<PAGE>
[LOGO]
TO THE SHAREHOLDERS OF
Washington National Corporation:
The annual meeting of shareholders of Washington National Corporation will
be held on Friday, June 16, 1995. The official notice of this meeting, together
with the proxy statement and form of proxy, is enclosed. You should have already
received a copy of the 1994 annual report to shareholders. If you have not
received the annual report, please call the financial reporting department at
(708) 793-3053.
At the annual meeting, you will have the opportunity to vote upon the
election of five directors of the Corporation. Directors and officers of the
Corporation will be present at the annual meeting to respond to any questions
that you may have.
We hope you will be able to attend the annual meeting. In the event you will
not be able to do so, please review the enclosed form of proxy carefully. After
voting, please sign and return it promptly to assure that your shares will be
voted at the meeting. If you attend, you may revoke your proxy and vote in
person.
Sincerely,
Robert W. Patin
CHAIRMAN OF THE BOARD, PRESIDENT
AND CHIEF EXECUTIVE OFFICER
<PAGE>
[LOGO]
April 29, 1995
TO THE SHAREHOLDERS OF
Washington National Corporation:
The annual meeting of shareholders of Washington National Corporation, a
Delaware corporation, will be held at the Corporation's Home Office, 300 Tower
Parkway, Lincolnshire, Illinois, on Friday, June 16, 1995, at 10:30 a.m.,
central daylight savings time, for the following purposes:
1. To elect four class B directors to serve for a term of three years;
2. To elect one class C director to serve for a term of one year; and
3. To transact such other business as may properly come before the meeting.
The board of directors has fixed the close of business on April 17, 1995 as
the record date for determining the shareholders entitled to notice of and to
vote at the annual meeting.
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE VOTE, SIGN
AND DATE THE ENCLOSED PROXY, AND RETURN IT IN THE POSTAGE-PAID ENVELOPE
PROVIDED.
By order of the board of directors,
Craig R. Edwards
CORPORATE SECRETARY
<PAGE>
Dated: April 29, 1995
WASHINGTON NATIONAL CORPORATION
300 Tower Parkway
Lincolnshire, Illinois 60069
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 16, 1995
This proxy statement is furnished in connection with the solicitation of
proxies by the board of directors of Washington National Corporation ("WNC") for
use at the annual meeting of shareholders to be held on Friday, June 16, 1995
and all adjournments thereof, for the purposes set forth in the accompanying
notice. Proxy materials are being mailed to shareholders of WNC on or about
April 29, 1995. The cost of the solicitation will be borne by WNC. In addition
to solicitation of proxies by mail, certain officers and employees of WNC may
solicit proxies by telephone, telegraph, or in person, but they will not be
compensated for doing so. WNC may agree to pay banks, brokers, nominees and
other fiduciaries their reasonable charges and expenses incurred in forwarding
the proxy material to the beneficial owners of WNC stock.
The holders of record of the common stock, par value $5 per share ("common
stock") and the $2.50 convertible preferred stock ("preferred stock") of WNC at
the close of business on Monday, April 17, 1995, will be entitled to vote at the
meeting. As of such record date, there were outstanding 12,188,148 shares of
common stock (excluding 3,383,473 shares held by WNC as treasury stock, which
will not be voted), and 144,607 shares of preferred stock. Each shareholder of
record will be entitled to one vote for every share of stock standing in his or
her name on the books of WNC on the record date.
Any shareholder entitled to vote may vote his or her shares either in person
or by his or her duly authorized proxy. Any proxy solicited herewith may be
revoked by the shareholder by written notice to the corporate secretary of WNC
at any time prior to the voting thereof, but a revocation will not be effective
until notice thereof has been received by the corporate secretary prior to such
voting. All shares represented by properly executed proxies received by WNC will
be voted at the meeting and all adjournments thereof in accordance with the
instructions reflected in the proxies. Absent any instructions to the contrary,
shares represented by properly executed proxies will be voted FOR the election
of directors.
A quorum of shareholders is necessary to take action at the annual meeting.
The presence, in person or by proxy, of the holders of record of a majority of
outstanding shares of stock entitled to be voted at the annual meeting shall
constitute a quorum. Votes cast by proxy or in person at the annual meeting will
be tabulated by the inspectors of election appointed for the meeting. The
inspectors will treat abstentions as shares that are present and entitled to
vote for purposes of determining the presence of a quorum. If a broker indicates
on the proxy that it does not have discretionary authority as to certain shares
to vote on a particular matter, those shares will not be considered present and
entitled to vote on that matter.
1
<PAGE>
ELECTION OF DIRECTORS
WNC's certificate of incorporation and by-laws currently provide that the
board of directors shall consist of not less than twelve nor more than sixteen
directors, with the exact number to be determined by a resolution of the board
of directors. The certificate of incorporation and by-laws also stipulate that
the board shall be divided into three classes which shall be as nearly equal in
number as possible. The WNC board adopted a resolution establishing the number
of its members at twelve, consisting of four class A directorships, four class B
directorships and four class C directorships.
At each annual meeting, successors of the class whose term of office expires
in that year are elected for three-year terms or until the election and
qualification of their successors. The terms of the class B directors, W.
Francis Brennan, Lee A. Ellis, John R. Haire, George P. Kendall, Jr., and Rex
Reade, expire this year and each has been nominated for reelection to the board.
Mr. Ellis will stand for reelection as a class C director to fill a class C
director vacancy created by the resignation of Patricia Y. Tsien. If Mr. Ellis
is elected, he will serve the remainder of the class C term which expires in
1996. If the four class B nominees are elected, they will serve the full
three-year term or until the election and qualification of their successors.
Unless directed to the contrary by the shareholders, the proxies received as a
result of this solicitation will be voted FOR election of all nominees. In case
any nominee should be unwilling or unable to accept nomination for election,
which is not now anticipated, the persons named in the proxy will vote for the
election of such other persons as they shall determine. A plurality of shares of
common stock and preferred stock, present in person or represented by proxy at
the annual meeting, is required for the election of directors.
THE FOLLOWING SETS FORTH CERTAIN INFORMATION ABOUT THE NOMINEES AND OTHER
DIRECTORS WHOSE TERMS CONTINUE AFTER THE MEETING:
NOMINEES
CLASS B--TO BE ELECTED FOR A TERM OF THREE YEARS, EXPIRING IN 1998:
W. FRANCIS BRENNAN--FORMER EXECUTIVE VICE PRESIDENT, UNUM CORPORATION,
PORTLAND, MAINE
Mr. Brennan, age 58, was elected by the board as a director of WNC in 1995,
and he serves on the finance and nominating committees. He retired from UNUM
Corporation in December 1994 as executive vice president, a position he held
since 1991. In his 10 years with UNUM, Mr. Brennan developed and executed
the company's corporate development and international expansion strategies.
