<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
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 Section240.14a-11(c) or
Section240.14a-12
OLD GUARD GROUP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
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:
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<PAGE>
[LOGO]
OLD GUARD GROUP, INC.
2929 LITITZ PIKE
P.O. BOX 3010
LANCASTER, PENNSYLVANIA 17604-3010
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 12, 1998
To the Shareholders of Old Guard Group, Inc.:
Notice is hereby given that the Annual Meeting (the "Meeting") of the
holders of Common Stock (the "Common Stock") of Old Guard Group, Inc. (the
"Company") will be held at the Eden Resort Inn, located at the intersection of
Route 272 and Route 30, Lancaster, Pennsylvania on Tuesday, May 12, 1998, at
10:00 a.m., local time:
1. To elect three Class II directors to hold office for three years
from the date of election and until their successors shall have been elected
and qualified and to elect two Class I directors to hold office for two
years from the date of election and until their successors shall have been
elected and qualified (Matter No. 1).
2. To ratify the appointment by the Company's Board of Directors of
Coopers & Lybrand L.L.P. as the Company's independent auditors for the
fiscal year ending December 31, 1998 (Matter No. 2).
3. To transact such other business as may properly come before the
Meeting or any adjournment or adjournments thereof.
Holders of record of issued and outstanding shares of Common Stock at the
close of business on March 1, 1998 are entitled to notice of, and to vote at,
the Meeting. Such shareholders may vote in person or by proxy. The stock
transfer books of the Company will not be closed.
The Board of Directors of the Company cordially invites you to attend the
Meeting. Whether or not you are personally present, it is important that your
shares be represented at the Meeting. Accordingly, please sign and return your
proxy in the enclosed envelope.
By Order of the Board of Directors,
/s/ Steven D. Dyer
Steven D. Dyer,
Secretary
Dated: Lancaster, Pennsylvania
April 16, 1998
SHAREHOLDERS ARE URGED TO SIGN, DATE AND MAIL THE ENCLOSED PROXY PROMPTLY IN
THE ACCOMPANYING ENVELOPE. THE PROXY IS REVOCABLE AT ANY TIME BY A WRITTEN
INSTRUMENT, INCLUDING A LATER DATED PROXY, SIGNED IN THE SAME MANNER AS THE
PROXY AND RECEIVED BY THE SECRETARY OF THE COMPANY AT OR BEFORE THE MEETING. IF
YOU ATTEND THE MEETING, YOU MAY, IF YOU WISH, REVOKE YOUR PROXY BY VOTING IN
PERSON.
<PAGE>
[LOGO]
OLD GUARD GROUP, INC.
2929 LITITZ PIKE
P.O. BOX 3010
LANCASTER, PENNSYLVANIA 17604-3010
------------------------
PROXY STATEMENT
FOR ANNUAL MEETING
MAY 12, 1998
GENERAL
INTRODUCTION
Old Guard Group, Inc. (the "Company") is a Pennsylvania business corporation
headquartered at 2929 Lititz Pike, Lancaster, Pennsylvania 17604-3010. The
Company owns all of the capital stock of Old Guard Insurance Company ("Old
Guard"), Old Guard Fire Insurance Company ("Old Guard Fire"), First Patriot
Insurance Company ("First Patriot" and collectively with Old Guard and Old Guard
Fire, the "Insurance Companies") and 80% of the capital stock of First Delaware
Insurance Company ("First Delaware"). The Company also owns, directly and
indirectly, interests in other insurance related entities.
SOLICITATION OF PROXIES
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of the Company to be used at the Annual
Meeting (the "Meeting") of holders of common stock (the "Common Stock") of the
Company to be held at the Eden Resort Inn, located at the intersection of Route
272 and Route 30, Lancaster, Pennsylvania, at 10:00 a.m., local time, on
Tuesday, May 12, 1998, and at any adjournment or adjournments thereof. The
approximate date upon which this Proxy Statement and the accompanying proxy were
first sent, given or otherwise made available to shareholders was April 16,
1998. In addition to the use of the mails, proxies may be solicited by personal
interview and telephone by directors, officers and employees of the Company and
its subsidiaries. The Company will pay all costs of soliciting proxies.
VOTING SECURITIES
Holders of record of the Common Stock at the close of business on March 1,
1998 (the "Record Date") are entitled to notice of, and to vote at, the Meeting.
At the Meeting, each shareholder is entitled to one vote for each share of
Common Stock registered in the shareholder's name at the close of business on
the Record Date. On the Record Date, there were 4,204,910 shares of Common Stock
outstanding and, accordingly, holders of Common Stock are entitled to cast a
total of 4,204,910 votes at the Meeting. Holders of Common Stock are not
entitled to cumulate votes in elections of directors.
If the enclosed form of proxy is appropriately marked, signed and returned
in time to be voted at the Meeting, the shares represented by the proxy will be
voted in accordance with the instructions marked
1
<PAGE>
thereon. Signed proxies not marked to the contrary will be voted "FOR" the
election of the nominees of the Company's Board of Directors, and "FOR" the
ratification of Coopers & Lybrand L.L.P. as the Company's independent auditors
for 1998. Signed proxies will be voted "FOR" or "AGAINST" each other matter that
properly comes before the Meeting or any adjournment or adjournments thereof, at
the discretion of the persons named as proxyholders.
RIGHT OF REVOCATION
Any shareholder giving a proxy has the power to revoke it by a written
instrument, including a later dated proxy, signed in the same manner as the
proxy and received by the Secretary of the Company prior to its exercise. Any
shareholder attending the Meeting may also revoke his proxy by voting in person
at the Meeting.
QUORUM
Under the Company's Bylaws, the presence, in person or by proxy, of
shareholders entitled to cast at least a majority of the votes that all
shareholders are entitled to cast will constitute a quorum for the transaction
of business at the Meeting.
