<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/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, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / 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.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NOTICE OF 1996
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 21, 1996 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,
[SIG]
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.
<PAGE>
LOGO
20TH CENTURY INDUSTRIES
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 1996
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 21, 1996 at 10:00 a.m. for the following purposes:
1. To elect eight directors.
2. To ratify the appointment of Ernst & Young as independent accountants
for 1996.
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 5, 1996 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 18, 1996
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.
<PAGE>
LOGO
20TH CENTURY INDUSTRIES
6301 OWENSMOUTH AVENUE
WOODLAND HILLS, CALIFORNIA 91367
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 21, 1996
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 21, 1996 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
before April 18, 1996 to all shareholders of the Company's common stock of
record as of April 5, 1996. 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 as the independent accountants for 1996. 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 5, 1996 will be entitled to notice of and to vote at the
meeting. As of that date, 51,512,006 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
<PAGE>
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Board of Directors recommends the election of the eight 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.
One current director, Louis W. Foster, has decided not to seek reelection. 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., 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 eight nominees.
NOMINEES FOR BOARD OF DIRECTORS
<TABLE>
<S> <C> <C>
JOHN B. DE NAULT Director since 1956. Age 77
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.
STANLEY M. BURKE Director since 1982. Age 60
Certified Public Accountant with offices in
Santa Monica, California.
JOHN B. DE NAULT, III Director since 1988. Age 48
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 55
Ophthalmologist in Stockton, California. He
is the son of Director Louis W. Foster.
RACHFORD HARRIS Director since 1956. Age 83
Retired since 1989. He previously served as a
Financial Consultant with Shearson Lehman
Brothers, Inc.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
WILLIAM L. MELLICK Director since 1995 Age 54
Chief Executive Officer, President and Chief
Operating Officer of the Company. Mr. Mellick
joined 20th Century Industries and
subsidiaries 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 40
Chairman of the Board of Directors and
President of Union Insurance Group, Union
Automobile Insurance Company, American Union
Life Insurance Company, Prairie State Farmers
Insurance Company and Union Automobile
Indemnity Company, all of Bloomington,
Illinois.
ARTHUR H. VOSS Director since 1963. Age 76
Chairman of Voss International Corporation,
an Exporter and Importer in Long Beach,
California.
</TABLE>
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 as follows:
<TABLE>
<S> <C> <C>
LOUIS W. FOSTER Director since 1956 Age 83
Chairman Emeritus and Founder of 20th Century
Industries and subsidiaries. He served as
Chief Executive Officer until August 31,
1993. He retired as Chairman of the Board on
December 15, 1994. He is the father of
Director R. Scott Foster, M.D.
ROBERT M. SANDLER Director since 1994 Age 53
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 51
Executive Vice President and Comptroller of
American International Group, Inc. located in
New York, N.Y. Mr. Smith currently serves as
a director of Transatlantic Holdings, Inc.
</TABLE>
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. Director Foster has chosen not to stand for
reelection as a director. His term expires on May 21, 1996.
3
<PAGE>
EXECUTIVE OFFICERS
The following is information concerning the executive officers of the
Company.
<TABLE>
<CAPTION>
HAS SERVED
AS AN OFFICER
OFFICERS OF THE COMPANY AGE SINCE BUSINESS BACKGROUND
- ------------------------- --- --------------- ----------------------------------------------------------------
<S> <C> <C> <C>
WILLIAM L. MELLICK 54 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 46 1988 Vice President, Human Resources. Before joining the Company in
June 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 60 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 58 1982 Treasurer and Assistant Secretary. Ms. Chang has been employed
by the Company since February 1966, serving in various
capacities with accounting responsibilities prior to being
elected Treasurer and Assistant Secretary in November 1982.
TERESA K. COLPO 47 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 57 1981 Vice President, Administrative Services. Mr. Crain joined the
Company in October 1981. From July 1976 to October 1981 he
served as the Regional Material Damage Manager for United
Services Automobile Association.