He headed UNUM's expansion into Canada, entry in the United Kingdom and most
recently, entry into Japan. Mr. Brennan also serves as a director of the
Alliance for the Mentally Ill of Maine and on The President's Council of
Visitors at the University of Southern Maine.
JOHN R. HAIRE--CHAIRMAN, COMMITTEE OF INDEPENDENT DIRECTORS, DEAN WITTER
GROUP OF INVESTMENT COMPANIES, NEW YORK, NEW YORK
Mr. Haire, age 70, has been a director of WNC since 1969, and he serves on
the finance and nominating committees. In 1989, he was elected chairman of
the Committee of Independent Directors of the Dean Witter Group of
Investment Companies. Between 1978 and 1989 he was president and chief
executive officer of the Council for Aid to Education, Inc., a
not-for-profit corporation promoting financial aid to higher education. Mr.
Haire is also a director of the Dean Witter Group of Mutual Funds.
GEORGE P. KENDALL, JR.--FORMER VICE CHAIRMAN, WNC, AND FORMER PRESIDENT,
WASHINGTON NATIONAL INSURANCE COMPANY, LINCOLNSHIRE, ILLINOIS
Mr. Kendall, age 60, was elected a director of WNC in 1974, and he serves on
the executive, nominating and audit committees, the latter of which he
serves as chairman. He retired in January 1991 as vice chairman of WNC, a
position he held since 1984. After holding various positions at Washington
National Insurance Company for 16 years, Mr. Kendall was elected its
president and a director in 1983, serving as a member of the executive
committee and as chairman of the finance committee of the board of directors
until his retirement in January 1991.
2
<PAGE>
REX READE--FORMER CHAIRMAN OF THE BOARD, RUST-OLEUM CORPORATION, VERNON
HILLS, ILLINOIS
Mr. Reade, age 70, was elected a director of WNC in 1983, and he serves on
the finance and nominating committees. He was associated with Rust-Oleum
Corporation, a manufacturer of rust-preventive coatings, since 1959 and he
was chairman of that company until his retirement in 1988.
CLASS C--TERM EXPIRING IN 1996:
LEE A. ELLIS--FORMER SENIOR VICE PRESIDENT FOR BUSINESS AND FINANCE,
NORTHWESTERN UNIVERSITY, EVANSTON, ILLINOIS
Mr. Ellis, age 65, was elected a director of WNC in 1982, and he serves on
the compensation, executive, finance and nominating committees, the latter
of which he serves as chairman. He was associated with Northwestern
University, a private institution of higher education, as senior vice
president for business and finance, from 1976 until his retirement in 1990.
The seven persons named below will continue to serve as directors for the
terms indicated.
CONTINUING DIRECTORS
CLASS C--TERMS EXPIRING IN 1996:
RONALD L. BORNHUETTER--CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER OF
NAC RE CORPORATION, GREENWICH, CONNECTICUT
Mr. Bornhuetter, age 62, was elected a director of WNC in 1992, and he
serves on the executive, finance and compensation committees, the latter of
which he serves as chairman. Mr. Bornhuetter is chairman, president, chief
executive officer and a director of NAC Re Corporation, a publicly held
property and casualty reinsurance company. Prior to his employment with NAC
Re Corporation, Mr. Bornhuetter was associated with General Re Corporation
from 1966 to 1985, where he served in a number of capacities, including the
position of chief financial officer. Mr. Bornhuetter also is a trustee of
the College of Wooster, Wooster, Ohio.
FRANK L. KLAPPERICH, JR.--PRESIDENT, CHARTER CAPITAL CORPORATION, CHICAGO,
ILLINOIS
Mr. Klapperich, age 60, was elected a director of WNC in 1991, and he serves
on the compensation, executive and finance committees, the latter of which
he serves as chairman. He is president of Charter Capital Corporation, a
private investment company. Prior to his retirement in 1990, Mr. Klapperich
had a 29-year investment banking career with Kidder Peabody & Co., Inc. and
was a senior vice president of that firm at the time of his retirement. Mr.
Klapperich also serves as a director of TC Manufacturing Co., Inc. and
Newcor, Inc.
LEE M. MITCHELL--PRINCIPAL, GOLDER, THOMA, CRESSEY, RAUNER, INC., CHICAGO,
ILLINOIS
Lee M. Mitchell, age 52, was elected a director of WNC in 1993, and he
serves on the audit, compensation and nominating committees. Mr. Mitchell is
a principal at Golder, Thoma, Cressey, Rauner, Inc., a private equity
investment firm. Founded in 1980, Golder, Thoma, Cressey, Rauner, Inc.
manages more than $700 million in equity capital and has investments in a
wide variety of industries. Prior to joining Golder, Thoma, Cressey, Rauner,
Inc. in 1994, Mr. Mitchell was a partner in the law firm of Sidley & Austin,
where he maintained a corporate and federal regulatory practice. From 1984
through 1992 he served as president and chief executive officer of The Field
Corporation and, prior thereto, Field Enterprises, Inc., diversified holding
companies with interests in communications, manufacturing and real estate.
Mr. Mitchell also serves as a director of Paging Network, Inc. and
Northwestern Memorial Management Corporation.
CLASS A--TERMS EXPIRING IN 1997:
FREDERICK R. BLUME--MANAGING PARTNER, FOUNDER, CAPITAL HEALTH VENTURE
PARTNERS, CHICAGO, ILLINOIS
Frederick R. Blume, age 52, was elected a director of WNC in 1993, and he
serves on the audit and compensation committees. Mr. Blume is founder and
managing partner of Capital Health Venture
3
<PAGE>
Partners, a Chicago-based venture capital management company established in
1985. Previously, Mr. Blume was a managing director of PaineWebber Capital
Markets and has also been vice president of corporate finance for A.G.
Becker & Company and Kidder, Peabody & Co., Inc. Mr. Blume also serves as a
director of Micro HealthSystems, Inc. and Cytyc Corporation.
ELAINE R. BOND--FORMER SENIOR CONSULTANT AND CHASE MANHATTAN BANK FELLOW,
THE CHASE MANHATTAN BANK, N.A., NEW YORK, NEW YORK
Ms. Bond, age 59, was elected a director of WNC in 1992, and she serves on
the audit and nominating committees. Ms. Bond was associated with The Chase
Manhattan Bank, N.A. from 1981 as senior vice president and corporate staff
head for the use of technology in the bank, until her retirement in
December, 1994. In 1993 she became a Chase Manhattan Bank Fellow and Senior
Consultant and was responsible for overseeing research projects, consulting
with executives of the bank, and influencing industry directions. From 1957
to 1981, Ms. Bond was associated with IBM Corporation where she served in a
number of capacities, including the position of director of information
services. Ms. Bond also serves as a director of Novell, Inc.
