<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.142-12
ZENITH NATIONAL INSURANCE CORP.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
ZENITH NATIONAL INSURANCE CORP.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 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(i)(3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO]
Zenith National Insurance
Corp.
21255 Califa Street
Woodland Hills,
California 91367
Telephone (818) 713-1000
NOTICE OF ANNUAL MEETING
- --------------------------------------------------------------------------------
The Annual Meeting of Stockholders of Zenith National Insurance Corp.
("Zenith") will be held at the offices of Zenith, 21255 Califa Street, Woodland
Hills, California, on Wednesday, May 25, 1994, at 10:00 a.m., for the following
purposes:
1. To elect a Board of nine (9) Directors.
2. To approve a performance bonus plan for Executive Officers.
3. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Stockholders of record at the close of business on March 28, 1994, the
record date fixed by the Board of Directors for the Annual Meeting, are entitled
to notice of, and to vote at, such meeting.
By Order of the Board of Directors
John J. Tickner
SECRETARY
Woodland Hills, California
Dated: March 31, 1994
STOCKHOLDERS, WHETHER OR NOT THEY EXPECT TO ATTEND THE MEETING IN PERSON,
ARE REQUESTED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED FORM OF PROXY IN
THE ACCOMPANYING POSTPAID AND ADDRESSED ENVELOPE. THE PROXY IS REVOCABLE AT ANY
TIME PRIOR TO THE EXERCISE THEREOF BY WRITTEN NOTICE TO ZENITH, AND STOCKHOLDERS
WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE IN PERSON IF
THEY SO DESIRE.
<PAGE>
ZENITH NATIONAL INSURANCE CORP.
21255 Califa Street,
Woodland Hills, California 91367
------------------------
PROXY STATEMENT
------------------------
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Zenith National Insurance Corp. ("Zenith") of proxies to
be voted at the Annual Meeting of Stockholders of Zenith to be held on
Wednesday, May 25, 1994, at 10:00 a.m., and at any adjournments thereof (the
"Annual Meeting"). Any proxy given pursuant to this solicitation may be revoked
at any time prior to its exercise by written notice to Zenith, and the persons
executing the same, if in attendance at the Annual Meeting, may vote in person
instead of by proxy. Unless authority therefor is withheld, all proxies will be
voted as provided therein. In addition to solicitation of proxies by mail,
officers and regular employees of Zenith and its subsidiaries, who will receive
no additional compensation therefor, may solicit proxies by telephone, telegram
or personal interview. The cost of this solicitation will be borne by Zenith. In
addition, Zenith will reimburse brokerage houses and other custodians, nominees
and fiduciaries for expenses incurred in forwarding solicitation materials to
stockholders.
The approximate date on which this Proxy Statement and accompanying form of
proxy is first being sent to stockholders is March 31, 1994.
Only stockholders of record at the close of business on March 28, 1994, the
record date for the Annual Meeting (the "Record Date"), are entitled to notice
of and to vote at such meeting. On such date, Zenith had outstanding
shares of Common Stock, $1.00 par value per share (the "Common Stock"). Each
share of Common Stock entitles the record holder at such time to one vote on all
matters. With respect to the election of Directors only, however, every
stockholder may cumulate his votes with respect to candidates whose names have
been placed in nomination prior to the vote if, but only if, any stockholder has
given notice at the Annual Meeting prior to voting of his intention to cumulate
his votes. In the event there is cumulative voting for Directors, each
stockholder will be entitled to give one candidate the number of votes equal to
the number of Directors to be elected multiplied by the number of votes to which
the stockholder's shares are entitled, or to distribute his votes on the same
principle among as many candidates as such stockholder thinks fit. The presence,
in person, or by proxy, of stockholders holding a majority of the issued and
outstanding stock of common stock entitled to vote shall constitute a quorom.
Election of directors shall be decided by plurality vote. Other matters
submitted for stockholder approval require the affirmative vote of the majority
of shares present in person or represented by proxy at the meeting and entitled
to vote on the subject matter. Absentions and broker non-votes (except on
matters for which brokers lack discretionary authority to vote under New York
Stock Exchange rules) will be counted and will have the same effect as "no"
votes.
The Board of Directors knows of no matters to come before the Annual Meeting
other than the matters referred to in this Proxy Statement. If, however, any
matters properly come before the meeting, it is the intention of each of the
persons named in the accompanying proxy to vote such proxies in accordance with
his best judgment thereon.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The following table contains certain information at the Record Date as to:
(1) all persons who, to the knowledge of Zenith, were the beneficial owners of
more than 5% of the outstanding shares of Common Stock, (2) each of the
Executive Officers named in the Summary Compensation Table, (3) each of the
Directors of Zenith and (4) all Executive Officers and Directors as a group. The
persons named hold sole voting and investment power with respect to the shares
shown opposite their respective names, unless otherwise indicated. The
information with respect to each person specified is as supplied or confirmed by
such person.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OF CLASS
- -------------------------------------------------- --------------------- -----------
