<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Schedule 14(a)
of the Securities Exchange Act of 1934
File by the Registrant /X/
Filed by a Party other than Registrant / /
Check the Appropriate Box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
THE SEIBELS BRUCE GROUP, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person Filing Proxy Statement)
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:
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2. Aggregate number of securities to which transaction applies:
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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):
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4. Proposed maximum aggregate value of transaction:
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5. Total fee paid:
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/ / 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:
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2. Form, Schedule or Registration Statement no.:
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3. Filing Party:
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4. Date Filed:
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THE SEIBELS BRUCE GROUP, INC.
COLUMBIA, SOUTH CAROLINA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 19, 1999
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. ("SBIG" 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 Wednesday, May 19, 1999 for the purpose of considering
and acting upon the following:
1) The election of two (2) directors to hold office until the 2002 Annual
Meeting of Shareholders or until his/her successor shall be elected
and shall qualify (Proposal 1);
2) The ratification of the Board's appointment of Arthur Andersen LLP as
auditors of the Company's books and records for the fiscal year ending
December 31, 1999 (Proposal 2); and
3) The transaction of 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
March 22, 1999 (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
/s/ Matt P. McClure
-------------------
Matt P. McClure
Corporate Secretary
April 12, 1999
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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 MAY 19, 1999
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. ("SBIG"
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 April 12, 1999.
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 directors 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.
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 SBIG at Post Office Box One, Columbia, South Carolina 29202, the
Company's mailing address; or (ii) executing and delivering to the Corporate
Secretary of SBIG (by mail at Post Office Box One, 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 1998 Annual Report, including Financial Statements, is
enclosed with this Proxy Statement. The Form 10-K Annual Report to the
Securities and Exchange Commission provides certain additional information.
Shareholders may obtain a copy of this Form 10-K Annual Report without charge
upon written request addressed to Corporate Secretary, The Seibels Bruce Group,
Inc., Post Office Box One, Columbia, South Carolina 29202. If the person
requesting a copy 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.
VOTING
Only holders of record of issued and outstanding shares of Common Stock, as
of March 22, 1999 (the "Record Date"), will be entitled to notice of and to vote
at the Meeting. On the Record Date, there were 7,728,707 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 accordance with applicable state law and the Company's Articles of
Incorporation and Bylaws,
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abstentions and "broker non-votes" will be counted for purposes of determining
whether a quorum is present. "Broker non-votes" occur when a broker or other
nominee holding shares for a beneficial owner does not vote on a proposal
because the beneficial owner has not checked the applicable box on the proxy
card. With respect to Proposal 1, abstentions and "broker non-votes" will not
count as either a vote "FOR" or "AGAINST" such Proposal. With respect to
Proposal 2, abstentions will be considered entitled to vote and thus will have
the effect of a vote "AGAINST" such Proposal while "broker non-votes" will not
be considered entitled to vote and thus will not be counted as a vote "FOR" or
"AGAINST" such Proposal.
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.
If a quorum is present: (i) those two nominees who receive the greatest
number of votes cast for the election of directors at the Meeting will become
directors of the Company at the conclusion of the tabulation of the votes; and
(ii) the affirmative vote of the holders of a majority of the shares of Common
Stock present in person or by proxy at the Meeting will be required to approve
Proposal 2.
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 DRSP 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.
1. ELECTION OF DIRECTORS (PROPOSAL 1)
One of the purposes of the Meeting is to elect two (2) directors to serve
until the 2002 Annual Meeting of Shareholders.
Under the Company's Articles of Incorporation, as restated, and 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. If 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.
All 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 shareholders to
the Corporate Secretary of the Company.
Although the Board of Directors does not know whether any nominations will
be made at the Meeting other
2
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than those set forth in this Proxy Statement, if any such nomination is made, or
if votes are cast for any candidate other than those nominated by the Board of
Directors, the persons authorized to vote shares represented by executed proxies
in the form enclosed with this Proxy Statement (if authority to vote for the
election of directors or for any particular nominees is not withheld) will have
full discretion and authority to vote cumulatively and allocate votes among any
or all of the nominees of the Board of Directors in such order as they may
determine.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote of a plurality of votes cast is required to elect
directors. THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THE NOMINEES
LISTED BELOW.