PRINCIPAL SHAREHOLDERS
The following table sets forth information, as of the Record Date, as to
beneficial owners, either directly or indirectly, of 5% or more of the
outstanding shares of Common Stock and as to the right and power of the Company,
directly or indirectly, to vote shares of Common Stock.
<TABLE>
<CAPTION>
AMOUNT
OF
NAME AND ADDRESS OF BENEFICIAL
OF BENEFICIAL OWNER OWNERSHIP CLASS PERCENT
- ------------------------------------------------------------------ ----------- ---------------
<S> <C> <C>
Bank of Lancaster County, N.A., 405,491(1) 9.64%
Trustee of the Old Guard Group, Inc.
Employee Stock Ownership Plan Trust Under Old Guard Group, Inc.
Employee Stock Ownership Plan Trust Agreement dated January 1,
1997
c/o Trust Technical Services
1097 Commercial Avenue
P.O. Box 38
East Petersburg, PA 17520-0038
Quest Advisory Corp. 405,000 9.63%
1414 Avenue of the Americas
9th Floor
New York, NY 10019
</TABLE>
- ------------------------
(1) As of the Record Date, 405,491 shares of Common Stock were held of record by
a nominee for the Bank of Lancaster County, N.A., trustee for the Old Guard
Group, Inc. Employee Stock Ownership Plan (the "ESOP"). Once shares held by
the ESOP are allocated to an individual participant account, shares are
voted in the manner directed by the participant. Shares allocated to an
individual participant account for which no direction is given and
unallocated shares are voted for or against all matters in the same
proportion as allocated shares for which direction has been received. As of
December 31, 1997, 21,434 shares of Common Stock had been allocated to the
accounts of ESOP participants.
2
<PAGE>
MATTER NO. 1
ELECTION OF DIRECTORS
GENERAL
The Articles of Incorporation of the Company provide that the Company's
business shall be managed by a Board of Directors of not less than 6 and not
more than 25 persons. The Company's Board, as provided in the Articles of
Incorporation, is divided into three classes: Class I, Class II and Class III,
each class being as nearly equal in number as possible. Under the Company's
Bylaws, a person elected to fill a vacancy on the Board of Directors serves as a
director for the remaining term of office of the Class to which he or she was
elected. The directors in each Class serve terms of three years each and until
their successors are elected and qualified.
The Board of Directors fixed the number of directors in Class II at three
and has nominated the three nominees listed below for election as Class II
directors. In addition, the Board of Directors has increased the number of
directors in Class I to four and has nominated two individuals to fill the
vacancies created thereby. Each of the Board nominees for election as Class II
director is presently a director of the Company. Neither nominee for election as
a Class I director is presently a director of the Company although Mr. Kreider
is a director of each of the Insurance Companies.
The Bylaws of the Company permit nominations for election to the Board of
Directors to be made by the Board of Directors or by any shareholder entitled to
vote for the election of directors. All nominations are referred to the
Nominating Committee of the Board of Directors for consideration. Nominations
for director to be made at the Meeting by shareholders entitled to vote for the
election of directors must be preceded by notice in writing, delivered or mailed
by first class United States mail, postage prepaid, to the Secretary of the
Company not less than 90 days prior to the Meeting, which notice must contain
certain information specified in the Bylaws. No notice of nomination for
election as a director has been received from a shareholder as of the date of
this Proxy Statement. If a nomination is attempted at the Meeting that does not
comply with the procedures required by the Bylaws or if any votes are cast at
the Meeting for any candidate not duly nominated, then such nomination and/or
such votes will be disregarded.
The three nominees who receive the highest number of votes cast at the
Meeting for Class II directors will be elected as Class II directors and the two
nominees who receive the highest number of votes cast at the Meeting for Class I
directors will be elected as Class I directors. Abstentions and broker non-votes
will not constitute or be counted as "votes" cast for purposes of the Meeting.
Shares represented by properly executed proxies will be voted for the three
Class II nominees and the two Class I nominees listed below unless otherwise
specified on a shareholder's proxy card. Any shareholder who wishes to withhold
authority from the proxyholders to vote for the election of directors, or to
withhold authority to vote for any individual nominee, may do so by marking the
proxy to that effect. No proxy may be voted for a greater number of persons than
the number of nominees named.
If any of the nominees listed below become unable to accept nomination or
election, the proxyholders may exercise their voting power in favor of such
other person or persons as the Board of Directors may recommend. The Company,
however, at present has no reason to believe that any nominee listed below will
be unable to serve as a director, if elected.
The principal occupation for the last five years for each nominee for
director and each continuing director, together with certain other relevant
information, is set forth below.
3
<PAGE>
NOMINEES AS CLASS II DIRECTORS TO SERVE UNTIL 2001
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE
DIRECTOR FOR THE LAST FIVE YEARS;
NAME AGE SINCE(1) OTHER DIRECTORSHIPS
- -------------------------------------- --- ----------- ---------------------------------------------------------
<S> <C> <C> <C>
James W. Appel........................ 53 1980 Director, the Company, the Insurance Companies and First
Delaware; Partner, Appel & Yost LLP (law firm); Vice
President, Aardvark Abstracting, Inc. (title insurance
agency).
M. Scott Clemens...................... 50 1994 Director, the Company and Old Guard; President/ Owner,
John T. Fretz Insurance Agency, Inc.; prior thereto,
Insurance Agent, P/C Insurance Agency.
G. Arthur Weaver...................... 64 1966 Director, the Company, Old Guard and Old Guard Fire;
Insurance and Real Estate Agent, George A. Weaver, Inc.;
Director, Sovereign Bancorp, Inc. and Sovereign Bank,
F.S.B.
</TABLE>
NOMINEES AS CLASS I DIRECTORS TO SERVE UNTIL 2000
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE
DIRECTOR FOR THE LAST FIVE YEARS;
NAME AGE SINCE(1) OTHER DIRECTORSHIPS
- -------------------------------------- --- ----------- ---------------------------------------------------------
<S> <C> <C> <C>
Karen M. Balaban...................... 44 -- Partner, Saul Ewing Remick and Saul (law firm) 1997 to
present; prior thereto Partner, Schnader Harrison Segal
and Lewis (law firm).