<S> <C> <C>
Reliance Insurance Company(2)(3).................. 6,574,445 %
4 Penn Center Plaza
Philadelphia, PA 19103
Gilder, Gagnon, Howe & Co.(4)..................... 1,862,363
1775 Broadway
New York, New York 10019
Harvey L. Silbert(3)(5)(6)........................ 1,091,040 %
10100 Santa Monica Blvd.
Suite 2200
Los Angeles, CA 90067
Stanley R. Zax(3)(5)(7)........................... 670,698 %
21255 Califa Street
Woodland Hills, CA 91367
Gerald Tsai, Jr.(5)(8)............................ 110,952 %
200 Park Ave.
New York, New York 10166
Jack M. Ostrow(3)(5)(9)........................... 105,000 %
9601 Wilshire Blvd.
Beverly Hills, CA 90210
Fredricka Taubitz(10)............................. 65,042 %
21255 Califa Street
Woodland Hills, CA 91367
John J. Tickner(11)............................... 23,672 %
21255 Califa Street
Woodland Hills, CA 91367
James P. Ross(12)................................. 16,153 %
21255 Califa Street
Woodland Hills, CA 91367
Max M. Kampelman(5)............................... 4,992 --
1001 Pennsylvania Avenue N.W.
Washington D.C. 20004
Keith E. Trotman(13).............................. 3,113 --
21255 Califa Street
Woodland Hills, CA 91367
George E. Bello(5)(14)............................ 0 --
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER (1) OF CLASS
- -------------------------------------------------- --------------------- -----------
<S> <C> <C>
William Steele Sessions(5)........................ 0 --
3920 Argyle Terrace N.W.
Washington, D.C. 20011
Robert M. Steinberg(5)(14)........................ 0 --
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
Saul P. Steinberg(5)(14)(15)...................... 6,574,445 %
Park Avenue Plaza
55 East 52nd Street
New York, NY 10055
All Executive Officers and Directors as a group
(16 persons)(15)(16).............................. 8,698,577 %
<FN>
- ------------------------
(1) Subject to applicable community property and similar statutes.
(2) Reliance Financial Services Corporation, a wholly-owned indirect subsidiary
of Reliance Group Holdings, Inc. ("RGH"), owns 100% of the common stock (97%
of the voting power) of Reliance Insurance Company ("Reliance"). Saul P.
Steinberg, members of his family and affiliated trusts own 49.5% of the
common stock of RGH. Pursuant to an Amended Exemption issued to Reliance by
the Insurance Commissioner of the State of California, Reliance has agreed
that it will not vote shares in excess of 28.7% of the outstanding Common
Stock unless Reliance obtains the Insurance Commissioner's consent or
qualifies for an exemption from such consent.
(3) Reliance and each of Jack M. Ostrow, Harvey L. Silbert (individually and as
trustee of a family trust) and Stanley R. Zax were granted certain rights to
require Zenith to register for sale, under the Securities Act of 1933,
shares of Common Stock beneficially owned by each of them. Zenith granted
these rights in connection with the sale in February 1981 of an aggregate of
1,387,375 shares of Zenith Common Stock (20.5% of the then outstanding
shares) to Reliance by certain selling stockholders, including Messrs.
Ostrow, Silbert and Zax.
(4) In February 1994, Zenith received a copy of a notification form on Schedule
13G filed by Gilder, Gagnon, Howe & Co. with the Securities and Exchange
Commission on February 17, 1994. The information in the table is based upon
such filing. The filing indicates that Gilder, Gagnon, Howe & Co. has shared
dispositive power and shared voting power with respect to 324,800 shares and
sole dispositive power, but no voting power, with respect to 1,537,563
shares. Gilder, Gagnon, Howe & Co. disclaims beneficial ownership with
respect to all of the shares shown in the table.
(5) Director of Zenith.
(6) Number of shares shown includes 183,551 shares held by Mr. Silbert as
trustee of certain family trusts, as to which shares Mr. Silbert disclaims
beneficial ownership. Number of shares shown also includes 907,489 shares
held by The Harvey L. and Lillian Silbert Family Trust, a revocable trust.
(7) Chief Executive Officer of Zenith. Number of shares shown includes 1,030
shares owned by Mr. Zax as custodian for his adult children, as to which
shares Mr. Zax disclaims beneficial ownership, 440,000 shares subject to
options that are exercisable within 60 days, and 23,100 shares held by Mr.
Zax as
co-trustee of a trust, as to which Mr. Zax shares voting and investment
power.
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
(8) Number of shares shown includes 60,952 shares owned by the Gerald Tsai
Foundation, of which Mr. Tsai is the President and trustee. Mr. Tsai
disclaims beneficial ownership of shares held by the foundation.
(9) Held by The Ostrow Family Trust, a revocable trust.
(10) Executive Officer of Zenith. Number of shares shown includes 3,942 shares
allocated to such Executive Officer's account in the Zenith Investment
Partnership 401(k) Plan as of December 31, 1993, the latest date for which
such information is available, and 60,000 shares subject to options that are
exercisable within sixty days.
(11) Executive Officer of Zenith. Number of shares shown includes 860 shares
allocated to such Executive Officer's account in the Zenith Investment
Partnership 401(k) Plan as of December 31, 1993, the latest date for which
such information is available, and 20,000 shares subject to options that are
exercisable within sixty days.
(12) Executive Officer of Zenith. Number of shares shown includes 16,000 shares
subject to options that are exercisable within sixty days.
(13) Executive Officer of Zenith. Number of shares shown consists of 3,113 shares
allocated to such Executive Officer's account in the Zenith Investment
Partnership 401(k) Plan as of December 31, 1993, the latest date for which
such information is available.
(14) Director of Reliance Insurance Company.
(15) Number of shares shown includes 6,574,445 shares owned by Reliance Insurance
Company. See notes (2) and (3) above.
(16) Number of shares shown includes 558,500 shares subject to options that are
exercisable within 60 days and excludes shares allocated to the Zenith
Investment Partnership 401(k) Plan accounts of Executive Officers since
January 1, 1994, which information is not available as of the date of this
Proxy Statement.
</TABLE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 and the regulations of
the Securities and Exchange Commission ("Commission") thereunder require
Zenith's Executive Officers and Directors, and persons who own more than ten
percent of a registered class of Zenith's equity securities, to file reports of
ownership and changes in ownership with the Commission and the New York Stock
Exchange and to furnish Zenith with copies of all such forms they file.
Based solely on its review of the copies of such forms received by it and
written representations from certain reporting persons, Zenith believes that,
during the year ended December 31, 1993, all filing requirements applicable to
its Executive Officers, Directors, and 10% stockholders were complied with.
