SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
/X/ Definitive Proxy Statement
/_/ Definitive Additional Materials
/_/ Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
21ST CENTURY HOLDING COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
/_/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1) or 14a-6(j)(2).
/_/ $500 per each party to the controversy pursuant to
Exchange Act Rule 14a-6(1)(3).
/_/ Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
/X/ No Fee Required.
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:*
_____________________________________________________________________________
4) Proposed maximum aggregate value of transaction:
_____________________________________________________________________________
/_/ 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 No. ______________________________________
3) Filing party: ___________________________________________________________
4) Date filed: _____________________________________________________________
___________
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
<PAGE>
21ST CENTURY HOLDING COMPANY
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 10, 1999
To the Shareholders of 21st Century Holding Company:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders (the "Annual
Meeting") of 21st Century Holding Company, a Florida corporation (the
"Company"), will be held at the Company's principal executive offices at 4161
N.W. 5th Street, Plantation, Florida 33317, at 10:00 A.M., on June 10, 1999 for
the following purposes:
1. To elect two directors of the Company to serve until 2002;
2. To consider and vote upon a proposal to ratify the appointment of
KPMG LLP as the Company's independent certified public accountants for the
fiscal year ending December 31, 1999; and
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponements thereof.
The Board of Directors has fixed the close of business on May 6, 1999 as
the record date for determining those shareholders entitled to notice of, and to
vote at, the Annual Meeting and any adjournments or postponements thereof.
Whether or not you expect to be present, please sign, date and return the
enclosed proxy card in the pre-addressed envelope provided for that purpose as
promptly as possible. No postage is required if mailed in the United States.
By Order of the Board of Directors,
Patrick D. Doyle, Secretary
Plantation, Florida
May 13, 1999
ALL SHAREHOLDERS ARE INVITED TO ATTEND THE ANNUAL MEETING IN PERSON. THOSE
SHAREHOLDERS WHO ARE UNABLE TO ATTEND ARE RESPECTFULLY URGED TO EXECUTE AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE. SHAREHOLDERS WHO EXECUTE
A PROXY CARD MAY NEVERTHELESS ATTEND THE ANNUAL MEETING, REVOKE THEIR PROXY AND
VOTE THEIR SHARES IN PERSON.
<PAGE>
21ST CENTURY HOLDING COMPANY
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 10, 1999
------------------------
PROXY STATEMENT
------------------------
TIME, DATE AND PLACE OF ANNUAL MEETING
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of 21st Century Holding Company, a Florida corporation
(the "Company"), of proxies from the holders of the Company's common stock, par
value $.01 per share (the "Common Stock"), for use at the Annual Meeting of
Shareholders of the Company to be held at 9:00 A.M., on June 10, 1999, at the
Company's principal executive offices at 4161 N.W. 5th Street, Plantation,
Florida 33317, and at any adjournments or postponements thereof (the "Annual
Meeting") pursuant to the enclosed Notice of Annual Meeting.
The approximate date this Proxy Statement and the enclosed form of proxy
are first being sent to shareholders is May 13, 1999. Shareholders should review
the information provided herein in conjunction with the Company's Annual Report
to Shareholders which accompanies this Proxy Statement. The Company's principal
executive offices are located at 4161 N.W. 5th Street, Plantation, Florida
33317, and its telephone number is (954) 581-9993.
INFORMATION CONCERNING PROXY
The enclosed proxy is solicited on behalf of the Company's Board of
Directors. The giving of a proxy does not preclude the right to vote in person
should any shareholder giving the proxy so desire. Shareholders have an
unconditional right to revoke their proxy at any time prior to the exercise
thereof, either in person at the Annual Meeting or by filing with the Company's
Secretary at the Company's headquarters a written revocation or duly executed
proxy bearing a later date; however, no such revocation will be effective until
written notice of the revocation is received by the Company at or prior to the
Annual Meeting.
The cost of preparing, assembling and mailing this Proxy Statement, the
Notice of Annual Meeting and the enclosed proxy is to be borne by the Company.
In addition to the use of mail, employees of the Company may solicit proxies
personally and by telephone. The Company's employees will receive no
compensation for soliciting proxies other than their regular salaries. The
Company may request banks, brokers and other custodians, nominees and
fiduciaries to forward copies of the proxy material to their principals and to
request authority for the execution of proxies. The Company may reimburse such
persons for their expenses in so doing.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, the Company's shareholders will consider and vote
upon the following matters:
1. To elect two directors of the Company to serve until 2002;
2. To ratify the appointment of KPMG LLP as the Company's independent
certified public accountants for the fiscal year ending December 31, 1999;
and
3. To transact such other business as may properly come before the
Annual Meeting and any adjournment or postponements thereof.
