SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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:
(X) Preliminary Proxy Statement ( ) Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
( ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
THE SEIBELS BRUCE GROUP, INC.
(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):
(X) No fee required
( ) 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 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
( ) Fee paid previously with preliminary materials.
( ) Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule, or Registration Statement No.:
3) Filing Party:
4) Date Filed:
<PAGE>
PRELIMINARY DRAFT
THE SEIBELS BRUCE GROUP, INC.
COLUMBIA, SOUTH CAROLINA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 12, 1996
TO THE SHAREHOLDERS OF THE SEIBELS BRUCE GROUP, INC.:
Notice is hereby given that the Annual Meeting of Shareholders (the
"Meeting") of The Seibels Bruce Group, Inc. ("SBIGE" or the "Company"), will be
held at the offices of the Company at 1501 Lady Street, Columbia, South Carolina
29201, at 11:00 a.m., on Thursday, December 12, 1996 for the following purposes:
1) To elect a total of six (6) Directors (staggered terms will
be entered) one (1) Director to serve until the 1997 Annual
Meeting of Shareholders, two (2) Directors to serve until
the 1998 Annual Meeting of Shareholders and three (3)
Directors to serve until the 1999 Annual Meeting of
Shareholders (Proposal 1);
2) To consider a proposal to ratify the selection of Arthur
Andersen LLP to audit the Company's books and records for
the fiscal year ending December 31, 1996 (Proposal 2);
3) To consider a proposal to ratify and approve the issuance of
35,000 shares to Non-Employee Directors as part of
compensation for services rendered pursuant to Rule 4460
(formerly Schedule D to the Bylaws) of the National
Association of Securities Dealers, Inc.(Proposal 3); and
4) To consider and transact such other business as may properly
and lawfully come before the Meeting or any adjournment
thereof.
All of the foregoing is more fully set forth in the Proxy Statement accompanying
this Notice.
The transfer books of the Company will close as of the end of business
on October 10, 1996 (the "Record Date") for purposes of determining shareholders
who are entitled to notice of and to vote at the Meeting, but will not be closed
for any other purpose.
All shareholders are cordially invited to attend the Meeting in person.
If you cannot attend the Meeting, please take the time to promptly sign, date
and mail the enclosed proxy in the envelope we have provided. If you attend the
Meeting and decide that you want to vote in person, you may revoke your proxy.
The Board of Directors recommends that you vote in favor of the nominees for
directors and the described proposals to be considered at the meeting.
By Order of the Board of Directors
Priscilla C. Brooks
Corporate Secretary
October 25, 1996
<PAGE>
THE ACCOMPANYING PROXY FORM IS SOLICITED BY THE BOARD OF DIRECTORS AND IS
REVOCABLE AT ANY TIME PRIOR TO BEING EXERCISED. THE PROXY WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFICATIONS THEREON. IF A CHOICE IS NOT INDICATED,
HOWEVER, THE PROXY WILL BE VOTED IN FAVOR OF THE NOMINEES FOR DIRECTORS, IN
FAVOR OF THE DESCRIBED PROPOSALS TO BE CONSIDERED AT THE MEETING, AND IN THE
BEST JUDGMENT OF THE PROXIES CONCERNING ALL OTHER PROPOSALS CONSIDERED AT THE
MEETING.
THE SEIBELS BRUCE GROUP, INC.
1501 Lady Street
Columbia, South Carolina 29201
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD DECEMBER 12, 1996
General
This Proxy Statement is furnished to the holders of Common Stock, par
value $ 1.00 per share (the "Common Stock") of The Seibels Bruce Group, Inc.
("SBIGE" or the "Company"), in connection with the solicitation of proxies by
the Board of Directors of the Company to be voted at the Annual Meeting of
Shareholders (the "Meeting") to be held at the time and place and for the
purposes specified in the accompanying Notice of Annual Meeting of Shareholders
and at any adjournments thereof. It is anticipated that this Proxy Statement
will be mailed to shareholders commencing on or about October 25, 1996.
When the enclosed proxy is properly executed and returned, the shares
which it represents will be voted at the Meeting in accordance with the
instructions thereon. In the absence of any such instructions, the shares
represented thereby will be voted in favor of the nominees for Director and the
described proposals to be considered at the Meeting and in the best judgment of
the proxies concerning all other proposals considered at the meeting.
Abstentions and "broker non-votes" are each included in the determination of the
number of shares present and voting, but are not counted as votes for or against
proposals presented to shareholders. (A "broker non-vote" occurs when a nominee
holding shares for a beneficial owner votes on one proposal, but does not vote
on another proposal because the nominee does not have discretionary voting power
and has not received instructions from the beneficial owner.)
Any shareholder who executes and delivers a proxy may revoke it prior
to its use by (i) giving written notice of such revocation to the Corporate
Secretary of SBIGE at PO Box 1, Columbia, South Carolina 29202, the Company's
mailing address; or (ii) executing and delivering to the Corporate Secretary of
SBIGE (by mail at PO Box 1, Columbia, South Carolina 29202, or by delivery at
1501 Lady Street, Columbia, South Carolina 29201) a proxy bearing a later date;
or (iii) appearing at the Meeting and voting in person.