4
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY CARD)
It is the intention of the persons named in the enclosed proxy, unless
otherwise specifically instructed, to vote the proxies received by them for the
election of the nominees listed in the table below as Directors of Zenith. In
the event that there should be cumulative voting in the election of Directors,
as set forth in this Proxy Statement under "Voting" above, it is the intention
of such persons to distribute the votes represented by each proxy among such
nominees in such proportion as they see fit, unless otherwise specifically
instructed.
All nominees have consented to being named herein and have indicated their
intention to serve if elected. In the unanticipated event that any of the
nominees become unable to serve as a Director, the proxies will be voted for a
substitute nominee in accordance with the best judgment of the person or persons
voting them.
A Director of Zenith serves until the next Annual Meeting of Stockholders
and until his successor is elected and qualified.
The nominees for Director listed below were designated by the Board of
Directors of Zenith. The information with respect to each nominee is as supplied
or confirmed by such nominee.
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS AND OTHER PUBLICLY HELD
SERVED AS DIRECTOR OFFICES HELD EMPLOYMENT DURING PAST CORPORATIONS IN WHICH
NAME AGE SINCE WITH ZENITH FIVE YEARS DIRECTORSHIPS HELD
- -------------------- ----- -------------------- ------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
George E. Bello 58 May 1984 Director of Executive Vice President Reliance Group Holdings,
(1) Zenith and and Controller of Inc.; Reliance Insurance
Zenith Reliance Group Holdings, Company; Reliance
Insurance Inc. for more than the Financial Services
Company past five years (2) Corporation; Telemundo
("Zenith Group, Inc.; TakeCare,
Insurance") Inc.
Max M. Kampelman 73 February 1989 Director of Attorney, Of Counsel, None
Zenith and March 1991 to present,
Zenith and Partner, January 1989
Insurance to March 1991, Fried,
Frank, Harris, Shriver &
Jacobson; Counselor of
the Department of State
and Head of the U.S.
Delegation to
Negotiations on Nuclear
and Space Arms with the
Soviet Union from January
1985 to January 1989
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS AND OTHER PUBLICLY HELD
SERVED AS DIRECTOR OFFICES HELD EMPLOYMENT DURING PAST CORPORATIONS IN WHICH
NAME AGE SINCE WITH ZENITH FIVE YEARS DIRECTORSHIPS HELD
- -------------------- ----- -------------------- ------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
Jack M. Ostrow 72 September 1977 Director of Attorney and Certified None
(1) Zenith and Public Accountant for
Zenith more than the past five
Insurance, years
Chairman of
Audit
Committee,
Member of
Performance
Bonus
Committee
William Steele 63 September 1993 Director of Attorney, Consultant, None
Sessions Zenith and O'Gara-Hess & Eisenhardt
Zenith since 1993; Director,
Insurance Federal Bureau of
Investigation from 1987
to 1993
Harvey L. Silbert 81 January 1978 Director of Attorney, Of Counsel, None
(1)(3) Zenith and Loeb and Loeb since March
Zenith 1991; Of Counsel, Wyman,
Insurance, Bautzer, Kuchel & Silbert
Member of for more than five years
Performance prior to March 1991;
Bonus management of personal
Committee investments for more than
the past five years
Robert M. Steinberg 51 February 1981 Director of President and Chief Reliance Group Holdings,
(1)(4) Zenith and Operating Officer of Inc.; Reliance Insurance
Zenith Reliance Group Holdings, Company; Reliance
Insurance Inc. and Chairman of the Financial Services
Board and Chief Executive Corporation; Telemundo
Officer of Reliance Group, Inc.
Insurance Company for
more than the past five
years (2)
Saul P. Steinberg 54 February 1981 Director of Chairman of the Board and Reliance Group Holdings,
(1)(4)(5) Zenith and Chief Executive Officer Inc.; Reliance Insurance
Zenith of Reliance Group Company; Reliance
Insurance Holdings, Inc. for more Financial Services
than the past five years Corporation;
(2) Symbol Technologies,
Inc.; Telemundo Group,
Inc.
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS AND OTHER PUBLICLY HELD
SERVED AS DIRECTOR OFFICES HELD EMPLOYMENT DURING PAST CORPORATIONS IN WHICH
NAME AGE SINCE WITH ZENITH FIVE YEARS DIRECTORSHIPS HELD
- -------------------- ----- -------------------- ------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C>
Gerald Tsai, Jr. 65 December 1991 Director of Chairman, President, and Rite Aid Corporation;
Zenith and Chief Executive Officer Sequa Corporation;
Zenith of Delta Life Corporation Meditrust; Proffitt's,
Insurance, since February 1993; Inc.; Triarc Companies,
Chairman of management of private Inc.
Performance investments since January
Bonus 1989; Chairman and CEO,
Committee Primerica Corp., February
1987 to December 1988
Stanley R. Zax 56 July 1977 Chairman of the Board and President of None
(1) Zenith, Zenith Insurance and CalFarm
Insurance Company ("CalFarm") and
Chairman of the Board of CalFarm Life
Insurance Company ("CalFarm Life") for
more than the past five years
<FN>
- ------------------------
(1) In connection with the sale in February 1981 of an aggregate of 1,387,375
shares of Common Stock (20.5% of the then outstanding shares) to Reliance by
certain selling stockholders, including Messrs. Ostrow, Silbert and Zax, the
selling stockholders agreed to use their best efforts to expand the Boards
of Directors of Zenith and Zenith Insurance and to cause (so long as
Reliance owns at least 10% of Zenith's outstanding Common Stock) the
election thereto of three qualified persons designated by Reliance. Reliance
has designated George E. Bello, Robert M. Steinberg and Saul P. Steinberg.
(2) Reliance Insurance Company, Reliance Group Holdings, Inc. and Reliance
Financial Services Corporation are insurance and insurance holding
companies. Based on Reliance Insurance Company's holdings of Zenith Common
Stock, Reliance Insurance Company, Reliance Group Holdings, Inc., and
Reliance Financial Services Corporation are affiliates of Zenith.