WILLIAM M. DAILEY, JR. 52 1987 Vice President, Information Services. Mr. Dailey joined the
Company in October 1987. Previously, he was employed by Allstate
Insurance Company for over 20 years, holding a variety of
positions including Claims Operation Director and Systems
Development Director.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
HAS SERVED
AS AN OFFICER
OFFICERS OF THE COMPANY AGE SINCE BUSINESS BACKGROUND
- ------------------------- --- --------------- ----------------------------------------------------------------
<S> <C> <C> <C>
RICHARD A. DINON 51 1986 Senior Vice President, Corporate Relations. Mr. Dinon joined the
Company in July 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 June 1986. He has served as Senior Vice President since 1990.
PAUL F. FARBER 44 1989 Senior Vice President, Claims. Mr. Farber joined the Company in
January 1984. Prior to his promotion to his current position in
January 1995, he held positions in Claims, Marketing and
Operations, serving as Vice President of Operations from 1989 to
1995.
RICHARD L. HILL 43 1993 Vice President, Corporate Relations. Mr. Hill joined the Company
in 1979, serving in numerous technical, administrative and
management positions. He has held the position of Assistant Vice
President in both Claims and Corporate Relations beginning in
1986.
JOSEPH J. PRATT 47 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 October 1988
to May 1994.
RICKARD F. SCHUTT 48 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 January 1992 until January 1995, when he assumed
responsibility for Operations.
DEAN E. STARK 42 1993 Vice President, Claims. Mr. Stark joined the Company in 1979 and
served in numerous claim positions including Assistant Vice
President. He has 20 years of experience in the insurance
industry.
ROBERT B. TSCHUDY 47 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 and a partner in its Los Angeles office
for nine years.
</TABLE>
Each executive officer serves at the pleasure of the Board of Directors. There
is no person chosen to be an executive officer who is not listed above.
5
<PAGE>
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 eight times during 1995. 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 six standing committees, identified below, in
1995. 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 twice during 1995,
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. Messrs. Burke and DeNault, III
joined the Committee on May 25, 1995, taking the places of Rex J. Bates and John
B. DeNault, who served on the Committee until that date.
KEY EMPLOYEE INCENTIVE COMMITTEE. The Key Employee Incentive Committee,
which met twice during 1995, is empowered to make recommendations to the Board
of Directors pertaining to any benefit plan in which the officers and Directors
of the Company are eligible to participate. Members of the Committee are Stanley
M. Burke, John B. De Nault, John B. De Nault, III, R. Scott Foster, M.D.,
Rachford Harris, Robert M. Sandler, Gregory M. Shepard, Howard I. Smith and
Arthur H. Voss.
INVESTMENT COMMITTEE. The Investment Committee, which met four times during
1995, is empowered to make recommendations to the Board on investment
matters. Members of the Committee are John B. De Nault III, Rachford Harris 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 Stanley M.
Burke, John B. De Nault and Gregory M. Shepard. Mr. Shepard joined the Committee
on May 25, 1995, taking the place of Rex J. Bates, who served on the Committee
until that date.
EXECUTIVE COMMITTEE. The Executive Committee, which met once during 1995,
is empowered to act in lieu of the Board of Directors and may exercise all the
powers of the Board of Directors except those powers reserved to the Board by
law. The members are John B. De Nault, R. Scott Foster, M.D., Rachford Harris,
William L. Mellick, Robert M. Sandler and Gregory M. Shepard.
STOCK OPTION COMMITTEE. The Stock Option Committee, established in May
1995, is empowered to administer the 1995 Stock Option Plan. The members are
Stanley M. Burke, John B. De Nault, III, R. Scott Foster, M.D., Rachford Harris
and Arthur H. Voss. The Committee met once in 1995.
6
<PAGE>
COMPENSATION OF DIRECTORS
For 1995, 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 standing 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 2,000 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.
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.