Annual Report
The Company's 1995 Annual Report, including Financial Statements, is
enclosed with this Proxy Statement to shareholders who have acquired the common
stock of the Company since April 11, 1996 (Special Shareholders Meeting) up to
the Record Date. Shareholders who received a copy but wish to receive another
may also obtain a copy of the Annual Report on Form 10-K of the Company for the
fiscal year ending December 31, 1995, without charge upon written request
addressed to Priscilla Brooks, Corporate Secretary, The Seibels Bruce Group,
Inc., PO Box 1, Columbia, South Carolina 29202. If the person requesting a copy
of the Annual Report on Form 10-K is not a shareholder of record, the request
must include a representation that he or she is a beneficial owner of the
Company's Common Stock.
Expenses of Solicitation
The cost of soliciting proxies will be borne by the Company. Officers,
directors, employees, and agents of the Company may solicit proxies by
telephone, telegram or personal interview, without additional compensation.
<PAGE>
Voting
Only holders of record of issued and outstanding shares of Common
Stock, as of October 10, 1996 (the "Record Date") will be entitled to notice of
and to vote at the Meeting. On the Record Date, there were 24,647,686 shares of
Common Stock outstanding. Each share of Common Stock is entitled to one vote,
except with respect to Proposal 1, as described below.
In connection with Proposal 1, the election of Directors, each
shareholder is allowed to cumulate his or her votes and cast as many votes as
the number of shares he or she holds multiplied by the number of Directors to be
elected, the same to be cast for any one candidate or distributed among any two
or more candidates. For shares to be voted cumulatively, a shareholder who has
the right to cumulate his or her votes shall either (1) give written notice of
his or her intention to the president or another officer of the Company not less
than 48 hours before the time fixed for the Meeting, which notice must be
announced in the Meeting before the voting, or (2) announce his or her intention
in the Meeting before the voting for Directors commences; and all shareholders
entitled to vote at the Meeting shall without further notice be entitled to
cumulate their votes. Directors will be elected by a plurality of the votes
cast.
For Proposal 2 and 3 to be approved, the affirmative vote of a majority
of the votes cast in person or by proxy at the Meeting is required.
Participants in the Company's Dividend Reinvestment and Shareholder
Purchase Plan (the "DRSP Plan") who have shares of Common Stock registered in
their names and who vote those shares on any matter submitted to the Meeting
will have all shares credited to their accounts under the Plan automatically
added to that number and voted in the same manner. If such participants do not
vote shares registered in their own names the shares credited to their account
in the DRSP Plan will not be voted. An executed proxy will be deemed to include
any DRSP shares and will be voted with respect to those shares credited to the
participant's account. If a participant desires to vote DRSP Plan shares in
person at the Meeting, a proxy for the shares credited to his or her account
will be furnished upon written request received by the Company, at the address
set forth on the cover of this Proxy Statement, at least fifteen (15) days prior
to the date of the Meeting.
ELECTION OF DIRECTORS (PROPOSAL 1)
One of the purposes of the Meeting is to elect a total of six (6)
directors; one (1) Director to serve until the 1997 Annual Meeting of
Shareholders, two (2) Directors to serve until the 1998 Annual Meeting of
Shareholders and three (3) Directors to serve until the 1999 Annual Meeting of
Shareholders.
Under Article 3, Section 2 of the Company's Bylaws, the Board of
Directors is divided into three classes which shall be as nearly equal in number
as possible, with the members of each class serving for three year terms or
until their successors are elected or qualified.
The shares represented by the proxies solicited hereby will be voted in
favor of the election of the persons named below unless authorization to do so
is withheld in the proxy. In the event any of the nominees should be unavailable
to serve as a Director, which contingency is not presently anticipated, it is
the intention of the persons named in the proxies to select and cast their votes
for the election of such other person or persons as the Board of Directors may
designate.
Pursuant to the Stock Purchase Agreement dated as of December 22, 1993
(the "Alissa Purchase Agreement") between the Company and Abdullatif Ali Alissa
Est. and Saad A. Alissa (the "Alissa Group"), the Alissa Group is entitled to
designate up to four (4) persons, who are reasonably acceptable to the Company,
to be included in the slate of nominees recommended by the Board of Directors to
the shareholders for election as directors. The Alissa Group has designated Mr.
William M. Barilka, Dr. Albert H. Cox, Jr., Mr. Kenneth A. Pavia,
2
<PAGE>
and Fred S. Clark, Esquire; three (3) being incumbent directors and one new
director, to serve as the four directors who may be designated by the Alissa
Group to serve on the Board of Directors.
Pursuant to the Stock Purchase Agreement dated as of January 29, 1996
(the "Powers Purchase Agreement") between the Company and Charles H. Powers,
Walker S. Powers and Rex W. and Jane P. Huggins (the "Powers Group"), the Powers
Group is entitled to designate two (2) persons, who are reasonably acceptable to
the Company, to be included in the slate of nominees recommended by the Board of
Directors to the shareholders for election as directors. The Powers Group is
waiving their right to the two designees for this Annual Meeting.
