NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
OF CITIZENS, INC.,
A COLORADO CORPORATION
Executive Office: 400 East Anderson Lane, Austin, Texas 78752
To the Stockholders of Citizens, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of
Citizens, Inc. will be held Tuesday, June 6, 1995, at 10:00 a.m.,
local time, at the Executive Office of the Company, 400 East
Anderson Lane, Austin, Texas, for the following purposes:
(1)To elect the members of the Board of Directors of the
Company; and
(2)To transact such other business as may properly come before
the Meeting or any adjournment thereof.
It is important, regardless of the number of shares you hold, that
your stock be represented at the Meeting by a signed proxy card or
personal attendance.
SHAREHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN
PERSON. PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND MAIL
IT PROMPTLY TO THE TRANSFER AGENT. NO POSTAGE IS REQUIRED. IF
YOU ATTEND THE MEETING YOU MAY REVOKE YOUR PROXY AND VOTE IN
PERSON.
By Order of the Board of Directors
April 18, 1995 Mark A. Oliver, Secretary
CITIZENS, INC.
400 East Anderson Lane
Austin, Texas 78752
April 18, 1995
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON
JUNE 6, 1995
SOLICITATION OF PROXIES
This proxy statement is furnished in connection with the
solicitation of proxies by and on behalf of the Board of Directors
of Citizens, Inc., for use at the Annual Meeting of Stockholders
to be held Tuesday, June 6, 1995, at 10:00 a.m., local time, (the
"Meeting") at the Executive Office of the Company, 400 East
Anderson Lane, Austin, Texas. This statement was sent to the
stockholders of the Company on or about April 28, 1995.
You are requested to complete the enclosed proxy card, sign where
indicated, and return it to the Transfer Agent in the envelope
provided, which requires no postage if mailed in the United
States. Solicitation of proxies will be primarily through the
mail. Proxies may also be solicited by personal interview,
telephone or telegram, by directors, officers and employees of the
Company and its wholly-owned subsidiaries at no additional cost to
the Company. The Company may also request banking institutions,
brokerage firms, custodians, trustees, nominees and fiduciaries to
forward soliciting material to the beneficial owners of the
Company's common stock held of record by such persons, firms, or
institutions, and the Company will reimburse the forwarding
expense. The cost of this solicitation will be borne by the
Company.
PROXIES
Shares represented by properly executed proxies received by the
Company prior to the Meeting will be voted as specified thereon.
If a proxy fails to specify how it is to be voted on any proposal
it will be voted FOR such proposal. A person giving a proxy shall
have the power to revoke it at any time before it is voted by
notifying the Secretary of the Company in writing or by personally
withdrawing such proxy at the Meeting.
The matters to be brought before the Meeting are: (i) the election
of directors; and (ii) such other matters as may properly be
brought before the Meeting.
RECORD DATE
Only stockholders of record at the close of business on April 18,
1995 are entitled to vote at the Meeting. As of the record date,
the Company had outstanding and entitled to vote 16,980,340 Class
A shares of common stock and 621,049 Class B shares of common
stock.
QUORUM
The presence, in person or by proxy, of the holders of a majority
of the outstanding shares of common stock of the Company entitled
to vote at the Meeting is necessary to constitute a quorum at the
Meeting. If a quorum is not present or represented at the
Meeting, the stockholders entitled to vote thereat, present in
person or represented by proxy, have the power to adjourn or
recess the Meeting from time to time for up to thirty (30) days
without notice, other than announcement at the Meeting, until a
quorum is present or represented. At such reconvened Meeting at
which a quorum is present or represented, any business may be
transacted which might have been transacted at the Meeting as
originally noticed.
Management knows of no matters to be submitted at the Meeting with
respect to which the stockholders are entitled to vote, other than
the proposals listed below. In the event other matters properly
come before the Meeting, the persons named in the proxy will vote
according to their best judgment.
STOCK AND PRINCIPAL STOCKHOLDERS
Both classes of common stock are equal in all respects, except
that (i) Class B common stock elects a simple majority of the
Board of Directors of the Company and Class A common stock elects
the remaining directors; and (ii) Class A shareholders receive, on
a per-share basis, twice the cash dividends paid on a per-share
basis to Class B common shareholders. Each outstanding share of
common stock has one vote in all matters to be considered at the
Meeting.
