<PAGE> 1
================================================================================
SCHEDULE 14A
(RULE 14a)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
<TABLE>
<S> <C>
[ ] 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
Bancinsurance Corporation
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE 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)(1) 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: ...........................................................
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<PAGE> 2
BANCINSURANCE CORPORATION
20 East Broad Street
Fourth Floor
Columbus, Ohio 43215
NOTICE OF ANNUAL
MEETING OF SHAREHOLDERS
To Our Shareholders:
The Annual Meeting of Shareholders of Bancinsurance Corporation will be
held at the offices of Porter, Wright, Morris & Arthur, 41 South High Street,
29th Floor, Columbus, Ohio on Tuesday, June 2, 1998, at 9:30 a.m., local
Columbus, Ohio time, for the following purposes:
1. To elect six directors to serve until the next annual meeting
and until their successors are duly elected and qualified.
2. To transact such other business as may properly come before
the meeting.
You will be most welcome at the meeting, and we hope you can attend.
Directors and officers of Bancinsurance Corporation and a representative of its
independent public accountants will be present to answer your questions and to
discuss its business.
We urge you to execute and return the enclosed proxy as soon as
possible so that your shares may be voted in accordance with your wishes. If you
attend the meeting, you may vote in person, and your proxy will not be used.
BY ORDER OF THE BOARD OF DIRECTORS
Columbus, Ohio
April 24, 1998 SALLY J. CRESS, SECRETARY
PLEASE SIGN AND MAIL THE ENCLOSED PROXY
IN THE ACCOMPANYING ENVELOPE
NO POSTAGE NECESSARY IF MAILED IN THE UNITED STATES
<PAGE> 3
[This page left intentionally blank]
<PAGE> 4
BANCINSURANCE CORPORATION
20 East Broad Street
Fourth Floor
Columbus, Ohio 43215
----------
PROXY STATEMENT
----------
ANNUAL MEETING OF SHAREHOLDERS
JUNE 2, 1998
----------
This Proxy Statement is furnished to the shareholders of Bancinsurance
Corporation (the "Company") in connection with the solicitation of proxies to be
used in voting at the Annual Meeting of Shareholders to be held on June 2, 1998,
at the offices of Porter, Wright, Morris & Arthur, 41 South High Street, 29th
Floor, Columbus, Ohio, and at any adjournment thereof. The enclosed proxy is
solicited on behalf of the Board of Directors of the Company. This Proxy
Statement and the enclosed proxy will be first sent or given to the Company's
shareholders on or about April 24, 1998.
The shares represented by the accompanying proxy will be voted as
directed if the proxy is properly signed and received by the Company prior to
the meeting. The proxy will be voted FOR the nominees for director named herein.
A proxy may be revoked by a shareholder by written notice received by
the Company prior to the meeting or in person at the meeting. If a proxy is
properly signed and not revoked by the shareholder, the shares it represents
will be voted at the meeting in accordance with the instructions of the
shareholder. Shareholders who attend the meeting may vote in person and their
proxies will not be used if such shareholder affirmatively revokes his or her
proxy prior to the meeting.
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<PAGE> 5
A majority of the outstanding shares of the Company will constitute a
quorum at the meeting. Abstentions and broker non-votes are counted for purposes
of determining the presence or absence of a quorum for the transaction of
business. The election of each director nominee of the Company requires the
favorable vote of a plurality of all votes cast by the holders of common stock,
without par value (the "Common Stock"), at a meeting at which a quorum is
present. Only shares that are voted in favor of a particular nominee will be
counted towards such nominee's achievement of a plurality. Proxies that are
marked "Withhold Authority" and broker non-votes are not counted toward such
nominee's achievement of a plurality and, thus, will have no effect. Each other
matter to be submitted to the shareholders at this meeting, if any, requires the
affirmative vote of the majority of shares present in person or represented by
proxy at the meeting and entitled to vote. Thus, abstentions will be counted and
will have the same effect as votes cast against the proposal; broker non-votes
will not be counted and will have no effect.
