SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
20TH CENTURY INDUSTRIES
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
20TH CENTURY INDUSTRIES
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement.)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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NOTICE OF 1998
ANNUAL MEETING OF SHAREHOLDERS
AND PROXY STATEMENT
LOGO
20TH CENTURY INDUSTRIES
WOODLAND HILLS, CALIFORNIA 91367
DEAR SHAREHOLDER,
YOU ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING OF SHAREHOLDERS OF
20TH CENTURY INDUSTRIES ON TUESDAY, MAY 19, 1998 AT 10:00 A.M., AT THE MARRIOTT
HOTEL, 21850 OXNARD STREET, WOODLAND HILLS, CALIFORNIA.
DETAILS OF THE BUSINESS TO BE CONDUCTED AT THE ANNUAL MEETING ARE GIVEN IN
THE ATTACHED NOTICE OF ANNUAL MEETING AND PROXY STATEMENT.
WHETHER OR NOT YOU PLAN TO ATTEND, IT IS IMPORTANT THAT YOUR SHARES BE
REPRESENTED AND VOTED AT THE MEETING. I THEREFORE URGE YOU TO SIGN, DATE AND
PROMPTLY RETURN YOUR PROXY CARD IN THE ENCLOSED SELF-ADDRESSED ENVELOPE, SO THAT
YOUR SHARES CAN BE VOTED IN ACCORDANCE WITH YOUR INSTRUCTIONS. YOU MAY ATTEND
THE ANNUAL MEETING AND VOTE IN PERSON, IF YOU SO DECIDE.
TICKETS FOR THE MEETING ARE NOT REQUIRED, THOUGH WE ASK THAT ATTENDEES SIGN
THE ATTENDANCE REGISTER PRIOR TO THE COMMENCEMENT OF THE MEETING.
ON BEHALF OF THE BOARD OF DIRECTORS, I WOULD LIKE TO EXPRESS OUR
APPRECIATION FOR YOUR CONTINUED INTEREST IN THE AFFAIRS OF THE COMPANY.
SINCERELY,
[LOGO]
JOHN B. DE NAULT
CHAIRMAN OF THE BOARD
YOUR VOTE IS IMPORTANT
Please Sign, Date and Return Your Proxy Card
Promptly in the Enclosed Envelope.
[LOGO]
20TH CENTURY INDUSTRIES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 19, 1998
The Annual Meeting of Shareholders of 20TH CENTURY INDUSTRIES will be held
at the Marriott Hotel, 21850 Oxnard Street, Woodland Hills, California 91367 on
May 19, 1998 at 10:00 a.m. for the following purposes:
1. To elect nine directors.
2. To ratify the appointment of Ernst & Young LLP as independent
accountants for 1998.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The Board of Directors has fixed the close of business on April 7, 1998 as
the record date for the determination of those shareholders entitled to notice
of, and to vote at the meeting.
By Order of the Board of Directors,
JOHN R. BOLLINGTON
Secretary
Woodland Hills, California
DATED: April 14, 1998
IMPORTANT
Whether or not you expect to attend in person, we urge you to sign, date,
and return the enclosed Proxy at your earliest convenience. This will ensure the
presence of a quorum at the meeting. PROMPTLY SIGNING, DATING, AND RETURNING THE
PROXY WILL SAVE THE COMPANY THE EXPENSE AND EXTRA WORK OF ADDITIONAL
SOLICITATION. An addressed envelope is enclosed for that purpose. Sending in
your Proxy will not prevent you from voting your stock at the meeting if you
desire to do so, as your Proxy is revocable at your option.
LOGO
20TH CENTURY INDUSTRIES
6301 OWENSMOUTH AVENUE
WOODLAND HILLS, CALIFORNIA 91367
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1998
GENERAL INFORMATION
This Proxy Statement and the accompanying Notice of Annual Meeting and Proxy
Card are solicited by the Board of Directors of 20th Century Industries (the
"Company") for use at the Annual Meeting of Shareholders to be held on Tuesday,
May 19, 1998 at 10:00 a.m., at the Marriott Hotel, 21850 Oxnard Street, Woodland
Hills, California 91367. These proxy materials are proposed to be sent on or
about April 14, 1998 to all shareholders of the Company's common stock of record
as of April 7, 1998. The Company's principal executive office is located at 6301
Owensmouth Avenue, Woodland Hills, California 91367.
All proxies, properly executed and returned, will be voted at the annual
meeting as directed by the shareholder. Any shareholder may revoke a proxy by
giving written notice to the Secretary of the Company, by submitting a
duly-executed proxy bearing a later date, or by voting in person at the meeting.
If no directions are indicated, the shares represented by the signed proxy will
be voted FOR the election of the nominees and FOR the appointment of Ernst &
Young LLP as the independent accountants for 1998. The cost of the solicitation
of these proxies is to be borne by the Company.
Only shareholders of record of the Company's common stock at the close of
business on April 7, 1998 will be entitled to notice of and to vote at the
meeting. As of that date, 51,701,963 shares of common stock without par value of
20th Century Industries were outstanding. A quorum represented by a majority of
the outstanding shares of common stock, present in person or by proxy, is
necessary to conduct the meeting. In the election of directors, nominees
receiving the highest number of affirmative votes cast, up to the number of the
directors to be elected, are elected. Each share is entitled to one vote on all
matters except for the election of directors. In electing directors, each
shareholder is entitled to that number of votes which is equal to the number of
shares held multiplied by the number of directors to be elected. If notice of
intention to cumulate votes is given by any shareholder, all shareholders may
cumulate their votes and give one nominee all of those votes, or they may
distribute the votes among as many nominees as the shareholder deems fit.
If there are nominees other than those designated by the Board of Directors,
the proxyholders have discretionary authority to cumulate votes, which they will
do through instructions from the Board, with the objective of electing as many
of the nominees of the Board of Directors as possible. The effect of the
decision of the proxyholders to exercise their discretionary authority to
cumulate votes will be to make it more difficult for nominees, other than those
designated by the Board of Directors, to be elected.
1
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board of Directors recommends the election of the nine nominees named in
this Proxy Statement to hold office until the next annual meeting and until
their successors are elected and qualified. All of the nominees are members of
the present Board and were elected at the last annual meeting of shareholders.