STANLEY P. HUTCHISON--FORMER CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER, WNC AND WASHINGTON NATIONAL INSURANCE COMPANY, LINCOLNSHIRE,
ILLINOIS
Mr. Hutchison, age 71, was elected a director of WNC in 1968, and he serves
on the audit and finance committees. In 1988, he retired as chairman of the
board and chief executive officer of WNC, positions he held since 1983 and
1978, respectively. From 1976 until his retirement, he also was chairman of
the board and chief executive officer of Washington National Insurance
Company.
ROBERT W. PATIN--CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, WNC AND WASHINGTON NATIONAL INSURANCE COMPANY, LINCOLNSHIRE,
ILLINOIS
Mr. Patin, age 52, was elected chairman of the board and chief executive
officer of WNC and chairman of the executive committee in July 1988. At that
time, he also assumed the position of chairman of the board of Washington
National Insurance Company. Mr. Patin was elected president of WNC and
Washington National Insurance Company in May 1990 and February 1991,
respectively. He also is a director of certain affiliated companies of WNC,
including United Presidential Corporation and United Presidential Life
Insurance Company. From 1986 through 1988, Mr. Patin was managing general
partner of The Harbor Group, a management consulting firm in East Greenwich,
Rhode Island. From 1980 through 1986, he was employed by General Electric
Capital Corporation, where he held the position of president of the
insurance operations. Between 1964 and 1980, Mr. Patin was employed by
Connecticut General Life Insurance Company. Mr. Patin also is a director of
Evanston Hospital Corporation.
BOARD OF DIRECTORS AND ITS COMMITTEES
The board of directors held five meetings during 1994. The board has
established five standing committees whose principal functions are described
below. During 1994, all WNC directors attended at least 75% of the total number
of board meetings and meetings of committees on which they served.
The executive committee met four times in 1994. Its function is to exercise,
between meetings of the board of directors, all of the powers and authority of
the board in the management of WNC to the extent permitted by law or as
otherwise restricted by the board. Robert W. Patin, Chairman, Ronald L.
Bornhuetter, Lee A. Ellis, George P. Kendall, Jr., and Frank L. Klapperich, Jr.,
currently serve on the executive committee, which consists of the chairman of
the board and the chairmen of the board's standing committees.
The audit committee met five times in 1994. Its function is to recommend to
the board the appointment of independent auditors each year; to review financial
statements with such independent auditors prior to their presentation to the
board of directors; and to determine the effectiveness and integrity of the
audit effort and of internal accounting controls for WNC and each of its
subsidiaries. George P. Kendall, Jr., Chairman, Frederick R. Blume, Elaine R.
Bond, Stanley P. Hutchison, and Lee M. Mitchell currently serve on the audit
committee.
4
<PAGE>
The compensation committee met five times in 1994. Its function is to review
and approve basic and incentive compensation plans for WNC and its subsidiaries;
to set the salaries of the executive officers of WNC and its subsidiaries; to
administer any existing stock option plans; and to act, together with WNC's
chief executive officer, in an advisory capacity to the board with respect to
matters of management succession. Ronald L. Bornhuetter, Chairman, Frederick R.
Blume, Lee A. Ellis, Frank L. Klapperich, Jr. and Lee M. Mitchell currently
serve on the compensation committee.
The finance committee met six times in 1994. Its function is to review
quarterly financial results and trends in depth to determine adequate financial
results and progress; to review and approve corporate and subsidiary investment
philosophies, strategies and guidelines; to approve items significantly
affecting capital structure; to review and recommend to the board actions
related to mergers, acquisitions or divestitures; to review and recommend to the
board the annual budget and profit plan; and to monitor asset utilization to
insure that management is able to identify and deploy assets that are
undervalued or utilized in unprofitable operations. Frank L. Klapperich, Jr.,
Chairman, Ronald L. Bornhuetter, W. Francis Brennan, Lee A. Ellis, John R.
Haire, Stanley P. Hutchison, and Rex Reade currently serve on the finance
committee.
The nominating committee met five times in 1994. Its function is to search
for, screen and recommend to the board, for nomination, persons for election or
reelection to the board of directors; to monitor the board's retirement policy;
and to recommend to the board the type, function and membership of board
committees. The nominating committee will consider nominations for directorships
submitted in writing by shareholders to the corporate secretary. Lee A. Ellis,
Chairman, Elaine R. Bond, W. Francis Brennan, John R. Haire, George P. Kendall,
Jr., Lee M. Mitchell and Rex Reade currently serve on the nominating committee.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934.
With the exceptions noted below, based solely on WNC's review of Forms 3, 4
and 5 and amendments thereto furnished to it pursuant to Rule 16a-3(e) during
its most recent fiscal year, no person who, at any time during the fiscal year,
was a director, officer or beneficial owner of more than ten percent of any
class of equity securities of WNC registered pursuant to Section 12 of the
Exchange Act, failed to file on a timely basis, reports required by Section
16(a) of the Exchange Act during the most recent fiscal year. Mr. Robert W.
Patin filed a Form 5 late on April 15, 1995, disclosing transfer of shares from
direct to indirect ownership and Mr. Stanley P. Hutchison filed a Form 4 five
days late reflecting two sales transactions.
STOCK OWNERSHIP
The following table sets forth the stock ownership of all persons known by
WNC to be the beneficial owners of more than 5% of the outstanding shares of
common stock of WNC (exclusive of treasury stock) as of April 4, 1995.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED (1)
------------------------
NAME AND ADDRESS OF BENEFICIAL OWNER NUMBER PERCENTAGE
- - ------------------------------------------ ---------- ------------
<S> <C> <C>
George P. Kendall, Jr.(2)
300 Tower Parkway
Lincolnshire, IL 60069 1,530,592 12.56%
NBD Bancorp, Inc.(3)
611 Woodward Avenue
Detroit, MI 48226 1,389,055 11.40%
Shufro, Rose & Ehrman(4)
745 Fifth Avenue
New York, NY 10151 686,200 5.63%
SunTrust Banks, Inc.(5)
25 Park Place, N. E.
Atlanta, GA 30303 1,498,350 12.29%
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C>
<FN>
(1) The table includes common stock which could be acquired within 60 days by
exercise of a stock option. The table does not include the beneficial
ownership of WNC's preferred stock. The only person known to WNC to own
beneficially more than 5% of the outstanding shares of the preferred stock
is Melvin S. Cutler, Cutler Associates Investments, Inc., P.O. Box 15049,
Worcester, Massachusetts 01615, who beneficially owned, as of March 30,
1995, 28,400 shares, or 19.6%, of the preferred stock according to a
Schedule 13G filed with the Securities and Exchange Commission on such
date. Such shares, if fully converted into shares of common stock, would
constitute less than 1% of the outstanding shares of common stock.