The following table shows the persons known to the Company to be
the beneficial owners
of more than five percent of the Company's Class A and Class B
common stock at
April 15, 1995.
Shares Owned and Percent
Name and Address Nature of Ownership of
Class
Harold E. Riley 5,542,994Class A direct
Post Office Box and 32.6%
149151 indirect 100.0%
Austin, Texas (1)
621,049Class B indirect
(1)
Marjorie D. Riley 1,170,000Class A direct 6.9%
3410 Tripp (2)
Amarillo, Texas
(1)See footnote (1) in the table immediately below.
(2) In record name.
The following table shows, as of April 15, 1995, certain
information with regard to the beneficial ownership of the
Company's Common Stock by each director and by the executive
officers and directors as a group.
Shares Owned and Percent
Name Nature of Ownership of
Class
Harold E. Riley 5,542,994Class A direct and
indirect (1) 32.6%
621,049Class B 100.0%
indirect (1)
Rick D. Riley 337,712Class A direct
and 2.0%
indirect (2)
Randall H. Riley 104,215Class A direct (3)
and
indirect (5)
Flay F. Baugh 41,959 Class A direct (3)
Joe R. Reneau, 42,652 Class A direct (3)
M.D.
Timothy T. 51,237 Class A direct (3)
Timmerman
T. Roby Dollar 31,612 Class A direct
and (3)
indirect (4)
Steven A. 1,000 Class A direct (3)
Rekedal
Mark A. Oliver 127Class A direct (3)
Carl E. Orange 50 Class A Direct (3)
Steven F. 1,886 Class A direct (3)
Shelton
Ralph M. Smith 15,389 Class A direct
and (3)
indirect (6)
Clayton D. 10 Class A Direct
Dunham (3)
All executive
officers 6,171,364Class A direct and
and directors as indirect 36.3%
a group 621,049Class B 100.0%
(thirteen) indirect
(1)Owns 5,287,507 Class A shares directly and spouse owns
255,487 Class A shares. The Harold E. Riley Trust, of which
Mr. Riley is the controlling Trustee, owns 621,049 Class B
shares, all the issued and outstanding Class B common stock.
(2)Son of Harold E. Riley. Owns 274,184 Class A shares directly
and 63,528 Class A shares indirectly as trustee for minor
children.
(3)Less than one percent (1%).
(4)Owns 16,612 Class A shares directly and spouse owns 15,000
Class A shares.
(5)Son of Harold E. Riley. Owns 101,694 Class A shares
directly, spouse owns 1,321 Class A shares. Mr. Riley is
trustee for a minor child owning 1,200 Class A shares.
(6)Owns 9,285 Class A shares directly and spouse owns 6,104
Class A shares.
The Company is not aware of any arrangement, including any pledge
by any person of securities of the Company, the operation of which
may at a subsequent date result in a change in control of the
Company.
CONTROL OF THE COMPANY
Harold E. Riley is deemed to be the "controlling stockholder" of
the Company. Mr. Riley owns, directly and indirectly, 5,542,994
shares (32.6%) of the outstanding Class A common stock and 621,049
shares (100%) of the Company's Class B common stock, which stock
elects a majority of the Company's Board of Directors.
PROPOSALS TO BE VOTED ON
Proposal No. 1: ELECTION OF DIRECTORS
Harold E. Riley has advised the Company that he intends to vote
all his Class A shares in favor of the Class A nominees and all
his Class B shares in favor of the Class B nominees. If for any
reason any nominee herein named is not a candidate when the
election takes place (which is not expected), the proxy will be
voted for the election of a substitute nominee at the discretion
of the persons named in the proxy.
A majority vote of a quorum present in person or by proxy will be
necessary to elect the directors. Cumulative voting is not
permitted.
NOMINEES FOR ELECTION AS DIRECTORS
Listed below are nine persons who have been nominated for election
as directors of the Company. These persons are nominees for
election to serve for one year until the next Annual Meeting of
Stockholders proposed to be held the first Tuesday of June, 1996,
or until their respective successors are duly elected and
qualified. Class A Shareholders will vote for those nominees for
Class A directors, and Class B Shareholders will vote on the Class
B nominees.