(3) Mr. Silbert is of counsel to the law firm of Loeb and Loeb, which performed
certain legal services for Zenith in 1993.
(4) Robert M. Steinberg and Saul P. Steinberg are brothers.
(5) On June 8, 1993, an involuntary petition was filed against Telemundo Group,
Inc. ("Telemundo") under chapter 11 of the United States Bankruptcy Code in
the United States Bankruptcy Court for the Southern District of New York. On
July 30, 1993, Telemundo consented to the entry of the order for relief, and
its reorganization case remains pending. Saul P. Steinberg is the Chairman
of the Board of Directors of Telemundo and previously served as President
(February 1990 through February 1991) and Chief Executive Officer (February
1990 through May 1992) of Telemundo.
</TABLE>
The Board of Directors communicated frequently during the year ended
December 31, 1993 and held four formal meetings. Zenith's Board of Directors has
a standing Audit Committee and a Performance Bonus Committee but has no
nominating committee or any committee performing similar functions. The sole
member and Chairman of the Audit Committee is currently Mr. Ostrow. The
functions of the Audit Committee are to recommend to the Board of Directors
retention or change of Zenith's independent auditors; to consider the range of
audit and non-audit fees; to review the independence of the auditors; to
7
<PAGE>
meet with them and Zenith's internal audit personnel to discuss and review the
results of their respective examinations and audit plans for the ensuing year;
to review the adequacy of Zenith's system of internal accounting controls and
like matters. This Committee is also authorized to review and discuss other
matters as it deems appropriate. During 1993, the Audit Committee communicated
frequently with Zenith's financial and accounting and internal audit department
personnel and independent auditors, including six formal meetings. The
Performance Bonus Committee was formed in December 1993, consisting of Jack M.
Ostrow, Harvey L. Silbert, and Gerald Tsai, Jr. (Chairman), and is responsible
for performance-based compensation plans for Executive Officers for 1994 and
thereafter. The Board of Directors will retain responsibility for all other
compensation matters. The Performance Bonus Committee did not hold any formal
meetings in 1993. Each Director attended at least 75% of the aggregate of all
meetings of the Board of Directors and of any committees thereof on which such
Director served.
Zenith pays each Director (other than Mr. Zax, who receives no additional
compensation therefor) a fee of $50,000 per annum for serving as a member of the
Board of Directors. Mr. Ostrow also receives a fee of $25,000 per annum for
serving as the Chairman and sole member of Zenith's Audit Committee.
PROPOSED BONUS PLAN
FOR EXECUTIVE OFFICERS
(ITEM 2 ON PROXY CARD)
The Performance Bonus Committee of the Board of Directors has adopted,
subject to the approval of stockholders, a performance-based bonus plan for
Executive Officers entitled the Executive Officer Bonus Plan ("Bonus Plan"). The
Board of Directors recommends the approval of the Bonus Plan by stockholders.
The Bonus Plan covers those officers that are identified by Zenith from time
to time as Executive Officers. Currently, eight officers are so identified.
Under the Bonus Plan, in each fiscal year, an annual bonus of up to two
hundred percent of an Executive Officer's Annual Base Salary in effect at the
beginning of such fiscal year is payable to such Executive Officer if Zenith's
combined ratio for the nine months ending September 30 of such fiscal year is
below the industry's combined ratio for such nine month period. The bonus
amount, as so determined, is the maximum payable to an Executive Officer and, on
a case by case basis, may be decreased or even eliminated by the Performance
Bonus Committee in its sole discretion.
The combined ratio is a recognized measurement in the insurance industry of
underwriting profitability and is calculated and published by independent
organizations for individual insurance companies, as well as the insurance
industry as a whole.
8
<PAGE>
The table below displays the maximum bonuses that would have been payable to
the Executive Officers identified in the Summary Compensation Table and to
Executive Officers as a group under the Bonus Plan as if it had been in effect
in 1993 and the maximum bonuses payable to such persons during 1994 under the
Bonus Plan if it is approved by the stockholders.
<TABLE>
<CAPTION>
1993 1994
NAME AND PRINCIPAL POSITION MAXIMUM BONUS MAXIMUM BONUS
- --------------------------------------------------------------------- --------------- ---------------
<S> <C> <C>
STANLEY R. ZAX....................................................... $2,000,000 $2,000,000
Chairman of the Board and President of Zenith, Zenith Insurance and
CalFarm, Chairman of CalFarm Life
FREDRICKA TAUBITZ.................................................... $680,000 $680,000
Executive Vice President and Chief Financial Officer of Zenith and
Zenith Insurance, Senior Vice President of CalFarm and CalFarm Life
KEITH E. TROTMAN..................................................... $610,000 $610,000
Senior Vice President of Zenith Insurance, CalFarm and CalFarm Life
JAMES P. ROSS........................................................ $460,000 $460,000
Senior Vice President of Zenith, Zenith Insurance and CalFarm,
Actuary of Zenith Insurance
JOHN J. TICKNER...................................................... $460,000 $484,000
Senior Vice President and Secretary of Zenith, Senior Vice
President, General Counsel and Secretary of Zenith Insurance and
CalFarm Life, Senior Vice President and Secretary of CalFarm
EXECUTIVE OFFICERS AS A GROUP........................................ $5,050,000 $5,162,000
NON-EXECUTIVE OFFICER DIRECTORS AS A GROUP........................... Not covered Not covered
NON-EXECUTIVE OFFICER EMPLOYEES AS A GROUP........................... Not covered Not covered
</TABLE>
9
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------
AWARDS
-----------------
SECURITIES
ANNUAL COMPENSATION UNDERLYING ALL OTHER
-------------------------- OPTIONS/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) SARS (#) ($)(1)