The Company will bear the cost of the solicitation of proxies, including
the cost of preparing and mailing the notice of the meeting, proxy statement,
proxy and all papers which may hereafter be issued to supplement this Proxy
Statement.
VOTING SECURITIES
Holders of record of Common Stock at the close of business on April 9,
1998 will be entitled to vote. At that date, the Company had 5,843,115 shares of
Common Stock outstanding and entitled to vote at the Annual Meeting.
Each share of Common Stock outstanding held on the record date entitles
the holder thereof to one vote upon each matter to be voted upon. The laws of
Ohio under which the Company is incorporated provide for cumulative voting
rights in the election of directors under certain circumstances. A shareholder
must give notice in writing to the President, a Vice President or the Secretary
of the Company not less than 48 hours before the time fixed for holding the
meeting of shareholders for the purpose of electing directors if notice of such
meeting has been given at least 10 days prior thereto, and otherwise not less
than 24 hours before such meeting, that he or she desires cumulative voting at
such election. If an announcement of the giving of such notice is made upon
convening of the meeting by the Chairman or Secretary, or by, or on behalf of,
such shareholder, each holder of shares shall have cumulative voting rights in
the election of directors. Cumulative voting entitles each shareholder to
cumulate the voting power he or she possesses in the election of directors and
give one nominee as many votes as is equal to the number of shares he or she
holds multiplied by the number of directors to be elected, or to distribute his
or her votes on the same principle among two or more of the nominees, as he or
she sees fit.
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<PAGE> 6
ELECTION OF DIRECTORS
The number of directors to be elected is six (6). The directors are to
be elected to hold office until the next annual meeting and until their
successors are duly elected and qualified. The shares represented by the
enclosed proxy, if authority is not withheld and the proxy is returned duly
executed, will be voted for the six nominees named below. If voting is
cumulative as a result of the request of a shareholder, the proxy holders
designated by the Board of Directors will have discretionary authority to
distribute the votes of shares subject to proxies they hold so as to elect the
maximum number of nominees for director set forth herein.
It is intended that, unless otherwise directed, the shares represented
by the enclosed proxy will be voted FOR the election of the nominees as
directors. In the event that any of the nominees for director should become
unavailable, the Board of Directors may designate a substitute nominee, in which
event such shares will be voted for each substitute nominee.
Each nominee for director was elected at the 1997 Annual Meeting of
Shareholders to serve a one-year term expiring in 1998.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
The following table sets forth certain information concerning each
nominee for director.
Directorships held in
any company with a class
of securities registered
pursuant to Sections 12
Director or 15(d) of the Securities
Name Age Since Exchange Act of 1934
---- --- ----- --------------------
Si Sokol 70 1970 Westford Group, Inc.
James R. Davis 63 1987 Westford Group, Inc.
Daniel D. Harkins 68 1981 Westford Group, Inc.
Milton O. Lustnauer 80 1981 None
John S. Sokol 35 1990 Westford Group, Inc.
Saul Sokol 78 1982 None
3
<PAGE> 7
Si Sokol has been Chairman of the Board of Directors of the Company
since 1970 and President since December 1980, and is also Chairman of the Board
and President of Ohio Indemnity and President of BCIS Services, Inc. Mr. Sokol
is also President and a Director of Westford Group, Inc., which is a holding
company currently involved in the preparation of codes and the publishing of
municipal ordinances, and which has its common stock registered pursuant to
Section 12 of the Securities Exchange Act of 1934, as amended. Mr. Sokol is a
Director of Fifth Third Bank of Columbus, Ohio and has previously served on the
boards of a number of corporations including several national banks and a
federally chartered savings and loan association located in the State of Ohio.
Mr. Sokol is Saul Sokol's brother and John Sokol's father.
James R. Davis joined the Company in 1989 as the Administrator of Ohio
Indemnity's Bonded Service program and was elected a Vice President of the
Company in 1992. He also serves as a Director of Ohio Indemnity and Westford
Group, Inc. and as Vice President of Ohio Indemnity and BCIS Services. From 1986
to 1989, Mr. Davis served as an independent consultant to third party
administrators of self-insured workers' compensation programs. He acted as
President and Director of James R. Davis & Associates, Inc., a corporation
providing cost management services, from 1980 to 1986, which he sold in 1985. He
was President of Gates, McDonald & Company, a corporation providing cost
management services from 1971 to 1979.