<PAGE>
Unless contrary instructions are indicated on the enclosed proxy, all
shares represented by valid proxies received pursuant to this solicitation (and
which have not been revoked in accordance with the procedures set forth herein)
will be voted (a) for the election of the respective nominees for director named
below and (b) in favor of all other proposals described in the Notice of Annual
Meeting. In the event a shareholder specifies a different choice by means of the
enclosed proxy, his shares will be voted in accordance with the specification so
made.
OUTSTANDING VOTING SECURITIES AND VOTING RIGHTS
The Board of Directors has set the close of business on May 6, 1999 as the
record date (the "Record Date") for determining shareholders of the Company
entitled to notice of and to vote at the Annual Meeting. As of the Record Date,
there were 3,390,000 shares of Common Stock issued and outstanding, all of which
are entitled to be voted at the Annual Meeting. Each share of Common Stock is
entitled to one vote on each matter submitted to shareholders for approval at
the Annual Meeting.
The attendance, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock entitled to vote at the Annual Meeting is
necessary to constitute a quorum. Directors will be elected by plurality of the
votes cast by the shares of Common Stock represented in person or by proxy at
the Annual Meeting. The affirmative votes of the holders of a majority of the
shares of Common Stock represented in person or by proxy at the Annual Meeting
will be required to ratify the appointment of KPMG LLP as the Company's
independent certified public accountants for the year ending December 31, 1999,
and any other matter that may be submitted to a vote of the shareholders. If
less than a majority of the outstanding shares entitled to vote are represented
at the Annual Meeting, a majority of the shares so represented may adjourn the
Annual Meeting to another date, time or place, and notice need not be given of
the new date, time or place if the new date, time or place is announced at the
meeting before an adjournment is taken.
Prior to the Annual Meeting, the Company will select one or more inspectors
of election for the meeting. Such inspector(s) shall determine the number of
shares of Common Stock represented at the meeting, the existence of a quorum and
the validity and effect of proxies, and shall receive, count and tabulate
ballots and votes and determine the results thereof. Abstentions will be
considered as shares present and entitled to vote at the Annual Meeting and will
be counted as votes cast at the Annual Meeting, but will not be counted as votes
cast for or against any given matter.
A broker or nominee holding shares registered in its name, or in the name
of its nominee, which are beneficially owned by another person and for which it
has not received instructions as to voting from the beneficial owner, may have
discretion to vote the beneficial owner's shares with respect to the election of
directors and other matters addressed at the Annual Meeting. Any such shares
which are not represented at the Annual Meeting either in person or by proxy
will not be considered to have cast votes on any matters addressed at the Annual
Meeting.
2
<PAGE>
BENEFICIAL SECURITY OWNERSHIP
The following table sets forth, as of the Record Date, information with
respect to the beneficial ownership of the Company's Common Stock by (i) each
person who is known by the Company to beneficially own 5% or more of the
Company's outstanding Common Stock, (ii) the Company's Chief Executive Officer
("CEO") and each of the other "Named Executive Officers" (as defined below in
"Executive Compensation -- Summary Compensation Table"), (iii) each director of
the Company, and (iv) all directors and executive officers of the Company as a
group. The Company is not aware of any beneficial owner of more than 5% of the
outstanding Common Stock other than as set forth in the following table.
<TABLE>
<CAPTION>
NUMBER OF SHARES
BENEFICIALLY PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER(1) OWNED(2) CLASS OUTSTANDING
--------------------------------------- ------------------- -----------------
<S> <C> <C>
Edward J. Lawson (3)................................ 1,269,078 37.4%
Michele V. Lawson (4)............................... 1,269,078 37.4
Ronald A. Raymond................................... 318,659 9.4
Patrick D. Doyle.................................... -- --
Joseph A. Epstein (5)............................... 1,700 *
Wallace J. Hilliard (6)............................. 332,380 9.8
Carla L. Leonard.................................... 166,740 4.9
Bruce Simberg....................................... 33,348 1.0
All directors and executive officers as a group (8
persons).......................................... 2,121,905 62.6
</TABLE>
- ------------------
* Less than 1%.