(2) George P. Kendall, Jr. beneficially owns 1,530,592 shares of common stock,
including 1,311,103 shares which are also reported under NBD Bancorp,
Inc.'s beneficial ownership total. The 1,311,103 shares are held by various
trusts (including the G. R. Kendall Foundation and Trust) with respect to
which George P. Kendall, Jr. and NBD Bancorp, Inc., as well as other
members of the Kendall family, share voting and investment power as
co-trustees of such trusts. Excluding these 1,311,103 shares, George P.
Kendall, Jr. beneficially owns 219,489 shares, or 1.8% of the outstanding
shares.
(3) According to a Schedule 13G filed with the Securities and Exchange
Commission on February 9, 1995 by NBD Bancorp, Inc., NBD Bancorp, Inc.
beneficially owned on such date 1,389,055 shares of common stock. NBD
Bancorp, Inc. indicated that it had sole voting power over 19,475 shares,
shared voting power over 1,369,580 shares, sole investment power over
34,926 shares and shared investment power over 1,352,754 shares. Included
in NBD Bancorp, Inc.'s beneficial ownership total are 545,169 shares held
by the G. R. Kendall Foundation and Trust over which NBD Bancorp, Inc.
shares voting and investment power in its capacity as co-trustee with,
among others, George P. Kendall, Jr., a director of WNC.
(4) According to its Schedule 13G filed with the Securities and Exchange
Commission on February 14, 1995, Shufro, Rose & Ehrman beneficially owned
on such date 686,200 shares of common stock. Shufro, Rose & Ehrman
indicated that it had sole voting power over 70,740 shares and sole
investment power over 686,200 shares.
(5) According to a Schedule 13G filed with the Securities and Exchange
Commission on February 3, 1995, SunTrust Banks, Inc., beneficially owned on
such date 1,498,350 shares of common stock. SunTrust Banks, Inc., indicated
that it had sole voting power over 728,450 shares, sole investment power
over 1,497,600 shares and shared investment power over 750 shares.
</TABLE>
The following table sets forth the beneficial ownership of WNC stock by each
director, each director nominee, each executive officer named in the Summary
Compensation Table, and all executive officers and directors as a group, as of
April 4, 1995.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED (1)
NAME OF --------------------------------
BENEFICIAL OWNER TITLE OF CLASS NUMBER PERCENTAGE
- - ---------------------------- ----------------- ----------------- -------------
<S> <C> <C> <C>
F. R. Blume common stock 2,950(3)
E. R. Bond common stock 5,750(3)
R. L. Bornhuetter common stock 11,250(3)
W. F. Brennan common stock 1,400
W. G. Brown common stock 10,021(3)
L. A. Ellis common stock 9,072(3)
C. L. Fuhrmann common stock 37,600(3)
K. A. Grubb common stock 16,095(3)
J. R. Haire common stock 9,400(3)
S. P. Hutchison common stock 12,588(3)
preferred stock 100
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY OWNED (1)
NAME OF --------------------------------
BENEFICIAL OWNER TITLE OF CLASS NUMBER PERCENTAGE
- - ---------------------------- ----------------- ----------------- -------------
<S> <C> <C> <C>
G. P. Kendall, Jr. common stock 1,530,592(3)(4) 12.56%
preferred stock 2,300 1.59%
F. L. Klapperich, Jr. common stock 7,750(3)
L. M. Mitchell common stock 3,000(3)
R. W. Patin common stock 126,203(3) 1.04%
J. N. Plato common stock 22,825(3)
T. Pontarelli common stock 40,506(3)
R. Reade common stock 6,500(3)
T. C. Scott common stock 49,100(3)
All Executive Officers common stock 1,902,602(3)(5) 15.61%
and Directors as a preferred stock 2,400 1.66%
Group (18 persons)
<FN>
(1) Unless otherwise indicated by footnote, persons owning the indicated shares
are deemed to have sole voting and investment power over such shares.
(2) The percentage of ownership of the common stock assumes conversion of
preferred stock only by the person or officers and directors as a group
holding such stock and not by all other holders of preferred stock. It also
includes common stock which could be acquired within 60 days by exercise of
a stock option. Unless otherwise indicated, the percentage of ownership of
each class of stock is less than one percent.
(3) Includes shares of common stock issuable pursuant to stock options
exercisable within 60 days after April 4, 1995, as follows: Mr. Blume,
2,000 shares, Ms. Bond, 4,600 shares; Mr. Bornhuetter, 4,600 shares; Mr.
Brown 10,000 shares; Mr. Ellis, 6,100 shares; Mr. Fuhrmann, 37,000 shares;
Mr. Grubb, 16,000 shares; Mr. Haire, 6,100 shares; Mr. Hutchison, 6,100
shares; Mr. Kendall, 5,350 shares; Mr. Klapperich, 4,600 shares; Mr.
Mitchell, 2,000 shares; Mr. Patin, 102,500 shares; Mr. Plato, 18,100
shares; Mr. Pontarelli, 39,000 shares; Mr. Reade, 6,100 shares; Mr. Scott,
39,000 shares; and all executive officers and directors as a group, 309,150
shares.
(4) See footnote (2) on page 7 for information relating to Mr. Kendall's
beneficial ownership.
(5) The 1,902,602 shares of common stock shown include 1,311,103 shares
beneficially owned by George P. Kendall, Jr. that are reported above under
both George P. Kendall, Jr.'s and NBD Bancorp, Inc.'s beneficial ownership
totals.
</TABLE>
EXECUTIVE COMPENSATION
REPORT OF WASHINGTON NATIONAL CORPORATION COMPENSATION COMMITTEE
The Compensation Committee reviews and approves the compensation of WNC's
executive officers, including the named executive officers in the Summary
Compensation Table. It also reviews overall compensation policies and levels for
all other executives.
WNC believes that shareholders should be provided meaningful information
relating to how it compensates its executives. To that end and consistent with
Securities and Exchange Commission rules, set forth below is a report submitted
by Messrs. Blume, Bornhuetter, Ellis, Klapperich, and Mitchell in their capacity
as the board's compensation committee addressing WNC's compensation policies for
1994 as they affected WNC's executive officers: Mr. Brown, Mr. Fuhrmann, Mr.
Grubb, Mr. Patin, Mr. Plato, Mr. Pontarelli and Mr. Scott. Each member of the
compensation committee is a non-employee director.
7
<PAGE>
COMPENSATION POLICIES TOWARD EXECUTIVE OFFICERS
The stated objectives of WNC's executive compensation program are:
(a) to reinforce and guide executives to align thinking and behavior with
the long-term interests of shareholders;
(b) to attract and retain key executives by providing a total compensation
package which rewards executives for adding value for shareholders and
meeting and exceeding performance objectives; and
(c) to enhance profitable business performance based on long-term decision
making.