<TABLE>
<CAPTION>
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 (4) OWNERSHIP CLASS
- ----------------------------------------------- ------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
AMERICAN INTERNATIONAL GROUP, INC. 20,754,369 29.08% 224,950 100%
and its subsidiaries (1)
70 Pine Street
New York, New York 10270
UNION AUTOMOBILE INSURANCE CO. 4,850,000 6.80% -0- --
and its subsidiary,
American Union Life Insurance Company
303 East Washington Street
Bloomington, IL 61701
LOUIS W. FOSTER (2) 4,725,696 6.62% -0- --
6301 Owensmouth Avenue
Woodland Hills, CA 91367
JOHN B. DE NAULT (3) 4,362,000 6.11 % -0- --
3314 Motor Avenue
Los Angeles, CA 90034
</TABLE>
- ------------------------
(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 preferred
stock and 900,000 shares of common stock currently owned.
(2) Mr. Foster had sole voting power over 4,725,696 shares.
7
<PAGE>
(3) Refer to footnote 2 of Management Ownership below.
(4) The "Percent of Class" column for common stock is calculated based upon a
total of 71,382,375 shares, reflecting an increase in the number of common
shares by the conversion value of the American International Group, Inc.
outstanding Series A Preferred Stock.
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, its former Chief Executive Officer, the four other highest
paid executive officers, and the directors and officers as a group.
<TABLE>
<CAPTION>
TITLE OF AMOUNT AND NATURE OF PERCENT OF
CLASS NAMES BENEFICIAL OWNERSHIP (1) CLASS (11)
- ----------- -------------------------------- ------------------------ ------------
<S> <C> <C> <C>
Common John B. De Nault 4,362,000(2) 6.11%
Common Neil H. Ashley -0- --
Common Stanley J. Burke 18,000(3) *
Common John B. De Nault, III 1,575,700(2)(3) 2.21%
Common Louis W. Foster 4,725,696 6.62%
Common R. Scott Foster, M.D 320,996(3) *
Common Rachford Harris 884,713(3)(4) 1.24%
Common Robert M. Sandler 2,000(3) *
Common Gregory M. Shepard 4,852,000(3)(5) 6.80%
Common Howard I. Smith 2,000(3) *
Common Arthur H. Voss 402,000(3) *
Common William L. Mellick 42,426(6) *
Common John R. Bollington 50,012(7) *
Common William M. Dailey, Jr. 13,960(8) *
Common Richard A. Dinon 15,802(9) *
Common Paul F. Farber 20,732(10) *
Common All Directors and Officers as a 17,428,975 24.42%
Group (25 persons)
</TABLE>
- ------------------------
* 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.
8
<PAGE>
(3) Includes 2,000 shares issuable upon exercise of stock options exercisable
within 60 days of the date of this Proxy Statement.
(4) Excludes 14,400 shares held by the wife of Rachford Harris, and 3,600 held
by his daughter and grandson as to which he has no voting or investment
power, and for which he disclaims beneficial ownership.
(5) Mr. Shepard is Chairman of the Board and President of Union Automobile
Insurance Company and its subsidiary, American Union Life Insurance
Company, which together own 4,850,000 shares.
(6) Includes 1,552 shares held under the Company's Restricted Shares Plan,
which can be voted by the participant but cannot be disposed of until
vested.
(7) Includes 1,493 shares held under the Company's Restricted Shares Plan,
which can be voted by the participant but cannot be disposed of until
vested, and 342 shares purchased through the Company's 401(k) Plan.
(8) Includes 1,848 shares held under the Company's Restricted Shares Plan,
which can be voted by the participant but cannot be disposed of until
vested.
(9) Includes 1,212 shares held under the Company's Restricted Shares Plan,
which can be voted by the participant but cannot be disposed of until
vested.
(10) Includes 10,736 shares held under the Company's Restricted Shares Plan,
which can be voted by the participant but cannot be disposed of until
vested.
(11) The "Percent of Class" column is calculated based upon a total of
71,382,375 shares, reflecting an increase in the number of common shares
by the conversion value of the American International Group, Inc.
outstanding Series A Preferred Stock.
9
<PAGE>
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, its former 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 1995.