Noah W. Kreider, Jr. ................. 65 1987 Director, the Insurance Companies; Owner/ operator,
Kreider Farms.
</TABLE>
CONTINUING CLASS I DIRECTORS SERVING UNTIL 2000
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE
DIRECTOR FOR THE LAST FIVE YEARS;
NAME AGE SINCE(1) OTHER DIRECTORSHIPS
- -------------------------------------- --- ----------- ---------------------------------------------------------
<S> <C> <C> <C>
Luther R. Campbell, Jr. .............. 69 1992 Director, the Company, Old Guard and First Patriot;
Partner, Campbell Rappold & Yurasits LLP (C.P.A. firm);
Director, Piel & Egan P.C. (law firm); Member, First
Union North Advisory Board and First Union Lehigh Valley
Advisory Board; prior thereto, Director, First Fidelity
Bancorporation.
Robert L. Wechter..................... 72 1956 Director, the Company, Old Guard and Old Guard Fire;
Owner, Robert L. Wechter Insurance Agency; prior thereto,
Vice-President, Claims Department, Old Guard.
</TABLE>
4
<PAGE>
CONTINUING CLASS III DIRECTORS TO SERVE UNTIL 1999
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE
DIRECTOR FOR THE LAST FIVE YEARS;
NAME AGE SINCE(1) OTHER DIRECTORSHIPS
- -------------------------------------- --- ----------- ---------------------------------------------------------
<S> <C> <C> <C>
John E. Barry......................... 72 1971 Director, the Company and Old Guard Fire; Retired
Representative, Hopper Soliday & Co., Inc. (investment
banking and brokerage firm); prior thereto, Registered
Representative, Hopper Soliday & Co., Inc.
David E. Hosler....................... 47 1985 Chairman, President, Chief Executive Officer and
Director, the Company; Director and Chairman, the
Insurance Companies; President and Chief Executive
Officer, Old Guard and Old Guard Fire; Chief Executive
Officer, First Patriot; and Director and Chairman, First
Delaware.
Richard B. Neiley, Jr. ............... 71 1991 Director, the Company and the Insurance Companies;
Retired Insurance Executive, Harleysville Insurance
Group; prior thereto Independent Insurance Consultant.
</TABLE>
- ------------------------
(1) Indicates year first elected as a director of one or more of the Insurance
Companies. All current members of the Board of Directors of the Company have
served as directors of the Company since its incorporation in May 1996.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information concerning the number of shares
of Common Stock held as of the Record Date by each nominee for director, each
present director and each named executive officer set forth in the compensation
tables herein.
<TABLE>
<CAPTION>
SOLE SHARED
TOTAL VOTING OR VOTING OR
BENEFICIAL DISPOSITIVE DISPOSITIVE PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP POWER POWER CLASS(1)
- ----------------------------------------------------------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
DIRECTORS
James W. Appel(2)(3)............................................. 13,493 13,493 0 *
Karen M. Balaban(4).............................................. 0 0 0 *
John E. Barry(5)................................................. 13,593 12,593 1,000 *
Luther R. Campbell, Jr.(6)....................................... 15,393 15,393 0 *
M. Scott Clemens(2)(7)........................................... 20,093 18,593 1,500 *
David E. Hosler(8)............................................... 135,503 100,503 35,000 3.18
Noah W. Kreider, Jr. (4)(9)...................................... 12,637 12,637 0 *
Richard B. Neiley, Jr.(10)....................................... 13,593 13,593 0 *
G. Arthur Weaver(2)(11).......................................... 15,093 13,093 2,000 *
Robert L. Wechter(12)............................................ 12,093 12,093 0 *
OTHER NAMED EXECUTIVE OFFICERS
- -----------------------------------------------------------------
Mark J. Keyser(13)............................................... 51,306 51,306 0 1.21
Scott A. Orndorff(14)............................................ 51,298 51,298 0 1.21
Steven D. Dyer(15)............................................... 47,247 46,222 1,025 1.11
All directors and named executive officers as a group (13
persons)(16)................................................... 401,342 360,817 40,525 9.11%
</TABLE>
5
<PAGE>
- ------------------------
(1) Unless otherwise indicated, amount owned does not exceed 1% of the total
number of shares of Common Stock outstanding on the Record Date.
(2) Indicates a nominee for election as a Class II director at the Meeting.
(3) Includes (i) 3,683 restricted shares awarded under the Company's Management
Recognition Plan (the "MRP") that vest ratably over a five-year period over
which Mr. Appel has voting control, and (ii) 7,910 shares that may be
acquired upon the exercise of outstanding stock options.
(4) Indicates a nominee for election as a Class I director at the Meeting.
(5) Includes (i) 3,683 restricted shares awarded under the MRP that vest ratably
over a five-year period over which Mr. Barry has voting control, and (ii)
7,910 shares that may be acquired upon the exercise of outstanding stock
options.
(6) Includes (i) 3,683 restricted shares awarded under the MRP that vest ratably
over five years over which Mr. Campbell has voting control, and (ii) 7,910
shares that may be acquired upon the exercise of outstanding stock options.
(7) Includes (i) 3,683 restricted shares awarded under the MRP that vest ratably
over five years over which Mr. Clemens has voting control, and (ii) 7,910
shares that may be acquired upon the exercise of outstanding stock options.
(8) Includes (i) 35,593 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Hosler has voting control and (ii)
59,321 shares that may be acquired upon the exercise of outstanding stock
options, and (iii) 589 shares allocated to the account of Mr. Hosler under
the ESOP.
(9) Includes (i) 3,683 restricted shares awarded under the MRP that vest ratably
over five years over which Mr. Kreider has voting control, and (ii) 3,954
shares that may be acquired upon the exercise of outstanding stock options.
(10) Includes (i) 3,683 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Neiley has voting control, and (ii)
7,910 shares that may be acquired upon the exercise of outstanding stock
options.
