<PAGE>
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[_] Preliminary Information Statement [_] Confidential, for Use of the
Commission Only (as permitted
by Rule 14c-5(d)(2))
[x] Definitive Information Statement
FORTUNE NATIONAL CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14c-5(g).
[_] Fee computed on table below per Exchange Act Rules 14c-5(g) 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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Notes:
<PAGE>
FORTUNE NATIONAL CORPORATION
10555 Richmond Avenue
Houston, Texas 77042
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On May 8, 1995
To Our Stockholders:
The Annual Meeting of Stockholders of Fortune National Corporation (the
"Company") will be held Monday, May 8, 1995, at 8:00 a.m., local time, at the
offices of the Company, 10555 Richmond Avenue, Houston, Texas.
The purposes of the meeting are:
1. To elect a Board of Directors to serve for the ensuing year; and
2. To act upon such other matters as may properly come before the meeting or
any adjournment thereof.
Holders of the Company's Common Stock of record at the close of business on
March 27, 1995, are entitled to receive notice of and to vote at the meeting.
The accompanying Information Statement is furnished on behalf of the Board of
Directors of the Company to provide notice of the Company's Annual Meeting of
Stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
For the Board of Directors
Paul L. Clancy
Secretary
April 10, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
General Information 1
Voting 1
Election of Directors 1
Meetings and Committees 2
Security Ownership of Certain Owners 3
Executive Officers 5
Security Ownership of Management 5
Beneficial Ownership Reporting 8
Executive Compensation 8
Certain Relationships and Related Transactions 9
Independent Auditors 9
Quorum for Meeting 10
Submission of Stockholder Proposals 10
</TABLE>
<PAGE>
FORTUNE NATIONAL CORPORATION
10555 Richmond Avenue
Houston, Texas 77042
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
GENERAL INFORMATION
This Information Statement is furnished on behalf of the Board of Directors of
Fortune National Corporation (the "Company") to provide notice of the Company's
Annual Meeting of Stockholders to be held Monday, May 8, 1995, at 8:00 a.m.,
local time, at the offices of the Company, 10555 Richmond Avenue, Houston,
Texas. This Information Statement is first being sent or given to stockholders
of the Company on or about April 10, 1995.
VOTING
The common stock, $1 par value (the "Common Stock"), of the Company is the only
outstanding class of voting securities of the Company. Only stockholders of
record at the close of business on March 27, 1995, the record date, are entitled
to vote at the Annual Meeting. As of the record date, there were 2,616,984
shares of Common Stock outstanding (excluding shares held by the Company's
subsidiary, which are not voted) and approximately 1,526 holders of the Common
Stock. Each share of the Company's Common Stock is entitled to one vote.
The shares owned by InsCap Corporation ("InsCap"), the majority stockholder of
the Company, will be voted for the election of directors recommended by the
Board of Directors.
ELECTION OF DIRECTORS
At a March 27, 1995 regular meeting of the Board of Directors, the Board amended
the By-Laws of the Company to eliminate staggered terms for the Company's
Directors and to provide for annual election of all of the Company's Directors.
The Board also voted to reduce the size of the Board from five members to three.
Accordingly, Messrs. John D. Cornett and Frank E. Hartung, current members of
the Board, are not standing for re-election. If, for any reason not known at
present, any nominee is not available for election, InsCap will vote for such
substitute persons, if any, as shall be designated by the Board of Directors.
1
<PAGE>
The affirmative vote of a majority of the shares of Common Stock represented at
the Annual Meeting is required to elect a director.
Brief statements setting forth the age (at March 27, 1995), the business
experience during the past five years, the year in which first elected a
director and other information concerning each nominee appear below. All such
nominees are members of the present Board of Directors. In addition, all such
nominees serve as directors of Acap Corporation ("Acap"), the majority-owned
subsidiary of the Company, which is subject to the reporting provisions of the
federal securities laws. The Company is a majority-owned subsidiary of InsCap
and Acap is a majority-owned subsidiary of the Company.
R. WELLINGTON DANIELS (80): Mr. Daniels has served as a director since 1991 and
is a member of the Audit Committee. Before his retirement in 1979, Mr. Daniels
served as Director of National Accounts, American Cyanamid Corporation. Mr.
Daniels has also served as a director of InsCap since 1990.
WILLIAM F. GUEST (63): Mr. Guest has served as a director since 1984 and is
Chairman of the Board and a member of the Executive Committee. Mr. Guest has
served as Chairman of the Board since 1991 and President of the Company since
1984. Mr. Guest is the Chairman of the Board and President of Acap, the
Chairman of the Board and Chief Executive Officer of each of the Company's life
insurance subsidiaries and is a director and the President of InsCap. Mr. Guest
is an attorney and prior to joining the Company and its affiliates was engaged
in the private practice of law in Houston, Texas for many years.
C. STRATTON HILL, JR., M.D. (66): Dr. Hill has served as a director since 1986
and is a member and the Chairman of the Audit Committee. Dr. Hill is also the
Medical Director of the Company's life insurance subsidiaries. Dr. Hill is a
physician and has been engaged in the practice of medicine at the M.D. Anderson
Tumor Institute, Houston, Texas for many years.
MEETINGS AND COMMITTEES OF THE BOARD
During 1994 the Board of Directors of the Company held four meetings. In
addition, there are two standing committees of the Board of Directors which have
the authority and responsibilities and which met during 1994 as described below.
Each incumbent director attended at least 75% of the total number of meetings of
the Board of Directors and committees of the Board of Directors on which he
served (during the periods of such service).