The remaining positions on the Board of Directors are held by Robert M. Sandler
and Howard I. Smith. Mr. Sandler and Mr. Smith were elected to the Board by the
holders of the Series A Preferred Stock pursuant to authority granted in the
Series A Preferred Stock Certificate of Determination and the Investment and
Strategic Alliance Agreement between the Company and American International
Group, Inc. ("AIG"), as approved by the common shareholders on December 15,
1994.
It is intended that the accompanying proxy will be voted in favor of the
following persons to serve as directors unless the shareholder indicates to the
contrary on the proxy. Management expects that each of the nominees will be
available for election, but if any of them is not a candidate at the time the
election occurs, it is intended that such proxy will be voted for the election
of another nominee to be designated by the Board of Directors to fill any such
vacancy. The proxy may not be voted for more than nine nominees.
NOMINEES FOR BOARD OF DIRECTORS
JOHN B. DE NAULT Director since 1956. Age 79
Chairman of the Board of the Company. He
previously served as Vice Chairman of the
Board from 1971 to December 15, 1994. He is
an investor, maintaining offices in Los
Angeles, California and is the father of
Director John B. De Nault, III. He currently
serves as a director of Roaring Camp & Big
Trees Narrow Gauge Railroad, and Liberty
Bank.
WILLIAM H. BRADDOCK Director since 1997 Age 62
Retired as Executive Vice President of
Marketing for Farmers Group, Inc. in June
1996. Since 1957 he held several positions
with Farmers Group, Inc., including Executive
Vice President, Property and Casualty
Operations from 1989 to 1994.
STANLEY M. BURKE Director since 1982. Age 62
Certified Public Accountant.
JOHN B. DE NAULT, III Director since 1988. Age 50
Chairman of the Board of Omnithruster, Inc.
in Orange, California and private investor
with offices in Los Angeles, California. He
is the son of Director John B. De Nault. He
currently serves as a director of Liberty
Bank.
R. SCOTT FOSTER, M.D. Director since 1986. Age 57
Ophthalmologist in Stockton, California. He
is the son of Louis W. Foster, Founder of the
Company.
2
RACHFORD HARRIS Director since 1956. Age 85
Retired since 1989. He previously served as a
Financial Consultant with Shearson Lehman
Brothers, Inc.
WILLIAM L. MELLICK Director since 1995 Age 56
Chief Executive Officer, President and Chief
Operating Officer of the Company. Mr. Mellick
joined the Company in 1979, and at various
times has served as Vice President, Senior
Vice President and Group Vice President. He
assumed the positions of Chief Operating
Officer and Executive Vice President in 1993,
President in 1994 and Chief Executive Officer
on March 1, 1995.
GREGORY M. SHEPARD Director since 1995 Age 42
Chairman of the Board of Directors and
President of American Union Financial
Corporation and its subsidiaries, Direct Auto
Insurance Company, American Union Life
Insurance Company, Illinois HealthCare
Insurance Company and Direct Auto Indemnity
Company, all of Bloomington, Illinois.
ARTHUR H. VOSS Director since 1963. Age 78
Chairman of Voss International Corporation,
an Exporter and Importer based in Long Beach,
California.
Each director will also serve as a director of 20th Century Insurance Company
and of 21st Century Casualty Company.
DIRECTORS OTHER THAN THE NOMINEES
Current directors of the Company, other than the nominees, are:
ROBERT M. SANDLER Director since 1994 Age 55
Vice Chairman of the Board of the Company.
Executive Vice President, Senior Casualty
Actuary and Senior Claims Officer of American
International Group, Inc. located in New
York, N.Y.
Mr. Sandler is also Chairman of American
International Underwriters, AIG's overseas
property-casualty operation.
HOWARD I. SMITH Director since 1994 Age 53
Executive Vice President, Chief Financial
Officer and Comptroller of American
International Group, Inc. located in New
York, N.Y. Mr. Smith currently serves as a
director of Transatlantic Holdings, Inc.
Directors Sandler and Smith were elected by the holders of the Series A
Preferred Stock, pursuant to the terms of the Series A Preferred Stock
Certificate of Determination and the Strategic Alliance and Investment
Agreement. They also serve as directors of 20th Century Insurance Company and
21st Century Casualty Company.
3
EXECUTIVE OFFICERS
The following is information concerning the executive officers of the
Company.
HAS SERVED
AS AN OFFICER
OFFICERS OF THE COMPANY AGE SINCE BUSINESS BACKGROUND
- ------------------------- --- --------------- ----------------------------------------------------------------
WILLIAM L. MELLICK 56 1979 Chief Executive Officer, President and Chief Operating Officer.
Mr. Mellick joined the Company in 1979 as Vice President of
Operations, was promoted to Senior Vice President in 1986 and to
Group Vice President in 1989. He assumed the positions of Chief
Operating Officer and Executive Vice President in 1993,
President in 1994 and Chief Executive Officer on March 1, 1995.
RICHARD A. ANDRE 48 1988 Vice President, Human Resources. Before joining the Company in
1988, Mr. Andre was with Fidelity National Title Insurance
Company. Prior to that time he was with Safeco Corporation where
he held a variety of positions including Vice President of
Personnel for Safeco Title Insurance Company.
JOHN R. BOLLINGTON 62 1991 Senior Vice President, General Counsel and Secretary. Mr.
Bollington joined the Company in 1975, serving as managing
counsel of the Company's Legal Department from 1975 to 1991.
MARGARET CHANG 60 1982 Treasurer and Assistant Secretary. Ms. Chang has been employed
by the Company since 1966, serving in various capacities with
accounting responsibilities prior to being elected Treasurer and
Assistant Secretary in 1982.
TERESA K. COLPO 49 1993 Vice President, Marketing. Ms. Colpo joined the Company in 1984
as Marketing Service Manager and has served as Assistant Vice
President of Marketing. Previously, Ms. Colpo held several
positions at California Casualty Insurance Group, including
policy service supervisor and district sales manager.
WILLIAM G. CRAIN 59 1981 Vice President, Administrative Services. Mr. Crain joined the
Company in 1981. From 1976 to 1981 he served as the Regional
Material Damage Manager for United Services Automobile
Association.