- --------------------------------------------------- --------- ------------ ------------ ----------------- -------------
<S> <C> <C> <C> <C> <C>
STANLEY R. ZAX 1993 $ 1,021,080 $ 1,000,000 0 $ 10,707
Chairman of the Board and President of 1992 1,017,375 1,000,000 0 10,544
Zenith, Zenith Insurance and CalFarm, 1991 1,017,350 1,000,000 0 --
Chairman of CalFarm Life
FREDRICKA TAUBITZ 1993 $ 355,600 $ 240,000 25,000 $ 6,478
Executive Vice President and Chief 1992 345,600 200,000 20,000 6,389
Financial Officer of Zenith and Zenith 1991 315,600 200,000 0 --
Insurance, Senior Vice President of
CalFarm and CalFarm Life
KEITH E. TROTMAN 1993 $ 320,600 $ 240,000 25,000 $ 7,678
Senior Vice President of Zenith Insurance, 1992 305,600 200,000 0 7,556
CalFarm, and CalFarm Life 1991 290,600 250,000 0 --
JAMES P. ROSS 1993 $ 246,750 $ 300,000 25,000 $ 1,946
Senior Vice President of Zenith, Zenith 1992 218,350 250,000 20,000 2,255
Insurance and CalFarm, Actuary of Zenith 1991 193,350 200,000 0 --
Insurance
JOHN J. TICKNER 1993 $ 234,582 $ 75,000 10,000 $ 6,156
Senior Vice President and Secretary of 1992 226,110 75,000 0 6,811
Zenith, Senior Vice President, General 1991 203,419 50,000 0 --
Counsel and Secretary of Zenith Insurance
and CalFarm Life, Senior Vice President
and Secretary of CalFarm
<FN>
- ------------------------
(1) The following amounts are included in the above table: (a) Zenith's
matching contributions made in fiscal year 1993 to the Zenith Investment
Partnership 401(k) Plan, as follows: Stanley R. Zax, none; Fredricka
Taubitz, $2,998; Keith E. Trotman, $2,998; James P. Ross, none; and John
J. Tickner, $2,998; (b) the dollar value of insurance premiums paid in
fiscal year 1993 by, or on behalf of, Zenith with respect to term life
insurance for the benefit of the named Executive Officer, as follows:
Stanley R. Zax, $9,000; Fredricka Taubitz, $3,480; Keith E. Trotman,
$4,680; James P. Ross, $1,800; and John J. Tickner, $2,880; and (c) the
dollar value of the benefit to the named Executive Officer of premiums
paid by, or on behalf of, Zenith during fiscal year 1993, with respect to
certain split dollar life insurance policies, as follows: Stanley R. Zax,
$1,707; Fredricka Taubitz, none; Keith E. Trotman, none; James P. Ross,
$146; and John J. Tickner, $278. Information for years prior to 1992 is
not required to be disclosed.
</TABLE>
10
<PAGE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
- -------------------------------------------------------------------------------------- ANNUAL RATES OF
NUMBER OF % OF TOTAL STOCK PRICE
SECURITIES OPTIONS/SARS APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM (4)
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION ------------------
NAME GRANTED (#) (1) FISCAL YEAR ($/SH) (2) DATE (3) 5% ($) 10% ($)
- ------------------------- ---------------- ------------- ------------ ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Stanley R. Zax -- -- -- -- -- --
Fredricka Taubitz 25,000 7.53% $ 22.5625 12/8/98 $155,840 $344,366
Keith E. Trotman 25,000 7.53% $ 22.5625 12/8/98 $155,840 $344,366
James P. Ross 25,000 7.53% $ 22.5625 12/8/98 $155,840 $344,366
John J. Tickner 10,000 3.01% $ 22.5625 12/8/98 $ 62,336 $137,746
<FN>
- ------------------------
(1) All stock options granted in 1993 provide for maximum purchases of
optioned shares on the following schedule: first year, none; second year,
25%; third year, 50%, reduced by prior purchases; fourth year, 75% reduced
by prior purchases; and fifth year, 100%, reduced by prior purchases.
(2) All options were granted at market value on the date of grant (average of
high and low prices for Zenith Common Stock as traded on the New York
Stock Exchange for such date).
(3) Options granted in 1993 expire on the earlier to occur of (a) five years
from the date of grant, (b) in the event of termination of the optionee's
employment, three months from the date of such termination, or (c) in the
event of the optionee's death, one year from the date thereof and,
following termination of employment or death, may be exercised only to the
extent they were exercisable on the date of the optionee's termination of
employment or death.
(4) The potential gains shown are net of the option exercise price and do not
include the effect of any taxes associated with exercise. The amounts
shown are for the assumed rates of appreciation only, do not constitute
projections of future stock price performance, and may not necessarily be
realized. Actual gains, if any, on stock option exercises depend on the
future performance of Zenith Common Stock, continued employment of the
optionee through the term of the option, and other factors.
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
SHARES OPTIONS/SARS AT FY-END (#) FY-END ($)
ACQUIRED ON VALUE --------------------------- -----------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------- ------------ ------------ ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stanley R. Zax -- -- 440,000(1) 0 $1,388,761(1) $ 0
Fredricka Taubitz -- -- 60,000 40,000 $ 294,375 $78,750
Keith E. Trotman 27,500 $149,792 0 25,000 $ 0 $ 0
James P. Ross -- -- 16,000 40,000 $ 76,125 $78,750
John J. Tickner 7,500 $ 75,248 20,000 10,000 $ 97,500 $ 0
<FN>
- ------------------------
(1) Mr. Zax holds Limited Stock Appreciation Rights ("LSARs") granted in
connection with his stock options. The LSARs are exercisable by Mr. Zax in
lieu of his stock options only in the event of termination of his
employment within 270 days following a "change of control." (See
"Employment Agreements and Termination of Employment and Change in Control
Arrangements.")
</TABLE>
11
<PAGE>
EMPLOYMENT AGREEMENTS AND TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL
ARRANGEMENTS
Effective February 28, 1990, Zenith entered into an amended and restated
employment agreement with Mr. Zax, which extends the expiration date of his
employment agreement from December 31, 1990 to December 31, 1995. The amended
and restated employment agreement provides for a base compensation plus an
annual bonus to be determined by the Board of Directors. Under the agreement,
Mr. Zax's base compensation was established as $750,000 for calendar year 1990
and $1,000,000 for calendars years 1991 through 1995, subject to such other
increases as the Board of Directors may determine from time to time. Upon Mr.