The following information is set forth with respect to the two (2) 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
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<S> <C>
NOMINEES FOR ELECTION TO HOLD OFFICE UNTIL THE 2002 ANNUAL MEETING OF SHAREHOLDERS:
Walker S. Powers, 44, is currently a director of the Company and has been a 1997
member of the management of SADISCO Corporation, an automobile salvage company
based in Florence, South Carolina ("SADISCO") since 1975. Mr. Powers served as
SADISCO's President from 1993 through 1994. Mr. Powers was designated by the
Powers Group to serve on the Board of Directors. Walker S. Powers is the son of
Charles H. Powers.
John P. Seibels, 57, is currently a director of the Company. He also holds 1969(1)
a directorship with Policy Management Systems Corporation. Mr. Seibels has been
an investor based in Columbia, South Carolina since March 1963. George R.P.
Walker, Jr. and John P. Seibels are cousins.
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2000 ANNUAL MEETING OF SHAREHOLDERS:
Charles H. Powers, 72, is currently Chairman of the Board of Directors of 1997
the Company and is the owner and operator of SADISCO, a position he has held
since 1964. He is also a Vice President and Treasurer of Holland Grills, in
Apex, North Carolina, and President of PC Inc., in Myrtle Beach, South Carolina.
Walker S. Powers is the son of Charles H. Powers. Mr. Powers was designated by
the Powers Group to serve on the Board of Directors.
Frank H. Avent, 57, is currently a director of the Company. He is a 1997
director, President and General Manager of Pepsi Cola Bottling Company of
Florence, South Carolina, a position he has held since 1963. Mr. Avent also
serves as a member of the Board of Directors of Atlantic Broadcasting Company,
Carolina Canners, Carotex, and Quality Financial Services. Mr. Avent was
designated to serve on the Board of Directors by the Avent Group.
George R.P. Walker, Jr., 66, is currently a director of the Company and has 1969(1)
been the owner and operator of Middlefield Farm (Hanoverian horse farm),
Blythewood, South Carolina, for more than the past five years. George R.P.
Walker, Jr. and John P. Seibels are cousins.
</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's principal 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.
3
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<TABLE>
<CAPTION>
NAME, AGE AND PRINCIPAL EMPLOYMENT FOR PAST FIVE YEARS DIRECTOR SINCE
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<S> <C>
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2001 ANNUAL MEETING OF SHAREHOLDERS:
A. Crawford Clarkson, Jr., 79, is currently a director of the Company. He 1997
is a Certified Public Accountant and attorney. Mr. Clarkson served as
Commissioner of the South Carolina Tax Commission from 1987 until 1995, of which
he was appointed Chairman in 1992. Prior to 1987, he was a senior partner of the
CPA firm of Clarkson, Harden & Gantt, which eventually combined with other firms
to join Ernst & Young.
Claude E. McCain, 74, is currently a director of the Company. He is also 1995
Chairman of 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, 56, is currently a director of the Company. He is General 1995
Partner of Bolero Investment Group, a position he has held since 1994. He also
holds the office of Chairman of FHI, Inc., a securities holding company and
Fiduciary Leasco, Inc., a leasing company, a position held since 1985.
Susie H. VanHuss, PhD., 59, is currently a director of the Company. She 1997
currently serves as Executive Director of the USC Foundations at the University
of South Carolina. From 1974 through 1997, Dr. VanHuss served as a Professor and
as Program Director of management at the University of South Carolina. Prior to
serving as Program Director, she served as Interim Dean of the School of
Business Administration, also at the University of South Carolina.