(1) The address of each person named in the table is c/o 21st Century Holding
Company, 4161 N.W. 5th Street, Plantation, Florida 33317.
(2) Except as otherwise indicated, the persons named in this table have sole
voting and investment power with respect to all shares of Common Stock
listed, which include shares of Common Stock that such persons have the
right to acquire a beneficial interest in within 60 days from the date of
this Report.
(3) Includes 634,539 shares of Common Stock held of record by Mrs. Lawson.
(4) Includes 634,539 shares of Common Stock held of record by Mr. Lawson.
(5) Includes 1,700 shares of Common Stock held in an individual retirement
account.
(6) Includes 327,980 shares of Common Stock held by a trust and 4,400 shares of
Common Stock held in an individual retirement account.
3
<PAGE>
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the Board of Directors
be divided into three classes. Each class of directors serves a staggered
three-year term. Joseph A. Epstein and Carla Leonard hold office until the 1999
Annual Meeting. Bruce Simberg, Patrick D. Doyle and Wallace J. Hilliard hold
office until the 2000 Annual Meeting. Edward J. Lawson, Michele V. Lawson, and
Ronald A. Raymond hold office until the 2001 Annual Meeting.
At the Annual Meeting, two directors will be elected by the shareholders to
serve until the Annual Meeting to be held in 2002 or until their successors are
duly elected and qualified. The accompanying form of proxy when properly
executed and returned to the Company, will be voted FOR the election as
directors of the two persons named below, unless the proxy contains contrary
instructions. Proxies cannot be voted for a greater number of persons than the
number of nominees named in the Proxy Statement. Management has no reason to
believe that any of the nominees are unable or unwilling to serve if elected.
However, in the event that any of the nominees should become unable or unwilling
to serve as a director, the proxy will be voted for the election of such person
or persons as shall be designated by the Board of Directors.
NOMINEES
The persons nominated as directors are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Joseph A. Epstein(1)(2).............................. 44 Director
Carla Leonard........................................ 37 Director
</TABLE>
- ------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
JOSEPH A. EPSTEIN has served as a director of the Company since April 1998.
Since January 1998, Mr. Epstein has been the Chief Financial Officer at the
Center of English Studies, Inc., a national provider of language services. From
November 1996 to January 1998, Mr. Epstein was a shareholder at the accounting
firm of Mallah, Furman & Company, P.A. From May 1989 to October 1996, Mr.
Epstein was a partner of the accounting firm of Rachlin, Cohen & Holtz.
CARLA LEONARD has served as a director of the Company since its inception.
Since September 1983, Ms. Leonard has also owned and operated Statewide
Insurance and Auto Tag Agency, Inc., an independent insurance agency.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF BOTH OF THE
NOMINEES FOR ELECTION AS DIRECTORS.
4
<PAGE>
Set forth below is certain information concerning the directors who are not
currently standing for election:
<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- ---- --- -------------------------
<S> <C> <C>
Edward J. Lawson(3)....................... 49 President, Chief Executive Officer and
Director
Michele V. Lawson......................... 41 Vice President -- Agency Operations,
Treasurer and Director
Ronald A. Raymond(3)...................... 54 President, Federated National and Director
Patrick D. Doyle(1)(2).................... 39 Secretary and Director
Wallace J. Hilliard....................... 66 Director
Bruce Simberg(2).......................... 50 Director
</TABLE>
- ------------------
(1) Member of Compensation Committee.
(2) Member of Audit Committee.
(3) Member of Investment Committee.
EDWARD J. LAWSON co-founded the Company and has served as its President and
Chief Executive Officer since inception. Mr. Lawson has over 16 years experience
in the insurance industry commencing with the founding of the Company's initial
agency in 1983.
MICHELE V. LAWSON co-founded the Company and has served as a director and
executive officer since inception. Mrs. Lawson is currently the Company's
Treasurer. Mrs. Lawson has 16 years experience in the insurance industry
commencing with the founding of the Company's initial insurance agency in 1983
and also holds a property and casualty license in Florida.
RONALD A. RAYMOND has served as a director of the Company and as Federated
National Financial Company's ("Federated National") President since June 1995.
From May 1970 to the present date, Mr. Raymond has been a shareholder and
president of Raymond/Patterson Agency, Inc., a managing general agency, in Ft.