Pursuant to the Stock Purchase Agreement dated March 28, 1996 between
the Company and Fred C. Avent, Frank H. Avent, and Pepsico Bottling Company of
Florence, (the "Avent Group"), the Avent Group is entitled to designate one (1)
person, who is reasonably acceptable to the Company, to be included in the slate
of nominees recommended by the Board of Directors to the shareholders for
election as directors. The Avent Group is waiving their right to the one (1)
designee for this Annual Meeting.
At the Special Shareholders' Meeting held June 14, 1996, the
shareholders approved fixing the number of directors of the Corporation at
eighteen (18). This was done in an effort to accommodate the additional seats
which would be generated by the Powers' Group and Avent Group pursuant to the
Stock Purchase Agreements between the Company and the Powers' Group and Avent
Group. However, with the waiver of the Powers' Group and Avent Group at this
time not to designate nominees for the upcoming annual meeting of shareholders
for election to the Board, it is the consensus of the Board of Directors that
the current number of ten (10) seats be maintained and that the additional eight
seats not be filled at this time. Pursuant to the Company's Articles and Bylaws,
these and other vacancies on the Board may be filled in the future at the
discretion of the Board.
All other nominees for election to the Board of Directors are
considered and recommended by a Nominating Committee of the Board of Directors.
(See "Committees of the Board of Directors.") The full Board of Directors
considers the recommendations of that Committee and recommends the nominees to
the shareholders. The Company has no procedure whereby nominations are solicited
or accepted from shareholders, but the Nominating Committee will consider
nominees whose names and business experience are submitted in writing by
stockholders to the Corporate Secretary of the Company.
Terry E. Fields, former Chief Financial Officer and Robert D. Brooks,
former President, resigned from their positions with the Company, including
their membership on the Board of Directors in March and April, 1995,
respectively. Robert H. Branche, resigned from his position on the Board in
March, 1995. In June, 1995, Ernst Csiszar was appointed as President and a
Director of the Company. In September, 1995, Michael Ameen resigned as a
Director. In October, 1995, John Weitzel was appointed Chief Financial Office
and a Director of the Company. At the same time, William Danzell was appointed
as a Director (October, 1995). In December, 1995, Roy Faulks resigned as a
Director of the Company, and Kenneth W. Pavia was appointed as a Director. All
appointments of Directors to fill vacancies created by resignation in 1995 were
made by the remaining members of the Company's Board of Directors.
The Board of Directors recommends a vote FOR each of the nominees
3
<PAGE>
The following information is set forth with respect to the six (6)
nominees for election to be Directors as well as the other members of the Board
of Directors.
<TABLE>
<CAPTION>
Name, Age and Principal Employment for Past five Years Director Since
------------------------------------------------------ --------------
<S> <C>
Nominees for Election to Hold Office until the 1997 Annual Meeting of Shareholders:
Fred S. Clark, Esquire, 60, Attorney at Law, Currently Partner in the Law Firm of Clark Not Currently
and Clark, Savannah, Georgia. He has been a partner in the Firm for the past five (5) years. A Director
Directors Continuing in Office until the 1997 Annual Meeting of Shareholders:
George R.P. Walker, Jr., 64, is currently a Director of the Company and certain 1969(1)
Company subsidiaries and has been the owner and operator of Middlefield Farm (Hanoverian
horse farm), Blythewood, South Carolina, for more than the past five years.
John C. West, 74, is currently Chairman of the Board of Directors of 1994
the Company. He 1994 was the Governor of the State of South Carolina from 1971
to 1975, and currently serves as Professor at the University of South Carolina
and as a practicing attorney. Mr. West also serves as a member of the Board of
Directors for Donaldson, Lufkin & Jenrette, Inc.
Nominees for Election to Hold Office until the 1998 Annual Meeting of Shareholders:
Claude E. McCain, 72, is currently a Director of the Company. He is also Chairman of 1995
H.C. McCain Agency, Inc., President of McCain Realty, Inc. and President of Insurance Finance
Company, Inc. He was formerly a member of the South Carolina State Insurance Commission for
15 years, 10 of which he served as Chairman. Mr. McCain has been in the insurance business
since 1946.
Kenneth W. Pavia, 54, is currently a Director of the Company. He is 1995
General Partner 1995 of Balboa Investments, a position he has held since 1992.
He also holds the office of Chairman of FHI, Inc., a securities holding company
and Fiduciary Leasco, Inc., a position held since 1985.
Directors who Continue to Hold Office until the 1998 Annual Meeting of Shareholders:
William M. Barilka, 48, is currently a Director of the Company. He has served since 1994
1991 as Chief Financial Officer of AGGAD Investment Company, Riyadh, Saudi Arabia. From
1986 to 1991, Mr. Barilka was employed by the National Commercial Bank, Riyadh, Saudi
Arabia, in a variety of corporate finance positions.
</TABLE>
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(1) Each present director of the Company with election dates prior to October
1978 (when the Company became the parent of the South Carolina Insurance Company
("SCIC"), the Company' principle subsidiary) was formerly a Director of SCIC and
the information set forth as to periods prior to 1978 reflects positions with
SCIC and the year such Director was first elected to the SCIC Board of
Directors.