James L. Zech, 41, is currently a director of the Company. He currently 1997
holds the office of President of the High Ridge Capital LLC, a position he has
held since August 1995. From 1992 through 1995, Mr. Zech was Managing Director
of S. G. Warburg & Co., Inc. He also is a director of Front Royal Group, Inc. a
privately held company based in Raleigh, N.C., and Acordia, Inc., based in
Indianapolis, Indiana.
</TABLE>
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors of the Company has five standing committees:
Executive, Audit, Compensation, Investment and Nominating.
The Executive Committee is currently composed of Frank H. Avent, A.
Crawford Clarkson, Jr., Claude E. McCain, Kenneth W. Pavia, Charles H. Powers,
Walker S. Powers 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 did not meet during
1998.
The Audit Committee is currently composed of John P. Seibels (Chairman), A.
Crawford Clarkson, Jr., Claude E. McCain and James L. Zech, 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
met six (6) times during 1998.
The Compensation Committee is currently composed of Kenneth W. Pavia
(Chairman), Frank H. Avent and Charles H. Powers, none of whom is an officer or
employee of the Company. For a discussion of certain actions taken with respect
to Mr. Powers' membership on the Compensation Committee, please see
"Compensation Committee Interlocks and Insider Participation." The Committee's
functions are to recommend to the full Board the
4
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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 (5) times in 1998.
The Investment Committee is currently composed of Susie H. VanHuss, PhD.
(Chairman), John P. Seibels and George R.P. Walker, Jr. 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 of the Company and its
subsidiaries. The Investment Committee met three (3) times in 1998.
The Nominating Committee is currently composed of Walker S. Powers
(Chairman), Claude E. McCain and James L. Zech. 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 re-election. The Nominating Committee met one (1) time in 1998.
The Board of Directors met seven (7) times in 1998. In 1998, each of the
incumbent directors attended at least 75% of the meetings of the Board and of
the Committee(s) of which he or she was a member held during the period for
which he or she served.
SECURITY OWNERSHIP OF THE COMPANY
The following table sets forth, as of December 31, 1998, information
regarding the beneficial ownership of the Company's Common Stock by the
directors of the Company, 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.
<TABLE>
<CAPTION>
Name of Beneficial Owner (and address, with Amount and Nature of Percent of Shares of
respect to non-directors or non-officers) Beneficial Ownership Common Stock (1)
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<S> <C> <C>
Frank H. Avent 532,500 (2) 6.63
A. Crawford Clarkson, Jr. 3,775 (3) 0.05
Claude E. McCain 6,266 (4) 0.08
Kenneth W. Pavia 3,750 (5) 0.05
Charles H. Powers 1,699,051 (6) 21.85
Walker S. Powers 252,500 (7) 3.25
John P. Seibels 155,477 (4,8) 2.00
</TABLE>
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(1) The numbers shown include the shares which are not currently outstanding
but which certain shareholders are entitled to acquire or will be entitled
to acquire within 60 days.
(2) Includes 20,000 shares of Common Stock and 12,500 shares of Common Stock
underlying certain options for which Mr. Avent has sole voting power and
250,000 shares of Common Stock and 250,000 shares of Common Stock
underlying certain options as to which he has shared voting power
beneficially owned (shared voting and disposition power) by Pepsi Cola
Bottling Company of Florence, South Carolina ("PepsiCo"). Mr. Avent has
informed the Company that he is the President and General Manager of
PepsiCo. Mr. Avent's address is Post Office Box 3886, Florence, South
Carolina 29502. Excludes an aggregate of 30,000 shares of Common Stock and
30,000 shares of Common Stock underlying certain options owned by Mr.
Avent's three daughters, of which shares he holds neither sole nor shares
voting or dispositive power and, therefore, disclaims beneficial ownership.
(3) Includes 1,250 share of Common Stock underlying certain options.
(4) Includes 5,000 shares of Common Stock underlying certain options.
(5) Includes 3,750 shares of Common Stock underlying certain options.