Daniel D. Harkins is a private investor. He also serves as a Director of
Ohio Indemnity and Westford Group, Inc. Prior to 1987, Mr. Harkins was the owner
and president of Ace Beverage Distributing Company. From 1973 to 1978, he served
as General Sales Manager and International Sales Manager for several divisions
of Ashland Chemical Co., and from 1978 to 1980, he served as a consultant for A.
T. Kearney Inc., a management consulting firm.
Milton O. Lustnauer is a private investor. He also serves as a Director
of Ohio Indemnity. Mr. Lustnauer was co-founder of BBF, Inc., a restaurant
chain, and served as Executive Vice President of that corporation from 1961 to
1969 when it was acquired by Borden Inc. Following the acquisition, he became
President of BBF, Inc., a position he held from 1969 to 1973. He previously
served as director of numerous corporations, including two banks.
John Sokol, son of Si Sokol, was elected Executive Vice President of
Bancinsurance Corporation and Ohio Indemnity Company in 1996. He was Vice
President of Bancinsurance and Ohio Indemnity from 1993 to 1996. Prior to that
time, he served as an officer for what is now The Chase Bank of New York
(formally Manufacturers Hanover and Chemical Bank) from 1989 to 1993. Mr. Sokol
became a Director of Bancinsurance Corporation and Ohio Indemnity
4
<PAGE> 8
Company in 1990. He became Chairman of Title Research Corporation in 1997. He
also serves on the Board of Trustees of the Central Ohio Transit Authority
(COTA). He holds a B.A. degree in Economics from Denison University and a M.B.A.
in Finance from Vanderbilt University.
Saul Sokol, brother of Si Sokol, is the owner of Sokol Insurance Agency.
He is a chartered life underwriter (CLU) and a chartered property/casualty
insurance underwriter (CPCU). He is the past president of the Columbus Life
Underwriter's Association and the Columbus Chapter of Chartered
Property/Casualty Underwriters. Mr. Sokol is a member of several local, state
and national insurance associations. In addition, he has published a book for
consumers dealing with insurance. Mr. Sokol also serves as a Director of Ohio
Indemnity.
COMMITTEES OF THE BOARD; OTHER INFORMATION
In October 1982, the Board of Directors of the Company established an
Executive Committee. The Executive Committee has authority to take any action,
other than filling vacancies on the Board of Directors or on any committee of
the Board of Directors, that the Board of Directors may from time to time
delegate to the Executive Committee. Messrs. Si Sokol, Harkins and Lustnauer
currently serve as members of the Executive Committee. The Executive Committee
did not meet during 1997.
In November 1992, the Company established an Audit Committee. The Audit
Committee recommends the annual appointment of the Company's auditors, with whom
the Audit Committee reviews the scope of the audit and nonaudit assignments and
related fees, the accounting principles used by the Company in financial
reporting, internal financial auditing procedures and the adequacy of the
Company's internal control procedures. Messrs. John S. Sokol, Harkins and
Lustnauer currently serve as members of the Audit Committee. The Audit Committee
held one meeting during 1997. All members of the Audit Committee attended the
meeting.
In June 1994, the Company established a Stock Option Committee to
administer the 1994 Stock Option Plan. The Stock Option Committee consists
solely of directors who are not, and have never been, employees of, or paid
consultants or advisors to, the Company. The Stock Option Committee is
authorized to determine to whom and at what time options may be granted. The
Stock Option Committee determines the number of shares subject to option, the
duration of the option, the per share exercise price, the rate and manner of
exercise, and whether the option is intended to be a Nonqualified Option or an
Incentive Option. Messrs. Harkins and Lustnauer
5
<PAGE> 9
currently serve as members of the Stock Option Committee. The Stock Option
Committee held one meeting during 1997. All members of the Stock Option
Committee attended the meeting.