RICHARD A. DINON 53 1986 Senior Vice President, Corporate Relations. Mr. Dinon joined the
Company in 1983 as a manager of training. He later was named
Assistant Vice President in Corporate Relations and was elected
to the position of Vice President, Corporation Relations in
1986. He has served as Senior Vice President since 1990.
4
HAS SERVED
AS AN OFFICER
OFFICERS OF THE COMPANY AGE SINCE BUSINESS BACKGROUND
- ------------------------- --- --------------- ----------------------------------------------------------------
PAUL F. FARBER 46 1989 Executive Vice President. Mr. Farber joined the Company in 1984,
holding various positions in Claims, Marketing and Operations.
He previously served as Vice President, Operations from 1989 to
1995 and Senior Vice President, Claims in 1995 and 1996. He was
promoted to Group Vice President in 1996 and assumed his current
position in December 1997.
MICHAEL T. FARRELL 49 1997 Vice President and Chief Information Officer. Mr. Farrell joined
the Company in February 1997. He was Vice President of
Information Services for National Computer Systems, Inc. from
1993 to 1997. Previously, Mr. Farrell was employed for 19 years
with General Mills, Inc. in various information services
capacities.
RICHARD L. HILL 45 1993 Vice President, Corporate Relations. Mr. Hill joined the Company
in 1979, serving in numerous technical, administrative and
management positions. He was previously an Assistant Vice
President in Claims and in Corporate Relations.
JOHN M. LORENTZ 45 1996 Controller. Mr. Lorentz joined the Company in July 1996. He was
employed by Transamerica Financial Services as Vice President
and Controller in 1995 and 1996 and as Assistant Controller from
1990 to 1995. Previously, he served with Ernst & Young in
various accounting and auditing capacities for 15 years.
JOSEPH J. PRATT 49 1995 Vice President and Chief Actuary. Mr. Pratt joined the Company
in October 1995. He was an actuary with Farmers Insurance Group
from June 1994 to October 1995. He also served as Vice President
and Actuary for Transamerica Insurance Group from 1988 to 1994.
Previously he served in various actuarial capacities with the
Automobile Club of Southern California from 1974 to 1988,
including Chief Actuary for three years.
RICKARD F. SCHUTT 50 1992 Vice President, Operations. Mr. Schutt joined the Company in
1982 as Underwriting Manager and was promoted to Assistant Vice
President in 1986. He served as Vice President of Underwriting
from 1992 until 1995, when he assumed responsibility for
Operations.
DEAN E. STARK 44 1993 Vice President, Claims. Mr. Stark joined the Company in 1979,
serving in numerous claim positions including Assistant Vice
President. He has over 20 years of experience in the insurance
industry.
5
HAS SERVED
AS AN OFFICER
OFFICERS OF THE COMPANY AGE SINCE BUSINESS BACKGROUND
- ------------------------- --- --------------- ----------------------------------------------------------------
ROBERT B. TSCHUDY 49 1995 Senior Vice President and Chief Financial Officer. Mr. Tschudy
joined the Company in July 1995. Previously, he was with Ernst &
Young for over 20 years, including nine years as a partner in
its Los Angeles office.
Each executive officer serves at the pleasure of the Board of Directors. There
is no person chosen by the Board of Directors to be an executive officer who is
not listed above.
BOARD OF DIRECTORS AND COMMITTEE MEETINGS
The business of the Company is managed under the direction of the Board of
Directors. The Board meets on a regularly scheduled basis during the year to
review significant developments affecting the Company and to act on matters
requiring Board approval. It also holds special meetings when an important
matter requires Board action between scheduled meetings. The Board of Directors
met four times during 1997. Each Board member participated in at least 75% of
the meetings of the Board and Committees of the Board on which he served.
The Board of Directors had standing audit and compensation committees,
identified below. The Company does not have a standing nominating committee. The
functions of a nominating committee are performed by the Board as a whole.
AUDIT COMMITTEE. The Audit Committee, which met three times during 1997,
recommends to the Board of Directors the appointment of the firm selected to be
independent accountants for the Company, reviews the Company's procedures and
accounting objectives, reviews and approves the findings and reports of the
independent accountants, and makes recommendations and reports to the Board of
Directors as it deems appropriate. Members of the Committee are Stanley M.
Burke, John B. De Nault, III and Howard I. Smith.
COMPENSATION COMMITTEE. The Compensation Committee met once last year. The
Compensation Committee reviews and approves compensation policies and makes
recommendations regarding executive compensation to the Board of Directors. No
member of the Committee is a former or current officer or employee of the
Company or any of its subsidiaries. Members of the Committee are John B. De
Nault, Rachford Harris and Gregory M. Shepard.
COMPENSATION OF DIRECTORS
For 1997, each outside director of the Company received an annual
remuneration of $15,000. All directors received $1,250 for each attended meeting
of the Board of Directors. In addition, each committee member received $1,250
for each attended meeting of a committee, if otherwise entitled. No director is
entitled to more than $1,250 for any calendar day, regardless of the number of
meetings attended on that day. Under the Company's 1995 Stock Option Plan,
nonemployee directors receive an option to purchase 4,000 shares of the
Company's common stock on the day of each Annual Meeting of Shareholders. The
options have an exercise price equal to the fair market value of the underlying
shares subject to the option on the date of grant and become exercisable one
year after the date of grant.
6
BENEFICIAL OWNERSHIP OF SECURITIES
PRINCIPAL SHAREOWNERS
The following table lists the beneficial ownership of each person or group
who owned, to the Company's knowledge, more than five percent of any class of
its outstanding voting securities.
SERIES A
COMMON STOCK PREFERRED STOCK
--------------------------- ---------------------------
AMOUNT AND AMOUNT AND
NATURE OF NATURE OF
BENEFICIAL PERCENT OF BENEFICIAL PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP CLASS (2) OWNERSHIP CLASS
- ----------------------------------------------- ------------- ------------ ------------ -------------
AMERICAN INTERNATIONAL GROUP, INC. 36,754,369 41.7% 224,950 100%
and its subsidiaries (1)
70 Pine Street
New York, New York 10270
DIRECT AUTO INSURANCE COMPANY 4,850,000 5.5% -0- --
and its subsidiary,
American Union Life Insurance Company
303 East Washington Street
Bloomington, IL 61701
GLADYCE L. FOSTER 4,725,696 5.4% -0- --
c/o 6301 Owensmouth Avenue
Woodland Hills, CA 91367
- ------------------------
(1) Series A Preferred Stock held by American International Group Inc. is
convertible into 19,854,369 shares of common stock. The number of shares of
common stock shown as beneficially owned by American International Group,
Inc. includes shares of common stock issuable upon conversion of the Series
A Preferred Stock, 16,000,000 shares of common stock purchasable on
exercise of its Series A Warrants, and 900,000 shares of common stock
currently owned.