(11) Includes (i) 3,683 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Weaver has voting control, and (ii)
7,910 shares that may be acquired upon the exercise of outstanding stock
options.
(12) Includes (i) 3,683 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Wechter has voting control, and (ii)
7,910 shares that may be acquired upon the exercise of outstanding stock
options.
(13) Includes (i) 14,095 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Keyser has voting control, (ii)
26,695 shares that may be acquired upon the exercise of outstanding stock
options, and (iii) 516 shares allocated to the account of Mr. Keyser under
the ESOP. Subsequent to the Record Date, Mr. Keyser exercised all
outstanding options and sold 36,695 shares of Common Stock.
(14) Includes (i) 14,095 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Orndorff has voting control, (ii)
26,695 shares that may be acquired upon the exercise of outstanding stock
options, and (iii) 508 shares allocated to the account of Mr. Orndorff under
the ESOP.
(15) Includes (i) 14,095 restricted shares awarded under the MRP that vest
ratably over five years over which Mr. Dyer has voting control, (ii) 26,695
shares that may be acquired upon the exercise of outstanding stock options,
and (iii) 432 shares allocated to the account of Mr. Dyer under the ESOP.
(16) Includes (i) 107,342 restricted shares awarded under the MRP, (ii) 198,730
shares that may be acquired upon the exercise of outstanding stock options,
and (iii) 2,045 shares allocated to the account of participants under the
ESOP.
6
<PAGE>
COMMITTEES OF THE BOARD OF DIRECTORS
Pursuant to the Company's Bylaws, the Board of Directors is authorized to
create an Audit Committee and such other permanent or temporary committees as it
deems necessary. As of December 31, 1997, the Board of Directors had established
a Nominating Committee, an Audit Committee and a Compensation Committee.
The Nominating Committee makes recommendations to the Board of Directors
with respect to qualifications and nominations of directors. The present members
of the Nominating Committee are Messrs. Barry, Clemens, and Weaver. In
determining its recommendations to the Company's Board, the Nominating Committee
will consider nominees recommended by shareholders. The Nominating Committee met
one time in 1997.
The Audit Committee serves as the principal liaison among the Board of
Directors, the Company's independent certified public accountants and the
Company's internal audit staff in connection with the audit function. In
addition, the Audit Committee makes recommendations to the Board of Directors
concerning the designation of the Company's independent certified public
accountants to audit the books and accounts of the Company and the performance
of nonaudit services. The present members of the Audit Committee are Messrs.
Campbell, Weaver and Wechter. The Audit Committee met two times in 1997.
The Compensation Committee makes recommendations to the Board of Directors
with respect to compensation of members of the Company's executive staff and
makes awards under the Company's compensation plans. The members of the
Compensation Committee are Messrs. Appel, Campbell and Neiley. The Compensation
Committee met seven times in 1997.
BOARD MEETINGS
During 1997, the Company Board of Directors held regular meetings. Each
member of the Board attended at least 75% of the aggregate number of meetings of
the Board and of committees of which such director is a member.
COMPENSATION PAID TO DIRECTORS
Directors of the Company are paid an annual retainer which consists of
$6,000 and 250 shares of Common Stock. Directors of Old Guard, Old Guard Fire
and First Patriot, who are not also directors of the Company, receive an annual
retainer of $5,400, $2,400, and $900, respectively, and each director of the
Insurance Companies is entitled to receive a minimum annual retainer of $2,600
regardless of the number of boards on which he serves. No Board fees were paid
to directors of First Delaware. Directors also receive up to $150 for each
committee meeting attended. Directors of the Company, the Insurance Companies or
First Delaware who receive a salary from the Insurance Companies or their
affiliates are not entitled to receive an annual retainer or other additional
compensation for services rendered as directors or committee members.
EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee is charged with the review and implementation of
the compensation for the Company's executive officers, each of whom is an
employee of Old Guard Insurance Management Co. ("OGIMC"), a Pennsylvania
corporation and a subsidiary of the Company, that operates for the purpose of
employing and paying the senior management of the Insurance Companies. The
Compensation Committee also oversees the Company's management development and
succession programs (the Compensation Committee shall be referred to herein as
the "Committee").
7
<PAGE>
The Committee bases its compensation recommendations on information derived
from multiple sources, including the Company's Human Resources Department,
industry surveys, and recommendations of management. The Committee believes that
consideration of these diverse sources of information helps to create a balanced
and appropriate compensation program.
The Committee has considered factors such as the following in establishing
executive compensation:
- the personal performance of the executive officer;
- the achievement of annual corporate goals;
- the achievement of an acceptable return on equity; and
- the need of the Company to attract, retain and motivate superior
management.
The consideration of these different factors permits the encouragement of
corporate goals including but not limited to sustained and consistent
management; enhancement of shareholder value; and the completion of strategic
initiatives. Reflecting these different factors, the compensation program for
executive officers to date contains several components;
1. Base Salary--Base salary is based upon a general competitive review and
a review of industry-specific data based on a peer group. The peer group
is determined primarily by size of company and geographic locale. Base
salary is discretionary on the part of the Committee and reflects
corporate performance as well as an evaluation of the executive officer's
performance of his or her duties. The Company generally sets its
competitive salary midpoint for an executive officer position at the
median level compared to those companies which it surveys. A salary range
based on this midpoint is then developed. With respect to 1998, salaries
were compared to a national peer group that has resulted in increases in
base compensation for 1998.
2. Senior Management Incentive Bonus Plan--This plan is discretionary on
the part of the Committee and is designed to direct executive officer
attention to the attainment of corporate performance. OGIMC is a party to
a management agreement with each of the Insurance Companies. In awarding
bonus compensation to the executive officers, the Committee considers all
factors surrounding the executive's performance.