Lauderdale, Florida. From May 1992 to the present date, Mr. Raymond has been a
shareholder of Gulfstream Insurance Group, Inc., a multi-lines insurance agency,
in Fort Lauderdale, Florida. Mr. Raymond holds general lines, and life insurance
licenses in Florida and is a past President of the Independent Insurance Agents
of Broward County.
PATRICK D. DOYLE has served as Secretary and a director of the Company
since April 1998. Since April 1990, Mr. Doyle has been Chief Financial Officer
of Effjohn North America Limited, a lessor and manager of cruise ships. From May
1982 to April 1990, Mr. Doyle was employed by KPMG Peat Marwick LLP, most
recently as a Senior Manager focusing on the emerging growth business sector.
Mr. Doyle is a certified public accountant. Mr. Doyle is also currently a
director of a subsidiary of Neptune Maritime OY, a Finnish Company.
WALLACE J. HILLIARD joined the Company's Board of Directors in January
1999. Since May 1997, Mr. Hilliard has been the owner of a private company which
charters business jets. Mr. Hilliard co-founded and was the chairman of American
Medical Security, Inc., a provider of medical and specialty health and life
insurance products and administrative services, which was sold to United
Wisconsin Services Inc. in 1996. Prior to that, Mr. Hilliard co-founded
Employers Health Insurance, which was sold to Humana, Inc. in 1995.
BRUCE SIMBERG has served as a director of the Company since January 28,
1998. Mr. Simberg has been a practicing attorney for the last 22 years, most
recently as managing partner of Conroy, Simberg & Ganon, a law firm in Ft.
Lauderdale, Florida since October 1979.
Edward J. Lawson and Michele V. Lawson are husband and wife. There are no
other family relationships among the Company's directors and executive officers.
5
<PAGE>
The Company has agreed to elect one designee of the managing underwriter of
the Company's November 1988 initial public offering to the Company's Board of
Directors through November 2001. Mr. Hilliard currently serves as such designee.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's executive officers, directors and holders of more than 10% of the
Company's Common Stock, to file reports of ownership and changes in ownership
with the Securities and Exchange Commission (the "Commission") and The Nasdaq
National Market. Such persons are required to furnish the Company with copies of
all Section 16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
oral or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that, with respect to the
fiscal year ended December 31, 1998 ("Fiscal 1998"), all filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were complied with.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During Fiscal 1998, the Board of Directors held ten formal meetings and
took actions by written consent on two occasions. During Fiscal 1998, no
director attended fewer than 75% of the number of meetings of the Board of
Directors and each Committee of the Board of Directors held during the period
such director served on the Board.
The only standing committees of the Board of Directors are the Audit
Committee, the Compensation Committee and the Investment Committee. The Board
does not have a nominating or similar committee.
The Audit Committee is presently comprised of Patrick D. Doyle, Joseph A.
Epstein and Bruce Simberg. The duties and responsibilities of the Audit
Committee include (a) recommending to the Board of Directors the appointment of
the Company's independent certified public accountants and any termination of
engagement, (b) reviewing the plan and scope of independent audits, (c)
reviewing the Company's significant accounting and reporting policies and
operating controls, (d) having general responsibility for all related auditing
matters, and (e) reporting its recommendations and findings to the full Board of
Directors. The Audit Committee was formed in mid 1998 and did not meet during
1998.
The Compensation Committee is presently comprised of Edward J. Lawson,
Patrick D. Doyle and Joseph A. Epstein. The Compensation Committee reviews and
approves the compensation of the Company's executive officers and administers
the Company's 1998 Stock Option Plan (the "1998 Plan"). The Compensation
Committee was formed in mid 1998 and did not meet during 1998.
The Investment Committee is presently comprised of Edward J. Lawson, Ronald
A. Raymond and one outside advisor. The Investment Committee manages the
Company's investment portfolio. The Investment Committee was formed in mid 1998
and did not meet during 1998.