The compensation committee's executive compensation policies are designed to
provide competitive levels of compensation that integrate pay with WNC's annual
and long-term performance goals, significantly reward above-average corporate
performance and increases in shareholder value, and recognize individual
initiative and achievements taking into account the value received for the
resources expended. Target levels of the executive officers' overall
compensation are intended to be consistent with those maintained by other
comparably sized publicly held life and health insurance companies, but are
increasingly being weighted toward programs contingent upon WNC's business
performance as described below. Competitive base and incentive compensation
levels are monitored through analysis of compensation surveys of leading
compensation consultants. In 1994, the Committee and its compensation consultant
conducted a study to analyze the continued competitiveness of WNC's compensation
program for its executive officers. The committee views the 60th percentile as
"competitive," and sets its base and target incentive compensation at that
level.
For 1994, approximately one-half of each executive officer's total
compensation was targeted to be in the form of base or fixed compensation, with
the remainder being variable pay or "pay-at-risk" (the receipt of which is
subject to the satisfaction of certain performance conditions, as described
below). Such pay-at-risk included both annual pay-at-risk compensation and
long-term pay-at-risk cash and stock-based compensation. The compensation
committee believes that stock-based compensation arrangements are very important
in aligning management and shareholder interests in improvement of shareholder
value. For this reason, the committee has utilized non-qualified stock option
grants in the past to compensate WNC's executve officers, and the committee
intends to continue to utilize such option grants in the future to provide a
large percentage of its executive officer long-term compensation. As a result of
the increased emphasis on tying executive compensation to corporate and
individual performance, in any particular year, WNC's executive officers may be
paid more or less than the executives of WNC's competitors, depending upon WNC's
performance, increases in shareholder value and individual performance.
RELATIONSHIP BETWEEN CORPORATE PERFORMANCE AND EXECUTIVE COMPENSATION
Compensation paid to WNC's executive officers in 1994, as reflected in the
following tables, primarily consisted of base compensation and annual
pay-at-risk compensation. During early 1994, the committee established target
payout and performance levels for the 1994 Annual Pay-at-Risk Plan. The Annual
Pay-at-Risk Plan is a cash bonus plan which in 1994 covered virtually all
employees of WNC and its subsidiaries. Payout targets are set at 40% of base
compensation for all executive officers other than the chief executive officer,
who has a 50% target. The Plan's objective is to reward achievement of certain
annual financial, operational and strategic goals. The participant is "at risk"
as to this compensation in that the payout pool is totally based on the
achievement of certain pre-established WNC, subsidiary and divisional pretax
operating income goals approved by WNC's board.
In order to insure that individual performance is differentiated and that
truly outstanding performance is rewarded, individual awards under the Annual
Pay-At-Risk Plan are variable, based on the individual performance of each
executive officer and the degree to which individual and corporate or divisional
goals are met during the year. The key WNC, subsidiary and divisional goals are
the achievement of board approved annual business plans which include specific
pretax operating income, revenue and expense control targets. In addition,
individual goals include specific managerial and personal initiatives and
projects not directly related to financial performance. Although important,
these individual goals are given a lesser weight in the setting of actual awards
levels than the financial goals of the unit for which the executive officer is
responsible.
8
<PAGE>
In March of 1993, WNC implemented a Long-Term Pay-At-Risk Plan for certain
elected officers of WNC and its subsidiaries. This plan uses two vehicles,
non-qualified stock options and cash, to provide market based and performance
based incentives. As reflected in the stock option grant table below, stock
options were granted in March of 1994 to the named executive officers at an
exercise price equal to the market value of the common stock on the date of
grant. These options may be exercised over ten years and will vest in equal
annual installments over a five year period. By providing value to the executive
as shareholder value is created, the option grants align the interest of
executives with those of the shareholders. The size of the 1994 stock option was
determined by placing a value on each option share utilizing an option valuation
model and taking into account the nature and size of the other elements of
compensation paid to the named executive officers. The committee established a
target of approximately 50% of total compensation being in the form of variable
or "at risk" pay. Since the other pay compensation components (base
compensation, target Annual Pay-At-Risk and the cash portion of the Long-Term
Pay-At-Risk Plan) had been previously set by the committee, the size of the
options was set to meet the committee's pay mix target for "at-risk" pay.
The Long-Term Pay-At-Risk Plan also provides for cash-based incentives for
achievement of rolling three year plans under which an executive officer earns a
percentage of base compensation (5% for the chief executive officer, 4% for
other executive officers) for each year in the three year plan. For 1994, awards
were earned by measuring corporate and divisional pretax operating income
performance versus plan and general financial performance versus the industry,
as determined by the subjective judgment of the committee. During 1994, the
compensation committee studied possible measurement standards other than pretax
operating income for the cash portion of the Long-Term Pay-At-Risk Plan. As a
result, performance measures for the 1995-1997 performance period of the
Long-Term Pay-At-Risk Plan have been revised to incorporate return on
shareholder equity targets and total shareholder return measured against both a
broad group of publicly held life and health insurance companies and the
Standard & Poor's SmallCap 600 index. Use of these new measures should
contribute to better balance in WNC's pay-at-risk compensation between internal
corporate performance and performance relative to the insurance industry and the
investment marketplace in general. The committee continues to believe that
operating performance criteria are appropriate for annual pay-at-risk plans
while common stock market price, return on shareholder equity and total
shareholder return relative to the market are appropriate measures for long-term
rewards.
The committee intends to continue structuring its pay-at-risk programs on
the achievement of aggressive corporate and individual performance goals
designed to provide appropriate incentives, while retaining sufficient
flexibility to assess and reward individual performance achievement.
CORPORATE PERFORMANCE AND CEO COMPENSATION
Consistent with its approach for executive officers, the compensation
committee's approach in setting Mr. Patin's target total compensation is to seek
to be competitive with comparable life and health insurance companies, but to
have a large percentage of his target total compensation "at risk" based on
objective short and long-term performance criteria. This balanced approach
provides incentive to achieve annual and long-term goals while also providing
Mr. Patin some certainty in the level of his compensation through the base
compensation component.
Mr. Patin is eligible to participate in the same executive compensation
plans as WNC's other executive officers. Mr. Patin's base compensation was
established in 1988 when he was recruited to join WNC. Based upon a compensation
consultant's recommendation, Mr. Patin's base compensation was set at the 60th
percentile for chief executive officers of life and health insurance companies
of comparable size in terms of assets, revenues and with a similar scope of
operations. Since that time, Mr. Patin has received annual merit increases to
his base compensation based on the compensation committee's assessment of WNC's
and his performance. The appropriateness of Mr. Patin's base compensation and
total compensation opportunities was reaffirmed in a market study undertaken by
the committee in 1994.