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION (5)
----------------------------------------
AWARDS
ANNUAL COMPENSATION ------------------------
---------------------------------------- RESTRICTED SECURITIES
OTHER ANNUAL STOCK UNDERLYING ALL OTHER
NAME AND SALARY BONUS COMPENSATION AWARDS OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(4) ($)(6) (#)(7) ($)(8)
- ---------------------- --------- --------- ------------ --------------- ----------- ----------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
William L. Mellick (1) 1995 299,167 100,000 12,013 -- 20,000 10,782
CEO, President, 1994 200,000 32,500(3) 13,200 -- -- 10,098
COO and Director 1993 170,000 65,000 12,992 -- -- 9,395
Neil H. Ashley (2) 1995 75,708 -- 2,750 -- -- 72,208(9)
CEO and Director 1994 621,250 100,000 16,500 -- -- 22,722
1993 215,000 200,000 7,513 -- -- 8,907
John R. Bollington 1995 207,500 28,500 13,200 -- 12,500 14,640
General Counsel, 1994 172,000 25,000(3) 13,200 -- -- 11,124
Sr. VP & Secretary 1993 163,000 50,000 13,200 -- -- 10,495
William M. Dailey, Jr. 1995 170,375 25,000 13,633 -- 10,000 9,411
VP Information 1994 137,000 22,500(3) 12,700 -- -- 9,015
Services 1993 130,000 45,000 12,700 130,000 -- 8,703
Richard A. Dinon 1995 162,421 22,000 13,700 -- 12,500 9,273
Sr. VP Corporate 1994 135,000 17,500(3) 13,700 -- -- 8,981
Relations 1993 125,000 35,000 13,700 -- -- 7,879
Paul F. Farber 1995 156,400 27,000 13,967 142,600 12,500 7,611
Sr. VP Claims 1994 118,000 17,500(3) 13,200 -- -- 7,505
1993 108,000 35,000 13,200 -- -- 6,769
</TABLE>
- --------------------------
(1) Mr. Mellick became Chief Executive Officer, effective March 1, 1995.
"Annual Compensation" includes compensation in all capacities, as well as
fees for attending meetings of the Board of Directors.
(2) Mr. Ashley retired as Chief Executive Officer, effective March 1, 1995.
"Annual Compensation" includes fees for attending meetings of the Board of
Directors until his term as a director expired on May 25, 1995 and unused
accrued vacation paid to him.
(3) Non-cash award through the Restricted Shares Plan granted and vested in
January 1995.
(4) Company-owned automobile allowance.
(5) During 1995 there were no awards of Stock Appreciation Rights ("SARs"), nor
were there any Long-Term Incentive Plan ("LTIP") payouts.
10
<PAGE>
(6) Restricted Stock grants 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 portfolio information and the vesting schedule for the
Named Executives:
<TABLE>
<CAPTION>
PRESENT VALUE
AS OF
SHARES VESTING IN BALANCE 12/31/95
DATE SHARE AWARD -------------------------------------- AS OF FMV $19 7/8
GRANTED GRANTED VALUE 1996 1997 1998 1999 2000 12/31/95 PER SHARE
------- ------- -------- ------ ------ ------ ------ ------ --------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
William L. Mellick 1/2/92 7,760 $160,000 1,552 1,552 -- -- -- 3,104 $ 61,692
Neil H. Ashley -- -- -- -- -- -- -- -- -- --
John R. Bollington 1/2/92 7,465 $154,000 1,493 1,493 -- -- -- 2,986 $ 59,347
William M. Dailey, Jr. 1/4/93 4,620 $130,000 924 924 924 -- -- 2,772 $ 55,094
Richard A. Dinon 1/2/92 6,060 $125,000 1,212 1,212 -- -- -- 2,424 $ 48,177
Paul F. Farber 1/22/95 13,420 $142,600 2,684 2,684 2,684 2,684 2,684 13,420 $ 266,723
</TABLE>
(7) Represents the number of shares of the Company's common stock for which
options were granted under the Company's 1995 Stock Option Plan.
