SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
[x] AMENDEMENT TO ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934. For the fiscal year ended December 31,
2002
OR
[ ] AMENDMENT TO TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934. For the transition period from ___to___
Commission file number 1-7411
------
ALLCITY INSURANCE COMPANY
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
New York 13-2530665
- --------------------------------------------------------------------------------
(State of incorporation) (I.R.S. Employer Identification Number)
45 Main Street, Brooklyn, N.Y 11201-3731
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 718-422-4000
------------
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
- ------------------- ----------------
None
- --------------------------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
- --------------------------------------------------------------------------------
None
(Title of Class)
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [x]
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
------- -------
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Securities Exchange Act).
Yes No X
--------- -----------
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of June 30, 2002 was $216,936.
The number of shares outstanding of each of the registrant's classes of
common shares, as of March 17, 2003, was 7,078,625.
DOCUMENTS INCORPORATED BY REFERENCE: None
1
EXPLANATORY NOTE
This report on Form 10-K/A amends and restates in their entirety the following
Items of the Annual Report on Form 10-K of Allcity Insurance Company (the
"Company") for the fiscal year ended December 31, 2002:
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
- -------- ---------------------------------------------------
Pursuant to the Company's Charter and By-Laws, the Board of Directors of the
Company consists of 13 members divided into three classes: Class I, Class II and
Class III. As of April 17, 2003, the directors and executive officers of the
Company, their ages, positions held by them during the past five years and the
periods during which they have served in such positions are as follows:
NAME, AGE AND POSITION PRINCIPAL OCCUPATION, OFFICE
WITH COMPANY AND TERM OF OFFICE
- ------------------------ ----------------------------
H.E. Scruggs, 45, Principal Occupation - Vice President of
Director, President and Leucadia since August 2002 and from
Chief Executive Officer March 2000 through December 2001;
President and Chief Executive Officer
of the Company and Empire since
September 2000. Chairman of American
Investment Bank ("AIB"), a Leucadia
subsidiary, since 1997. Director of MK
Gold (an international mining company)
since March 2001; Chairman of Conwed
Plastics (a subsidiary of Leucadia which
manufactures plastic netting) since
January 2000.
Class II Director since September 2000;
current term expires 2004.
Martin B. Bernstein, 69, Principal Occupation - Chairman, Bedford
Director Capital and private investor since July
2002. Previously, President and Director
of Ponderosa Fibres of America, Inc. (a
pulp manufacturer for paper producers)
from 1988 through July 2002.
Class II Director since February 1988;
current term expires 2004.
Ian M. Cumming, 62, Principal Occupation - Chairman of the
Director Board and a Director of Leucadia since
June 1978. Chairman of the Board of The
FINOVA Group Inc. (a middle market
lender) ("FINOVA") since August 2001;
Director of Skywest, Inc. (a Utah based
regional air carrier) since June 1986.
Director of MK Gold since June 1995;
Director of HomeFed Corporation
("HomeFed"), (a real estate development
company) since May 1999; Director of
Carmike Cinemas, Inc. (a motion picture
exhibitor) since January 2002; Chairman
of WilTel Communications Group Inc. (a
telecommunications company) ("WilTel")
since October 2002.
Class I Director since February 1988;
current term expires 2003.
James E. Jordan, 59, Principal Occupation - Managing Director
Director of Arnhold & S. Bleichroder Advisers,
LLC (a privately owned global investment
management company) since July 2002;
Previously, private investor and from
1986 to 1997, President of The William
Penn Corporation; Director of First
Eagle Mutual Funds and J.Z. Equity
Partners PLC (a British investment trust
company).
Class III Director since 1997; current
term expires 2005.
2
NAME, AGE AND POSITION PRINCIPAL OCCUPATION, OFFICE
WITH COMPANY AND TERM OF OFFICE
- ----------------------- ------------------------------
Thomas E. Mara, 57, Principal Occupation - Executive Vice
Director President of Leucadia since May 1980 and
Treasurer of Leucadia since January
1993; Director of MK Gold since February
2000; Director of FINOVA since September
2002.
Class I Director since October 1994;
current term expires 2003.
Louis V. Siracusano, 56, Principal Occupation - Attorney with
Director McKenna, Siracusano & Chianese (a law
firm) since 1976.
Class II Director since 1985; current
term expires 2004.
Joseph A. Orlando, 47, Principal Occupation - Vice President
Director and Chief Financial Officer of Leucadia
since April 1996.
Class III Director since 1998; current
term expires 2005.
Joseph S. Steinberg, 59, Principal Occupation - President of
Director, Chairman of the Board Leucadia since January 1979 and Director
of Leucadia since December 1978;
Director of MK Gold since June 1995.