4
<PAGE>
<TABLE>
Albert H. Cox, Jr., 64, is currently a Director of the Company. He is a Consulting 1994
Economist, formerly serving as Chief Economist of Feltman & Co., an Atlanta based investment
banking firm from 1995 through 1996. From 1985 to 1993, he held various executive positions,
including Board Member and Senior Economic Advisor, with BIL Management, Inc., a subsidiary
of the Bank in Liechtenstein. Prior to 1985, he held a number of positions with Merrill Lynch
& Co.
<CAPTION>
<S> <C>
Name, Age and Principal Employment for Past five Years Director Since
------------------------------------------------------ --------------
Nominees for Election to Hold Office until the 1999 Annual Meeting of Shareholders:
John P. Seibels, 54, is currently a Director of the Company, Policy Management 1969(1)
Systems, Corp. ("PMSC") and certain subsidiaries of the Company. Mr. Seibels has been an
investor based in Columbia, South Carolina since March 1963.
Ernst N. Csiszar, 46, is currently a Director and (since June, 1995) 1995
has held the office 1995 of President and Chief Executive Officer (since
January, 1996) of the Company and all of its subsidiaries. He also continues to
serve as a visiting professor at the School of Business, University of South
Carolina, a position he has held since 1988.
John A. Weitzel, 50, is currently a Director and (since September, 1995) has held the 1995
office of Chief Financial Officer of the Company and all of its subsidiaries. From April, 1985
to November, 1994, he served as Chief Financial Officer of Milwaukee Insurance Group, Inc.
From March through August, 1995, Mr. Weitzel acted as a consultant to the Company.
</TABLE>
Security Ownership of the Company
The following table sets forth, as of September 30, 1996, information
regarding the beneficial ownership of the Company's Common Stock by the
directors of the Company, and nominees for election, each executive officer
named in the Summary Compensation Table that appears under "Executive
Compensation -- Summary Compensation Table," all directors and executive
officers as a group and each person known to the Company to own 5% or more of
its Common Stock.
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<TABLE>
<CAPTION>
Percent of
Number of Shares Shares of
of Common Stock(1) Common Stock
Name of Beneficial Owner (and address, with respect to non-directors or
officers)
<S> <C>
William M. Barilka 135,000(2,3) (4)
Fred S. Clark 15,608(5) (4)
Albert H. Cox, Jr. 6,000(3) (4)
Ernst N. Csiszar 0(6) (4)
William B. Danzell 0(7) (4)
Claude E. McCain 5,064(3) (4)
Kenneth A. Pavia 0(7) (4)
John P. Seibels 596,908(3,8,9) 2.42
George R.P. Walker, Jr. 496,858(3,9,10) 2.02
John A. Weitzel 0(11) (4)
John C. West 42,100(12) (4)
All Directors, Nominees for Director and Executive Officers as a Group 1,307,538 5.30
</TABLE>
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(1) Includes shares underlying options authorized for issuance by the Board of
Directors.
(2) Includes 100,000 shares jointly owned by Mr. Barilka with his wife
but excludes 10,000 shares of Common Stock underlying certain options.
(3) Excludes 10,000 shares of Common Stock underlying certain options.
(4) Less than 1% of issued and outstanding shares of Common Stock of the
Company.
(5) Includes 6,100 shares held by Mr. Clark's wife, and 3,840 shares held by his
minor son.
(6) Excludes 300,000 shares of Common Stock underlying certain options.
(7) Excludes 5,000 shares of Common Stock underlying certain options.
(8) Excludes 9,012 shares of Common Stock held by Mr. Seibels' wife, of which
shares he holds neither sole nor shared voting or dispositive power and,
therefore, disclaims beneficial ownership.
(9) George R.P. Walker, Jr. and John P. Seibels are cousins.
(10) Excludes 45,557 shares of Common Stock held by Mr. Walker's wife, of which
shares he holds neither sole nor shared voting or dispositive power and,
therefore, disclaims beneficial ownership.
(11) Excludes 300,000 shares of Common Stock underlying certain options.
(12) Excludes 280,000 shares of Common Stock underlying certain options.
6
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<TABLE>
<S> <C>
Alissa Group 7,398,500(13) 30.00
PO Box 192
Alkhobar, Saudi Arabia
Avent Group 1,635,000(14) 6.63
PO Box 3886
Florence, South Carolina 29502
Powers Group 6,614,206(15) 26.83
PO Box 6525
Florence, South Carolina 29502
</TABLE>
Section 16(a) Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers, directors and persons who own more than ten percent of the
Company's equity securities to file reports of ownership and changes in
ownership with the Securities and Exchange Commission and to furnish the Company
with all such forms they file. Based on the Company's review of the forms it has
received and on written representations from certain reporting persons that no
such forms were required for them, the Company believes that for the fiscal year
ended December 31, 1995, the Section 16(a) filing requirements applicable to its
officers, directors and greater than ten percent beneficial owners were in
compliance.
Committees of the Board of Directors
The Company has five standing committees: Executive, Audit,
Compensation, Investment and Nominating.