(8) Includes the following other compensation for each Named Executive:
(a) Imputed income of group term life in excess of $50,000.
(b) Deferred employer's contribution to the Company's 401(k) plan.
<TABLE>
<CAPTION>
1995
(A) (B) TOTAL
--------- --------- ---------
<S> <C> <C> <C>
William L. Mellick....................................... 4,032 6,750 10,782
Neil H. Ashley........................................... 3,290 6,750 10,040
John R. Bollington....................................... 7,890 6,750 14,640
William M. Dailey, Jr.................................... 2,661 6,750 9,411
Richard A. Dinon......................................... 2,523 6,750 9,273
Paul F. Farber........................................... 861 6,750 7,611
--------- --------- ---------
21,257 40,500 61,757
--------- --------- ---------
--------- --------- ---------
</TABLE>
(9) Includes a payment in the amount of $62,168 made to Mr. Ashley in
connection with his severance from the Company.
11
<PAGE>
OPTION GRANTS IN 1995
The following table sets forth as to each of the Named Executives
information with respect to options granted during 1995 and the present value of
the options on the date of grant.
<TABLE>
<CAPTION>
PERCENT OF
TOTAL OPTIONS
NUMBER OF GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED IN 1995 ($/SH) (1) DATE $ (2)
- ------------------------ ----------- --------------- ------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
William L. Mellick 20,000 12.5% 12.50 7-14-05 $ 134,400
Neil H. Ashley -- -- -- -- --
John R. Bollington 12,500 7.8% 12.50 7-14-05 $ 84,000
William M. Dailey, Jr. 10,000 6.2% 12.50 7-14-05 $ 67,200
Richard A. Dinon 12,500 7.8% 12.50 7-14-05 $ 84,000
Paul F. Farber 12,500 7.8% 12.50 7-14-05 $ 84,000
</TABLE>
- ------------------------
(1) Options were granted to the Named Executives on July 15, 1995 at an
exercise price of $12.50 per share. The exercise price is equal to the
closing price of the Company's common stock on the business day immediately
preceding the date of grant, as reported in the Wall Street Journal,
Western Edition. Options vest at the rate of no more than 8,000 per year
and will not begin to become exercisable until July 15, 1996.
(2) Present value was calculated using the Black-Scholes option pricing model.
Use of this model should not be viewed in any way as a forecast of the
future performance of the Company's common stock, which will be determined
by future events and unknown factors. The estimated values under the
Black-Scholes model are based upon certain assumptions as to variables,
including expected stock price volatility of .25, an annual interest rate
of 6.62%, a dividend yield of 0% and an expected term of ten years.
DECEMBER 31, 1995 OPTION VALUES
The following table provides information as to the value of options held by
each of the Named Executives at December 31, 1995. No options were exercised or
exercisable during 1995.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1995 (#) AT DECEMBER 31, 1995 ($)(1)
--------------------------------- ---------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------ ----------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C>
William L. Mellick -- 20,000 -- $ 147,500
Neil H. Ashley -- -- -- --
John R. Bollington -- 12,500 -- $ 92,188
William M. Dailey, Jr. -- 10,000 -- $ 73,750
Richard A. Dinon -- 12,500 -- $ 92,188
Paul F. Farber -- 12,500 -- $ 92,188
</TABLE>
- ------------------------
(1) Value is based on the difference between the exercise price of each option
and $19.875, the closing price of the Company's common stock on December
29, 1995 (the last business day of 1995), as reported in the Wall Street
Journal, Western Edition.
12
<PAGE>
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE MANAGEMENT COMPENSATION
The Compensation Committee has been in existence since 1993. The Committee
met once in 1995, and again in 1996 to consider base salaries and bonuses for
Chief Executive Officer William L. Mellick, and all other officers. Compensation
covering the first two months of 1995 for Chief Executive Officer Neil H. Ashley
was established in a Compensation Committee meeting occurring in November 1994.
The Compensation Committee's recommendations were reviewed and approved by the
Board of Directors.