(2) The "Percent of Class" column for common stock is calculated based upon a
total of 88,165,797 shares, assuming for purposes of the table the issuance
of all shares of common stock issuable upon conversion or exercise, as
applicable, of the Series A Preferred Stock, the Series A Warrants and any
stock options exercisable within 60 days of this Proxy Statement.
7
MANAGEMENT OWNERSHIP
The following table sets forth information regarding the beneficial
ownership of the Company's common stock by directors, the Company's Chief
Executive Officer, the four other highest paid executive officers, and the
directors and officers as a group.
TITLE OF AMOUNT AND NATURE OF PERCENT OF
CLASS NAMES BENEFICIAL OWNERSHIP (1) CLASS (11)
- ----------- -------------------------------- ------------------------ -------------
Common John B. De Nault 4,350,000(2)(3) 4.9%
Common Stanley M. Burke 24,000(3) *
Common William H. Braddock 5,900(4) *
Common John B. De Nault, III 1,581,700(2)(3) 1.8%
Common R. Scott Foster, M.D. 327,384(3) *
Common Rachford Harris 890,713(3) 1.0%
Common Robert M. Sandler 8,000(3) *
Common Gregory M. Shepard 4,858,080(3)(5) 5.5%
Common Howard I. Smith 8,000(3) *
Common Arthur H. Voss 406,000(3) *
Common William L. Mellick 110,449(6) *
Common Robert B. Tschudy 47,886(7) *
Common John R. Bollington 98,315(8) *
Common Paul F. Farber 53,066(9) *
Common Richard A. Dinon 57,552(10) *
Common All Directors and Officers as a 13,190,081 15.0%
Group (25 persons)
- ------------------------
* Less than 1%
(1) Under the rules of the Securities and Exchange Commission (the "SEC"), a
person is deemed to be a beneficial owner of a security if he or she has
or shares the power to vote or to direct the voting of such security, or
the power to dispose or to direct the disposition of such security. A
person is also deemed to be a beneficial owner of any securities of which
that person has the right to acquire beneficial ownership within 60 days,
as well as any securities owned by such person's spouse, children or
relatives living in the same household. Accordingly, more than one person
may be deemed to be a beneficial owner of the same securities. Unless
otherwise indicated by footnote, the named individuals have sole voting
and investment power with respect to the shares held by them.
(2) John B. De Nault and John B. De Nault, III share voting and investment
power on 408,000 shares for which they are both considered beneficial
owners.
(3) Includes 8,000 shares issuable upon exercise of stock options exercisable
within 60 days of the date of this Proxy Statement.
(4) Includes 4,000 shares issuable upon exercise of stock option exercisable
within 60 days of the date of this Proxy Statement.
8
(5) Mr. Shepard is Chairman of the Board and President of Direct Auto
Insurance Company and its subsidiary, American Union Life Insurance
Company, which together own 4,850,000 shares and includes 80 shares owned
by his son as to which Mr. Shepard has sole voting power.
(6) Includes 29,244 shares currently held under the Company's Restricted
Shares Plan, which can be voted by the participant but cannot be disposed
of until vested, and 32,668 shares issuable upon exercise of stock options
exercisable within 60 days of this Proxy Statement.
(7) Includes 9,879 shares currently held under the Company's Restricted Shares
Plan, which can be voted by the participant but cannot be disposed of
until vested, 1,587 shares purchased through the Company's 401(k) Plan,
and 31,834 shares issuable upon exercise of stock options exercisable
within 60 days of this Proxy Statement.
(8) Includes 14,248 shares currently held under the Company's Restricted
Shares Plan, which can be voted by the participant but cannot be disposed
of until vested, 892 shares purchased through the Company's 401(k) Plan,
and 30,996 shares issuable upon exercise of stock options exercisable
within 60 days of this Proxy Statement.
(9) Includes 9,368 shares currently held under the Company's Restricted Shares
Plan, which can be voted by the participant but cannot be disposed of
until vested, and 28,334 shares issuable upon exercise of stock options
exercisable within 60 days of this Proxy Statement.
(10) Includes 11,800 shares currently held under the Company's Restricted
Shares Plan, which can be voted by the participant but cannot be disposed
of until vested, and 27,500 shares issuable upon exercise of stock options
exercisable within 60 days of this Proxy Statement.
(11) The "Percent of Class" column is calculated based upon a total of
88,165,797 shares, assuming for purposes of the table the issuance of all
shares of common stock issuable upon conversion or exercise, as
applicable, of the Series A Preferred Stock, the Series A Warrants and any
stock options exercisable within 60 days of this Proxy Statement.
9
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain information regarding compensation
paid during each of the Company's last three years to the Company's Chief
Executive Officer, and each of the Company's four other most highly compensated
executive officers (the "Named Executives"), based on salary and bonus earned
during 1997.
LONG TERM
COMPENSATION (3)
----------------------------------------
AWARDS
ANNUAL COMPENSATION ------------------------
------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(2) ($)(4) (#)(5) ($)(6)
- ---------------------- --------- --------- --------- --------------- ----------- ----------- --------------
William L. Mellick 1997 505,000(1) 150,000 20,500 500,000 60,000 34,876
CEO, President, 1996 408,750(1) 125,000 14,267 -- 20,000 29,250
COO and Director 1995 299,167(1) 100,000 12,013 -- 20,000 10,782
Robert B. Tschudy 1997 249,500 67,000 15,500 -- 35,000 14,888
Sr. VP and CFO 1996 233,625 57,500 15,500 225,000 20,000 6,477
1995 103,125 18,000 3,229 -- 20,000 512
John R. Bollington 1997 230,487 50,000 13,200 232.000 33,750 19,275
General Counsel, 1996 219,500 38,500 13,200 -- 15,000 18,396
Sr. VP & Secretary 1995 207,500 28,500 13,200 -- 12,500 14,640
Paul F. Farber 1997 203,000 78,000 15,500 -- 35,000 13,913
Executive VP 1996 179,583 65,000 15,500 -- 15,000 10,031
1995 156,400 27,500 13,967 142,600 12,500 7,611
Richard A. Dinon 1997 181,500 45,000 15,500 181,500 30,000 13,181
Sr. VP Corporate 1996 171,000 30,000 14,900 -- 12,500 11,358
Relations 1995 162,421 22,000 13,700 -- 12,500 9.273
- --------------------------
(1) Includes fees for attending meetings of the Board of Directors.