(6) Includes 1,696,551 shares of Common Stock and 2,500 shares of Common Stock
underlying certain options. Excludes 62,500 shares of Common stock held by
Mr. Powers' daughter and son-in-law, of which shares, he holds neither sole
nor shares voting or dispositive power and, therefore, disclaims beneficial
ownership.
(7) Includes 250,000 shares of Common Stock and 2,500 shares of Common Stock
underlying certain options.
(8) Excludes 2,253 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.
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<TABLE>
<CAPTION>
Name of Beneficial Owner (and address, with Amount and Nature of Percent of Shares of
respect to non-directors or non-officers) Beneficial Ownership Common Stock (1)
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<S> <C> <C>
Susie H. VanHuss, PhD. 3,025 (3,10) 0.04
George R.P. Walker, Jr. 130,464 (4,11) 1.68
James L. Zech 704,374 (12) 8.31
Steven M. Armato 58,743 (13) 0.75
Michael A. Culbertson 54,011 (14) 0.69
Wayne A. Fletcher 36,205 (15) 0.46
Andrew P. Martin 51,931 (16) 0.66
R. Thomas Savage, Jr. 47,241 (17) 0.60
All Directors, Nominees for Director and Executive 3,739,313 (18) 41.62
Officers as a Group
PRINCIPAL HOLDERS
Avent Group 830,000 (19) 10.14
Franklin Resources, Inc. 650,900 (20) 8.37
Goldman Sachs & Co. 613,900 (21) 7.90
Heartland Advisors, Inc. 500,000 (22) 6.43
</TABLE>
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(9) The numbers shown include the shares which are not currently outstanding
but which certain shareholders are entitled to acquire or will be entitled
to acquire within 60 days.
(10) Excludes 2,250 shares of Common Stock held by Mrs. VanHuss' husband, of
which shares she holds neither sole nor shared voting or dispositive power
and, therefore, disclaims beneficial ownership.
(11) Excludes 11,389 shares of Common Stock held by Mr. Walkers's wife, of which
shares he holds neither sole nor shared voting or dispositive power and,
therefore, disclaims beneficial ownership.
(12) The share ownership for (i) High Ridge Capital, LLC is jointly filed with
(ii) High Ridge Capital Partners, LP, (iii) HRC General Partner, LP, (iv)
James L. Zech and (v) Steven J. Tynan. Includes 703,124 shares of Common
Stock underlying certain options. The information was reported on Form 13D
dated January 28, 1998 and filed with the Securities and Exchange
Commission. Includes 1,250 shares of Common Stock underlying certain
options. The principal address for (i), (ii), (iii), (iv), and (v) is 107
Elm Street, Four Stamford Plaza, Post Office Box 120043, Stamford,
Connecticut 06912-0043.
(13) Excludes 2,500 shares held by Mr. Armato's wife, of which shares he holds
neither sole nor shared voting or dispositive power and, therefore,
disclaims beneficial ownership and includes 52,425 shares of Common Stock
underlying certain options.
(14) Includes 52,425 shares of Common Stock underlying certain options.
(15) Includes 33,625 shares of Common Stock underlying certain options.
(16) Includes 50,000 shares of Common Stock underlying certain options.
(17) Includes 40,000 shares of Common Stock underlying certain options.
(18) Includes 1,211,599 shares of Common Stock underlying certain options as
held by the above individuals.
(19) Includes (i) 270,000 shares of Common Stock and 262,500 shares of Common
Stock underlying certain options for which Mr. Frank Avent, a director of
the Company, either owns individually or shares voting and dispositive
power and (ii) 148,750 shares of Common Stock and 148,750 shares of Common
Stock underlying certain options which are owned by other members of the
Avent Group. The address for the Avent Group is Post Office Box 3886,
Florence, South Carolina 29502.