GENERAL COMPENSATION POLICY
The Board of Directors' fundamental policy has been to offer the Company's
executive officers competitive compensation opportunities based substantially
upon their contribution to the success of the Company, and upon their personal
performance. In line with this policy, each individual officer's compensation
package, other than that of the Chief Executive Officer, is comprised of three
elements: (i) base salary designed primarily to be competitive with relevant
salary levels in the industry, (ii) for fiscal year 1995, annual variable
performance awards payable 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 stockholders.
Several of the more important factors which the Board considered in
establishing the components of each executive officer's compensation package for
the 1995 fiscal year are summarized below. Compensation decisions may be based
upon different factors, particularly quantitative measures of financial
performance, in setting executive compensation for future fiscal years.
BASE SALARY. Base Salary for each officer is set subjectively, after
reviewing salary levels in effect for comparable positions in the market place,
personal performance and internal comparability considerations. The Company uses
salary survey information to assign a salary grade range to each position,
including the executive officers. Salary range midpoints are targeted at the
50th percentile of like business enterprises in the same geographic area, if
possible. Salary recommendations for the year were based in part upon salary
survey information published by the National Association of Independent Insurers
and Sibson & Company. The Committee believes that data provided by these groups
present 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 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 INCENTIVE COMPENSATION. Bonuses were paid to Chief Executive Officer
William L. Mellick and other executive officers for the 1995 fiscal year based
upon subjective evaluation of Company performance relative to key issues that
impacted the re-establishment of profitability and corporate surplus. The
bonuses varied by individual executive but, in general, ranged between 4% and
17% of base salary for executive officers other than the Chief Executive
Officer. At the end of the year, a bonus
13
<PAGE>
pool was established. Thereafter, the Company determined individual executive
officer bonuses based upon that officer's performance and contributions measured
subjectively. Other factors of importance included assessments of the relative
contributions of each executive officer.
LONG-TERM 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 vests 20 percent per year, provided the officer continues his or her
employment with the Company.
In 1995 the Committee concluded that a stock option plan would improve the
linkage between shareholder value and executive compensation. Upon
recommendation of this Committee, our 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. Neil H. Ashley's base salary through March 1, 1995 was
established by the Compensation Committee and reflected a substantial reduction
of monthly compensation in anticipation that the time devoted to his duties with
the Company and spent at the Company's corporate office would be reduced, and
that the President would assume a portion of those duties. He was awarded no
annual incentive or long-term incentive compensation, but was paid $62,168 in
connection with his severance from the Company. 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 in addition to the
office of Chief Executive Officer, he continued to hold the offices of President
and Chief Operating Officer. In July of 1995, Mr. Mellick was awarded 20,000
stock options under the 1995 Stock Option Plan. No additional awards of
Restricted Shares were granted to him in 1995. Mr. Mellick was awarded a cash
bonus of $100,000 for service performed in 1995 based upon subjective evaluation
by the Compensation Committee of Mr. Mellick's performance during 1995.
The Company has reviewed Section 162(m) of the Internal Revenue Code which
does not permit the deductibility of applicable employee remuneration to a
company's chief executive officer and each of the other four highest compensated
executive officers to the extent such compensation exceeds $1,000,000 for any
individual, and does not otherwise qualify for an exception under the statute.
As the Summary Compensation Table above indicates, no executive officer's
compensation exceeded $1,000,000 in 1995. The Compensation Committee continues
to evaluate the advisability of qualifying the deductibility of such executive
compensation in the future. No performance goals have been recommended to the
Board of Directors for Section 162(m) qualification purposes.
Submitted by the Compensation
Committee
John B. De Nault, Chairman
Stanley M. Burke
Gregory M. Shepard
14
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
As indicated above, the Company's Compensation Committee consists of Stanley
M. Burke, Gregory M. Shepard and John B. De Nault. Mr. Shepard joined the
Committee on May 25, 1995, replacing Rex J. Bates, whose term as a director
expired on that date. No Committee member is or was an employee of 20th Century
Industries.
Prior to his retirement as Chief Executive Officer on March 1, 1995, Neil H.