Zax's death, Zenith will continue to pay either his wife, children or estate his
base compensation and annual bonus for a period of twelve months. If Mr. Zax's
employment is terminated for disability, he will receive his base compensation
and annual bonus for a period of six months. If Mr. Zax's employment is
terminated for cause, he will receive his base compensation through the end of
the month in which the termination occurs. If his employment is terminated for
any reason other than for cause, death, or disability, Zenith will pay Mr. Zax
his base compensation and annual bonus through the term of his employment
agreement. Upon a change in control (as defined below) of Zenith, all stock
options and stock appreciation rights granted to Mr. Zax, to the extent not
exercisable at such time, become immediately exercisable. Further, in the event
Mr. Zax ceases being an employee of Zenith or a subsidiary within 270 days
following a change in control, Mr. Zax may elect to exercise his LSARs and
receive cash in lieu of exercising his stock options. The amount payable by
Zenith upon exercise of the LSARs is equal to the excess of the fair market
value on the date of such election of the shares subject to option over the
option exercise price for such shares. Mr. Zax may exercise his LSARs up to
ninety days following such termination of employment. In addition, if Mr. Zax's
employment is terminated subsequent to any change in control either by Mr. Zax
within 180 days of the change in control or by Zenith for any reason other than
disability or cause, Mr. Zax is entitled to receive Severance Payments (as
defined below).
On May 24, 1990, Zenith entered into an employment agreement with Ms.
Taubitz for a term commencing on February 28, 1990 and ending on October 1,
1995. The agreement with Ms. Taubitz provides for base compensation plus an
annual bonus to be determined by the Board of Directors, and certain additional
benefits. The base compensation is $265,000 per year until October 1, 1990, and
$300,000 per year thereafter, subject to such other increases as the Board of
Directors may determine from time to time.
Effective October 1, 1990, Zenith entered into an employment agreement with
Mr. Tickner for a term commencing on such date and ending on October 1, 1995.
The agreement with Mr. Tickner provides for base compensation plus discretionary
bonuses to be determined by the Board of Directors, and certain additional
benefits. The base compensation is $200,000 per year, subject to such increases
as the Board of Directors may determine from time to time.
Zenith's employment agreements with Ms. Taubitz and Mr. Tickner provide that
if her or his employment is terminated by Zenith other than for cause or
disability, the executive is entitled to Severance Payments. In addition, each
of Ms. Taubitz and Mr. Tickner may terminate her or his employment with Zenith
and receive Severance Payments should (a) Mr. Zax cease, for any reason other
than death or disability, to be the full-time Chairman of the Board and
President of Zenith, (b) she or he be prohibited or restricted in the
performance of her or his duties, (c) any payment due her or him under her or
his agreement remain unpaid for more than 60 days, or (d) she or he give written
notice of termination of the employment agreement to Zenith within 180 days of a
change in control of Zenith.
12
<PAGE>
The employment agreements define a "change in control" to include,
generally, a merger or consolidation of Zenith, a sale of all or substantially
all of its assets, an assignment of the executive's employment agreement, a
change in the identities of a majority of the members of the Board of Directors
within any one-year period, and any other transaction requiring the approval of
the California Insurance Commissioner.
For purposes of the foregoing, "Severance Payments" include the following
benefits: (1) in the case of Mr. Tickner, all salary payments that would have
been payable to the executive for the greater of (a) the remaining term of the
employment agreement or (b) one year, plus a pro rata portion of any bonus that
would have been payable to the executive with respect to the year of
termination; (2) in the case of Mr. Zax and Ms. Taubitz, a cash lump sum payment
equal to the greater of (a) twice the sum of the executive's then current base
compensation and the highest annual bonus paid or payable during the three
consecutive years immediately preceding termination of employment or (b) the
actuarial equivalent of the base compensation and annual bonuses that would have
been payable to the executive under the remaining term of the employment
agreement; (3) continuation of life, disability, dental, accident and group
health insurance benefits, plus an additional amount necessary to reimburse the
executive for any taxes attributable solely to the executive's receipt of such
benefits; (4) in the case of Ms. Taubitz and Mr. Tickner, vesting of all stock
option and similar rights; and (5) an additional payment, if necessary, to
assure that none of the above benefits are subject to net reduction due to the
imposition of excise taxes under section 4999 of the Internal Revenue Code of
1986, as amended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
In 1993, all decisions on Executive Officer compensation were made by the
Board of Directors. Mr. Zax, Chairman of the Board and President, is a member of
the Board of Directors, and except with respect to his own compensation,
participated in the Board's deliberations concerning Executive Officer
compensation.
In December 1993, the Board established the Performance Bonus Committee,
consisting of Messrs. Ostrow, Silbert, and Tsai, to determine matters relating
to performance-based compensation plans for Executive Officers for 1994 and
thereafter. The Board will retain responsibility for all other compensation
matters. Mr. Silbert is of counsel to the law firm of Loeb and Loeb, which
performed certain legal services for Zenith in 1993.
BOARD REPORT ON EXECUTIVE COMPENSATION
Zenith's entire Board of Directors made determinations with respect to
compensation of Executive Officers in 1993, except with respect to Mr. Zax's
compensation, which is established in Board actions from which Mr. Zax excuses
himself and in which he does not participate. The Board's report on Executive
Compensation follows. The report shall not be deemed to be incorporated by
reference through any general statement incorporating by reference this proxy
statement into any filings under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 and shall not otherwise be deemed to be filed
under such Acts.
13
<PAGE>
REPORT
EXECUTIVE OFFICERS
The Executive Officers of Zenith are generally compensated through salary,
annual discretionary bonuses, and grants of stock options. The level of
compensation is intended to be competitive and to provide appropriate
incentives.