The Executive Committee is currently composed of John C. West
(Chairman), Ernst N. Csiszar, Claude E. McCain, John P. Seibels, and George R.P.
Walker, Jr. The Executive Committee exercises the same powers as the Board of
Directors, except as otherwise limited by specific prohibitions in South
Carolina statutes. The Committee's function is to act in the place of the Board
on any matters which require Board action and occur between meetings of the
Board. The Executive Committee of the Company met twenty times during 1995.
The Audit Committee is currently composed of Kenneth W. Pavia
(Chairman), Albert H. Cox, Jr. and Claude E. McCain, none of whom is an officer
or employee of the Company. The Committee's functions include recommending
independent public accountants to be employed by the Company, reviewing with the
independent public accountants their reports and audits, and reporting to the
full Board of Directors on their findings. The Audit Committee of the Company
met two times during 1995.
The Compensation Committee is currently composed of John P. Seibels
(Chairman), Albert H. Cox, Jr.,
- --------
(13) Based on information contained in Statement on Form 4 for September, 1996:
includes 152,800 shares for which Mr. Alissa has sole voting power, and
7,240,700 shares as to which he has share voting power beneficially owned
(shared voting and dispositive power) by Abdullatif Ali Alissa Est. (the
"Establishment"), Financial Investors Limited ("FIL") and General Investors
Limited ("GIL"). Mr. Alissa has informed the Company that he is the President of
the Establishment; that FIL is wholly owned by the Establishment; and that GIL
is wholly owned by Mr. Alissa.
(14) Excludes 1,635,000 shares of Common Stock underlying certain options.
(15) Excludes 6,250,000 shares of Common Stock underlying certain options.
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<PAGE>
Claude E. McCain and George R.P. Walker, Jr., none of whom is an officer or
employee of the Company. The Committee's functions are to recommend to the full
Board the remuneration arrangements for senior executive officers and for
members of the Board of Directors, the adoption of compensation plans in which
Officers and Directors are eligible to participate and the granting of stock
options or other benefits under such plan. The Compensation Committee met five
times in 1995.
The Investment Committee is currently composed of Claude E. McCain
(Acting Chairman), William M. Barilka and Ernst N. Csiszar. The Committee's
functions are to advise the Board of Directors and officers of the Company with
respect to investment of the Company's assets and to periodically review,
evaluate and report on the performance of the investments and the investment
managers and advisors of the Company and its subsidiaries. The Investment
Committee met twice in 1995.
The Nominating Committee is currently composed of George R.P. Walker,
Jr. (Chairman), Albert H. Cox, Jr. and John C. West. The Committee's functions
include selecting and recommending nominees for election as new, additional, and
replacement Directors and reviewing the performance of incumbent Directors for
nomination for reelection. The Nominating Committee met once in 1995.
Roy L. Faulks served as Chairman of the Investment Committee and was a
member of the Audit Committee prior to his resignation from the Board in
December 1995. Michael M. Ameen, Jr. served on the Compensation Committee and
the Audit Committee prior to his resignation from the Board in September, 1995.
The Board of Directors met nine times in 1995. In 1995, each of the
incumbent Directors attended at least 75% of the meetings of the Board and of
the Committee(s) of which he was a member held during the period for which he
served.
8
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Compensation of Directors
In 1995, the Company paid quarterly to each Director who was not a
full-time employee of the Company a retainer fee of $175 per month plus $656.25
for each meeting of the Board at which the Director was present, a fee of $175
for each meeting of a Board Committee which he attended on the same day and in
the same general location as a Board meeting or by telephone, and a fee of
$262.50 for attending a Committee meeting otherwise. The Chairman of the Board
of Directors, John C. West, does not receive any additional director
compensation in connection with his position of Chairman of the Board of
Directors.
Compensation of Executive Officers
The following table sets forth, for the years ended December 31, 1995,
1994 and 1993, the cash compensation paid by the Company and its subsidiaries,
as well as certain other compensation paid or accrued for those years, to each
of the executive officers of the Company and such subsidiaries whose
compensation was in excess of $100,000 (the "Executive Group"), in all
capacities in which they serve.
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Position Salary Bonus Compensation Awards Options Compensation
Year ($) ($) ($) ($) (#) ($)
- ----------------------------- -------- ------------ --------- ----------------- -------------- ------------- ----------------
<S> <C>
John C. West 1995(1) 141,785 0 15,625(2) 0 290,000 0
Chairman of the Board 1994 0 0 0 0 0 0
Ernst N. Csiszar 1995(1) 119,154 0 0 0 300,000 0
President and Chief
Executive Officer
John A. Weitzel 1995(1) 33,231(3) 0 0 0 100,000 174
Chief Financial Officer
Former Officers
Sterling E. Beale 1995 0 0 0 0 0 347,968(4)
Chairman of the Board and 1994 147,813 2,438 0 0 0 359,2064
Chief Executive Officer 1993 182,483 0 0 0 0 2,765
W. Thomas Reichard 1995 0 0 0 0 0 0
President 1994 102,476 1,813 0 0 0 252,279(5)
1993 135,659 0 0 0 0 2,199
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</TABLE>
(1) Gov. West was appointed an officer of the Company for the first time in
1994; Messrs. Csiszar and Weitzel were appointed officers of the Company for the
first time in 1995.