3. Stock-based Compensation--On August 19, 1997, shareholders of the
Company approved the Company's Stock Compensation Plan (the "Plan") and
the MRP. The Committee made awards under each of the Plan and the MRP
consistent with the awards disclosed in the 1997 proxy statement and also
disclosed herein. The Committee believes that the Plan and MRP constitute
an important part of the Company's compensation programs designed to
encourage directors and employees of the Company, the Insurance Companies
and First Delaware to increase their stake in the Company and to more
significantly align their interests with those of the Company's
shareholders. The Committee believes adoption and implementation of the
Plan and the MRP has advanced the interests of the Company and its
shareholders by giving participants a proprietary and vested interest in
the Company and an increased incentive to contribute to the success of
the Company. The Committee also believes that the implementation of the
Plan and the MRP will continue to aid the Company in attracting,
retaining, and encouraging competent and dedicated management level
employees.
8
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The base salary of chief executive officer, David E. Hosler, was unchanged
in 1997 compared to 1996 at his request so as not to be an issue in, or be
affected by, the conversion of the three Insurance Companies from mutual to
stock insurance companies. The base salaries of the other executive officers
were adjusted by the Committee in December 1996. The total compensation of
executive officers, composed of base salary and Senior Management Incentive
Bonus Plan award and stock-based compensation was compared with compensation
packages of similar officers within the insurance industry.
The limits on full deductibility of compensation for the Company permitted
by Internal Revenue Code Section 162(m) are not currently an issue for the
Company inasmuch as compensation levels for Mr. Hosler and the Named Executive
Officers do not exceed the $1,000,000 threshold figure. The Company will, of
course, continue to monitor this issue and will take appropriate action to
respond to developments and growth in compensation.
COMPENSATION COMMITTEE
James W. Appel, Chairperson
Luther R. Campbell, Jr.
Richard B. Neiley, Jr.
9
<PAGE>
COMPENSATION PAID TO EXECUTIVE OFFICERS
The following table sets forth information regarding the compensation of the
Chief Executive Officer, the Chief Financial Officer, the Executive Vice
President, and the Secretary and General Counsel of the Company for each of the
years ended December 31, 1995, 1996 and 1997. The amounts below represent the
aggregate compensation paid to such executive officers by OGIMC pursuant to
OGIMC's management agreements with the Insurance Companies. No other executive
officer of the Company received compensation in excess of $100,000 for the year
ended December 31, 1997.
<TABLE>
<CAPTION>
OTHER SECURITIES
NAME AND ANNUAL RESTRICTED UNDERLYING
PRINCIPAL COMPEN- STOCK OPTIONS/ LTIP
POSITION YEAR SALARY(1) BONUS SATION(2) AWARDS(3) SARS PAYOUTS
- ------------------------------- --------- ----------- --------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
David E. Hosler, Chairman, 1997 $ 180,000 $ 41,913 $ -- $ 658,471 59,321 $ --
President and Chief Executive 1996 179,423 27,851 -- -- -- --
Officer 1995 174,769 10,501 -- -- -- --
Mark J. Keyser, Chief Financial 1997 124,272 12,730 -- 260,758 26,695 --
Officer and Treasurer 1996 110,878 8,160 -- -- -- --
1995 101,539 8,000 -- -- -- --
Scott A. Orndorff, Executive 1997 123,808 11,280 -- 260,758 26,695 --
Vice President 1996 98,144 10,368 -- -- -- --
1995 85,777 10,000 -- -- -- --
Steven D. Dyer, Secretary & 1997 94,700 19,998 19,262(7) 260,758 26,695 --
General Counsel 1996 86,369 7,856 -- -- -- --
1995 79,423 6,580 -- -- -- --
<CAPTION>
ALL OTHER
NAME AND COMPEN-
PRINCIPAL SATION
POSITION (4)(5)
- ------------------------------- -----------
<S> <C>
David E. Hosler, Chairman, $ 10,600(6)
President and Chief Executive 16,322(6)
Officer 16,370(6)
Mark J. Keyser, Chief Financial 5,612
Officer and Treasurer 9,261
8,540
Scott A. Orndorff, Executive 5,520
Vice President 8,494
7,466
Steven D. Dyer, Secretary & 4,696
General Counsel 7,736
6,327
</TABLE>
- ------------------------
(1) Includes amounts which were deferred pursuant to Old Guard's 401(k) plan.
Under the 401(k) plan, employees who elect to participate may elect to have
earnings reduced and to cause the amount of such reduction to be contributed
to the 401(k) plan's related trust in an amount up to 12% of earnings (This
amount was reduced to 10% effective October 1, 1997). Any employee who has
completed 1 year of service and has worked 1,000 hours in a plan year is
eligible to participate in the 401(k) plan.
(2) OGIMC provided other benefits to the executive officers in connection with
their employment. Except with respect to Mr. Dyer, the value of such
personal benefits, which is not directly related to job performance, is not
included in the table above because the value of such benefits does not
exceed the lesser of $50,000 or 10% of the salary and bonus paid to any
executive officer.
(3) Equals the dollar value of restricted stock awards determined by multiplying
the closing market price of $18.50 on August 19, 1997, the date of the
award, by the number of shares awarded.
(4) Includes amounts contributed under the 401(k) plan for the benefit of the
executive officer. Old Guard will make a matching contribution equal to 100%
of the employee's salary reduction up to a maximum of 3% of the employee's
salary.
(5) Includes amounts contributed under a Profit Sharing Plan for the benefit of
the executive officer.
(6) Includes the amount of insurance premiums paid by the Insurance Companies
with respect to a split dollar term life insurance policy.
(7) Includes income resulting from the forgiveness of a loan previously made by
the Company to Mr. Dyer to finance his legal education.
The following table sets forth information concerning grants of stock
options for the fiscal year ended December 31, 1997 to the named executive
officers.