The compensation committee established Mr. Patin's annual pay-at-risk target
at 50% of his base compensation for 1994. Mr. Patin was paid 106% of this target
primarily because WNC exceeded its profit plan goals, including its pretax
operating income and revenue targets. In addition, the committee considered and
rewarded Mr. Patin's performance in achieving certain personal performance goals
in 1994. As a result
9
<PAGE>
of WNC's achievement of its 1994 pretax operating income target, Mr. Patin also
vested in the 1994 segment of the 1993-1995 and the 1994-1996 performance
periods of the Long-Term Pay-At-Risk Plan. If he is still employed by WNC in
1996, Mr. Patin will receive an additional 10% of his 1995 base compensation in
the Spring of 1996, as a result of the vested portion of the 1993-1995
performance period. Likewise, if he is still employed by WNC in 1997, Mr. Patin
will receive an additional 5% of his 1996 base compensation in the Spring of
1997 as a result of the vested portion of the 1994-1996 performance period. In
March 1994, the committee granted Mr. Patin an option to purchase 25,000 shares
of WNC's common stock under the stock-based portion of the Long-Term Pay-At-Risk
Plan at 100% of the then market price of $24.39. This option has a ten year term
and vests in equal installments over five years.
The Internal Revenue Code was amended for 1993 to limit the deductibility of
certain compensation in excess of $1,000,000 annually. Mr. Patin is the only
executive officer who could potentially approach this compensation level in 1995
(owing in part to the value of currently unexercised stock options). The
committee continues to study this issue with an intent to maximize deductibility
without hindering its discretion to compensate executives commensurate with
performance and comparative compensation information.
This report shall not be deemed incorporated by reference into any filing
under the Securities Act of 1933 or under the Securities Exchange Act of 1934,
except to the extent that WNC specifically incorporates this information by
reference, and it shall not otherwise be deemed filed under such Acts.
COMPENSATION COMMITTEE OF THE WASHINGTON NATIONAL CORPORATION
BOARD OF DIRECTORS
Ronald L. Bornhuetter, Chairman
Frederick R. Blume
Lee A. Ellis
Frank L. Klapperich, Jr.
Lee M. Mitchell
10
<PAGE>
The following tables set forth the compensation information for the years
1992 through 1994 with respect to WNC's chief executive officer and the six most
highly compensated executive officers of WNC whose cash compensation exceeded
$100,000 in 1994.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPEN-
ANNUAL COMPENSATION SATION
------------------------------------ (SECURITIES ALL OTHER
OTHER ANNUAL UNDERLYING COMPEN-
NAME AND COMPEN- OPTIONS/ SATION
PRINCIPAL POSITION YEAR SALARY BONUS SATION ($) SARS (#)) ($)(4)(5)
- - ---------------------------------------- --------- --------- --------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
R. W. Patin 1994 $ 521,398 $ 275,000 $ 16,703(1) 25,000 $ 81,210
Chairman of the Board, 1993 $ 494,748 $ 312,375 $ 12,894 25,000 $ 91,458
President and CEO 1992 $ 459,160 $ 275,000 $ 70,646 0 $ 75,701
WNC and Washington National
Insurance Company
W. G. Brown 1994 $ 178,773 $ 77,500 $ 110,637(1)(2) 10,000 $ 20,472
Executive Vice President and 1993 $ 87,500 $ 60,000 $ 24,492 20,000 $ 3,938
Chief Information Officer (6)
WNC and Washington National
Insurance Company
C. L. Fuhrmann 1994 $ 247,737 $ 114,000 $ 8,227(1) 10,000 $ 40,108
President 1993 $ 257,937 $ 137,500 $ 10,374 15,000 $ 42,275
Health Division 1992 $ 214,293 $ 109,000 $ 4,353 0 $ 31,820
Washington National Insurance Company
K. A. Grubb 1994 $ 203,084 $ 19,000 $ 61,783(1)(3) 10,000 $ 33,536
President 1993 $ 193,874 $ 92,750 $ 54,109 10,000 $ 18,781
Education Division 1992 $ 92,914 $ 45,000 $ 29,769 $ 618
Washington National Insurance Company
J. N. Plato 1994 $ 242,300 $ 111,000 $ 10,163(1) 10,000 $ 38,867
Chairman of the Board, 1993 $ 183,476 $ 102,500 $ 0 15,000 $ 21,704
President and CEO (6)
United Presidential Life Insurance
Company
T. Pontarelli 1994 $ 222,190 $ 96,000 $ 11,519 (1) 10,000 $ 34,784
Executive Vice President 1993 $ 210,780 $ 105,500 $ 8,569 10,000 $ 33,128
Law and Administration 1992 $ 197,928 $ 85,000 $ 4,834 0 $ 29,079
WNC and Washington National
Insurance Company
T. C. Scott 1994 $ 223,132 $ 93,000 $ 4,049 (1) 10,000 $ 34,743
Executive Vice President and 1993 $ 212,974 $ 102,500 $ 10,037 10,000 $ 34,048
Chief Financial Officer 1992 $ 200,157 $ 88,000 $ 5,637 0 $ 29,626
WNC and Washington National
Insurance Company
<FN>
(1) Includes $16,703, $19,000, $8,227, $20,702, $10,163, $11,519 and $4,049
paid to Messrs. Patin, Brown, Fuhrmann, Grubb, Plato, Pontarelli and Scott,
respectively, for payment of taxes incurred primarily in connection with
company-provided automobiles and company-related travel.
(2) This amount includes $77,331 reimbursement for relocation expenses.
(3) This amount includes $22,501 incurred in connection with a company-provided
automobile.
(4) Includes $63,300, $1,800, $22,882, $14,836, $19,402, $17,702 and $17,517 in
contributions made pursuant to WNC's Supplemental Executive Retirement Plan
to Messrs. Patin, Brown, Fuhrmann, Grubb, Plato, Pontarelli and Scott,
respectively.
(5) Includes $16,182, $9,450, $16,182, $16,182, $16,182, $16,182, and $16,182
in contributions made pursuant to WNC's defined contribution plans to
Messrs. Patin, Brown, Fuhrmann, Grubb, Plato, Pontarelli and Scott,
respectively.
(6) Neither Mr. Brown nor Mr. Plato was an executive officer of WNC in 1992.