Director of Jordan Industries Inc. (a
public company that owns and manages
manufacturing companies) since June
1988; Director of HomeFed since August
1998; Chairman of the Board since
December 1999; Director of FINOVA since
August 2001; Director of White Mountains
Insurance Group, Ltd. (a publicly traded
insurance holding company) since June
2001; Director of WilTel since October
2002.
Class I Director since February 1988;
current term expires 2003.
Daniel G. Stewart, 84, Principal Occupation - Independent
Director consulting actuary since 1991.
Class I Director since 1980; current term
expires 2003.
Lucius Theus, 80, Principal Occupation - President, The
Director U.S. Associates (consultants in civic
affairs, human resources and business
management) since 1989; Principal and
Chief Operating Officer of the Wellness
Group, Inc. (a provider of health
promotion programs) since 1989.
Class II Director since 1980; current
term expires 2004.
Rocco J. Nittoli, 44, Principal Occupation -Chief Operating
Director, Chief Operating Officer Officer of the Company and Empire since
February 2001, Senior Vice President &
Chief Information Officer of the Company
and Empire from January 2000 to February
2001; Vice President and Controller from
June 1999 to January 2000; Controller
from September 1997 to June 1999.
Class I Director since March 2001, current
term expires 2003.
Harry H. Wise, 64 Principal Occupation - President and
Director Director, H.W. Associates, Inc. (an
investment advisory firm) since 1981.
Class III Director since 1988; current
term expires 2005.
3
NAME, AGE AND POSITION PRINCIPAL OCCUPATION, OFFICE
WITH COMPANY AND TERM OF OFFICE
- ----------------------- ------------------------------
Christopher J. Gruttemeyer, 37, Principal Occupation - Vice President
Director, Vice President for the Company and Empire since
December 2000; Assistant Vice President
from September 1999 to December 2000;
Senior Financial Analyst from December
1996 to September 1999.
Class III Director since March 2001;
current term expires in 2005.
Edward A. Hayes, 51, Principal Occupation - Senior Vice
Senior Vice President President, Claims for the Company and
Empire since November 1999; Previously,
attorney with Hawkins, Feretic, Daly,
Maroney & Hayes (a law firm) from May
1997 to November 1999.
Douglas M. Whitenack, 43, Principal Occupation - Chief Financial
Chief Financial Officer Officer, for the Company and Empire
since December 2002; Vice President and
Controller from January 2000 to December
2002; Assistant Vice President from
September 1997 to January 2000.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
- -----------------------------------------
Section 16 (a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors, and persons who beneficially own more than ten
percent of the Company's common stock to file reports of ownership and changes
in ownership with the Securities Exchange Commission. Based solely upon written
representations from the Company's executive officers and directors and greater
than 10% beneficial shareholders, the Company believes that during the year
ended December 31, 2001, no persons subject to the reporting requirements of
Section 16 (a) were required to file any such reports.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
SUMMARY COMPENSATION TABLE
The Company does not remunerate its executive officers directly. Executive
officers of the Company are also executive officers of the Company's parent,
Empire, which pays all salaries. The Company operates under the same general
management as Empire and has full use of Empire's personnel, information
technology systems and facilities. All salaries and other operating expenses are
shared by the Company and Empire pursuant to a pooling arrangement under which
30% of such expenses are charged to the Company. The amounts reflected in the
table below represent the Company's 30% share of compensation expense.
The following table sets forth certain compensation information for H.E.
Scruggs, Jr., President and Chief Executive Officer ("CEO") of the Company.
There were no other executive officers whose salaries or bonuses paid, or
accrued for, under the pooling arrangement exceeded $100,000 for the year ended
December 31, 2002.
SUMMARY COMPENSATION TABLE
--------------------------
ALL OTHER
ANNUAL COMPENSATION COMPENSATION
------------------- ------------
NAME AND PRINCIPAL
POSITION SALARY BONUS
YEAR $ $ $
---- -------- --------- -------
H. E. Scruggs 2002 $ 11,100 -- $ 1,157
President & CEO 2001 $ 32,366 $ 140,513 $ 2,688
2000 (a) (a) (a)
(a) Mr. Scruggs received no compensation from the Company in 2000. Mr. Scruggs
was compensated directly by Leucadia in 2000. Mr. Scruggs was not employed by
the Company prior to September 2000.