The level of an Executive Officer's compensation is generally based on a
combination of (1) the performance of Zenith, (2) the performance of the
insurance subsidiary, if any, to which the Executive Officer is principally
assigned, and (3) a subjective and qualitative evaluation of the personal
contribution made by the Executive Officer to Zenith.
The performance of Zenith is generally measured by the combined ratio of its
property and casualty insurance operations and by its overall profitability.
Zenith strives for combined ratios that are about 100% and that also compare
favorably in both the short and long term with insurers primarily engaged in
writing workers' compensation insurance. Theses insurers include but are not
limited to those constituting the Peer Group utilized in the Stock Price
Performance Graph. In addition, Zenith endeavors to have loss ratios that are
among the lowest for the industry in any rolling previous five year period. The
performance of the Zenith insurance subsidiaries is generally measured by the
same factors, as applicable.
With respect to the subjective and qualitative evaluation of an Executive
Officer's personal contribution to the business of Zenith, a variety of factors
are taken into account. These factors vary and include, but are not limited to,
the manner in which the Executive Officer favorably affects Zenith's combined
ratio and profitability. Equally, if not more, important is the manner in which
the Executive Officer performs in Zenith's entrepreneurial environment. Zenith
fosters such an environment because it believes an entrepreneurial spirit
maximizes profits, promotes sound execution of good business fundamentals, and
maintains a pool of executive talent. In such an environment, proactive and
innovative approaches are strongly encouraged and rewarded.
On the operational side, activities that demonstrate an opportunistic
outlook, anticipation of changing business conditions and the development of
postures to take advantage of opportunities to increase short and long term
profits are rewarded. On the administrative side, efficiency, competence, strong
compliance efforts, anticipation and avoidance of problems, as well as
innovation, are rewarded.
Certain of the Executive Officers are employed under employment agreements
that provide for minimum base compensation and annual bonuses. Determinations as
to bonus levels and salary increases for these Executive Officers, as well as
those without employment agreements, have been discretionary and have not been
made on the basis of a formulaic weighing of the factors described above.
In 1993, the combined ratio of Zenith's property and casualty operations was
less than 100% and was less than the industry as a whole. Overall, Zenith not
only continued to be profitable in 1993, but showed an increase in profits over
1992. Given this performance and taking into account the subjective and
qualitative evaluations of individual Executive Officers, bonuses were awarded
accordingly.
From time to time, options to purchase Common Stock are granted as a part of
compensation in recognition of an Executive Officer's contribution and to
reinforce that Executive Officer's long term commitment to the success of
Zenith. Options are granted to an Executive Officer based on the recommendation
of the Chairman, taking into consideration subjective measures and prior grants
to that Executive Officer. Beyond these general considerations, there is no
particular formula governing the number of shares awarded.
14
<PAGE>
STANLEY R. ZAX, CHIEF EXECUTIVE OFFICER
Mr. Zax's base salary is set out in his five year employment agreement that
was executed in 1990. Increases to that base compensation and the granting of
annual bonuses are at the discretion of the Board of Directors and have not been
based on formulaic weighing of factors. In determining whether to grant any such
salary increase or bonus, the same criteria that are applied to Executive
Officers in general are also applied to Mr. Zax.
Mr. Zax is never present when the Board deliberates with respect to his
compensation and, accordingly, does not participate in Board decisions on his
own compensation.
In 1993, Mr. Zax's base compensation was not increased. However, the Board
did award him a bonus. In making the decision to award Mr. Zax a bonus and in
establishing its amount, the Board considered many factors. As discussed above,
the combined ratio of Zenith's property and casualty operations was less than
100% and less than the industry as a whole. Zenith's 1993 profit showed an
increase over 1992's.
More than strict corporate performance, the Board considered a number of Mr.
Zax's other efforts on a qualitative and subjective basis. These other efforts
include the forward looking leadership position that Mr. Zax continues to hold
for long term workers' compensation reform in California, his careful expansion
into the Texas workers' compensation insurance market and into the California
surcharged workers' compensation insurance business, his posturing of Zenith to
take advantage of both present and prospective changes in health care
(principally by hiring senior officers to develop, staff, manage, and lead
certain programs), his focus on improving the claims function in Zenith's
property and casualty subsidiaries, and his management of the investment
portfolio so as to maximize both realized and unrealized gains.
Taking both the corporate performance and these subjective considerations
into account, the Board awarded Mr. Zax the bonus that it did.
SECTION 162(M) POLICY
Section 162(m) of the Internal Revenue Code of 1986, as amended ("Code"),
generally limits the federal income tax deduction that a public corporation may
claim for annual compensation paid to certain executive officers. The limitation
with respect to each affected Executive Officer is $1,000,000 a year. However,
the limitation does not apply to compensation approved by Zenith stockholders
and which satisfies certain other conditions set forth in the Code and
regulations thereunder. Stock option awards payable to Executive Officers under
Zenith's existing stock option plan comply with the requirements of Section
162(m) and the Bonus Plan, if approved by Zenith's stockholders, will also
comply with Section 162(m). Accordingly, subject to Zenith stockholder approval
of the Bonus Plan, neither income accruing to Executive Officers upon exercise
of stock options nor the amount of any bonus payments made to Executive Officers
will be subject to the $1,000,000 limit on deductibility. The Board has
determined that it will pay Mr. Zax's annual salary even though any portion in
excess of $1,000,000 will not be deductible by Zenith.
Stanley R. Zax, Chairman of the Board
<TABLE>
<S> <C>
George E. Bello Harvey L. Silbert
Max M. Kampelman Robert M. Steinberg
Jack M. Ostrow Saul P. Steinberg
William Steele Gerald Tsai, Jr.