6
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following compensation table sets forth, for the year ended December
31, 1998 and 1997, the cash and certain other compensation paid by the Company
to the Company's CEO and the four most highly compensated other executive
officers whose annual salary and bonus exceeded $100,000 during 1998 (together
with the CEO, collectively, the "Named Executive Officers"):
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION SECURITIES
--------------------------- UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1)(2) COMPENSATION($)(2)
- --------------------------- ---- --------- -------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
Edward J. Lawson.................. 1998 129,438 0 -- 17,014(1)
President and CEO 1997 290,936 0 -- 3,000(2)
Michele V. Lawson................. 1998 104,618 0 -- 17,744(1)
Vice President -- Agency 1997 192,991 0 -- 2,000(2)
Operations and Treasurer
Ronald A. Raymond................. 1998 103,320 0 -- 17,264(1)
President, Federated National... 1997 106,000 0 -- 5,000(2)
</TABLE>
- ------------------
(1) Represents $3,030 in contributions for Mr. Lawson, Mrs. Lawson and Mr.
Raymond to the Company's 401(k) Plan and $49,992 in directors fees for Mr.
Lawson, Mrs. Lawson and Mr. Raymond during 1998.
(2) Represents $3,000 in contributions for Mr. Lawson and Mr. Raymond to the
Company's 401(k) Plan and $2,000 in directors fees for Mrs. Lawson and Mr.
Raymond during 1997.
COMPENSATION OF DIRECTORS
The Company has historically paid fees to all of its directors. Such fees
were paid at the rate of $6,000 per annum during 1997 and at rates ranging from
$12,000 to $25,000 per annum during the period from January 1, 1998 through
August 31, 1998.
Since September 1, 1998, non-employee directors receive a fee of $500 per
meeting of the Board of Directors or committee thereof attended and received
annual grants of stock options under the 1998 Plan to purchase 3,000 shares of
Common Stock. All directors are also reimbursed for travel and lodging expenses
in connection with their attendance of meetings.
In September 1998, each of Mrs. Leonard and Messrs. Doyle, Epstein and
Simberg were granted ten-year options under the 1998 Plan to purchase 3,000
shares of Common Stock at an exercise price of $10.00 per share. Such options
vest over a four-year period commencing September 1999. Mr. Doyle has also been
granted additional options under the 1998 Plan.
INDEMNIFICATION AGREEMENTS
The Company has entered into an indemnification agreement with each of its
directors and executive officers. Each indemnification agreement provides that
the Company will indemnify such person against certain liabilities (including
settlements) and expenses actually and reasonably incurred by him or her in
connection with any threatened or pending legal action, proceeding or
investigation (other than actions brought by or in the right of the Company) to
which he or she is, or is threatened to be, made a party by reason of his or her
status as a director, officer or agent of the Company, provided that such
director or executive officer acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the Company
and, with respect to any criminal
7
<PAGE>
proceedings, had no reasonable cause to believe his or her conduct was unlawful.
With respect to any action brought by or in the right of the Company, a director
or executive officer will also be indemnified, to the extent not prohibited by
applicable law, against expenses and amounts paid in settlement, and certain
liabilities if so determined by a court of competent jurisdiction, actually and
reasonably incurred by him or her in connection with such action if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the Company. The Company has secured $3.0
million in directors' and officers' liability insurance.
EMPLOYMENT AGREEMENTS
Effective September 1, 1998, the Company entered into employment agreements
with each of Edward J. Lawson, the Company's President and Chief Executive
Officer and Michele V. Lawson, the Treasurer. Each employment agreement, has a
"rolling" two-year term, so that at all times the remaining term of the
agreement is two years. The employment agreements provide for annual salaries
initially set at $156,000 for Mr. Lawson, and $78,000 for Mrs. Lawson, and such
bonuses and increases as may be awarded by the Board of Directors.
Each employment agreement provides that the executive officer will continue
to receive his salary for a period of two years after the termination of
employment, if his or her employment is terminated by the Company for any reason
other than death, disability or Cause (as defined in the employment agreement),
or for a period of 24 months after termination of the agreement as a result of
his or her disability and a bonus equal to twice the amount paid to the
executive officer during the 12 months preceding the termination, and the
executive officer's estate will receive a lump sum payment equal to two year's
salary plus a bonus equal to twice the amount paid to the executive officer
during the 12 months preceding the termination by reason of his death. Each
employment agreement also prohibits the executive officer from directly or
indirectly competing with the Company for one year after termination for any
reason except a termination without Cause. Notwithstanding the foregoing, no
assurance can be given that a court of competent jurisdiction will enforce the
provisions restricting these executives from competing with the Company. If a
Change of Control (as defined in the employment agreement) occurs, the
employment agreement provides for the continued employment of the executive
officer for a period of two years following the Change of Control. In addition,
following the Change of Control, if the executive officer's employment is
terminated by the Company other than for Cause or by reason of his death or
disability, or by the executive officer for certain specified reasons (such as a
reduction of compensation or a diminution of duties), he or she will receive a
lump sum cash payment equal to 299% of the cash compensation received by him or
her during the 12 calendar months prior to such termination.