(20) The share ownership for Franklin Resources, Inc. is based on a Form 13G
dated February 4, 1999 and filed with the Securities and Exchange
Commission. The shares owned by (i) Franklin are beneficially owned by (ii)
Charles B. Johnson, a principal shareholder of Franklin, and (iii) Rupert
H. Johnson, Jr., a principal shareholder of Franklin, and (iv) Franklin
Advisory Services, Inc., investment advisor for Franklin. The principal
address for (i), (ii) and (iii) is 777 Mariners Island Boulevard, San
Mateo, California 94404, and the principal address for (iv) is One Parker
Plaza, Sixteenth Floor Fort Lee, New Jersey 07024.
(21) The share ownership for (i) Goldman, Sachs & Co. is jointly filed with the
(ii) Goldman Sachs Group, LP and (iii) Goldman Sachs Trust on behalf of
Goldman Sachs Small Cap Value Fund based on a Form 13G dated February 16,
1999 and filed with the Securities and Exchange Commission. The principal
address for (i), (ii) and (iii) is 85 Broad Street, New York, New York
10004.
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<TABLE>
<CAPTION>
Name of Beneficial Owner (and address, with Amount and Nature of Percent of Shares of
respect to non-directors or non-officers) Beneficial Ownership Common Stock (1)
------------------------------------------- -------------------- --------------------
<S> <C> <C>
High Ridge Capital, LLC 703,124 (12) 8.30
Powers Group 2,014,051 (24) 25.89
Wellington Management Company, LLP 749,600 (25) 9.64
</TABLE>
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(22) The share ownership for Heartland Advisors, Inc. is based on a Form 13G
dated February 2, 1999 and filed with the Securities and Exchange
Commission. The principal address for Heartland Advisors, Inc. is 790 North
Milwaukee Street, Milwaukee, Wisconsin 53202.
(23) The numbers shown include the shares which are not currently outstanding
but which certain shareholders are entitled to acquire or will be entitled
to acquire within 60 days.
(24) Includes (i) 1,696,551 shares of Common Stock and 2,500 shares of Common
Stock underlying certain options which are owned by Mr. Charles H. Powers,
a director of the Company, (ii) 250,000 shares of Common Stock and 2,500
shares of Common Stock underlying certain options which are owned by Walker
S. Powers, a director of the Company, and (iii) 62,500 shares of Common
Stock and 28,124 shares of Common Stock underlying certain options owned by
Mr. Charles Powers' daughter and son-in-law. The address for the Powers
Group is Post Office Box 6525, Florence, South Carolina 29502.
(25) The share ownership for Wellington Management Company, LLP is based on
information provided in a 13G dated February 10, 1999 and filed with the
Securities and Exchange Commission. Amount beneficially owned is 749,600
with shared voting power of 385,100 and shared power to dispose or to
direct the disposition of 749,600. The principal address is 75 State
Street, Boston Massachusetts 02109.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
COMPENSATION OF DIRECTORS
In 1998, the Company paid quarterly to each director who was not a
full-time employee of the Company a retainer fee of $500 per month plus $750 for
each meeting of the Board at which the director was present, and a fee of $500
for each meeting of a Board Committee which he attended. A fee of $1,000 is paid
to a director who serves as a Chairman of a Board Committee for attendance at
such meeting. Pursuant to the Company's 1995 Stock Option Plan for Non-Employee
Directors, on June 16, 1998, each non-employee director serving on that date was
granted a non-statutory stock option with a right to buy 1,250 shares of Common
Stock. The exercise price of each option is $7.00, which was 100% of the fair
market value per share of Common Stock on the date the option was granted. John
C. West resigned as Chairman of the Board effective July 31, 1998. Upon his
resignation, Mr. West was given the honorary title "Chairman Emeritus" and he
became a consultant to the Company. In connection with this consultant
arrangement, Mr. West was granted an option to purchase 100,000 shares of Common
Stock at an exercise price of $7.25 per share for a term of two years.