NOMINEES FOR ELECTION BY CLASS A STOCKHOLDERS
Common
Stock
Principal Direct of the
Name Age Occupation or Company
Since Beneficiall
y
Owned
4/15/95
Flay F. Baugh 81 Investments 1989 41,959
Temple, Texas Class A
Steven F. 39 Farmer/Rancher 1993 1,886 Class
Shelton Lamar, Colorado A
Ralph M. Smith, 64 Pastor 1993 15,389
Th.D. Hyde Park Baptist Class A
Church
Austin, Texas
Timothy T. 34 President 1989 51,237
Timmerman Texas Cable Class A
Systems, Inc.
TCSI-Huntsville
and Timmerman
Investments,
Inc., Round Rock
Texas
NOMINEES FOR ELECTION BY CLASS B STOCKHOLDERS
Common Stock
of the
Principal Directo Company
Name Ag Occupation r Beneficially
e Since Owned
4/15/95
T. Roby Dollar 57 Vice Chairman, Chief 1993 31,612 Class A
Actuary of the
Company
Austin, Texas
Joe R. Reneau, 63 Physician - Medical 1989 42,652Class
M.D. Consultant A
Austin, Texas
Harold E. Riley 66 Chairman of the Board 1987 5,542,994Cla
and CEO of the ss A
Company 621,049Class
Austin, Texas B
Randall H. 40 Vice Chairman, Chief 1993 104,215 Class
Riley * Executive Officer of A
the Company
Austin, Texas
Rick D. Riley * 41 Executive Vice 1989 337,712Class
President A
and Chief Operating
Officer
of the Company
Austin, Texas
* Son of Harold E. Riley. There are no other family relationships
between or among the nominees to the Board and the Executive
Officers of the Company.
Information concerning the nominees is set forth below:
Flay F. Baugh, Investments; President, Baugh's Inc., Temple, Texas
1954 to present; Director of Citizens Insurance Company of America
(Texas), former parent of the Company, 1978 to 1988. Director of
the Company, 1989 to present.
T. Roby Dollar, Vice Chairman, Chief Actuary of the Company and its
affiliates 1994 to present; President of the Company and its
affiliates 1992 to 1994; Executive Vice President and Chief Actuary
of the Company and its affiliates 1987-1992.
Joe R. Reneau, M.D., Physician- Medical Consultant, Abbott
Laboratories, Austin, Texas, 1987 to present and IBM, Austin,
Texas, 1992 to present, Medical Director of Company and its
affiliates, 1987 to present.
Harold E. Riley, controlling stockholder; Chairman of the Board of
the Company and its affiliates 1994 to present; Chairman of the
Board and Chief Executive Officer of the Company and its
affiliates 1992 to present; Chairman of the Board, Chief Executive
Officer and President of the Company and its affiliates, 1987 to
1992; Chairman of the Board, President and Chief Executive
Officer, Continental Investors Life Insurance Company, 1989 to
1992.
Randall H. Riley, Vice Chairman and CEO of the Company and its
affiliates 1994 to present; Vice Chairman and Marketing Director
of the Company, 1993 to present. General Manager, Negocios Savoy,
S.A. 1989 to 1993. Director, 1993 to present.
Rick D. Riley, President, Chief Administrative Officer of the
Company and its affiliates, 1994 to present; Executive Vice
President and Chief Operating Officer of the Company and its
affiliates, 1990 to 1991 and 1992 to 1994; President, Computing
Technology, Inc. 1991 to 1992; Executive Vice President, Data
Processing, the Company and its affiliates, 1987 to 1991;
Executive Vice President, Continental Investors Life Insurance
Company 1989 to 1992.
Steven F. Shelton, Rancher/Farmer 1974 to present; Director, First
Centennial Corporation, January to October, 1989 and August, 1990
to 1992. Director of the Company 1993
to present.
Ralph M. Smith, ThD, Pastor, Hyde Park Baptist Church, Austin,
Texas, 1960 to present. Director of the Company 1989 to 1990,
1993 to present; Advisory Director of the Company 1991 to 1993.