10
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
NUMBER OF
SECURITIES % OF TOTAL POTENTIAL REALIZABLE VALUE AT
UNDERLYING OPTIONS/SARS ASSUMED ANNUAL RATES OF
OPTIONS/ GRANTED EXERCISE PRICE APPRECIATION FOR OPTION TERM
SARS IN FISCAL OR BASE EXPIRATION --------------------------------------
GRANTED(1) YEAR PRICE(2) DATE 0%(2) 5%(3) 10%(3)
----------- --------------- ----------- ----------- ---------- ------------ ------------
David E. Hosler............... 59,321 25.00% $ 10 02/11/07 $ 504,229 $ 1,194,132 $ 2,253,011
Mark J. Keyser................ 26,695 11.25% 10 02/11/07 226,908 537,370 1,013,876
Scott A. Orndorff............. 26,695 11.25% 10 02/11/07 226,908 537,370 1,013,876
Steven D. Dyer................ 26,695 11.25% 10 02/11/07 226,908 537,370 1,013,876
</TABLE>
- ------------------------
(1) All amounts represent non-qualified stock options; no SARs or SARs granted
in tandem with options were granted during 1997. Except for certain
exceptions, options are not exercisable following an optionee's voluntary
termination of employment other than by reason of retirement or disability.
(2) In the case of each option grant, the exercise price per share was equal to
the price at which Common Stock was sold in the initial public offering. The
potential realizable value assuming no price appreciation represents the
difference between the market price on the date of grant multiplied by the
number of options granted.
(3) The dollar amounts set forth under these columns are the result of
calculations assuming 5% and 10% price appreciation rates as required by
Securities and Exchange Commission regulations and are not intended to
indicate future price appreciation, if any, of the Common Stock.
The following table sets forth information concerning the exercise of
options to purchase shares of Common Stock by the Named Executives during the
fiscal year ended December 31, 1997, as well as the number of securities
underlying unexercised options and potential value of unexercised options (both
options which are presently exercisable and options which are not presently
exercisable) as of December 31, 1997.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUE(1)
<TABLE>
<CAPTION>
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
OPTIONS/ SARS OPTIONS/SARS
AT FISCAL AT FISCAL
YEAR YEAR
VALUE END (#) END($)(2)
SHARES ACQUIRED REALIZED EXERCISABLE/ EXERCISABLE/
ON EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
--------------------- --------------- ------------- -------------
<S> <C> <C> <C> <C>
David E. Hosler......................................... 0 0 59,321/0 $ 541,304/$0
Mark J. Keyser.......................................... 0 0 26,695/0 243,592/ 0
Scott A. Orndorff....................................... 0 0 26,695/0 243,592/ 0
Steven D. Dyer.......................................... 0 0 26,695/0 243,592/ 0
</TABLE>
- ------------------------
(1) All amounts represent stock options. No SARs or SARs granted in tandem with
stock options were either exercised during 1997 or outstanding at fiscal
year end 1997.
(2) "In-the-money options" are stock options with respect to which the market
value of the underlying shares of Common Stock exceeded the exercise price
for such options. The fair market value of the underlying shares of Common
Stock on December 31, 1997 was $19 1/8 per share.
11
<PAGE>
EMPLOYMENT AGREEMENTS.
CHIEF EXECUTIVE OFFICER. As of June 1, 1996, Mr. David E. Hosler entered
into an Employment Agreement with the Company and OGIMC. The Employment
Agreement has an initial three-year term and provides for automatic annual
one-year extensions commencing on June 1, 1997 and continuing on each June 1
thereafter unless the Company or Mr. Hosler gives prior written notice of
nonrenewal. Under the Employment Agreement, Mr. Hosler is entitled to receive an
annual base salary of not less than $180,000. In addition, Mr. Hosler is
entitled to participate in any other incentive compensation and employee benefit
plans that the Company maintains. In the event the Company terminates Mr.
Hosler's employment for "Cause" as defined in the Employment Agreement, Mr.
Hosler would be entitled to receive his accrued but unpaid base salary and an
amount for all accumulated but unused leave time. In the event the Company
terminates Mr. Hosler's employment without Cause, Mr. Hosler would be entitled
to receive an annual amount equal to the greater of (i) his highest base salary
received during one of the two years immediately preceding the year in which he
is terminated, or (ii) his base salary in effect immediately prior to his
termination for the remainder of the term of the Employment Agreement. In
addition, Mr. Hosler would be entitled to continuation annually during the
remaining term of the Employment Agreement, of (i) an amount equal to the higher
of the aggregate bonuses paid to him in one of the two years immediately
preceding the year in which he is terminated and (ii) an amount equal to the sum
of the highest annual contribution made on his behalf (other than his own salary
reduction contributions) to each of the Company's tax qualified and nonqualified
defined contribution plans (as such term is defined in Section 3(35) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) in the
year in which he is terminated or in one of the two years immediately preceding
such year. Mr. Hosler would also be entitled to certain retirement, health and
welfare benefits.
In the event Mr. Hosler terminates his employment with the Company for "Good
Reason," as defined in the Employment Agreement, Mr. Hosler would be entitled to
receive the same amounts and benefits he would receive if terminated without
Cause. In the event Mr. Hosler terminates his employment with the Company
without Good Reason, Mr. Hosler would be entitled to receive his accrued but
unpaid base salary until the date of termination and an amount for all
accumulated but unused leave time.
In the event of Mr. Hosler's death or disability during the term of his
Employment, Mr. Hosler and his eligible dependents or his spouse and her
eligible dependents, as the case may be, would be entitled to receive certain
cash amounts and certain health and welfare benefits.
In the event that Mr. Hosler is required to pay any excise tax imposed under
Section 4999 of the Code (or any similar tax imposed under federal, state or
local law) as a result of any compensation and benefits received under the
Employment Agreement in connection with a change in control, the Company will
pay to Mr. Hosler an additional amount such that the net amount retained by him,
after the payment of such excise taxes (and any additional income tax resulting
from such payment by the Company), equals the amount he would have received but
for the imposition of such taxes.
