown for 1994 for Mr. Reichard include payments
aggregating $249,502 pursuant to a certain Separation Agreement
and Mutual Release (See "Employment Agreements"), matching
contributions of $2,123 by the Company under its 401(k) stock
purchase savings plan and the value of premiums for term life
insurance paid during 1994 by the Company in the amount of $654.
Option Grants
During the year ended December 31, 1994, the Company did not
grant any stock options pursuant to the Company's 1987 Stock
Option Plan or otherwise.
Option Exercises and Year-End Holdings
During the year ended December 31, 1994, no member of the
Executive Group exercised any stock options. The following table
sets forth certain information with respect to unexercised stock
options held by the Executive Group as of December 31, 1994.
Options Exercised in 1994
and Year-End Option Values
(a) (b) (c) (d) (e)
Number of Unexercised
Shares of Common Options at Value of
Unexercised In-The
Stock Acquired FY-End (#) Money
Options at
on Exercise (#) Value Exerciseable/
FY-End ($)
Name Realized Unexerciseable
Exerciseable/Unexerciseable
Sterling E. Beale -0- N/A 9,600/-0-
- - -0-/-0-
Employment Agreements
In December 1988, the Company and Seibels, Bruce & Company, an
indirect wholly-owned subsidiary of the Company ("SBC"), entered
into restated three-year Employment Agreements with Mr. Beale,
who was then the Chief Executive Officer, and Mr. Reichard, who
was then Executive Vice President of the Company and who later
became President. Messrs. Beale and Reichard also served as
Directors of the Company. The agreements created certain
obligations on the part of SBC, as the employer, to the other
parties to the agreements and provided that in the event of a
change of control of the Company (as defined in the terms of the
agreements), certain automatic extensions of the terms of the
agreements would occur.
The announcement on September 26, 1991, of a proposed
transaction with a group of investors led by J. Randolph Updike
and PMSC caused the agreements with Messrs. Beale and Reichard to
be extended for five years from September 26, 1991. Thereafter,
the announcement on April 14, 1992, of the proposed merger of the
Company with American States Insurance Company caused the
agreements with Messrs. Beale and Reichard to be extended for
five years from April 14, 1992. Although the merger was not
consummated, both of the employment agreements remained in
effect, as extended to April 14, 1997. On December 22, 1993, the
date on which the Company entered into the Alissa Purchase
Agreement, the employment agreements with Messrs. Beale and
Reichard were automatically extended until December 22, 1998.
In addition to the employment agreement with Mr. Beale, SBC
entered into an executive compensation agreement with Mr. Beale
(the "Executive Compensation Agreement"). Pursuant to the
Executive Compensation Agreement, SBC agreed to provide specified
annual remuneration upon the event of a qualifying retirement,
death or total disability. SBC agreed to provided monthly
payments over a 15-year period, which payments were contingent
primarily upon continued employment until such an event occurs
and were not vested until that time. The annual remuneration
under the Executive Compensation Agreement for Mr. Beale was
approximately $31,250.
On October 14, 1994, the Company, SBC and Mr. Beale entered
into an Amended and Restated Employment Agreement (the "Amended
and Restated Employment Agreement"). Under the terms of the
Amended and Restated Employment Agreement, Mr. Beale will
continue to be employed by SBC in a consulting role until
November 15, 1995. Mr. Beale will be paid the sum of $183,750
and will continue to participate in and receive benefits from the
employee benefit plans of SBC until the agreement terminates on
November 15, 1995.
The Company and Mr. Reichard entered into a Separation
Agreement and Mutual Release dated October 14, 1994 (the
"Separation Agreement"). Under the terms of the Separation
Agreement, Mr. Reichard's employment agreement with the Company
was terminated and the Company paid Mr. Reichard the sum of
$249,502 and agreed to bear the costs of outplacement services,
with such costs not to exceed $20,000.
In addition to the Amended and Restated Employment Agreement,
the Company, SBC, and Mr. Beale entered into a Retirement
Agreement, dated October 14, 1994 (the "Retirement Agreement").
Under the terms of the Retirement Agreement, the Executive
Compensation Agreement was terminated and Mr. Beale agreed,
beginning on November 15, 1995, to take early retirement from his
position as an employee of SBC. In lieu of all payments to be
made to Mr. Beale under the Employment Agreement and the
Executive Compensation Agreement (except those provided in the
Amended and Restated Employment Agreement as described above),
SBC agreed to pay to Mr. Beale $355,500 on October 14, 1994,
$193,748 on October 14, 1995 and $193,748 on October 14, 1996.