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information concerning individual grants of
stock options made during 1998 to any of the Named Executive Officers.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES # OF TOTAL
UNDERLYING OPTIONS GRANTED EXERCISE OR
OPTIONS TO EMPLOYEES IN BASE PRICE
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) EXPIRATION DATE
- ---- ------------- --------------- ----------- ---------------
<S> <C> <C> <C> <C>
Edward J. Lawson................. 16,000 310,800 10.00 November 5, 2008
Michele V. Lawson................ 10,000 310,800 10.00 November 5, 2008
Ronald A. Raymond................ 10,000 310,800 10.00 November 5, 2008
</TABLE>
- ------------------
(1) Represents options granted under the 1998 Plan. Such options vest over a
four-year period commencing one year from the date of grant.
8
<PAGE>
STOCK OPTIONS HELD AT END OF FISCAL 1998
The following table indicates the total number and value of exercisable and
unexercisable stock options held by each of the Named Executive Officers listed
as of December 31, 1998. No options were exercised by the Named Executive
Officers during the year ended December 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL YEAR-END(#) OPTIONS AT FISCAL YEAR-END($)
------------------------------- -------------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE(1)
- ---- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C>
Edward J. Lawson................... 0 16,000 0 0
Michele V. Lawson.................. 0 10,000 0 0
Ronald A. Raymond.................. 0 10,000 0 0
</TABLE>
- ------------------
(1) Based on a fair market value of $7.00 per share at December 31, 1998.
CERTAIN TRANSACTIONS
SALES AND REDEMPTION OF COMMON STOCK
In June 1997, the Company redeemed 33,348 shares Common Stock held by Carla
Leonard for cash consideration of $120,000.
In December 1997, the Company sold 33,348 shares of Common Stock to Bruce
Simberg in a private transaction for cash consideration of $120,000.
CORPORATE REORGANIZATION TRANSACTIONS
In January 1997, the Company acquired all of the issued and outstanding
capital stock of each of Assurance Managing General Agents, Inc. ("Assurance
MGA"), Federated Premium Finance, Inc. ("Federated Premium") and Superior
Adjusting, Inc. ("Superior") for cash consideration of $65,000, $42,500 and
$2,500, respectively. Edward J. Lawson, Michele V. Lawson and Ronald A. Raymond
were principal shareholders of Assurance MGA, Federated Premium and Superior.
In January 1998, the Company acquired all of the issued and outstanding
capital stock of eight affiliated corporations, principally the Company's
insurance agencies, in exchange for the issuance of 954,124 shares of Common
Stock to eight persons. Included in such shares were 377,481 shares of Common
Stock issued to each of Edward J. Lawson and Michele V. Lawson, who were
principal shareholders of seven of such corporations and 18,526 shares of Common
Stock issued to Ronald A. Raymond, who was the principal shareholder of the
eighth corporation.
In February 1998, the Company acquired all of the issued and outstanding
capital stock of one additional insurance agency in exchange for the issuance of
27,792 shares of Common Stock to five persons, including 6,948 shares of Common
Stock issued to each of Edward J. Lawson and Michele V. Lawson, who were
principal shareholders of the agency.
REAL ESTATE TRANSACTIONS
In October, 1997, the Company sold an office property housing one of its
agencies to Edward J. Lawson and Michele V. Lawson for $255,000. In connection
with the sale, the Company lent the Lawsons the sum of $200,000. Such loan is
evidenced by a promissory note which matures in October 2002, bearing interest
at the rate of 8.0% per annum and providing for monthly payments of principal
9
<PAGE>
and interest. The outstanding balance of the promissory note was $163,164 and
$197,278 at December 31, 1998 and December 31, 1997, respectively. The
promissory note is secured by a first mortgage lien on the property. The Company
leases the property from the Lawsons at a rental of $3,000 per month, pursuant
to a lease expiring in May 2001.
The Company also leases a second insurance agency location from Edward J.
Lawson and Michele V. Lawson at a rental of $3,500 per month pursuant to a lease
expiring in May 2001.
In January 1999, the Company purchased the two agency locations from Mr.
and Mrs. Lawson. Consideration for the purchase was cash of $442,000 and
satisfaction of the mortgage balance of $163,000.