7
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth, for the years ended December 31, 1998,
1997 and 1996, 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 Chief Executive Officer and the four most highly compensated executive
officers of the Company and such subsidiaries, other than the Chief Executive
Officer, whose compensation was in excess of $100,000 (the "Executive Group"),
in all capacities in which they serve.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-term Compensation
----------------------
Annual Compensation Awards Payouts
------------------- ------ -------
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Name and Principal Salary Bonus Compensation Awards Options Payouts Compensation
Position Year ($) ($) ($) ($) (#) ($) ($)
- --------------------------- ------- --------- ------- --------------- ----------- ------------ --------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
R. Thomas Savage, Jr. 1998 73,962 0 48,165(1) 4,500 40,000 0 0
Acting President and
Chief Executive Officer
and Chief Financial
Officer(2)
Ernst N. Csiszar 1998 389,231 0 0 0 50,000 0 0
President and Chief 1997 225,000 0 0 0 0 0 0
Executive Officer(3) 1996 144,000 50,000 0 0 50,001 0 0
John A. Weitzel 1998 232,631 0 0 0 25,000 0 0
President and Chief 1997 165,600 0 20,000(4) 0 0 0 0
Executive Officer(5) 1996 144,000 25,000 0 0 25,000 0 0
Andrew P. Martin 1998 126,000 10,000 0 14,000 35,000 0 0
President and Chief
Operating Officer(6)
Wayne A. Fletcher 1998 121,500 10,000 41,202 13,500 23,625 0 0
Vice President(6)
Michael A. Culbertson 1998 105,713 2,000 0 11,499 20,125 0 0
Senior Vice President 1997 103,505 0 5,308 11,495 34,103 0 0
Steven M. Armato 1998 105,713 2,500 0 11,499 20,125 0 0
Vice President-Adm 1997 103,505 0 2,289 11,495 34,103 0 0
</TABLE>
- ----------
(1) This amount represents relocation expenses paid on behalf of Mr. Savage by
the Company, including approximately $39,000 paid to Prudential Relocation
Services for assistance with various relocation matters.
(2) Elected Chief Financial Officer July 31, 1998. Appointed Acting President
and Chief Executive Officer September 21, 1998.
(3) Resigned April 15, 1998.
(4) The amount shown represents the dollar value of the difference between the
price Mr. Weitzel paid to the Company upon the exercise of certain stock
options and the fair market value of the Common Stock he received at the
date of exercise.
(5) Resigned September 16, 1998.
(6) Officer of certain subsidiaries.
8
<PAGE>
OPTION GRANTS
During the year ended December 31, 1998, the Company granted a total of
363,875 stock options to certain members of the Executive Group pursuant to the
Company's 1996 Stock Option Plan for Employees. The following table sets forth
the grants during the year ended December 31, 1998.
OPTIONS/SAR GRANTS DURING THE YEAR ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
Number of Percent of
Securities Total Potential Realizable Value at
Underlying Options/ Exercise Assumed Rates of Stock Price
Options/ SARs or Base Appreciation for Option Term
SARs Granted Granted to Price Expiration ($)
Name (#) Employees ($/Share) Date 5%(1) 10%(1)
- --------------------------- -------------- ------------- ------------ ------------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
R. Thomas Savage, Jr. 40,000 5.16% $7.125 7/6/2003 $0 $0
Ernst N. Csiszar 50,000 6.44% $8.125 3/25/2003 $0 $0
John A. Weitzel 25,000 3.22% $8.125 3/25/2003 $0 $0
Andrew P. Martin 35,000 4.51% $7.25 2/12/2003 $0 $0
Wayne A. Fletcher 23,625 3.04% $7.25 2/12/2003 $0 $0
Michael A. Culbertson 20,125 2.59% $7.25 2/12/2003 $0 $0
Steven M. Armato 20,125 2.59% $7.25 2/12/2003 $0 $0
</TABLE>
- ----------
(1) Assumed for illustrative purposes only.
9
<PAGE>
OPTION EXERCISES AND YEAR-END HOLDINGS
During the year ended December 31, 1998, no member of the Executive
Group exercised stock options. The following table sets forth certain
information with respect to unexercised stock options held by the Executive
Group as of December 31, 1998.