Ashley, then a director, also participated in deliberations concerning executive
officers' compensation, other than his own. Mr. Ashley previously served as
President of the Company from September 1, 1986 to June 30, 1989 and as Group
Vice President and General Counsel from April 1, 1983 to August 31, 1986.
William L. Mellick, Director and Chief Executive Officer, also participated in
deliberations concerning executive officers' compensation, 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
<PAGE>
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, 1990 and
ending December 31, 1995. The graph and table assume that $100 was invested on
December 31, 1990 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 Star
Services, 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
<TABLE>
<CAPTION>
20TH CENTURY (TW) S&P 500 S&P P&C
<S> <C> <C> <C>
1990 $100 $100 $100
1991 $150 $130 $125
1992 $209 $140 $147
1993 $205 $155 $144
1994 $79 $157 $151
1995 $150 $215 $205
</TABLE>
16
<PAGE>
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, then the
participant will receive a like amount of matching contributions under the
401(k) Supplemental Plan.
17
<PAGE>
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).
<TABLE>
<CAPTION>
NUMBER OF YEARS OF SERVICE
FINAL AVERAGE -------------------------------------
COMPENSATION 5 10 15 OR MORE
- -------------- ----------- ----------- -----------
<S> <C> <C> <C>
$ 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
</TABLE>
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 plus overtime and bonuses. This compensation
will approximate and fall within 10% of the total of 1993 through 1995 salary
and bonus amounts shown in the Summary Compensation Table for the listed
individuals, except for Neil H. Ashley. Mr. Ashley was reemployed as Chief
Executive Officer and served as such until March 1, 1995. Based upon his prior
service, he is entitled to an annual Pension Plan benefit of $12,720 and an
annual Supplemental Executive Retirement Plan benefit of $108,150.
The credited years for the Named Executives in the Summary Compensation
Table are William L. Mellick -- 16 years; Neil H. Ashley -- 7 years; John R.
Bollington -- 20 years; William M. Dailey, Jr. -- 8 years; Richard A. Dinon --
12 years, and Paul F. Farber -- 11 years.
20TH CENTURY INDUSTRIES 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
<PAGE>
1995 STOCK OPTION PLAN
On May 25, 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 composed 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 the rate of a
fixed number of shares per year; the shares granted to key employees in 1995
vest at the rate of no more than 8,000 per year until the amount granted is
exhausted. 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 2,000 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.
COMPLIANCE WITH SECTION 16(A) OF
THE SECURITIES EXCHANGE ACT OF 1934
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 1995 fiscal year, all Section 16(a) filing requirements were complied
with except as described below.
Joseph J. Pratt failed to file a timely report on the ownership of 400
shares of the Company's common stock upon becoming a reporting person in October
1995. Rickard F. Schutt failed to file a timely report on the sale of 970 shares
of common stock in November 1995. Due in part to delay in year-end reporting of
share ownership on 401(k) Plan holdings, the following participants failed to
file a timely report of increases in ownership of common stock in the Company's
401(k) Plan for year-end 1994: John R. Bollington, 301 shares, Richard L. Hill,
1,116 shares, Rickard F. Schutt, 278 shares, and Dean E. Stark, 105 shares. All
such untimely filings were inadvertent, and all required reports have since been
filed.
INDEPENDENT ACCOUNTANTS
(PROPOSAL 2)
The Board of Directors has approved a resolution retaining Ernst & Young,
Certified Public Accountants, as its independent accountants for 1996. Ernst &
Young has audited the Company's financial
19
<PAGE>
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 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 1997 ANNUAL MEETING OF SHAREHOLDERS
If a shareholder desires to present a proposal at the Annual Meeting of
Shareholders of the
Company for the year 1997 (to be held on May 20, 1997), 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 20, 1996.