The Company's Board of Directors held five meetings during 1997. Each of
the directors attended 75% or more of the total number of Board of Directors
meetings held during 1997.
COMPENSATION OF DIRECTORS
The directors of the Company are also directors of Ohio Indemnity, which
paid each non-employee director, a $1,000 retainer plus $400 per meeting
attended in 1997. In addition, non-employee directors received $200 for each
committee meeting attended in 1997. Under the Company's 1994 Stock Option Plan,
non-employee directors automatically receive an option to purchase 2,000 shares
of the Common Stock on the first business day after each Annual Meeting of
Shareholders, provided the director continues to serve on the Board on such
date. Such options are not exercisable until one year from the date of grant and
terminate on the earlier of the tenth anniversary of the date of grant or three
months following the date the director ceases to be a director of the Company or
becomes disabled or dies. Employee directors do not receive additional
compensation from the Company or Ohio Indemnity for serving as directors.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In May 1994, the Company entered into a Split-Dollar Insurance Agreement
("Agreement") with the Fifth-Third Bank of Columbus as Trustee ("Trustee") for
the benefit of Si Sokol, the Company's Chief Executive Officer, and his spouse,
Barbara K. Sokol (collectively, the "Insureds"). Pursuant to the Agreement, the
Trustee has acquired a second-to-die policy on the lives of the Insureds, in the
aggregate face amount of $2,700,000. The aggregate annual premium is comprised
of a term and a whole life portion, of which the whole life portion is treated
as an interest-free loan with the insurance policy assigned to the Company as
collateral to secure the Company's interest in the policy. The term and whole
life portion of the split-dollar life insurance policy equaled $967 and $70,752,
respectively, for 1997. All premiums paid by the Company in connection with the
split-dollar life insurance policy are to be repaid, in full, without interest,
upon the death of the second-to-die of the Insureds. In addition, Mr. and Mrs.
Sokol have contributed 15,000 shares of the Company's Common Stock to the Si and
Barbara K. Sokol Irrevocable Trust dated May 6, 1994 (the "Trust"), and the
Trust has pledged such shares to secure the Trustee's rights under the
Agreement.
The Company places its insurance coverages with the Sokol Insurance
Agency whose principal is Saul Sokol, a director of the Company and Ohio
Indemnity.
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<PAGE> 10
Management believes that the transactions with affiliates, including the
loans and insurance products mentioned above, have not been material and have
been made under terms that were no less favorable to the Company than those that
would have been offered to or could have been obtained from unaffiliated third
parties. In the future, the Company will not enter into any transactions with
officers, directors, principal shareholders or affiliates, including loans,
unless the terms are no less favorable to the Company than those that could be
obtained from unaffiliated third parties and the transactions are approved by a
majority of the Company's directors, including a majority of disinterested
directors.
OWNERSHIP OF VOTING STOCK
The following table sets forth the beneficial ownership of the Company's Common
Stock as of March 31, 1998 by: (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding Common Stock of the Company;
(ii) each of the Company's directors and the executive officers named in the
Summary Compensation Table; and (iii) the directors and executive officers as a
group.
Name and Address Number of Shares Percent
of Beneficial Beneficially of
Owner Owned(1,2) Class(2)
- ---------------- ---------------- --------
Si Sokol 2,856,900(3) 48.9%
Chairman, Director and President
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
Barbara K. Sokol 2,856,900(3) 48.9%
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
John S. Sokol 275,140(3,4) 4.7%
Director and Executive Vice President
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
7
<PAGE> 11
Name and Address Number of Shares Percent
of Beneficial Beneficially of
Owner Owned(1,2) Class(2)
- ---------------- ---------------- --------
Daniel D. Harkins 54,500(4) .9%
Director
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
Milton O. Lustnauer 415,560(4) 7.1%
Director
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
James R. Davis 37,000(4) 0.6%
Director and Vice President
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
Saul Sokol 309,850(4) 5.3%
Director
20 East Broad Street, Fourth Floor
Columbus, Ohio 43215
All directors and
executive officers as a group
(seven persons) 3,783,410(4) 63.9%
(1) Except as otherwise noted, none of the named individuals shares with
another person either voting or investment power as to the shares
reported.