</TABLE>
11
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
NUMBER OF ------------------------------- POTENTIAL REALIZABLE VALUE
SECURITIES % OF TOTAL AT ASSUMED ANNUAL RATES
UNDERLYING OPTIONS OF STOCK PRICE APPRECIATION
OPTIONS GRANTED TO EXERCISE OR FOR OPTION TERM (3)
GRANTED EMPLOYEES IN BASE PRICE ($) EXPIRATION --------------------------------
NAME (#)(1) FISCAL YEAR ($/SH)(2) DATE 5% ($) 10% ($)
- - ------------------------ ------------ --------------- -------------- ---------- --------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
R. W. Patin 25,000 17.18% $ 24.39 03/11/04 $ 383,468 $ 971,784
W. G. Brown 10,000 6.87% $ 24.39 03/11/04 $ 153,387 $ 388,714
C. L. Fuhrmann 10,000 6.87% $ 24.39 03/11/04 $ 153,387 $ 388,714
K. A. Grubb 10,000 6.87% $ 24.39 03/11/04 $ 153,387 $ 388,714
J. N. Plato 10,000 6.87% $ 24.39 03/11/04 $ 153,387 $ 388,714
T. Pontarelli 10,000 6.87% $ 24.39 03/11/04 $ 153,387 $ 388,714
T. C. Scott 10,000 6.87% $ 24.39 03/11/04 $ 153,387 $ 388,714
<FN>
(1) Twenty percent of the options granted may be exercised each year beginning
on March 11, 1995.
(2) All options were granted at the then current market price of a share of
WNC's common stock.
</TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF SECURITIES IN-THE-MONEY
UNDERLYING UNEXERCISED OPTIONS AT
OPTIONS AT FISCAL YEAR-END ($)
VALUE FISCAL YEAR-END (#) -----------------------------
SHARES ACQUIRED REALIZED -------------------------------- EXERCISABLE
NAME ON EXERCISE (#) ($)(1) EXERCISABLE UNEXERCISEABLE (2) UNEXERCISEABLE
- - ----------------------- ----------------- -------------- ----------------- ------------- -------------- -------------
<S> <C> <C> <C> <C> <C> <C>
R. W. Patin 0 85,000 55,000 $ 175,800 $ 87,900
W. G. Brown 0 4,000 26,000 $ 0 $ 0
C. L. Fuhrmann 0 30,000 26,000 $ 24,570 $ 43,950
K. A. Grubb 0 12,000 28,000 $ 0 $ 0
J. N. Plato 2,267 $ 26,826 10,350 30,583 $ 0 $ 11,717
T. Pontarelli 0 32,000 22,000 $ 52,740 $ 35,160
T. C. Scott 0 32,000 22,000 $ 52,740 $ 35,160
<FN>
(1) This amount represents the difference between the market value of one share
of WNC's common stock on the date of exercise and the exercise price times
the number of shares.
(2) This amount represents the difference between the market value of one share
of WNC's common stock on December 31, 1994 ($19.00) and the exercise price
times the number of shares.
</TABLE>
12
<PAGE>
PERFORMANCE GRAPH
WASHINGTON NATIONAL CORPORATION (WNC)
TOTAL RETURNS -- DIVIDENDS REINVESTED
12/31/89 TO 12/31/94
The following graph compares WNC's stock price performance with the Standard
& Poor's 500 Index (a broad-based, multi-industry measure of the stock market)
and the Dow Jones Life Insurance Index. The latter index is comprised of ten
mid-size life and health insurance companies. The graph shows the yearly change
in total shareholder return during the period from December 31, 1989 through
December 31, 1994, assuming the investment of $100 on December 31, 1989 and the
reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
WASHINGTON NAT'L CORP. PEER GROUP S & P 500 INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 41.646 91.311 96.885
1991 65.384 139.575 126.276
1992 99.814 182.338 135.883
1993 108.908 194.386 149.517
1994 90.621 174.033 151.547
</TABLE>
COMPENSATION OF DIRECTORS
Effective January 1, 1995, Directors who are not employees of WNC or its
subsidiaries earn an annual fee of $25,000, paid in quarterly installments, and
$1,000 for attendance at each meeting of the board of directors and its
committees. Directors who chair a committee also receive a $2,500 annual fee.
Directors employed by WNC or its subsidiaries do not earn fees for their
services as directors. WNC directors may elect to defer payment of a portion of
their director compensation. The terms of the deferred compensation agreements
vary and the agreements may be amended on an annual basis.
Following six years of service on the board, a director is entitled to a
retirement benefit for a period of the earlier to occur of (i) five years from
the payment commencement date and (ii) the deaths of the director and his or her
spouse. The annual retirement benefit is equal to ten percent of the amount of
the annual director's retainer at the time of termination for each year of
independent (non-employee) director service to a maximum of 100% of such amount.
Pursuant to the current terms of the WNC Stock Benefit Plan, each
non-employee director of WNC automatically receives a non-qualified stock option
to purchase 2,000 shares of common stock on the day following the annual meeting
of the board of directors in each calendar year that the plan is in existence.
The option may be exercised in whole or in part at any time after the date of
grant and shall expire 10 years after the date of grant.
13
<PAGE>
WASHINGTON NATIONAL RETIREMENT PLAN
WNC, Washington National Insurance Company and Washington National
Development Company are sponsoring employers of a tax-qualified,
non-contributory defined benefit retirement plan entitled the Washington
National Retirement Plan (the "Retirement Plan"). Effective December 31, 1990,
the Retirement Plan was amended, resulting in no further accrual of benefits
beyond that date. The Retirement Plan will continue to be maintained and the
previously accrued benefits of each participant will be paid upon termination of
employment, death or retirement.
As of December 31, 1994, Messrs. Patin, Pontarelli and Scott had,
respectively, 1, 16 and 16 years of credited benefit service under the
Retirement Plan and have accrued a frozen annual benefit of $8,771, $35,985 and
$32,481, respectively, payable at age 65 and ending at their death without
survivor benefits. W.G. Brown, C.L. Fuhrmann, K. A. Grubb and J. N. Plato were
not eligible to participate in the Retirement Plan prior to the date on which
the Plan was amended and therefore are not entitled to any benefits thereunder.
EMPLOYMENT CONTRACTS
W. G. Brown, C. L. Fuhrmann, K. A. Grubb, R. W. Patin, J.N. Plato, T.
Pontarelli and T. C. Scott have employment agreements with WNC and/or its
wholly-owned subsidiaries, Washington National Insurance Company and United
Presidential Life Insurance Company (collectively referred to herein as the
"Employer"), which provide for continued employment during the two-year period
following the dates of the agreements, subject to automatic extensions of one
day for each day served during the terms of the agreements and base compensation
of at least $177,650, $278,250, $202,630, $543,400, $253,350, $225,750 and
$226,950, respectively, plus any bonus payable under the annual pay-at-risk
plan. The agreements further provide that base compensation is subject to annual
review by the compensation committee of WNC's board of directors but may not be
reduced in any year without the consent of the executive officer. The Employer
or the executive officer may terminate the agreement for any reason; however, if
the Employer terminates the employment of the executive officer for other than
"good cause" or if the executive officer terminates his or her employment for
"good reason," then the Employer shall make a lump sum payment to the executive
officer in an amount equal to two years' salary and bonuses for both years under
the annual pay-at-risk plan (prorated for any partial year) that is at least
equal to the most recently paid bonus.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Mr. Haire was a member of the Compensation Committee until June, 1994. Prior
to 1978, Mr. Haire served as the Chairman of the Board and Chief Executive
Officer of one of WNC's subsidiaries.