(2) Company-owned automobile allowance.
(3) During 1997 there were no awards of Stock Appreciation Rights ("SARs"), nor
were there any Long-Term Incentive Plan ("LTIP") payouts.
10
(4) Restricted Stock awards are for a five-year period, vesting at 20% per
year. During the restriction period, participants are entitled to receive
dividends on and may vote the shares. The following table sets forth the
restricted stock award information and the vesting schedule for the Named
Executives:
PRESENT VALUE
AS
SHARES VESTING IN BALANCE OF 12/31/97
DATE SHARE AWARD -------------------------------------- AS OF FMV
AWARDED AWARDED VALUE 1998 1999 2000 2001 2002 12/31/97 $26 PER SHARE
------- ------- -------- ------ ------ ------ ------ ------ --------- -------------
William L. Mellick 1/2/97 30,305 $500,000 6,061 6,061 6,061 6,061 6,061 30,305 $ 787,930
Robert B. Tschudy 1/2/96 11,465 $225,000 2,293 2,293 2,293 2,293 -- 9,172 $ 238,472
John R. Bollington 1/2/97 14,060 $232,000 2,812 2,812 2,812 2,812 2,812 14,060 $ 365,560
Paul F. Farber 1/22/95 13,420 $142,600 2,684 2,684 2,684 -- -- 8,052 $ 209,352
Richard A. Dinon 1/2/97 11,000 $181,500 2,200 2,200 2,200 2,200 2,200 11,000 $ 286,000
(5) Represents the number of shares of the Company's common stock for which
options were granted under the Company's 1995 Stock Option Plan.
(6) Includes the following other compensation for each Named Executive for
1997:
(a) Imputed income of group term life in excess of $50,000.
(b) Deferred employer's contribution to the Company's qualified 401(k) Plan
and supplemental 401(k) plan.
1997
(A) (B) TOTAL
--------- --------- ---------
William L. Mellick....................................... 6,750 28,126 34,876
Robert B. Tschudy........................................ 2,091 12,797 14,888
John R. Bollington....................................... 8,143 11,132 19,275
Paul F. Farber........................................... 1,853 12,060 13,913
Richard A. Dinon......................................... 2,673 10,508 13,181
--------- --------- ---------
21,510 74,623 96,133
--------- --------- ---------
--------- --------- ---------
11
OPTION GRANTS IN 1997
The following table sets forth as to each of the Named Executives
information with respect to options granted during 1997 and the present value of
the options on the date of grant.
PERCENT OF
TOTAL OPTIONS
NUMBER OF GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (1) IN 1997 ($/SH) (1) DATE $ (2)
- --------------------- ----------- --------------- --------------- ----------- --------------
William L. Mellick 10,000 5.17% $ 175/8 2/26/07 $ 69,000
10,000 5.19% $ 193/4 6/05/07 $ 79,500
40,000 18.18% $ 22 7/18/07 $ 352,400
Robert B. Tschudy 8,750 4.53% $ 175/8 2/26/07 $ 60,375
8,750 4.54% $ 193/4 6/05/07 $ 69,563
17,500 7.95% $ 22 7/18/07 $ 154,175
John R. Bollington 7,500 3.88% $ 175/8 2/26/07 $ 51,750
8,750 4.54% $ 193/4 6/05/07 $ 69,563
17,500 7.95% $ 22 7/18/07 $ 154,175
Paul F. Farber 8,750 4.53% $ 175/8 2/26/07 $ 60,375
8,750 4.54% $ 193/4 6/05/07 $ 69,563
17,500 7.95% $ 22 7/18/07 $ 154,175
Richard A. Dinon 7,500 3.88% $ 175/8 2/26/07 $ 51,750
7,500 3.89% $ 193/4 6/05/07 $ 59,625
15,000 6.82% $ 22 7/18/07 $ 132,150
- ------------------------
(1) Options were granted to the Named Executives on February 26, 1997, June 5,
1997 and July 18, 1997, respectively. The exercise price is equal to the
closing price of the Company's common stock on the business day immediately
preceding the date of grant, as reported in the Wall Street Journal,
Western Edition. These options vest in three equal installments beginning
February 26, 1998, June 5, 1998 and July 18, 1998, respectively.
(2) Present value was calculated using the Black-Scholes option pricing model.
Use of this model should not be viewed in any way as a forecast of the
future performance of the Company's common stock, which will be determined
by future events and unknown factors. The estimated values under the
Black-Scholes model are based upon certain assumptions as to variables,
including expected stock price volatility of .27, an annual interest rate
of 6.5%, 6.6% and 6.2%, a dividend yield of 1.4%, 1.3% and 1.1% for the
options granted on February 26, 1997, June 5, 1997 and July 18, 1997,
respectively, and an expected term of eight years.
12
DECEMBER 31, 1997 OPTION VALUES
The following table provides information as to the value of options held by
each of the Named Executives at December 31, 1997. No options were exercised by
the Named Executives during 1997.
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1997 (#) AT DECEMBER 31, 1997 ($)(1)
---------------------------- ----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- --------------------- ------------ -------------- ------------ --------------
William L. Mellick 21,000 79,000 $ 246,625 $ 452,125
Robert B. Tschudy 21,000 54,000 $ 246,625 $ 343,844
John R. Bollington 17,500 43,750 $ 199,375 $ 248,750
Paul F. Farber 17,500 45,000 $ 199,375 $ 259,219
Richard A. Dinon 17,500 37,500 $ 199,375 $ 215,625
- ------------------------
(1) In accordance with proxy statement reporting requirements, values of both
exercisable and unexercisable options are based on the difference between
the exercise price of each option and $26, the closing price of the
Company's common stock on December 31, 1997, as reported in the Wall Street
Journal, Western Edition.