(2) Calculated on the basis of the number of outstanding shares plus the
number of shares a person has the right to acquire within 60 days of
March 31, 1998.
(3) Includes 2,266,280 shares owned by Barbara K. Sokol, of which 661,620
shares are owned by her as trustee for her children including 220,540
shares as trustee for John Sokol, her son, and 590,620 shares owned by
Si Sokol, her husband. Included in both Mr. and Mrs. Sokol's shares are
15,000 indirectly owned shares that were contributed,
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<PAGE> 12
7,500 shares from each, to the Si and Barbara K. Sokol Irrevocable Trust
(Fifth Third Bank as Trustee) in connection with a split-dollar
insurance policy on the life of Mr. and Mrs. Sokol, for the benefit of
their three children, including 5,000 shares as pledged through a
collateral agreement for John Sokol, over which John Sokol shares no
investment control over the Trust. The rules of the Securities and
Exchange Commission require that Mr. and Mrs. Sokol's shares be
aggregated for purposes of this disclosure; however, Mr. and Mrs. Sokol
each disclaim any beneficial ownership of the other's shares.
(4) Includes 19,000, 8,000, 8,000, 15,000 and 8,000 shares each for Messrs.
John Sokol, Harkins, Lustnauer, Davis and Saul Sokol and 81,000 shares
for all directors and executive officers of the Company as a group which
may be purchased pursuant to stock options exercisable within 60 days of
March 31, 1998.
EXECUTIVE OFFICERS OF THE COMPANY
Executive officers are elected annually by the Board of Directors and
serve at the pleasure of the Board. In addition to Si Sokol, Chairman of the
Board and President, John S. Sokol, Executive Vice President, and James R.
Davis, Vice President, the following person is an executive officer of the
Company.
SALLY J. CRESS, age 43, has served as the Secretary, Treasurer and
principal accounting officer of the Company and Ohio Indemnity since March 1985.
She also serves as Director of Ohio Indemnity and as Secretary and Treasurer of
BCIS Services and Westford Group, Inc. Mrs. Cress is a Certified Public
Accountant.
EXECUTIVE COMPENSATION
The following table sets forth the compensation paid by the Company and
its principal subsidiaries to the Company's Chief Executive Officer and the
executive officers whose salary and bonus exceeded $100,000 for the fiscal years
ended December 31, 1997, 1996 and 1995, respectively.
9
<PAGE> 13
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long-Term
Annual Compensation
Compensation Awards
------------------- ------------
(a) (b) (c) (d) (g) (i)
Securities All Other
Name and Principal Salary Bonus Underlying Compensation
Position Year ($) ($) Options (#) ($) (1)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
SI SOKOL(2) 1997 $251,616 $70,000 -- $ 9,930
Chairman, President 1996 226,731 30,000 -- 7,472
Chief Executive Officer 1995 215,000 20,000 -- 699
JOHN SOKOL 1997 125,385 25,000 25,000 12,078
Executive Vice President 1996 75,577 15,000 -- 8,461
1995 59,235 10,000 10,000 5,400
JAMES R. DAVIS 1997 118,906 70,000 5,000 10,911
Vice President 1996 115,978 40,000 -- 10,810
1995 110,100 40,000 10,000 5,400
</TABLE>
- ----------
(1) Represents, for each named executive, the amount of the Corporations
matching contributions to the Ohio Indemnity Company Employee 401(k) and
Profit Sharing Plan (the "401(k) Plan"), effective January 1, 1996, plus
reimbursement of forfeiture penalties incurred as a result of merging of
the predecessor Profit Sharing Plan. Messrs. Si Sokol and Davis are 100%
vested and Mr. John Sokol is 60% vested in the 401(k) Plan as of
December 31, 1997. There was no contribution to the Profit Sharing Plan
in 1995. Additionally, Mr. John Sokol and Mr. Davis are entitled to
annual reimbursement for automobile expenses of $5,400 per annum, and,
for Mr. Si Sokol, costs associated with the term portion of a
split-dollar life insurance policy, which premium equaled $967, $822 and
$699 for 1997, 1996 and 1995, respectively.