The Employment Agreement further provides that in the event Mr. Hosler's
employment is terminated for Cause or without Good Reason prior to a "Change in
Control," as defined in the Employment Agreement, Mr. Hosler may not, for a
period of twelve months after the date of termination, without the prior written
consent of the Company's Board of Directors, become an officer, director,
shareholder or equity owner of 4.9% or more of any entity engaged in the
property and casualty insurance business with its corporate headquarters located
within fifty miles of Lancaster, Pennsylvania. In addition, during Mr. Hosler's
employment and for a period of 12 months following the termination of his
employment, except following a Change in Control, Mr. Hosler may not solicit,
endeavor to entice away from the Company, its subsidiaries or affiliates, or
otherwise interfere with the relationship of the Company or its subsidiaries or
affiliates with any person who is, or was within the then most recent 12-month
period, an employee or associate of the Company or any of its subsidiaries or
affiliates.
12
<PAGE>
OTHER NAMED EXECUTIVE OFFICERS. As of June 1, 1996, Messrs. Mark J. Keyser,
Scott A. Orndorff and Steven D. Dyer entered into Employment Agreements with the
Company and OGIMC. The Employment Agreements have an initial three-year term and
provide for automatic annual one-year extensions commencing on June 1, 1997 and
continuing on each June 1 thereafter unless the Company or the respective
executive officer gives prior notice of nonrenewal. Under the Employment
Agreements, Messrs. Keyser, Orndorff and Dyer are entitled to receive annual
base salaries of not less than $106,080, $94,000 and $87,200, respectively.
In the event the Company terminates an Executive Officer's employment for
"Cause," as defined in the Employment Agreement, the executive would be entitled
to receive his accrued but unpaid base salary and an amount for all accumulated
but unused leave time.
In the event the Company terminates an Executive Officer's employment
without Cause, the Executive Officer would be entitled to receive an amount
equal to the greater of (i) his highest base salary received during one of the
two years immediately preceding the year in which he is terminated, or (ii) his
base salary in effect immediately prior to his termination for the two-year
period, beginning with the date of termination. In addition, the Executive
Officer would be entitled to continuation, for two years, of (i) an amount equal
to the higher of the aggregate bonuses paid to him in one of the two years
immediately preceding the year in which he is terminated and (ii) an amount
equal to the sum of the highest annual contribution made on his behalf (other
than his own salary reduction contributions) to each of the Company's tax
qualified and non-qualified defined contribution plans (as such term is defined
in Section 3(35) of ERISA), in the year in which he is terminated or in one of
the two years immediately preceding such year. The Executive Officer would also
be entitled to certain retirement, health and welfare benefits.
In the event the Executive Officer terminates his employment with the
Company for "Good Reason," as defined in the Employment Agreement, the Executive
Officer would be entitled to receive the same amounts and benefits he would
receive if terminated without Cause. In the event the Executive Officer
terminates his employment with the Company without Good Reason, the Executive
Officer would be entitled to receive his accrued but unpaid base salary and an
amount for all accumulated but unused leave time.
In the event of the Executive Officer's death or disability during the term
of the Employment Agreement, the Executive Officer and his eligible dependents
or his spouse and her eligible dependents, as the case may be, would be entitled
to receive certain cash amounts and certain health and welfare benefits.
In the event that the Executive Officer is required to pay any excise tax
imposed under Section 4999 of the Code (or any similar tax imposed under
federal, state or local law) as a result of any compensation and benefits
received under his Employment Agreement in connection with a change in control,
the Company will pay to the Executive Officer an additional amount such that the
net amount retained by him, after the payment of such excise taxes (and any
additional tax resulting from such payment by the Company), equals the amount he
would have received but for the imposition of such taxes.
The Employment Agreement for each Executive Officer further provides that in
the event the Executive Officer's employment is terminated for Cause or he
voluntarily terminates his employment prior to a "Change in Control," as defined
in the Employment Agreement, the Executive Officer may not for a period of
twelve months after the date of termination, without the prior written consent
of the Company's Board of Directors, become an officer, director, shareholder or
equity owner of 4.9% or more of any entity engaged in the property and casualty
insurance business with its corporate headquarters located within fifty miles of
Lancaster, Pennsylvania. In addition, during the Executive Officer's employment
and for a period of 12 months following the termination of his employment,
except following a Change in Control, the Executive Officer may not solicit,
endeavor to entice away from the Company, its subsidiaries or affiliates, or
otherwise interfere with the relationship of the Company or its subsidiaries or
affiliates with any person who is, or was within the most recent 12-month
period, an employee or associate of the Company or any of its subsidiaries or
affiliates.
13
<PAGE>
PERFORMANCE GRAPH
Set forth below is a graph comparing the percentage change in the cumulative
total shareholder return on the Common Stock against the cumulative total return
on the Nasdaq Composite Index and the Nasdaq Insurance Index since March 31,
1997, the date on which the Common Stock commenced trading on the
Nasdaq/National Market System. The graph assumes an initial investment of
$100.00 with dividends, if any, reinvested over the periods indicated.
[GRAPH]
<TABLE>
<CAPTION>
03/31/97 06/30/97 09/30/97 12/31/97
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
OGGI............................................................................ 100.00 107.23 135.81 139.46
CCMP............................................................................ 100.00 118.04 137.98 128.54
CINS............................................................................ 100.00 115.64 127.83 126.22
</TABLE>
OGGI = Old Guard Group, Inc., CCMP = NASDAQ Composite Index, CINS = NASDAQ
Insurance Index.
14
<PAGE>
ADDITIONAL INFORMATION REGARDING DIRECTORS AND OFFICERS.
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), requires the Company's officers and directors, and any persons
owning ten percent or more of the Company's common stock, to file in their
personal capacities initial statements of beneficial ownership, statements of
changes in beneficial ownership and annual statements of beneficial ownership
with the Securities and Exchange Commission (the "SEC"). Persons filing such
beneficial ownership statements are required by SEC regulation to furnish the
Company with copies of all such statements filed with the SEC. The rules of the
SEC regarding the filing of such statements require that "late filings" of such
statements be disclosed in the Company's proxy statement. Based solely on the
Company's review of any copies of such statements received by it, or written
representations from directors and officers that no annual statements of
beneficial ownership were required to be filed by such persons, the Company
believes that all filings during 1997 were made on a timely basis except that
Mr. Appel inadvertently neglected to file on a timely basis one such statement
with respect to the acquisition of 500 shares of Common Stock. Mr. Appel's
statement was filed seven days late.