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE MANAGEMENT COMPENSATION
The Compensation Committee, consisting of nonemployee directors John B. De
Nault, Rachford Harris and Gregory M. Shepard, has furnished the following
report on executive compensation:
GENERAL COMPENSATION POLICY
The Board of Directors' fundamental policy has been to offer the Company's
executive officers competitive compensation opportunities based in large part
upon their contributions to the success of the Company, and upon their personal
performance. The Company believes in compensating its executives for
demonstrated and sustained levels of performance in their individual jobs. The
achievement of higher levels of performance and contribution is rewarded by
higher levels of compensation. Each individual officer's compensation package,
other than that of the Chief Executive Officer, is comprised of three elements:
(i) base salary, designed principally to be competitive with relevant salary
levels in the industry, (ii) annual variable performance awards paid in cash,
based upon subjective evaluation of individual performance not tied to specific
company performance goals and (iii) long-term stock awards and stock option
grants which strengthen the mutuality of interest between executive officers and
the Company's shareholders.
Some of the more important factors, which the Board considered in
establishing the components of each executive officer's compensation package for
the 1997 fiscal year, are summarized below.
BASE SALARY. Base salary for each officer is set subjectively, after
reviewing personal performance, internal comparability considerations and salary
levels in effect for comparable positions in the market place. The Company uses
salary survey information to assign a salary grade range to each position,
including executive officers. Salary range midpoints are targeted at the 50th
percentile of like business enterprises in the same geographic area, if
possible.
13
Salary recommendations for the year were based in part upon salary survey
information published by the National Association of Independent Insurers, SNL
Executive Compensation Review for Insurance Companies, and Sibson & Company. The
Committee believes that information provided by these groups presents a broadly
based cross-section of insurance company compensation practices. Individual
salary adjustments for executive officers were based upon analysis of base
salary levels, effectiveness of performance, changes in job responsibilities and
a subjective assessment of their personal contributions to the effectiveness of
the organization as a whole. All of the factors enumerated were applied in a
subjective, non-quantitative manner to establish an executive officer's base
salary. The peer group examined when establishing these compensation levels is
different from the industry group utilized in the Stockholder Return Performance
Graph diagramed below.
ANNUAL CASH INCENTIVE COMPENSATION. Bonuses were paid to Chief Executive
Officer William L. Mellick and other executive officers for the 1997 fiscal year
based upon subjective evaluation of Company performance relative to key issues
impacting profitability, development of corporate surplus and enhancement of
marketplace competitiveness. At the end of the year, a bonus pool was
established for executive officers other than the Chief Executive Officer.
Thereafter, the Company determined individual executive officer bonuses based
upon that officer's performance and contributions measured subjectively. Another
factor of importance was assessment of the relative contributions of each
executive officer. Full-year bonuses varied by individual executive and
generally ranged between 15% and 38% of base salary.
LONG-TERM EQUITY INCENTIVE COMPENSATION. Restricted Shares Awards are
granted to executive officers through the Key Employee Incentive Committee,
consistent with a policy designed to align the interests of executive officers
with those of the shareholders. The grants provide the executives with a
significant incentive to manage the Company from the perspective of an owner
with an equity stake in the Company. The number of shares subject to each grant
is based on the officer's salary level on the grant date, as reflected in
Restricted Shares Plan guidelines. Prior awards are not considered when a new
grant is awarded. A grant of stock generally vests at 20 percent per year,
provided the officer continues his or her employment with the Company.
In 1995 the Compensation Committee concluded that a stock option plan would
improve the linkage between shareholder value and executive compensation. Upon
this Committee's recommendation, the Board of Directors adopted the 1995 Stock
Option Plan, which was approved by shareholders at the 1995 Annual Meeting.
Executives and key managers are eligible to receive stock options from time to
time, giving them the right to purchase shares of the Company's common stock at
a specified price in the future. The Plan is administered by the Stock Option
Committee, which has authority to select optionees and to determine the number
of shares granted to them.
CEO COMPENSATION. William L. Mellick's base salary was established by the
Board of Directors upon recommendation of the Compensation Committee, and took
into account the fact that he held not only the office of Chief Executive
Officer, but also served as President and Chief Operating Officer. In 1997, his
annualized base salary was increased from $400,000 to $500,000. In 1997, Mr.
Mellick was awarded 60,000 stock options under the 1995 Stock Option Plan. Mr.
Mellick was awarded a cash bonus of $150,000 for services rendered in 1997 based
upon subjective evaluation by the Compensation Committee of Mr. Mellick's 1997
performance.
The Compensation Committee's recommendations as outlined in this report have
been submitted to, reviewed and approved by the Board of Directors.
14
The Company has reviewed Section 162(m) of the Internal Revenue Code which
generally limits the deduction of compensation paid to a company's chief
executive officer and each of the other four highest compensated executive
officers to $1,000,000 for each individual, with certain exceptions. The
Company's deductions for compensation paid during 1997 was not limited by
Section 162(m). None of the compensation deduction attributable to stock options
granted by the Company is limited by this section, but compensation deductions
attributable to restricted stock grants, generally equaling the fair market
value of the underlying stock on the date of vesting, do not qualify as an
exception. The deductibility of compensation attributable to restricted stock
grants or other forms of compensation paid by the Company may be limited in the
future. While the Compensation Committee considers Section 162(m) in evaluating
compensation of executive officers, it is only one of the several factors
considered in arriving at a compensation package.
Submitted by the Compensation
Committee
John B. De Nault, Chairman
Rachford Harris
Gregory M. Shepard
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
As indicated above, the Company's Compensation Committee consists of John B.
De Nault, Rachford Harris and Gregory M. Shepard. No Committee member is or was
an employee of 20th Century Industries.
William L. Mellick, Director and Chief Executive Officer, also participated
in deliberations concerning executive officers' compensation during 1997, other
than his own. Mr. Mellick has been an officer of the Company since 1979, Chief
Executive Officer since March 1, 1995 and a director since May 25, 1995.