Timothy T. Timmerman, President, Texas Cable Systems, Inc.;
President, TCSI-Huntsville; President, Northeast Cablevision,
Inc.; President, Timmerman Investments Inc., Round Rock, Texas,
1984 to present. Director of the Company 1989 to present.
No director of the Company is a director of any other company with
a class of securities registered under the Securities Exchange Act
of 1934 or any investment company registered under the Investment
Company Act of 1940.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The business affairs of the Company are conducted under the
direction of its Board of Directors. The Board of Directors held
four meetings during 1994. During 1994, the Board of Directors
had three committees, the Executive Committee, the Compensation
Committee and the Audit Committee. Mr. John Boswell, who has
resigned from the Board, attended fewer than 75 percent of the
aggregate of the Board of Directors meetings and the Committee
meetings on which he served. The Executive Committee, composed of
Messrs. Harold E. Riley, Joe R. Reneau, M.D. and Timothy Timmerman
met seven times during 1994 and has exercised and may exercise all
of the authority of the Board of Directors in the management of
the business affairs of the Company, except where action of a
majority of all members of the Board of Directors is required by
statute or by the Articles of Incorporation or by the Bylaws of
the Company, and has the power to authorize the seal of the
Company to be affixed to all papers which may require it.
The Audit Committee, composed of Messrs. Joe R. Reneau, Ralph M.
Smith and Timothy T. Timmerman met once during 1994. The
functions of the Audit Committee include recommending to the Board
each year the firm of independent auditors to be engaged by the
Company, reviewing the annual financial statements issued by the
Company to its security holders, reviewing and approving in
advance the plan and scope of the audit of the Company to be
performed for the following year by the independent auditors,
reviewing with the principal independent auditors upon completion
of their audit, their findings and recommendations, and
periodically reviewing with them the principal accounting policies
of the Company and other pertinent matters.
The Compensation Committee, composed of Messrs. Joe R. Reneau,
M.D., Timothy T. Timmerman and Ralph M. Smith met once during
1994. The functions of the Compensation Committee include
establishing compensation policies applicable to the Company's
executive officers and making recommendations concerning executive
compensation to the Board of Directors.
Based solely upon a review of Forms 3, 4 and 5 and amendments
thereto furnished to the Company during the year ended December
31, 1994, the Company is aware of two officers who failed to file
reports required by Section 16 of the Securities Exchange Act of
1934 on a timely basis. Messrs. Mark A. Oliver and Steve Rekedal
each filed a Form 4 after the due date. Both instances involved
an oversight error by the parties and was rectified in the month
the form was due, but after the requisite filing date.
EXECUTIVE OFFICERS
The following table sets forth certain information concerning the
executive officers of the Company who are elected annually by the
Board of Directors at the first meeting of the Board following the
Annual Meeting of Stockholders of the Company:
All positions held
with the Company and
Name Ag Principal Occupation
e
Harold E. Riley 66 Chairman of the Board
(1)
Randall H. 40 Vice Chairman and
Riley (2) Chief Executive
Officer
T. Roby Dollar 56 Vice Chairman, Chief
(1) Actuary and Assistant
Treasurer
Rick D. Riley 41 President and
(3) Chief Administrative
Officer
Mark A. Oliver 36 Executive Vice
(1) President,
Chief Financial
Officer and
Secretary/Treasurer
Carl E. Orange 56 Executive Vice
(4) President and
Chief Operating
Officer
Steven A. 48 Executive Vice
Rekedal (5) President,
Chief Marketing
Officer
Clayton D. 51 Senior Vice President
Dunham (6) and
Director of Marketing
John A. 59 Vice President and
Templeton (7) Controller
(1) H. Riley, Dollar, and Oliver have served since 1987. They
hold similar positions in affiliated subsidiary: Citizens
Insurance Company of America.
(2) Randall H. Riley has served since September, 1993 and holds
similar positions in Citizens Insurance Company of America, a
wholly-owned subsidiary of the Company. Prior to 1993, he served
as General Manager for Negocios Savoy, S.A., a Panamanian
Marketing Company.