Compensation Committee Interlocks and Insider Participation in
Compensation Decisions
None of the members of the Compensation Committee is an officer
or employee of the Company or any of its subsidiaries. Mr.
Beale, a director and the Chief Executive Officer of the Company
until October 1994, served as a director of PMSC until early
January 1994, at which time Mr. Beale resigned from the Board of
PMSC. Messrs. Faulks and Seibels serve as directors of the
Company and of PMSC. Mr. Wilson, a director of the Company until
early January 1994, at which time he resigned from the Board of
the Company, serves as Chairman of the Board, President and Chief
Executive Officer of PMSC. Neither Mr. Beale nor Mr. Wilson
served on the Compensation Committee of either company.
Report of the Board of Directors on Executive Compensation
No action was taken during 1994 to increase the compensation
paid to any member of the Executive Group. Currently, the
Company does not have a Chief Executive Officer, but has an
Office of Chief Executive, which is comprised of the Chairman,
the President and the Senior Executive Vice President. The
primary elements of the Company's executive compensation program
have historically consisted of a base salary, a bonus opportunity
and stock options. Base salaries are determined, and have at
times been increased, by evaluating the responsibilities of the
position held and the experience of the executive officer. The
Board of Directors has not provided for any increase in base
salary since January 1992.
The foregoing has been furnished by the Company's Compensation
Committee.
John P. Seibels (Chairman)
Michael M. Ameen
William M. Barilka
George R.P. Walker, J.R.
Stock Performance Graph
The following chart compares the yearly percentage change in
the cumulative total stockholder return on the Company's Common
Stock during the five fiscal years ended December 31, 1994 ("1")
with the cumulative total return on the Nasdaq Stock Market Index
("2") and the Nasdaq Property and Casualty Insurance Stock Index
("3").
The Performance Graph is not included in this electronic
submission. Presented below is the table of data points used in
the graph as required by Rule 304(d) of Regulation S-T.
Nasdaq Property and
Casualty Stock
SBIG Nasdaqu Index Index
1989 100 100 100
1990 44.118 84.917 96.143
1991 60.146 136.275 137.190
1992 20.504 158.574 184.925
1993 19.137 180.923 190.401
1994 27.339 176.907 183.328
CONSIDERATION OF PROPOSED AMENDMENT TO THE COMPANY'S ARTICLES OF
INCORPORATION WITH RESPECT TO INDEMNIFICATION OF OFFICERS AND
DIRECTORS OF THE COMPANY (PROPOSAL 2)
On March 7, 1995, the Board of Directors adopted a proposed
amendment of the Company's Articles of Incorporation, as amended
(the "Articles"), to remove the provision relating to the
indemnification of officers and directors. The Articles state
"the Corporation shall indemnify those persons permitted to be
indemnified by South Carolina Code Section 33-13-180 (1976), as
amended, and may insure such persons to the extent permitted by
statute." Section 33-13-180 of the South Carolina Code was
replaced in 1988 by Sections 33-8-500 through 33-8-580.
In order to clarify the Company's policy on indemnification,
the Board of Directors recommends that the provisions relating to
indemnification of officers and directors be deleted from the
Articles and that indemnification permitted officers and
directors of the Company under South Carolina law be provided for
in the Bylaws. Providing for indemnification in the Bylaws
rather than the Articles, allows the Board of Directors to amend
or rescind such policy without shareholder approval, and, thus,
allows the Board a greater degree of flexibility in its policy of
indemnification. Accordingly, on March 7, 1995, the Board of
Directors amended Section 6 of Article 8 of the Bylaws of the
Company to provide that the Company shall indemnify officers and
directors of the Company and its subsidiaries to the fullest
extent permitted by South Carolina law and that the Company may
insure such persons against liability arising out of or relating
to their employment by the Company in an amount and according to
such terms as the Board of Directors deems prudent.
The provisions of South Carolina law relating to officer and
director indemnification are set forth below.