Prior to the Company's consolidation of its executive offices and
administrative operations, the Company leases a location from Ronald A. Raymond
at a rental of $2,650 per month and two other locations from Edward J. Lawson
and Michele V. Lawson at a rental of $6,500 per month.
The Company believes that its transactions with Edward J. Lawson, Michele
V. Lawson and Ronald A. Raymond are on terms at least as favorable as those the
Company could secure from a non-affiliated third party.
OTHER TRANSACTIONS
Bruce F. Simberg, a director of the Company, is a partner of the Fort
Lauderdale, Florida law firm of Conroy, Simberg & Ganon, which renders legal
services to the Company. In 1997 and 1998 the Company paid legal fees to Conroy,
Simberg & Ganon for services rendered in the amount of $113,929 and $189,444,
respectively.
APPROVAL OF AFFILIATED TRANSACTIONS
The Company has adopted a policy that any transactions between the Company
and its executive officers, directors, principal shareholders or their
affiliates take place on an arms-length basis and require the approval of a
majority of the independent directors of the Company. The January 1999
transaction between the Company and Mr. and Mrs. Lawson was so approved.
RATIFICATION OF SELECTION OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
The firm of KPMG LLP, independent certified public accountants, served as
the Company's independent certified public accountants for Fiscal 1998. The
Board of Directors has selected KPMG LLP as the Company's independent certified
public accountants for the current fiscal year ending December 31, 1999. One or
more representatives of KPMG LLP are expected to be present at the Annual
Meeting, will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions from
shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF THIS PROPOSAL.
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OTHER BUSINESS
The Board knows of no other business to be brought before the Annual
Meeting. If, however, any other business should properly come before the Annual
Meeting, the persons named in the accompanying proxy will vote proxies as in
their discretion they may deem appropriate, unless they are directed by a proxy
to do otherwise.
INFORMATION CONCERNING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 promulgated by the Commission, a shareholder
intending to present a proposal to be included in the Company's proxy statement
for the Company's 2000 Annual Meeting of Shareholders must deliver a proposal in
writing to the Company's principal executive office no later than January 14,
2000.
By Order of the Board of Directors
Patrick D. Doyle, Secretary
Plantation, Florida
May 13, 1999
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21ST CENTURY HOLDING COMPANY
ANNUAL MEETING OF SHAREHOLDERS -- JUNE 10, 1999
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
21ST CENTURY HOLDING COMPANY
The undersigned hereby appoints Edward J. Lawson and Michele V. Lawson, as
Proxies, each with full power to appoint a substitute, to represent and to vote,
with all the powers the undersigned would have if personally present, all the
shares of common stock, $.01 par value per share, of 21st Century Holding
Company (the "Company") held of record by the undersigned on May 6, 1999 at the
Annual Meeting of Shareholders to be held on June 11, 1999 or any adjournment or
adjournments thereof.
PROPOSAL 1. ELECTION OF DIRECTORS
/ / FOR ALL THE NOMINEES LISTED BELOW
/ / WITHHOLD AUTHORITY (except as marked to the contrary below) TO VOTE FOR
ALL NOMINEES LISTED BELOW.
Joseph A. Epstein Carla Leonard
(INSTRUCTIONS: To withhold authority for any individual nominees, write that
nominee's name in the space below.)
PROPOSAL 2. TO RATIFY THE SELECTION OF KPMG LLP AS INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS FOR THE COMPANY FOR THE FISCAL YEAR ENDING DECEMBER 31,
1999.
/ / FOR / / AGAINST / / ABSTAIN
In their discretion, the Proxies are authorized to vote upon other business
as may come before the meeting.
(CONTINUED AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE>
This proxy, when properly executed, will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, the Proxy will
be voted FOR Proposals 1 and 2.
Please date this proxy and sign
your name exactly as it appears
hereon.
Dated: _____________________ , 1999
___________________________________
Signature
___________________________________
Signature
PLEASE SIGN HERE
Where there is more than one owner, each should sign. When signing as an
agent, attorney, administrator, executor, guardian, or trustee, please add your
title as such. If executed by a corporation, the proxy should be signed by a
duly authorized officer who should indicate his office.
PLEASE DATE, SIGN, AND MAIL THIS PROXY CARD IN THE ENCLOSED ENVELOPE. NO
POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