15
STOCKHOLDER RETURN PERFORMANCE GRAPH
Set forth below is a line graph comparing the cumulative total stockholder
return on the Company's Common Stock against the cumulative total return of the
Standard & Poor's 500 Stock Index and the Standard & Poor's Property & Casualty
Insurance Index for the period of five years commencing December 31, 1992 and
ending December 31, 1997. The graph and table assume that $100 was invested on
December 31, 1992 in each of the Company's Common Stock, the Standard & Poor's
500 Stock Index and the Standard & Poor's Property & Casualty Insurance Index,
and that all dividends were reinvested. This data was furnished by Research Data
Group, Inc.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG 20TH CENTURY INDUSTRIES, THE S&P 500 INDEX
AND THE S&P PROPERTY-CASUALTY INSURANCE INDEX
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
20TH CENTURY (TW) S&P 500 S&P PROPERTY-CASUALTY INS
12/92 $100 $100 $100
12/93 $98 $110 $98
12/94 $38 $112 $103
12/95 $72 $153 $140
12/96 $61 $189 $170
12/97 $95 $252 $247
16
RETIREMENT PLANS
PENSION PLAN
The Company's Pension Plan is a noncontributory defined benefit plan for all
regular employees under which normal retirement is at age 65 and early
retirement can be elected by any participant who has reached age 55 and has at
least 10 years of service. The plan, subject to certain maximum and minimum
provisions, bases pension benefits on an employee's career average compensation
and length of service. The annual pension benefit payable upon normal retirement
is equal to the sum of the accruals for each year a participant was in the plan.
At retirement, the participant has various life and contingent annuity
payment elections. For purposes of this plan, compensation includes base annual
salary plus overtime and bonuses. These pension benefits serve as an offset in
calculating benefits for participants under the Supplemental Executive
Retirement Plan.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
Employees nominated by the Chief Executive Officer and approved by the Board
of Directors are eligible to participate in the Supplemental Executive
Retirement Plan. The plan is a nonqualified defined benefit plan under which
normal retirement is age 65 with at least 5 years of service, and early
retirement can be elected by any participant who has reached age 55 with at
least 10 years of service. The annual retirement benefit payable is equal to 60%
of the participant's final average compensation during the three years preceding
retirement, reduced by the participant's benefit under the Pension Plan and 50%
of the participant's social security benefit. At retirement, the participant may
elect a 15 year certain or 100% joint and survivor payment method.
PENSION SUPPLEMENTAL PLAN AND 401(K) SUPPLEMENTAL PLAN
Effective January 1, 1996, the Company adopted the Pension Supplemental Plan
and the 401(k) Supplemental Plan. Each is a non-qualified deferred compensation
plan designed for certain executives and key employees of the Company whose
benefits under the Company's qualified Pension and 401(k) Plans have been
limited by certain provisions of the Internal Revenue Code (the "Code").
The Pension Supplemental Plan provides a benefit equal to the difference
between the pension that would be payable under the Pension Plan, absent the
Code's limitations upon compensation considered in calculating pension benefits,
and the actual benefits payable subject to those limitations. If a participant
in this plan is also entitled to receive benefits under the Supplemental
Executive Retirement Plan, the Pension Supplemental Plan benefits will be
reduced accordingly.
The 401(k) Supplemental Plan permits certain executives and key employees to
defer an amount of current compensation which, in addition to amounts actually
contributed to the 401(k) Plan, allows the participant to defer the full amount
of contributions that could have been deferred under the 401(k) Plan without
regard to limitations which the Code places on contributions and eligible
compensation. To the extent that such limitations preclude a participant's
account from receiving matching contributions under the 401(k) Plan, the
participant will receive a like amount of matching contributions under the
401(k) Supplemental Plan.
17
The table below sets forth the benefit payable from the Pension Plan,
Supplemental Executive Retirement Plan, the Pension Supplemental Plan, and one
half of the Social Security benefit (assuming the recipient is entitled to the
age 65 Social Security benefit).
NUMBER OF YEARS OF SERVICE
FINAL AVERAGE -------------------------------------
COMPENSATION 5 10 15 OR MORE
- -------------- ----------- ----------- -----------
$ 150,000 $ 45,000 $ 67,500 $ 90,000
200,000 60,000 90,000 120,000
250,000 75,000 112,500 150,000
300,000 90,000 135,000 180,000
350,000 105,000 157,500 210,000
400,000 120,000 180,000 240,000
450,000 135,000 202,500 270,000
500,000 150,000 225,000 300,000
550,000 165,000 247,500 330,000
600,000 180,000 270,000 360,000
650,000 195,000 295,500 390,000
Any deduction for Social Security or other offset has already been taken
into account.
As set forth above, compensation used in calculating the Pension,
Supplemental Executive Retirement Plan and Pension Supplemental retirement
benefit includes annual base salary, overtime and bonuses and will approximate
and fall within 10% of the total of 1995 through 1997 salary and bonus amounts
shown in the Summary Compensation Table for the listed individuals.
The credited years for the Named Executives in the Summary Compensation
Table are William L. Mellick -- 18 years; Robert B. Tschudy -- 2 years; John R.
Bollington -- 22 years; Paul F. Farber -- 13 years and Richard A. Dinon -- 14
years.
RESTRICTED SHARES PLAN
The shareholders at their meeting held on May 25, 1982 approved the 20th
Century Industries Restricted Shares Plan. Pursuant to the Plan, the Board of
Directors established a committee of its members entitled the Key Employee
Incentive Committee (the "Committee") to designate the participants in the Plan,
the amount of benefits thereunder, and to otherwise administer the Plan. Members
of the Committee are not eligible for benefits under the Plan. Designation of an
employee for benefits under the Restricted Shares Plan does not necessarily
entitle the employee to benefits under any other Company benefit plan.
In general, the shares granted are restricted for a period of five years,
vesting at the rate of 20% per year. If the employment of the participant is
terminated within the five year period, all shares not then vested are
forfeited. Any shares forfeited may be regranted to an existing participant or
any other employee eligible to be designated as a participant. During the
restricted period, a participant has the right to receive dividends and the
right to vote the shares.
The Plan does not create any right of any employee or class of employees to
receive a grant, nor does it create in any employee or class of employees any
right with respect to continuation of employment by the Company.