ADDITIONAL INFORMATION
The Annual Report to Shareholders for the year ended December 31, 1995 is
being mailed to the shareholders separately from 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 18, 1996 JOHN B. DE NAULT, Chairman of the Board
20th Century Industries
6301 Owensmouth Avenue
Woodland Hills, California 91367
20
<PAGE>
[LOGO] 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 5, 1996 at the Annual Meeting of
Shareholders to be held at the Marriott Hotel, 21850 Oxnard Street,
Woodland Hills, California on May 21, 1996 at 10:00 A.M., or any
adjournment thereof.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S><C>
Please mark
your votes as /X/
indicated in
this example
FOR WITHHOLD AUTHORITY to vote FOR AGAINST ABSTAIN
1. Election of Directors. for all nominees listed below 2. Proposal to ratify / / / / / /
For the nominees listed / / / / the appointment of Ernst &
below with discretionary Young as the independent
authority to cumulate accountants of the Company
votes except as marked for 1996.
to the contrary below.
3. In their discretion,
S. M. Burke R. S. Foster, M.D. G. M. Shepard The Proxies are authorized
J. B. De Nault R. Harris A. H. Voss to vote upon such other
J. B. De Nault, III W. L. Mellick business as may properly
come before the meeting.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below.)
- -----------------------------------------------------------------------
- -----------------------------------------------------------------------
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 sign exactly as name appears below. 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.
Signature(s) Dated , 1996
----------------------------------------------------------------------------- ---------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE
- -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
</TABLE>
<PAGE>
BNY WESTERN TRUST COMPANY
TO: MEMBERS OF THE 20TH CENTURY INDUSTRIES SAVINGS & SECURITY PLAN
The Plan provides that the Common Stock of 20th Century Industries held in
your account may be voted by the Trustee at any meeting of the stockholders of
the Company in accordance with your written instructions. If you do not provide
voting instructions to the Trustee, the Trustee shall not be required to vote
those shares unless required to do so by applicable law. Please mark your voting
instructions for the Annual Meeting of Shareholders to be held on May 21, 1996
in the spaces provided below and on the reverse side, sign and date the form and
return it in the enclosed postage prepaid envelope. It is understood that the
Trustee will have the authority to vote on all other matters which may properly
come before the meeting and at any adjournment. Your instructions will be held
in confidence.
BNY WESTERN TRUST COMPANY
April 18, 1996
<TABLE>
<S> <C> <C>
1. ELECTION OF DIRECTORS
FOR THE NOMINEES LISTED BELOW WITH WITHHOLD AUTHORITY TO VOTE
DISCRETIONARY AUTHORITY TO CUMULATE FOR ALL NOMINEES LISTED BELOW / /
VOTES EXCEPT AS MARKED TO THE
CONTRARY BELOW / /
</TABLE>
(INSTRUCTION: To withhold authority to vote for any individual nominee, mark the
box next to the nominee's name below.)
<TABLE>
<S> <C> <C>
/ / S. M. Burke / / R. S. Foster, M.D. / / W. L. Mellick
/ / J. B. De Nault / / R. Harris / / G. M. Shepard
/ / J. B. De Nault, III / / A. H. Voss
</TABLE>
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
<PAGE>
2. PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG AS THE INDEPENDENT
ACCOUNTANTS OF THE COMPANY FOR 1996
/ / FOR / / AGAINST / / ABSTAIN
3. IN ITS DISCRETION, THE TRUSTEE IS AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING.
Dated _______________________________________
Signature(s)_________________________________
_____________________________________________
see other side for important information
Please mark, date and sign as your name appears
to the left and return in the enclosed envelope.
If acting as executor, administrator, trustee or
guardian, you should so indicate when signing.
If the signer is a corporation, please sign the
full corporate name, by duly authorized officer.
If shares are held jointly, each stockholder
named should sign.
YOUR VOTING INSTRUCTIONS ARE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
20TH CENTURY INDUSTRIES. THE SHARES IN YOUR ACCOUNTS WILL BE VOTED AS DIRECTED.
IN THE ABSENCE OF SUCH DIRECTION, THE TRUSTEE WILL NOT BE REQUIRED TO VOTE SUCH
SHARES UNLESS REQUIRED TO DO SO BY APPLICABLE LAW.