(2) The aggregate annual premium of Mr. Sokol's split-dollar life insurance
policy is comprised of a term and a whole life portion, of which the
whole life portion is treated as an interest-free loan. The premium for
the whole life portion of Mr. Sokol's split-dollar life insurance policy
equaled $70,752, $70,897 and $71,020 for 1997, 1996 and 1995,
10
<PAGE> 14
respectively, and has not been included in the Summary Compensation
Table. The aggregate annual premiums associated with the split-dollar
life insurance policy are to be repaid, in full, upon the second-to-die
of Mr. and Mrs. Sokol.
The following table sets forth certain information regarding stock
options granted to the executive officers named in the Summary Compensation
Table during the Company's 1997 fiscal year and the exercise price and
expiration date of the options granted to such executive officers.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realized
Value at Assumed
Annual Rates of
Stock Price
Appreciation for
Individual Grants Option term (2)(3)
- --------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f) (g)
Number of
Securities % of Total
Underlying Options Granted Exercise
Options to Employees in Price Expiration
Name Granted(#) Fiscal Year ($/Sh)(1) Date 5% ($) 10% ($)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Si Sokol -- -- -- -- -- --
John S. Sokol(4) 25,000 35.2% $3.875 1-1-07 $157,799 $251,268
James R. Davis(4) 5,000 7.0 3.875 1-1-07 31,560 50,254
</TABLE>
- ----------
(1) The option price is the fair market value of the Company's
common stock on the date of grant, determined in accordance with
the 1994 Stock Option Plan (i.e., the closing sales price per
share on the Nasdaq National Market on that date).
(2) The dollar amounts in these columns are the product of (a) the
difference between (1) the product of $3.875 (the per share
market price on the date of grant) and the sum of 1 plus the
assumed rate of appreciation (5% and 10%) compounded over the
term of the option
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<PAGE> 15
(ten years) and (2) $3.875 (the per share exercise price) and
(b) the number of shares underlying the grant at the end of
fiscal 1997.
(3) The appreciation rates stated are arbitrarily assumed, and may
or may not reflect actual appreciation in the stock price over
the life of the option. Regardless of any theoretical value
which may be placed on a stock option, no increase in its value
will occur without an increase in the value of the underlying
shares. Whether such an increase will be realized will depend
not only on the efforts of the recipient of the option, but also
on the conditions in the Company's industry and market area,
competition, and general and local economic conditions, over
which the optionee may have little or no control.
(4) These options were granted January 2, 1997 and will vest 20%
every year over a five year period.
The following table sets forth certain information regarding stock
options exercised by the executive officers named in the Summary Compensation
Table during the Company's 1997 fiscal year and the year-end values of
unexercised options held by such executive officers.
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<CAPTION>
- ------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Fiscal Options at Fiscal
Year End (#) Year End ($)(2)
Shares Value
Acquired on Realized Exercisable/ Exercisable/
Name Exercise (#) ($)(1) Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Si Sokol -- -- -- --
John S. Sokol -- -- 14,000/31,000 $2,250/31,500
James R. Davis(2) 15,000 $36,563 14,000/11,000 0/16,500
</TABLE>
- ----------
12
<PAGE> 16
(1) Represents the difference between the per share fair market value on
the date of exercise and the per option exercise price, multiplied by
the number of shares to which the exercise relates.
(2) Represents the total gain which would be realized if all in-the-money
options held at year end were exercised, determined by multiplying the
number of shares underlying the options by the difference between the
per share option exercise price and the per share fair market value at
year end. An option is in-the-money if the fair market value of the
underlying shares exceeds the exercise price of the option.
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed Coopers and Lybrand L.L.P. as
independent certified public accountants to examine and report on the Company's
financial statements for the current fiscal year, and to perform other
appropriate audit, accounting and consulting services. Coopers & Lybrand L.L.P.
served as the Company's independent accountants and audited the Company's
financial statements for the year ended December 31, 1997. Representatives of
Coopers & Lybrand L.L.P. will be present at the meeting and will have an
opportunity to make a statement if they desire to do so. Such representatives
will be available to respond to appropriate questions.