TRANSACTIONS WITH MANAGEMENT
On March 7, 1990, WNC made a mortgage loan to C. L. Fuhrmann in connection
with his purchase of a residence in Illinois. This mortgage loan, in the amount
of $101,980, has a 10-year term, with interest-only payments, provides for a
floating rate of interest which bore interest at a rate of 4.8% during 1994 and
is secured by a mortgage on his Illinois residence and by amounts payable under
his employment agreement. During 1994, Mr. Fuhrmann made interest payments of
$2,110 and principal payments of $17,890, and, as of December 31, 1994, a
principal balance of $29,286 remains outstanding. The largest amount outstanding
during 1994 was $47,176.
On November 15, 1993, WNC made a mortgage loan to K. A. Grubb, in the amount
of $100,000, in connection with his purchase of a residence in Illinois. The
mortgage loan has a 10-year term, a 25-year amortization schedule and annual
principal and interest payments due each year on December 31, except during the
last year of the term during which the principal and all accrued interest are
due and payable on April 30, 2003. The loan provides for a floating rate of
interest which bore interest at a rate of 5.84% during 1994 and is secured by a
mortgage on his Illinois residence and by amounts payable under his employment
agreement. During 1994, Mr. Grubb made interest payments of $3,697 and principal
payments of $3,918 were made, and, as of December 31, 1994, a principal balance
of $96,081 remains outstanding. The largest amount outstanding during 1994 was
$100,000.
On October 10, 1991, WNC made a mortgage loan to R. W. Patin, in the amount
of $250,000, in connection with his purchase of a residence in Illinois. This
loan has a 10-year term, a 25-year amortization schedule and annual principal
and interest payments due on April 1 of each year of the loan. The loan bears
14
<PAGE>
an interest rate of 7.93% per annum and is secured by a mortgage on his Illinois
residence and by amounts payable under his employment agreement. During 1994,
Mr. Patin made principal payments of $53,867 and interest payments of $19,259,
and, as of December 31, 1994, a principal balance of $191,046 remains
outstanding. The largest amount outstanding during 1994 was $244,913.
In 1994, WNC made a mortgage loan to W. G. Brown in the amount of $100,000,
in connection with his purchase of a residence in Illinois. This loan has a
10-year term and 25-year amortization schedule. The loan bears an interest rate
of 6.35% per annum and is secured by a mortgage on his Illinois residence and by
amounts payable under his employment agreement. The largest amount outstanding
during 1994 was $105,080.
AUDITORS
The independent public accounting firm of Ernst & Young LLP has audited
WNC's 1994 consolidated financial statements as well as the individual financial
statements of certain subsidiary companies.
Ernst & Young LLP has been selected by the board of WNC to serve as its
independent auditor for the year 1995. A representative from Ernst & Young LLP
will be present at the annual meeting and will have the opportunity to make a
statement and to respond to appropriate questions.
SHAREHOLDER PROPOSALS
If a shareholder desires to have a proposal considered for inclusion in the
proxy materials relating to the 1996 annual meeting of shareholders, such
proposal must be marked to the attention of the corporate secretary and received
at WNC's principal executive offices not later than January 1, 1996.
OTHER BUSINESS
The board of directors knows of no business which will be presented for
consideration at the annual meeting other than that stated in the notice of the
meeting. However, if any other business shall properly come before the meeting,
shares represented by the enclosed proxy will be voted with respect to such
business in accordance with the best judgment of the person or persons acting
under the proxy.
By order of the board of directors,
Craig R. Edwards
CORPORATE SECRETARY
Lincolnshire, Illinois
15
<PAGE>
P
R WASHINGTON NATIONAL CORPORATION
O 300 TOWER PARKWAY
X LINCOLNSHIRE, ILLINOIS 60069
Y
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints R. L. Bornhuetter, F. L. Klapperich, Jr.,
and Robert W. Patin as Proxies, each with the power to appoint his
substitute, and hereby authorizes them or any of them to represent and vote, as
designated below, all the shares of common stock and preferred stock of
Washington National Corporation held of record by the undersigned as of the
close of business on April 17, 1995, at the annual meeting of shareholders to be
held on June 16, 1995, or any adjournment thereof.
ELECTION OF DIRECTORS:
CLASS B DIRECTORS: W. Francis Brennan, John R. Haire,
George P. Kendall, Jr., and Rex Reade
CLASS C DIRECTOR: Lee A. Ellis
You are encouraged to specify your choices by marking the appropriate box, SEE
REVERSE SIDE, but you need not mark any box if you wish to vote in accordance
with the Board of Directors' recommendations. The Proxies cannot vote your
shares unless you sign and return this card.
-----------
See Reverse
Side
-----------
- - -------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
IT IS IMPORTANT THAT YOUR SHARES ARE REPRESENTED AT THE ANNUAL
MEETING WHETHER OR NOT YOU PLAN TO ATTEND IN PERSON. WE URGE YOU
TO COMPLETE AND MAIL YOUR PROXY CARD IN THE ENCLOSED ENVELOPE.
<PAGE>
/X/ Please mark, sign, date 3092
and mail this proxy in
the envelope provided.
<TABLE>
<S><C>
This proxy, when properly executed will be voted in the manner directed herein by the undersigned shareholder(s).
If no direction is made, this proxy will be voted "FOR" the election of the nominees for director. In their discretion,
the Proxies are authorized to vote upon such other business as may properly come before the meeting.
- - ----------------------------------------------------------------------------------------------------------------------------------
The Board of Directors recommends a vote "FOR"
- - ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C>
FOR Withheld as to all nominees
Election of / / / / To withhold authority to
Directors vote for any individual
nominee(s), mark the "FOR"
box and write the name
of each such nominee with
respect to which you intend
to withhold authority to vote
on the line provided below.
</TABLE>
<TABLE>
<S> <C>
- - ------------------------------------
Please check the box if you plan / /
to attend the annual meeting on
June 16, 1995.
Please date and sign as name appears hereon. If shares are
held jointly by two or more persons, each shareholder
named should sign. When signing as an attorney, executor,
administrator, trustee, or guardian, please give full title
as such. If the signer is a corporation, please sign full
corporate name by President or other authorized officer.
If a partnership, please sign in partnership name by
authorized person.
-----------------------------------------------------------
SIGNATURE
-----------------------------------------------------------
SIGNATURE Date
- - ----------------------------------------------------------------------------------------------------------------------------------
/\ FOLD AND DETACH HERE /\
</TABLE>