Aggregated Option/SAR Exercises During the Year
Ended December 31, 1998 and 1998 Year-End Option/SAR Values
<TABLE>
<CAPTION>
Shares
Acquired Number of Securities Value of Unexercised
On Value Underlying Unexercised In-The-Money Options/SARs at
Exercise Realized Options/SARs at Year-End Fiscal Year- End
Name (#) ($) (#) Exercisable/Unexercisable Exercisable/Unexercisable
- ---------------------------- ----------- ----------- -------------------------------- --------------------------------
<S> <C> <C> <C> <C>
R. Thomas Savage, Jr. 0 N/A 13,334/26,666 $0/$0
Ernst N. Csiszar 0 N/A 0/0 $0/$0
John A. Weitzel 0 N/A 36,666/33,334 $2,500/$0
Andrew P. Martin 0 N/A 26,667/23,333 $0/$0
Wayne A. Fletcher 0 N/A 7,875/25,750 $0/$0
Michael A. Culbertson 0 N/A 22,907/29,518 $0/$0
Steven M. Armato 0 N/A 22,907/29,518 $0/$0
</TABLE>
EMPLOYMENT AGREEMENTS
During 1998, there were no formal employment contracts between any
Executive Officer and the Company. Any issue relating to executive compensation
would be reviewed by the Compensation Committee, which would recommend a course
of action to the Board of Directors.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee of the Company's Board of Directors is
responsible for recommending 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 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.
BASE SALARY. Each executive officer's base salary is determined based on a
number of factors including the executive officer's responsibilities,
contribution to the achievement of the Company's business plan goals,
demonstrated leadership skills and overall effectiveness and length of service.
Base salaries are designed to be competitive with those offered in markets in
which the Company competes for executive talent. Each executive officer's salary
is reviewed semi-annually and although these and other factors are considered in
setting base salaries, the overall assessment is primarily a subjective one,
intended to reflect the level of responsibility and individual performance of
the particular executive officer.
BONUS OPPORTUNITY. A bonus, if any, is based upon the operations of the
Company and recommendations by the Compensation Committee. No bonuses have been
paid to Ernst N. Csiszar R, Thomas Savage, Jr. or John A.
10
<PAGE>
Weitzel (the "Named Executive Officers") based on their performances during
1998.
STOCK OPTIONS. The Compensation Committee recommended and the Board
approved a grant of options to each of the Named Executive Officers. The
Compensation Committee believes stock option grants to these officers (and other
employees) promote success by aligning employee financial interests with
long-term shareholder value. Stock option grants are based on various subjective
factors primarily relating to the responsibilities of the individual Named
Executive Officers, their expected future contributions and prior option grants.
The compensation paid to other executive officers was not determined by
this Compensation Committee. Currently, compensation for executive officers
other than the Named Executive Officers noted above, is determined by the Chief
Executive Officer based on the performance of each individual.
The foregoing has been provided by the Company's Compensation Committee.
Kenneth W. Pavia (Chairman)
Frank H. Avent
Charles H. Powers
THE REPORT OF THE COMPENSATION COMMITTEE SHALL NOT BE DEEMED INCORPORATED
BY REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER
THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (TOGETHER, THE "ACTS"), EXCEPT
TO THE EXTENT THAT THE COMPANY SPECIFICALLY INCORPORATES THIS INFORMATION BY
REFERENCE, AND SHALL NOT OTHERWISE BE DEEMED FILED UNDER SUCH ACTS.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
On July 31, 1998, the Board of Directors appointed Charles H. Powers
Chairman of the Board of Directors. By virtue of the Company's By-laws, the
Chairman of the Board of Directors was considered an unpaid officer of the
Company from July 31, 1998 until February 12, 1999, when the Board of Direcotrs
amended the Company's By-laws to remove such officer designation. On November
12, 1998, the Compensation Committee approved a grant to certain Company
employees, including certain executive officers, of options to purchase shares
of the Company's Common Stock pursuant to the 1996 Stock Option Plan for
Employees (the "Grant"). The Board ratified the Grant by unanimous approval on
February 4, 1999.