(3) Rick D. Riley has served from 1987 to 1991 and 1992 to
present and holds similar positions in Citizens Insurance Company
of America, a subsidiary. Additionally, he is Chairman of the
Board and CEO of Computing Technology, Inc., a subsidiary of the
Company. From 1991 to 1992, he was President of Computing
Technology, Inc.
(4) Carl E. Orange became Executive Vice President and Chief
Operating Officer in November, 1994. From June of 1993 until
November, 1994, he worked as a self-employed consultant. From 1981
to 1993, he was Vice President of Fidelity Bankers Life of
Richmond, Virginia.
(5) Steven A. Rekedal joined Citizens in February, 1994 as
Executive Vice President and Chief Marketing Officer. From 1987 to
February, 1994, he served as Vice President of the DeHayes
Consulting Group in Roseville, California.
(6) Clayton D. Dunham was named Senior Vice President and Director
of Marketing of the Company and its affiliates in November, 1994.
From 1990 to 1994, he served as President of DIA International.
From 1987 through 1990, he was General Manager of Negocios Savoy,
S.A.
(7) John A. Templeton became an officer of the Company and its
subsidiaries on March 1, 1993. He has held similar position with
other life insurance companies since 1965: Vice President,
Controller of American Security Life Insurance Company 1978 to
1990, insurance accounting project work for Texas Protective
Insurance Company, Legal Security Life Insurance Company and
Bankers Life Insurance Company of America, 1990 to 1992, and
Senior Financial Analyst, I.C.H., Inc. 1992 to 1993.
EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
The following table presents the aggregate compensation which was
earned by the Chairman for each of the past three years, and for
such other officers whose aggregate compensation exceeded $100,000
in 1994. No other employee of the Company earned total annual
salary and bonus in excess of $100,000 prior to 1994. There has
been no compensation awarded to, earned by or paid to any employee
required to be reported in any table or column in any fiscal year,
other than what is set forth in the table below.
SUMMARY COMPENSATION TABLE
Long Term
Compensation
Annual Awards Payout
Compensation s
(a) (b (c) (d (e) (f) (g) (h) (i)
) ) Othe
Name r Rest All
and Annu rict Opt LTI Othe
Princ Salar al ed ion P r
ipal Ye y Bo Comp Stoc s/ Pay Comp
Posit ar nu en- k SAR out en-
ion s sati Awar s s sati
on d(s) on
Harol 1 $260, N/ N/A N/A N/A N/A N/A
d E. 9 616 A N/A N/A N/A N/A N/A
Riley 9 $25 N/ N/A N/A N/A N/A N/A
, 4 0,200 A
Chair 19 $25 N/
man 93 0,200 A
19
92
Randa 19 $150, N/ N/A N/A N/A N/A N/A
ll H. 94 200 A
Riley
,
C.E.O
.
Steve 19 $110, N/ N/A N/A N/A N/A N/A
n 94 200 A
Reked
al,
Exec.
V.P.
Harold E. Riley, the Company's Chairman, has pledged 419,666
shares of Class A common stock of the Company, which he directly
owns, to a bank as collateral for one of the Company's notes
payable in favor of the bank, for which he receives no
compensation or other consideration. The shares secure a total
principal amount on the note payable of $600,000.
All employees of the Company are covered under a non-contributory
profit-sharing plan. Under the terms of the Plan, all employees
who have completed one year of service are eligible to
participate. Vesting begins following completion of two years'
service and employees become fully vested after seven years'
service. During 1993, no contributions to the Plan were made. In
1994, the Company made a $50,000 contribution to the Plan.
Messrs. H. Riley, R. Riley and Dollar each had $52,069, $52,059,
and $52,059, respectively, vested under the Plan as of December
31, 1993, the last allocation date. Mr. Oliver had $2,629 of
vested benefits.
The members of Board of Directors who are not officers of the
Company are paid $300 per meeting, while Committee members who are
not officers are paid $150. Total directors' fees paid during
1994 were $3,900. Messrs. Reneau and Smith were paid $16,200 and
$1,800, respectively in 1994 for services performed as consultants
to the Company.