MATTER NO. 2
RATIFICATION OF INDEPENDENT AUDITORS
The Board of Directors of the Company, in accordance with the recommendation
made by the Company's Audit Committee, has appointed the firm of Coopers &
Lybrand L.L.P., independent auditors, to provide certain accounting services for
the Company and its subsidiaries during fiscal year 1998. Such appointment is
being submitted to shareholders for ratification.
Coopers & Lybrand L.L.P. has audited the books of account and financial
statements of the Insurance Companies or certain of their affiliates since 1990.
The Company has been advised that neither Coopers & Lybrand L.L.P. nor any of
its partners possesses any other material direct or indirect relationship with
the Company, its subsidiaries or its officers or directors, in their capacities
as such. Representatives of Coopers & Lybrand L.L.P. are expected to attend the
Meeting, will be afforded an opportunity to make a statement if they desire to
do so and will be available to respond to questions from shareholders.
THE BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF
THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS THE COMPANY'S INDEPENDENT
AUDITORS FOR THE 1998 FISCAL YEAR. The affirmative vote of a majority of all
votes cast at the Meeting is required to ratify the appointment. Abstentions and
broker non-votes will not constitute or be counted as "votes" cast for purposes
of the Meeting. All proxies will be voted "FOR" ratification of the appointment
unless a shareholder specifies to the contrary on such shareholder's proxy card.
SHAREHOLDER PROPOSALS FOR 1999
The Company's Annual Meeting of Shareholders for 1998 will be held on or
about May 11, 1999. Any shareholder desiring to submit a proposal to be
considered for inclusion in the Company's 1998 proxy materials must submit such
proposal or proposals in writing, addressed to Old Guard Group, Inc., 2929
Lititz Pike, P.O. Box 3010, Lancaster, Pennsylvania 17604-3010, Attention:
Corporate Secretary, on or before December 17, 1998.
OTHER MATTERS
The Board of Directors does not intend to bring any other matter before the
Meeting and is not presently informed of any other business which others may
bring before the Meeting. If any other matters should properly come before the
Meeting, or any adjournment or adjournments thereof, however, it is the
intention of the persons named in the accompanying proxy to vote on such matters
as they, in their discretion, may determine.
15
<PAGE>
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR ITS FISCAL YEAR ENDED
DECEMBER 31, 1997, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO,
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY BE
OBTAINED, WITHOUT CHARGE, FROM OLD GUARD GROUP, INC., 2929 LITITZ PIKE, P.O. BOX
3010, LANCASTER, PENNSYLVANIA 17604-3010, ATTENTION: INVESTOR RELATIONS.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Steven D. Dyer
Steven D. Dyer,
Secretary
April 16, 1998
PLEASE SIGN, DATE AND MAIL YOUR PROXY NOW.
16
<PAGE>
REVOCABLE PROXY
OLD GUARD GROUP, INC.
Annual Meeting of Shareholders
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints John E. Barry and Steven D. Dyer, with
full powers of substitution, to act as attorneys and proxies for the
undersigned, to vote all shares of common stock of Old Guard Group, Inc.,
which the undersigned is entitled to vote at the Annual Meeting of
Shareholders, to be held at the Eden Resort Inn, located at the intersection
of Route 272 and Route 30, Lancaster, Pennsylvania on Tuesday, May 12, 1998
at 10:00 a.m. and at any adjournments thereof, as follows:
(Continued and to be dated and signed on the reverse side)
<PAGE>
Please Detach and Mail in the Envelope Provided
A / X / Please mark your
vote as in this
sample
1. To elect three Class II directors to hold office for three years
from the date of election and to elect two additional Class I directors
to hold office for two years from the date of election and each to
hold office until their successors shall have been elected and qualified.
FOR WITHHOLD AUTHORITY
all nominees listed to vote for all nominees
listed at right
/ / / /
WITHHOLD AUTHORITY to vote for any individual
nominee, strike a line through that nominee's
name in the list at right.
Nominees:
Class I:
Karen M. Balaban
Noah W. Kreider, Jr.
Class II:
James W. Appel
M. Scott Clemens
G. Arthur Weaver
2. To ratify the appointment by the Company's Board of Directors and
Coopers & Lybrand L.L.P. as the Company's independent auditors
for the Company's fiscal year ended December 31, 1998.
FOR AGAINST ABSTAIN
/ / / / / /
The Board of Directors recommends a vote "FOR" each of the
listed propositions.
THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED "FOR" EACH OF THE PROPOSITIONS STATED. IF
ANY OTHER BUSINESS IS PRESENTED AT SUCH MEETING, INCLUDING MATTERS RELATING
TO THE CONDUCT OF THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN
THIS PROXY IN THEIR BEST JUDGMENT. AT THE PRESENT TIME, THE BOARD OF
DIRECTORS KNOWS OF NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Should the undersigned be present and elect to vote at the Meeting or at
any adjournment thereof, then the power of said attorneys and prior proxies
shall be deemed terminated and of no further force and effect. The
undersigned may also revoke his or her proxy by filing a subsequent proxy or
notifying the Secretary of his or her decision to terminate his or her proxy.
The undersigned acknowledges receipt from Old Guard Group, Inc. prior to
the execution of this proxy of notice of the Meeting, and a Proxy dated April
15, 1998.
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
- -------------------------------------------------------------------------------
SIGNATURE OF SHAREHOLDERS PRINT NAME OF SHAREHOLDERS DATE
Note: Please sign exactly as your name appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title. If shares are held jointly, each holder should sign.