11
<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 1998 with the cumulative total return on the NASDAQ
Stock Market (U.S. 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 02/19/1999 including data to 12/31/1998
[graph omitted]
<TABLE>
<CAPTION>
LEGEND
Symbol CRSP Total Returns Index For: 12/1993 12/1994 12/1995 12/1996 12/1997 12/1998
- ------ ----------------------------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
The Seibels Bruce Group Inc. 100.0 142.9 85.7 117.9 107.9 48.2
NASDAQ Stock Market (US Companies) 100.0 97.8 138.3 170.0 208.3 293.5
NASDAQ Stocks (SIC 6330-6339 US Companies) 100.0 96.3 135.0 146.3 222.3 189.5
Fire, Marine, and Casualty Insurance
</TABLE>
NOTES:
A. The lines represent monthly index levels derived from compounded daily
returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.0 on 12/31/1993.
THE STOCK PRICE PERFORMANCE GRAPH SHALL NOT BE DEEMED INCORPORATED BY
REFERENCE BY ANY GENERAL STATEMENT INCORPORATING BY REFERENCE THIS PROXY
STATEMENT INTO ANY FILING UNDER THE ACTS, EXCEPT TO THE EXTENT THAT THE COMPANY
SPECIFICALLY INCORPORATES THIS INFORMATION BY REFERENCE, AND SHALL NOT OTHERWISE
BE DEEMED FILED UNDER SUCH ACTS.
12
<PAGE>
CERTAIN TRANSACTIONS
Mr. John C. West, chairman emeritus of the Board of Directors of the
Company, is of counsel to the law firm of Bethea, Jordan & Griffin. Bethea,
Jordan & Griffin has been retained by the Company to perform legal services.
During the fiscal year ended December 31, 1998, the Company paid a total of
$40,136 to Bethea, Jordan & Griffin.
During the fiscal year ended December 31, 1998, the Company paid a total of
$521,738 to SADISCO Corporation ("SADISCO") of which $53,800 was for salvage and
disposal services provided to the Company in the ordinary course of business and
$467,938 was for reimbursement of expenses advanced by SADISCO on behalf of the
Company in connection with such services. Charles H. Powers, chairman of the
Board of Directors of the Company, is the owner and operator of SADISCO.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who own more than ten percent of
the Company's equity securities to file initial 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 solely 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, 1998, the Section 16(a) filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were in compliance, with the exception of Charles H. Powers, who filed a
late Form 4 relating to certain shares transferred.
2. RATIFICATION OF 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, 1999. Arthur Andersen LLP
has served as the Company's independent accountants since December 28, 1992. On
February 4, 1999, 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 1999 and the
submission of the selection to the shareholders for ratification. Accordingly,
the Board recommends the approval 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, 1999, 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. Approval by the Shareholders of the
appointment of independent auditors is not required but the Board deems it
desirable to submit this matter to the Shareholders. If holders of a majority of
the Shares of Common Stock present and entitled to vote at the Meeting should
not approve the selection of Arthur Andersen LLP, the Board will consider the
selection of another accounting firm.
VOTE REQUIRED AND BOARD RECOMMENDATION
The affirmative vote by the holders of a majority of the votes cast in
person or by proxy at the Meeting is required for approval of Proposal 2. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT OF
INDEPENDENT ACCOUNTANTS.
SHAREHOLDER PROPOSALS
For a shareholder proposal to be presented at the next annual meeting, it
must be received by the Company
13
<PAGE>
at its principal executive offices not later than December 10, 1999, in order to
be included in the proxy statement and proxy form for the 2000 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 29201 or mailed to Post Office Box One, Columbia, South
Carolina 29202.
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.
/s/ Matt P. McClure
--------------------
Matt P. McClure
Corporate Secretary