(2) The amount shown represents the dollar value of the difference between the
price paid by Gov. West for shares upon the exercise of stock options and the
fair market value at the date of exercise.
(3) Mr. Weitzel was employed by the Company effective September 30, 1995. The
salary amount stated is for the three-month period from the date of employment
through December 31, 1995. Prior to the date of employment, Mr. Weitzel was a
consultant to the Company during 1995. With respect to his consulting services,
the Company paid Mr. Weitzel consulting fees in the amount of $114,000 during
1995.
9
<PAGE>
Option Grants
During the year ended December 31, 1995, the Company granted 300,000
stock options to members of the Executive Group pursuant to the Company's 1987
Stock Option Plan. In addition, the Board of Directors approved the grant of
400,000 stock options to members of the Executive Group pursuant to the 1996
Plan, subject to shareholder approval of that plan. That plan was approved at a
special shareholders' meeting on June 14, 1996. The following table sets forth
the grants during the year ended December 31, 1995.
<TABLE>
Option Grants During the Year Ended December 31, 1995
<CAPTION>
Potential Realizable value at
assumed rates of stock price
appreciation for option terms ($)
---------------------------------
Number of Percent of
Securities Total
Underlying Options Exercise
Options Granted to Price Expiration
Name Granted (#) Employees ($/Share) Date 0%(6) 5%(7) 10%(7)
---- ----------- --------- --------- ---- ----- ----- ------
<S> <C>
John C. West 100,000(8) 13% 1.625 12/21/00 0 44,895 99,208
Chairman 100,000(8) 13% 2.500 12/21/00 0 (42,605) 11,708
100,000 13% .875 06/13/00 0 24,175 53,420
Ernst C. Csiszar 100,000(8) 13% 1.625 12/21/00 0 44,895 99,208
Chief Executive 100,000(8) 13% 2.5 12/21/00 0 (42,605) 11,708
Officer 100,000 13% 06/13/00 0 24,175 53,420
John A. Weitzel 100,000 13% .8125 09/30/00 0 22,428 49,604
Chief Financial
Officer
</TABLE>
- --------
(6) These grants were made with a exercise price per share at or above the
closing market price per share on the date of the grant.
(7) Assumed for illustrative purposes only.
(8) These grants were authorized the by the Board of Directors during 1995 under
the 1996 Plan, subject to shareholder approval of the 1996 Plan.
10
<PAGE>
Option Exercises and Year-End Holdings
During the year ended December 31, 1995, members of the Executive Group
exercised a total of 20,000 stock options. The following table sets forth
certain information with respect to option exercises during the year ended
December 31, 1995, and unexercised stock options held by the Executive Group as
of December 31, 1995.
<TABLE>
Aggregated Option Exercises During the Year
Ended December 31, 1995 and 1995 Year-End Option Values
<CAPTION>
Shares
Acquired Number of Securities
On Value Underlying Unexercised Value of Unexercised In-The-
Exercise Realized Options at Year-End Money Options at Yeaar-End
Name (#) ($) (#) Exercisable/Unexercisable ($) Exercisable/Unexercisable
---- -------- -------- ----------------------------- -----------------------------
<S> <C>
John C. West 20,000 15,625(1) 180,000/100,000(2) 50,000
Chairman of the Board
Ernst N. Csiszar 0 N/A 200,000/100,000(3) 62,500
Chief Executive Officer
John A. Weitzel 0 N/A 100,000/0 68,750
Chief Financial Officer
</TABLE>
Employment Agreements
The Company has entered into employment agreements (each, an
"Agreement") under which Ernst N. Csiszar will serve as President and Chief
Executive Officer, John C. West will serve as Chairman and John A. Weitzel will
serve as Group Vice President and Chief Financial Officer (each an "Employee"),
of the Company for a term of one (1) year. The terms of each Agreement are
substantially identical (except as detailed below). The following is a summary
of the terms of the Agreements.
Effective Dates of Employment. The one-year terms of Mr. Csiszar and Gov. West
began on January 1, 1996. Mr. Weitzel's one-year term began on September 30,
1995. Mr. Weitzel's Agreement has been extended for three months to coincide
with Mr. Csiszar's and Gov. West's Agreement.
- --------
(1) The amount shown represents the dollar value of the difference between the
purchase price paid by Gov. West for the shares upon exercise of the stock
options and the fair market value of the shares at the date of purchase.
(2) The amounts shown for Gov. West include 200,000 option grants authorized by
the Board of Directors during 1995 under the 1996 Plan, subject to shareholder
approval of the 1996 Plan which was received at the Special Shareholders Meeting
of June 14, 1996.
(3) The amounts shown for Mr. Csiszar include 200,000 option grants authorized
by the Board of Directors during 1995 under the 1996 Plan, subject to
shareholder approval of the 1996 Plan which was received at the Special
Shareholders Meeting of June 14, 1996.
11
<PAGE>
Salary. As payment for services rendered by the Employee under the Agreement,
the Company pays Messrs. Csiszar and Weitzel $12,000, and Gov. West $7,200, per
month during the term of the Agreement. The Employee does not receive additional
compensation for service on the Board of Directors of the Company or any
committee thereof.