Sessions
</TABLE>
15
<PAGE>
STOCK PRICE PERFORMANCE GRAPH
The Stock Price Performance Graph shall not be deemed incorporated by
reference through any general statement incorporating by reference this proxy
statement into any filings under the Securities Act of 1933 or under the
Securities Exchange Act of 1934 and shall not otherwise be deemed to be filed
under such Acts.
The Stock Price Performance Graph compares the cumulative total returns of
Zenith Common Stock, the S&P 500 Index, and a Peer Group consisting of Argonaut
Group, Inc., CII Financial, Inc, Citation Insurance Group, Fremont General
Corporation, Pacific Rim Holding Corporation, The Penn Central Corporation, and
Unicare Financial Corp. for a five year period. Some of the members of the Peer
Group were not publicly traded during the entire five years and the results of
those members are included only for those periods when they were publicly
traded. Stock price performance is based on historical results and is not
necessarily indicative of future stock price performance.
COMPARATIVE FIVE-YEAR TOTAL RETURNS*
ZENITH, S&P 500, PEER GROUP
(PERFORMANCE RESULTS THROUGH 12/31/93)
[GRAPHIC]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ZNT $ 100.00 $ 107.42 $ 85.56 $ 114.46 $ 142.03 $ 167.32
S&P 500 $ 100.00 $ 131.69 $ 127.60 $ 166.47 $ 179.15 $ 197.21
Peer Group $ 100.00 $ 126.48 $ 100.45 $ 125.62 $ 145.27 $ 178.44
</TABLE>
Assumes $100 invested at the close of trading on the last trading day preceding
the first day of the fifth preceding fiscal year in Zenith Common Stock, the S&P
500, and the Peer Group.
*Cumulative total return assumes reinvestment of dividends.
The foregoing graph was prepared by Standard and Poor's Compustat, which
obtained factual materials from sources believed by it to be reliable, but which
disclaims responsibility for any errors or omissions contained in such data.
16
<PAGE>
LOAN TO EXECUTIVE OFFICER
On January 9, 1991, Zenith loaned Mr. Zax, the Chairman of the Board,
President, and a Director of Zenith, $3,000,000 pursuant to a promissory note
payable on January 9, 1994. The note bore interest until maturity at the
publicly-announced base rate ("prime rate") of City National Bank and,
thereafter, such rate plus 3%. In 1993, the highest principal balance of the
note was $2,800,000. In September 1993, the note and all accrued interest were
paid by Mr. Zax.
INFORMATION RELATING TO INDEPENDENT PUBLIC ACCOUNTANTS
Zenith's independent auditor for fiscal year 1993 was Coopers & Lybrand,
and, upon the recommendation of the Audit Committee, the Board of Directors of
Zenith has selected Coopers & Lybrand as Zenith's independent auditor for fiscal
year 1994.
Representatives of Coopers & Lybrand are expected to be present at the
meeting and will have an opportunity to respond to appropriate questions and to
make a statement if they desire to do so.
For information concerning Zenith's Audit Committee, see "Election of
Directors" above.
STOCKHOLDER PROPOSALS AT THE NEXT ANNUAL
MEETING OF STOCKHOLDERS
Stockholders of Zenith who intend to submit proposals to Zenith's
stockholders at the next Annual Meeting of Stockholders to be held in 1995 must
submit such proposals to Zenith no later than
December 1, 1994 in order for them to be included in Zenith's proxy materials
for such meeting. Stockholder proposals should be submitted to Zenith National
Insurance Corp., 21255 Califa Street, Woodland Hills, California 91367,
Attention: Secretary.
By Order of the Board of Directors
JOHN J. TICKNER
SECRETARY
Dated: March 31, 1994.
17
<PAGE>
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
ZENITH NATIONAL INSURANCE CORP.
The undersigned stockholder hereby appoints Harvey L. Silbert, Jack M.
Ostrow and Stanley R. Zax and each or any of them (each with full power of
substitution), proxies for the undersigned to vote all shares of Common Stock of
Zenith National Insurance Corp. ("Zenith") owned by the undersigned at the
Annual Meeting of Stockholders to be held on Wednesday, May 25, 1994, at
10:00 a.m., at the offices of Zenith, 21255 Califa Street, Woodland Hills,
California, and at any adjournments thereof, in connection with the matters set
forth in the Notice of Annual Meeting and Proxy Statement dated March 31, 1994
(the "Proxy Statement"), copies of which have been received by the undersigned.
<TABLE>
<S> <C> <C>
1. ELECTION OF FOR all nominees listed below WITHHOLD AUTHORITY
DIRECTORS: (except as marked to the contrary below) / / to vote for all nominees listed below / /
</TABLE>
George E. Bello, Max M. Kampelman, Harvey L. Silbert, Jack M. Ostrow,
William Steele Sessions, Robert M. Steinberg,
Saul P. Steinberg, Gerald Tsai, Jr. and Stanley R. Zax.
(INSTRUCTION: To withhold authority for any individual nominee write that
nominee's name on the space provided below.)
- --------------------------------------------------------------------------------
2. PROPOSAL TO APPROVE A PERFORMANCE BONUS PLAN FOR EXECUTIVE OFFICERS:
FOR / / AGAINST / / ABSTAIN / /
3. In their discretion, upon such other matters as may properly come before
the meeting.
(Continued and to be signed on other side)
<PAGE>
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED
IN ACCORDANCE WITH THE INSTRUCTIONS OF THE
STOCKHOLDER, BUT IF NO INSTRUCTIONS ARE GIVEN THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
Dated ............... , 1994
_____________________________
_____________________________
NOTE: Please sign EXACTLY as
your name appears herein. When
signing as attorney, executor,
administrator, trustee or
guardian, please give your full
title as such. If executed by a
corporation, an authorized
officer should sign, and the
corporate seal should be
affixed. A copy for shares held
in joint ownership should be
signed by each joint owner.
PLEASE DATE AND SIGN THIS
PROXY, AND RETURN IT PROMPTLY
IN THE ACCOMPANYING ENVELOPE,
WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES.