PROPOSALS BY SHAREHOLDERS FOR 1999 ANNUAL MEETING
If any shareholder of the Company wishes to submit a proposal to be
included in next year's Proxy Statement and acted upon at the annual meeting of
the Company to be held in 1999, the proposal must be received by the Secretary
of the Company at the principal executive offices of the Company, 20 East Broad
Street, Fourth Floor, Columbus, Ohio 43215, prior to the close of business on
January 1, 1999. Any proposal submitted after that date may be omitted by the
Company from the Proxy Statement and form of proxy relating to that meeting.
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<PAGE> 17
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and greater than 10% shareholders,
to file reports of ownership and changes in ownership of the Company's
securities with the Securities and Exchange Commission (SEC). Copies of the
reports are required by SEC regulation to be furnished to the Registrar. Based
on its review of such reports and written representations from reporting
persons, the Company believes that, during fiscal 1997, all filing requirements
were complied with.
OTHER MATTERS
The Company's 1997 Annual Report was furnished to shareholders prior to
or concurrently with the mailing of this proxy material. Extra copies of the
1997 Annual Report are available upon request.
As of this date, management knows of no other business that will come
before the meeting. Should any other matter requiring a vote of shareholders
arise, the proxy in the enclosed form confers upon the person or persons
designated to vote the shares discretionary authority to vote the same with
respect to any such other matter in accordance with their best judgment.
UPON THE WRITTEN REQUEST OF ANY PERSON WHOSE PROXY IS HEREBY SOLICITED,
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS ANNUAL REPORT ON FORM
10-K, AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. ANY SUCH REQUEST
SHOULD BE ADDRESSED TO SALLY J. CRESS, SECRETARY, BANCINSURANCE CORPORATION, 20
EAST BROAD STREET, FOURTH FLOOR, COLUMBUS, OHIO 43215.
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE URGED TO SIGN
AND DATE THE ENCLOSED PROXY AND TO MAIL IT PROMPTLY.
BY ORDER OF THE BOARD OF DIRECTORS
SALLY J. CRESS, SECRETARY
APRIL 24, 1998
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BANCINSURANCE CORPORATION
20 EAST BROAD STREET, FOURTH FLOOR
COLUMBUS, OHIO 43215
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Daniel D. Harkins, Milton O. Lustnauer,
and Si Sokol, or any of them as proxies, each with the power to appoint his
substitute, and hereby authorizes them (or any of them if all shall not be
present) to represent and to vote, as indicated, at the Annual Meeting of
Shareholders of Bancinsurance Corporation to be held June 2, 1998, at the
offices of Porter, Wright, Morris & Arthur, 41 South High Street, 29th Floor,
Columbus, Ohio, or at any adjournment thereof, upon the election of directors
and, in their discretion, upon such other business as may properly come before
the meeting, all the Common Shares of Bancinsurance Corporation held of record
by the undersigned on April 9, 1998.
<TABLE>
<S> <C> <C>
ELECTION OF DIRECTORS [ ] FOR all nominees [ ] WITHHOLD AUTHORITY
(except as marked to the contrary below) to vote for ALL nominees listed below
James R. Davis Saul Sokol Daniel D. Harkins John S. Sokol Milton O. Lustnauer Si Sokol
</TABLE>
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED
"FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR LISTED ABOVE.
(This Proxy Continues And Must Be Signed On The Reverse Side)
<PAGE> 21
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders, the Proxy Statement and the 1997 Annual Report.
[ ] Please check if you plan to attend the Annual Meeting.
............................................................
(Date)
............................................................
(Signature)
............................................................
(Second Signature, if Applicable)
Please date and sign exactly as name appears above. When
signing as attorney, executor, administrator, trustee,
guardian or corporate officer, please give full title. All
joint owners must sign. Please return promptly.
PLEASE RETURN PROXY IN ENVELOPE FURNISHED.