4
The Company does not directly remunerate directors. The directors of the Company
are also directors of Empire and their fees are paid pursuant to the pooling
agreement described above. Directors who are not officers or employees of Empire
and the Company are paid an annual joint retainer of $5,000. In addition,
eligible directors receive $1,500 for each joint board meeting attended. For
attendance at a meeting of a committee of the joint board, such directors
receive $1,500 per meeting. In addition, each Chairperson of a committee is
entitled to $500 per annum. In December 2002, a special committee of the Board
of Directors, consisting of Martin B. Bernstein (Chairman) and Lucius Theus, was
formed to consider a possible offer by Leucadia to purchase shares of the
Company's common stock not already beneficially owned by Leucadia. Each member
of the special committee will be paid a retainer of $10,000 and $1,500 per
meeting for his services on the special committee. All fees paid to such
directors are shared in accordance with the pooling agreement.
The Company and Empire do not have a pension plan. Eligible employees of Empire
participate in Leucadia's savings and retirement plan and all related costs are
shared in accordance with the pooling agreement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
- -------- ---------------------------------------------------------------
AND RELATED STOCKHOLDER MATTERS
-------------------------------
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of April 25, 2002 as to the common
stock of the Company owned of record and beneficially by each person who owns of
record, or is known by the Company to own beneficially, more than 5% of such
common stock.
NAME AND AMOUNT AND
ADDRESS OF NATURE OF
BENEFICIAL BENEFICIAL PERCENT OF
OWNER OWNERSHIP CLASS
----- --------- -----
Empire Insurance Company 5,987,401 shares of 84.58%
45 Main Street common stock
Brooklyn, N.Y. 11201 owned of record
Baldwin Enterprises, Inc. 471,407 shares of 6.66%
529 East South Temple common stock
Salt Lake City, Utah 84102 owned of record
As discussed in Item 1, "Business", Leucadia (and certain of its wholly-owned
subsidiaries) may be deemed a parent of Empire and of the Company as a result of
its indirect ownership of 100% of the outstanding common stock of Empire.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information concerning beneficial ownership of
the Company's common stock and the equity securities of Leucadia by each
director and by all directors and officers of the Company as a group as of April
17, 2003.
Each holder shown exercises sole voting and sole investment power of the shares
shown opposite his or her name.
NAME OF BENEFICIAL AMOUNT AND NATURE OF PERCENT OF
OWNER BENEFICIAL OWNERSHIP CLASS
- ------------------ -------------------- -----------
Martin B. Bernstein - -
Ian M. Cumming (1) - -
Christopher J. Gruttemeyer - -
James E. Jordan - -
Thomas E. Mara - -
Rocco J. Nittoli - -
Joseph A. Orlando - -
H.E. Scruggs - -
Louis V. Siracusano - -
Joseph S. Steinberg (1) - -
5
Daniel G. Stewart - -
Lucius Theus - -
Harry H. Wise - -
Directors and Executive
Officers as a group - -
(15 persons) (2)
(1) Although neither Ian M. Cumming nor Joseph S. Steinberg directly owns any
shares of common stock of the Company, by virtue of their respective interest of
approximately 16.6% and 15.4% in Leucadia and their positions as directors and
Chairman and President, respectively, of Leucadia, each may be deemed to be the
beneficial owner of a proportionate number of the shares of common stock of the
Company beneficially owned by Leucadia through its subsidiaries, Empire and
Baldwin Enterprises, Inc.
(2) Aside from the beneficial ownership described in Note 1 to this table,
Messrs. Bernstein, Gruttemeyer, Jordan, Mara, Nittoli, Orlando, Scruggs and
Wise, as well as one executive officer, beneficially own common shares of
Leucadia, which in the aggregate, represent less than 1% of Leucadia's common
shares.
EQUITY COMPENSATION PLAN INFORMATION
There are no equity compensation plans outstanding at December 31, 2002.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
See Item 1 of this report and Notes 1, 3, 8, 9, 10 and 11 of Notes to
Consolidated Financial Statements for information relating to transactions and
relationships between the Company and its affiliates.
6
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
ALLCITY INSURANCE COMPANY
Registrant
By: /s/ Douglas M. Whitenack
---------------------------------
Douglas M. Whitenack
Chief Financial Officer
Dated: April 28, 2003
7
CERTIFICATIONS
--------------
I, H.E. Scruggs, certify that:
1. I have reviewed this annual report on Form 10-K/A of Allcity
Insurance Company; and
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report.
Date: April 28, 2003
/s/ H.E. Scruggs
--------------------------------
H.E. Scruggs
Chief Executive Officer
8
CERTIFICATIONS
--------------
I, Douglas M. Whitenack, certify that:
1. I have reviewed this annual report on Form 10-K/A of Allcity
Insurance Company; and
2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this annual report.
Date: April 28, 2003
/s/ Douglas M. Whitenack
-------------------------------
Douglas M. Whitenack
Chief Financial Officer
9