Bonus. Mr. Csiszar and Gov. West receive a bonus based on the operating earnings
of the Company for the calendar year 1996 of up to 150% of base salary.
Stock Options. Mr. Csiszar and Gov. West received, effective December 21, 1995,
options to purchase 200,000 shares of the Company's stock. The option for
100,000 shares vested on December 21, 1995, and shall be valid for a period of
five (5) years from the date of issue and shall expire on December 20, 2000. The
exercise price for these 100,000 shares is the closing price of the Company's
stock on December 21, 1995 ($1.625). The options for the remaining 100,000
shares shall vest on the earlier of (1) Employee's termination of employment
with the Company, or (2) December 31, 1996. The Options shall be valid for a
period of five (5) years from the date of vesting and the exercise price for
these Options shall be $2.50 per share. These Options are awarded under the
terms and provisions of the 1996 Plan.
Mr. Weitzel received, effective September 30, 1995, options to purchase
100,000 shares of the Company's stock. The options vested on September 30, 1995,
and shall be valid for a period of five (5) years from the date of issue and
shall expire on September 29, 2000. The exercise price for these 100,000 shares
is the closing price of the Company's stock on September 30, 1995 ($.8125).
Relocation Expenses. Mr. Weitzel will be reimbursed by the Company for the
reasonable costs incurred in relocating from Wisconsin to South Carolina,
including real estate commissions and closing costs paid in the sale of his
residence; these costs are not to exceed $35,000. In addition, the Company will
reimburse Mr. Weitzel for up to 6 months of temporary living costs -- apartment
rental and round-trip flight to Wisconsin every 2 weeks -- until his permanent
relocation.
Covenant Not To Compete. The Employee agrees that for a period of one year after
the date of termination of his employment for any reason except a termination
without cause, the Employee shall not solicit any customers or prospective
customers in any state in which the Company (including its subsidiaries) engages
in business, with whom the Employee became acquainted or gained knowledge of
during the course of his employment, and the Employee shall not engage in any
business which is in any way competitive with the business of the Company. The
Employee further agrees never to disclose any information deemed proprietary by
the Company, including but not limited to, customer lists and trade secrets,
regardless of the Employee's employment status.
Termination. Each party shall have the right to terminate the Agreement at any
time during the term upon thirty (30) days written notice to the other party.
The Company may terminate the Agreement at any time with cause or upon thirty
(30) days written notice without cause; provided, that if the Company terminates
the Agreement without cause the Company will pay the Employee within ten (10)
days after termination, one year's base salary as severance pay. In the event
that during the term of the Agreement, there is a sale of all or substantially
all of the Company's assets or all or substantially all of the Company's stock
and the new owners express their desire for a change in management or reassign
the Employee to a job with the Company with lesser duties or responsibilities,
then the Employee has the right to give written notice of his intent to
terminate the Agreement and shall receive the remaining balance or amount due
under the Agreement as severance.
Compensation Committee Interlocks and Insider Participation in Compensation
Decisions
None of the members of the Compensation Committee is or was formerly an
officer or employee of the Company or any of its subsidiaries.
12
<PAGE>
Report of the Board of Directors on Executive Compensation
The primary elements of the Company's executive compensation program have
historically consisted of a base salary, a bonus opportunity and stock options.
Base salaries are determined, and have at times been increased, by evaluating
the responsibilities of the position held and the experience of the executive
officer. Overall compensation is based on the Compensation Committee's
assessment of prevailing market compensation levels. The foregoing has been
provided by the Company's Compensation Committee.
John P. Seibels (Chairman) Claude E. McCain
Albert H. Cox, Jr. George R.P. Walker, Jr.
13
<PAGE>
Stock Performance Chart
The following chart compares the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during the
five years through December 1995 with the cumulative total return on the NASDAQ
Stock Market (US companies) Index and the NASDAQ Fire, Marine and Casualty
Insurance Stock Index.
Comparison of Five Year-Cumulative Total Returns
Performance Graph for
The Seibels Bruce Group Inc.
Prepared by the Center for Research in Security Prices
Produced on 02/02/96 including data to 12/29/95
<TABLE>
<CAPTION>
CRSP Total Returns Index for: 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
<S> <C>
The Seibels Bruce Group Inc. 100.0 136.3 46.5 43.4 62.0 37.2
Nasdaq Stock Market (US Companies) 100.0 160.6 186.9 214.5 209.7 296.3
NASDAQ Stock (SIC 6330-6339 US 100.0 142.7 192.3 198.0 190.7 267.4
Companies)
Fire, Marine, and Casualty Insurance
</TABLE>
14
<PAGE>
CONSIDERATION OF RESOLUTION RATIFYING SELECTION OF ARTHUR ANDERSEN LLP TO
BE INDEPENDENT ACCOUNTANTS FOR THE COMPANY
(PROPOSAL 2)
One of the purposes of the Meeting is to ratify the selection of
independent accountants to audit the books, records, and accounts of the Company
and its subsidiaries for the year ending December 31, 1996. Arthur Andersen LLP
has served as the Company's independent accountants since December 28, 1992. On
September 25, 1996 acting on the recommendation of the Audit Committee, the
Board of Directors adopted resolutions directing the employment of Arthur
Andersen LLP to audit the books, records, and accounts of the Company for 1996
and the submission of the selection to the shareholders for ratification.