Under South Carolina law, a corporation may indemnify a past or
present director against liability incurred in a proceeding if
(1) the director conducted himself in good faith, (2) the
director reasonably believed (a) in the case of conduct in his
official capacity with the corporation, that his conduct was in
its best interest, and (b) in all other cases, that his conduct
was at least not opposed to its best interest and (3) in the case
of any criminal proceeding, the director had no reasonable cause
to believe his conduct was unlawful; provided, however, that a
corporation may not indemnify a director (i) in connection with a
proceeding by or in the right of the corporation in which the
director is adjudged liable to the corporation, or (ii) in
connection with any other proceeding charging improper personal
benefit to him in which he is adjudged liable on the basis that
personal benefit was improperly received by him.
In addition, under South Carolina law, unless limited by the
articles of incorporation, a corporation shall indemnify a
director who is wholly successful, on the merits or otherwise, in
the defense of any proceeding to which he is party because he is
or was a director against reasonable expenses incurred by him in
connection with the proceeding. Under South Carolina law, a
corporation may pay in advance for the reasonable litigation
expenses of a director if (1) the director furnishes the
corporation a written affirmation of his good faith belief that
he has met the applicable standard of conduct, (2) the director
furnishes the corporation a written undertaking to repay the
advance if it is ultimately determined that he did not meet the
standard of conduct and (3) a determination is made that the
facts then known to those making the determination would not
preclude indemnification. Such determination, as well as any
determination that indemnification shall be paid, must be made in
one of the following ways: (i) by a majority vote of a quorum of
the board of directors consisting of directors not at the time
parties to the proceeding, (ii) if a quorum cannot be obtained,
by majority vote of a committee designated by the board,
consisting solely of two or more directors not at the time
parties to the proceeding, (iii) by special legal counsel (a)
selected by the board or its committee in the manner prescribed
above or (b) if a quorum of the board cannot be obtained and a
committee cannot be designated, selected by majority vote of the
full board of directors or (iv) by the shareholders, but shares
owned by or voted under the control of directors who are at the
time parties to the proceeding may not be voted on the
determination.
Under South Carolina law, an officer is entitled to the benefit
of the same indemnification provisions as apply to directors, but
in addition a corporation may indemnify and advance expenses to
an officer who is not a director to the extent, consistent with
public policy, provided by the corporation's articles of
incorporation, the corporation's bylaws, general or specific
action of the board of directors, or contract. Unless the
corporation's articles of incorporation provide otherwise, South
Carolina law permits a court in certain circumstances to order
the payment of indemnification to a director, whether or not he
met the applicable standard of conduct, if the director is fairly
and reasonably entitled to indemnification in view of all the
relevant circumstances.
The Board of Directors of the Company recommends a vote FOR the
proposed amendment to the Articles relating to indemnification of
officers and directors.
CONSIDERATION OF RESOLUTION RATIFYING SELECTION OF ARTHUR
ANDERSEN LLP TO BE INDEPENDENT ACCOUNTANTS FOR THE COMPANY (PROXY
ITEM NO. 3)
One of the purposes of the Meeting is to ratify the selection
of independent accountants to audit the books, records, and
accounts of the Company and its subsidiaries for the year ending
December 31, 1995. Arthur Andersen LLP has served as the
Company's independent accountants since December 28, 1992. On
March 7, 1995 acting on the recommendation of the Audit
Committee, the Board of Directors adopted resolutions directing
the employment of Arthur Andersen LLP to audit the books,
records, and accounts of the Company for 1995 and the submission
of the selection to the shareholders for ratification.
Accordingly, the Board recommends the adoption of the following
resolution:
RESOLVED, that the selection by the board of directors
of the firm of Arthur Andersen LLP to audit the books,
records, and accounts of the Company and its
subsidiaries for the year ending December 31, 1995, be
ratified.
A representative of Arthur Andersen LLP is expected to be
present at the Meeting and will have the opportunity to make a
statement, and will be available to answer questions from
shareholders.
The Board of Directors recommends a vote FOR ratification of the
appointment of independent accountants.
Other Business
There is no reason to believe that any other business will be
presented at this Meeting; however, if any other business should
properly and lawfully come before the Meeting, the proxies will
vote in accordance with their best judgment.
Shareholder Proposals
For a shareholder proposal to be presented at the next annual
meeting, it must be received by the Company at its principal
executive offices not later than January 25, 1996, in order to be
included in the proxy statement and proxy for the 1996 annual
meeting. Any such proposal should be addressed to the Company's
Corporate Secretary and delivered to the Company's principal
executive offices at 1501 Lady Street, Columbia, South Carolina
or mailed to P.O. Box 1, Columbia, South Carolina 29202.
Priscilla C. Brooks
Corporate Secretary
DC1DOCS1.8994