OTHER BUSINESS
Should any other business come before the Meeting, and management
is not aware of any at this time and does not expect any, the
persons named in the proxy will vote on such business as their
best judgment and discretion indicates.
PUBLIC ACCOUNTANTS
KPMG Peat Marwick, 200 Crescent Court, Suite 300, Dallas, Texas
75201, is the Company's principal independent auditor. It is
expected that a representative of KPMG Peat Marwick will be
present at the Annual Meeting of Stockholders to answer questions.
ANNUAL REPORT AND OTHER MATERIAL
A copy of the Company's Annual Report to Stockholders has been
mailed under separate cover. A copy of the report of the
Compensation Committee of the Board of Directors and a Performance
Graph regarding stockholder return accompany this Proxy Statement.
No part of such material is incorporated herein and no part
thereof is to be considered proxy soliciting material.
DEADLINE FOR RECEIPT OF STOCKHOLDER
PROPOSALS FOR ANNUAL MEETING TO BE HELD IN JUNE, 1996
Any proposal by a stockholder to be presented at the Company's
next annual meeting currently scheduled to be held on the first
Tuesday in June, 1996, must be received at the offices of the
Company, 400 East Anderson Lane, Austin, Texas 78752, no later
than December 18, 1995.
BY THE ORDER OF THE BOARD OF DIRECTORS
Mark A. Oliver
Secretary
Austin, Texas
April 18, 1995
BOARD OF DIRECTORS
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The compensation level of Citizens' executives is circumscribed by
the present and envisioned growth plans of the Company. The
present policy is a conservative compensation plan designed to
attract and retain competent executives who share the Chief
Executive Officer's enthusiasm for continued growth through hard
work, dedication, and sound decision making. Consideration is
also given to the compensation levels of comparable positions in
the local and national markets.
Since 1987, the Company has experienced record levels of profit,
insurance in force, and asset growth. This, along with the fact
that such growth has been achieved without significant debt, is
the primary factor upon which Chief Executive Officer Harold E.
Riley's compensation has been determined. His vision, management,
leadership and hands on contribution to the sound and solid growth
of the Company cannot be measured. His creation of the "Ultra
Expansion" insurance products in 1987 has been the single most
important factor contributing to the Company's growth.
Additionally, his guidance and actions have resulted in
significant growth in shareholder value in the marketplace. In
1987, the Company's market value per share times the number of
shares outstanding was under $2,000,000, compared to today's value
of over $130,000,000. Furthermore, over the years, he has used
and continues to use his personal assets to guarantee obligations
and debts of the Company for which he receives no consideration.
When evaluating his overall contributions toward the dynamic
growth of the Company and the level of compensation received by
other individuals in similar positions of responsibility in the
insurance industry, along with the fact that there has been no
increase in his compensation since 1991, we recommend an increase
in Mr. Riley's salary to $300,000 for 1995 from the present
$250,000.
Randall H. Riley has served as Vice Chairman of the Company since
September, 1993. He has several years' experience in business and
marketing management and his knowledge of Spanish makes him a
valuable member of the Company's management. In November, 1994, he
was appointed Chief Executive Officer of the Company. His
background and leadership skills will serve the Company well as he
leads it towards the next century. Based upon his experience and
position, as well as his value to the Company, a salary of $160,000
is recommended for 1995.
COMPENSATION COMMITTEE:
Joe R. Reneau, M.D.
Timothy T. Timmerman
Ralph M. Smith
COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN
AMONG CITIZENS, INC.,
AMEX MARKET INDEX AND PEER GROUP INDEX
The following graph represents a comparison of the preceding five
year cumulative total return of the Company, a peer group and a
broad market index. The broad market index chosen was the AMEX
Market Index. The peer group, which includes life, accident and
health companies, was compiled by Media General Financial Services.
fiscal year ending
1989 1990 1991 1992 1993 1994
CITIZENS, INC. 100.00 72.34 93.62 85.11 144.68 140.43
PEER GROUP 100.00 79.10 111.13 142.29 163.57 150.06
BROAD MARKET 100.00 84.80 104.45 105.88 125.79 111.12
Source: Media General Financial Services
P.O. Box 85333
Richmond, Virginia 23293