18
STOCK OPTION PLAN
In 1995, the Company's shareholders approved the Company's 1995 Stock Option
Plan in order to enable the Company to attract, retain and motivate key
employees and nonemployee directors and to further align their interests with
those of the Company's shareholders by providing for or increasing their
proprietary interest in the Company. The Stock Option Plan is administered by a
committee comprised of disinterested members of the Board of Directors. The
committee has the authority to select persons to be granted options and to
determine exercise prices, vesting schedules and other provisions not
inconsistent with the provisions of the Stock Option Plan.
Each option gives a grantee the right to purchase shares of the Company's
common stock at a specified price in the future. Shares vest at fixed numbers of
shares per year over varying future periods. The Stock Option Plan provides that
on the day of an annual meeting of shareholders of the Company each nonemployee
director will be granted an option to purchase 4,000 shares of the Company's
common stock. Nonemployee director options have an exercise price equal to the
fair market value of the underlying shares subject to the option on the date of
grant and become exercisable one year after the date of grant.
EXECUTIVE SEVERANCE PLAN
The Company has enacted an Executive Severance Plan covering each of its
executive officers. If an officer is terminated for reasons other than death,
long-term disability, or good cause within a three-year period following a
change of control of the Company, or if the officer resigns after significant
adverse changes in his authority, duties, compensation, benefits or geographical
location, then the officer is entitled to a lump sum severance payment of one to
three times his current annual salary and most recent cash bonus. Junior
officers could receive one year of severance payments; senior officers, two
years; and the Chief Executive Officer, three years; with all severance payments
limited to the amount deductible to the Company under the provisions of Internal
Revenue Code Section 280G.
SECTION 16(A) BENEFICIAL OWNERSHIP
REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, executive officers and persons who own more than ten percent of a
registered class of the Company's equity securities to file with the Securities
and Exchange Commission (the "SEC") initial reports of ownership and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Executive officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
To the Company's knowledge, based solely on a review of reports furnished to
the Company and written representations that no other reports were required
during the 1997 fiscal year, all Section 16(a) filing requirements were complied
with except as described below.
William H. Braddock failed to file a timely report on the purchase of 800
shares of the Company's common stock in June 1997. Such untimely filing was
inadvertent, and the required report has since been filed.
19
INDEPENDENT ACCOUNTANTS
(PROPOSAL 2)
The Board of Directors has approved a resolution retaining Ernst & Young
LLP, Certified Public Accountants, as its independent accountants for 1998.
Ernst & Young LLP have audited the Company's financial statements since 1991.
The appointment was recommended by the Audit Committee. It is intended that
unless otherwise directed by the shareholders, proxies will be voted for the
ratification of this appointment.
Representatives of Ernst & Young LLP are expected to be present at the
annual meeting to make a statement, if they desire, and to be available to
respond to appropriate questions.
SHAREHOLDERS PROPOSALS AT 1999 ANNUAL MEETING OF SHAREHOLDERS
If a shareholder desires to present a proposal at the Annual Meeting of
Shareholders of the Company for the year 1999 (scheduled to be held on May 18,
1999), such proposal must conform with all of the requirements of Rule 14a-8,
paragraphs (a), (b), and (c) under the Securities Exchange Act of 1934, and must
be received at the principal executive offices of the Company at 6301 Owensmouth
Avenue, Woodland Hills, California 91367 no later than December 18, 1998.
ADDITIONAL INFORMATION
The Annual Report to Shareholders for the year ended December 31, 1997 is
being mailed to the shareholders with this Proxy Statement.
THE COMPANY WILL PROVIDE WITHOUT CHARGE ON WRITTEN REQUEST A COPY OF 20TH
CENTURY INDUSTRIES' ANNUAL REPORT ON FORM 10-K FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE REQUEST SHOULD BE DIRECTED TO JOHN B. DE NAULT,
CHAIRMAN OF THE BOARD OF 20TH CENTURY INDUSTRIES, 6301 OWENSMOUTH AVENUE,
WOODLAND HILLS, CALIFORNIA 91367.
OTHER BUSINESS
The Company is unaware of any matter to be acted upon at the meeting by
shareholder vote except the election of directors and the ratification of the
appointment of independent accountants. In the case of any matter properly
coming before the meeting for shareholder vote, the proxyholders named in the
proxy accompanying this statement shall vote shares held by them in accordance
with their best judgment.
April 14, 1998 JOHN B. DE NAULT, Chairman of the Board
20th Century Industries
6301 Owensmouth Avenue
Woodland Hills, California 91367
20
20TH CENTURY INDUSTRIES
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints John B. De Nault, Rachford Harris and
William L. Mellick as Proxies, each with the power to appoint his substitute,
and hereby authorizes them to represent and to vote, as designated on the
reverse side of this card, all the shares of common stock of 20th Century
Industries held of record by the undersigned on April 7, 1998 at the Annual
Meeting of Shareholders to be held at the Marriott Hotel, 21850 Oxnard Street,
Woodland Hills, California on May 19, 1998 at 10:00 A.M. or any adjournment
thereof.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
PLEASE DETACH AND MAIL IN THE ENVELOPE PROVIDED
- -------------------------------------------------------------------------------
A /X/ Please mark your votes as in this example.
1. Election of Directors
WITHHOLD AUTHORITY Nominees:
to vote for all nominees W. H. Braddock
FOR listed at right S. M. Burke
J. B. De Nault
/ / / / J. B. De Nault, III
R. S. Foster, M.D.
For the nominees listed at right with discretionary R. Harris
authority to cumulate votes except as marked to the W. L. Mellick
contrary below. G. M. Shepard
A. H. Voss
(INSTRUCTION: To withhold authority to vote for
any individual nominee, write that nominee's name
in the space provided below.)
2. Proposal to ratify the appointment of Ernst & Young LLP as the
independent accountants of the Company for 1998.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
PLEASE CHECK THIS BOX IF YOU PLAN TO ATTEND THE MEETING. / /
THIS PROXY, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE
ENCLOSED ENVELOPE.
Signature(s) _______________________________ Dated ___________________, 1998
SIGNATURE, IF HELD JOINTLY
Note: Please sign exactly as your name appears hereon. When shares are held
by joint tenants, both should sign. When signing as attorney, or as executor,
administrator, trustee or guardian, please so indicate. If a corporation,
please sign in full corporate name by the President or other authorized
officer. If a partnership, please sign in partnership name by authorized
person.