Accordingly, the Board recommends the adoption of the following resolution:
RESOLVED, that the selection by the board of directors of the firm of
Arthur Andersen LLP to audit the books, records, and accounts of the
Company and its subsidiaries for the year ending December 31, 1996, be
ratified.
A representative of Arthur Andersen LLP is expected to be present at
the Meeting and will have the opportunity to make a statement, and will be
available to answer questions from shareholders.
The Board of Directors recommends a vote FOR ratification of the appointment of
independent accountants.
CONSIDERATION OF RESOLUTION RATIFYING SHARES ISSUED TO N0N-EMPLOYEE
DIRECTORS (PROPOSAL 3)
One of the purposes of the Meeting is to ratify the actions taken by
the Board of Directors at a meeting held June 13, 1995 (the "June Resolution"),
whereby the Board of Directors unanimously approved a resolution awarding each
non-employee director (a total of seven directors) 5,000 shares of the common
stock of the Corporation as compensation for services rendered in 1995, in
addition to their other compensation. Rule 4460 (formerly Schedule D to the
Bylaws) of the National Association of Securities Dealers, Inc. ("NASD") (which
applies to the Company as its shares are listed on the NASDAQ) requires
shareholder approval of a plan or arrangement pursuant to which stock may be
acquired by directors. The establishment of a plan or arrangement under which
the amount of securities which may be issued does not exceed the lesser of 1% of
the number of shares outstanding or 25,000 shares does not generally require
shareholder approval. The June Resolution contemplated the issuance of 35,000
shares (5,000 shares to each of seven non-employee directors). The Company has
been advised by NASDAQ to seek shareholder approval of the issuance of these
shares to non-employee directors. Accordingly, the Board recommends the adoption
of the following resolution:
RESOLVED, that the action of the Board of Directors dated June 13,
1995, authorizing the one time issuance of 5,000 shares of common stock
of The Seibels Bruce Group, Inc., to each outside Director of the
Company be ratified and approved.
The Board of Directors recommends a vote FOR this proposal.
Other Business
There is no reason to believe that any other business will be presented
at this Meeting; however, if any other business should properly and lawfully
come before the Meeting, the proxies will vote in accordance with their best
judgment.
15
<PAGE>
Shareholder Proposals
For a shareholder proposal to be presented at the next annual meeting,
it must be received by the Company at its principal executive offices not later
than January 27, 1997, in order to be included in the proxy statement and proxy
for the 1997 annual meeting. Any such proposal should be addressed to the
Company's Corporate Secretary and delivered to the Company's principal executive
offices at 1501 Lady Street, Columbia, South Carolina or mailed to PO Box 1,
Columbia, South Carolina 29202.
Priscilla C. Brooks
Corporate Secretary
October 25, 1996
16
<PAGE>
INFORMATION ON PROXY CARD
SIDE I
PROXY CARD
THE SEIBELS BRUCE GROUP, INC.
P.O. Box 1
Columbia, South Carolina 29201
PROXY SOLICITATION ON BEHALF OF THE BOARD OF
DIRECTORS OF THE COMPANY FOR THE ANNUAL MEETING OF
SHAREHOLDERS ON DECEMBER 12, 1996
The undersigned hereby appoints Ernst N. Csiszar and John A. Weitzel and each or
either of them, as proxies, with full power of substitution, to vote all shares
of the Common Stock of The Seibels Bruce Group, Inc. which the undersigned is
entitled to vote at the Annual Meeting of Shareholders to be held on December
12, 1996 and at any adjournment thereof, upon the items described in the Proxy
Statement. The undersigned acknowledges receipt of notice of the Meeting and of
the Proxy Statement.
Proxies will be voted in accordance with any Instructions indicated above, if no
specification is made the Proxy will be voted FOR the Proposal. This Proxy is
revocable any time prior to its use. The Board of Directors recommends a vote
FOR all proposals.
(continued and to be signed on other side)
SIDE II
Business to Come Before the Annual Meeting of Shareholders
1. To elect directors as follows: FOR WITHHELD Nominees:
Fred S. Clark
Claude E. McCain
Kenneth W. Pavia
Ernst N. Csiszar
John P. Seibels
John A. Weitzel
2. To ratify the selection of Arthur Andersen LLP to audit the Company's
books and records for the fiscal year ending December 31, 1996.
3. To ratify and approve the issuance of 35,000 shares to Non-Employee
Directors pursuant to rule 4450 (formerly Schedule D to the Bylaws) of
the 1995 national Association of Securities Dealers, Inc. as part of
compensation for services rendered.
Signature____________________________ Date_________________________
Signature____________________________ Date_________________________
NOTE: Signature should agree with name on stock, as shown hereon, Officers,
fiduciaries, etc., should so indicate. When shares are held in the names of more
than one person, each person should sign the proxy.