2
<PAGE>
EXECUTIVE COMMITTEE. The Executive Committee has and may exercise all of the
powers and authority of the Board of Directors in the management of the business
and affairs of the Company except as may be limited by law or the By-Laws of
the Company. No meetings of the Executive Committee were held in 1994.
AUDIT COMMITTEE. The Audit Committee has the authority and responsibility to
oversee the work of the independent public accountants for the Company and to
meet with such accountants from time to time to determine the adequacy of the
Company's accounting systems and controls and audit procedures. Two meetings of
the Audit Committee were held in 1994.
OTHER FUNCTIONS. There is no standing nominating committee or compensation
committee of the Board of Directors, nor is there any committee of the Board of
Directors performing similar functions. American Capitol Insurance Company
("American Capitol"), a wholly-owned subsidiary of Acap, maintains a standing
compensation committee which has the responsibility of recommending the amount
and form of compensation and benefits for officers and other key employees of
American Capitol. Messrs. Daniels, Hartung and Hill are the members of American
Capitol's compensation committee. American Capitol's compensation committee
held no meetings during 1994. The Company does not provide separate or
additional compensation for its officers, all of whom are also officers of
American Capitol, but is obligated to reimburse American Capitol for services
provided to the Company by such persons in accordance with the terms of an
intercompany service agreement.
DIRECTOR COMPENSATION. Directors who are also officers of the Company do not
receive directors' fees or other amounts in compensation for participation on
the Board of Directors or a committee of the Board of Directors. All other
directors are each paid a fee of $500 plus travel expenses for each meeting of
the Board of Directors attended. In addition, each director who serves as a
member of a committee of the Board of Directors is paid a fee of $500 plus
travel expenses for each meeting of such committee attended unless such meeting
is held in conjunction with a meeting of the Board of Directors held on the same
day.
SECURITY OWNERSHIP OF CERTAIN OWNERS
Set forth below is information with respect to each person, entity or group
known to have been the beneficial owner of more than 5% of the Company's Common
Stock, its sole voting class of securities, as of March 27, 1995.
3
<PAGE>
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned (1) Class
- - ----------------------------------------------------------------
<S> <C> <C>
InsCap Corporation 1,646,063 (2) 61.91%
10555 Richmond Avenue
Houston, Texas 77042
William F. Guest 1,751,263 (3) 63.36%
10555 Richmond Avenue
Houston, Texas 77042
Frank K. Noll 158,620 (4) 5.82%
R.D. No. 2, Box 331
Ligonier, Pennsylvania 15658
</TABLE>
(1) Except as otherwise indicated, the beneficial owner of the shares exercises
sole voting and investment powers.
(2) InsCap owns 1,604,263 shares of the Company's issued and outstanding Common
Stock, and is deemed to be the beneficial owner of 41,800 additional shares
of Company Common Stock by virtue of 3,800 shares of Acap's Cumulative
Exchangeable Preferred Stock, Series A, $2.50 (Adjustable) (referred to
herein as "Series A Preferred Stock") owned by it which are exchangeable
for shares of Company Common Stock at the ratio of approximately 11 to one.
(3) Mr. Guest owns 380,514 shares, or 43.23%, of InsCap's issued and
outstanding Common Stock, the sole voting class of securities of InsCap,
and as the controlling stockholder of InsCap is deemed to be the beneficial
owner of shares of Company Common Stock beneficially owned by InsCap as set
forth in Note (2). In addition to shares of Company Common Stock owned
indirectly through InsCap, Mr. Guest is deemed to be the beneficial owner
of 90,200 shares of Company Common Stock issuable in exchange for 7,300
shares of Acap Series A Preferred Stock directly owned by him and 900
shares of Acap Series A Preferred Stock indirectly owned by him through a
trust for which Mr. Guest acts as trustees. Mr. Guest is also deemed to be
the beneficial owner of 15,000 additional shares of Company Common Stock by
virtue of options granted to him to purchase same.
(4) The shares shown as owned by Mr. Noll do not include 18,713 shares owned by
Mr. Noll's adult son, the beneficial ownership of which is disclaimed by
Mr. Noll. Included in these shares are 110,000 shares issuable in exchange
for 10,000 shares of Acap Series A Preferred Stock owned by Mr. Noll.
4
<PAGE>
EXECUTIVE OFFICERS
The By-Laws of the Company provide for the election of executive officers
annually at the meeting of the Board of Directors following the annual meeting
of stockholders. Executive officers serve until their successors are chosen and
qualified or until their death, resignation or removal.
Brief statements setting forth the age (at March 27, 1995), the offices held and
the business experience during the past five years of each executive officer
appear below.
WILLIAM F. GUEST (63): Chairman of the Board and President. For the biography
of Mr. Guest see "Election of Directors."
JOHN D. CORNETT (36): Mr. Cornett has served as a director since 1990 and is a
member of the Executive Committee. Mr. Cornett has also served as Executive
Vice President of the Company since 1990 and as Treasurer of the Company since
1986. Mr. Cornett is a director and the Executive Vice President and Treasurer
of Acap, a director and the Secretary of InsCap and the President and Chief
Operating Officer of each of the Company's life insurance subsidiaries. Mr.
Cornett is a certified public accountant and prior to joining the Company and
its affiliates in 1984 held positions with American General Life Insurance
Company and Prudential Insurance Company of America.
SHERENE L. DAVIS (33): Ms. Davis has served as Assistant Treasurer of the
Company since 1990. Ms. Davis is also the Assistant Treasurer of Acap and the
Treasurer and Controller of each of the Company's life insurance subsidiaries.
Ms. Davis is a certified public accountant and prior to joining the Company and
its affiliates in 1986 was a Senior Auditor with the public accounting firm KPMG
Peat Marwick, Houston, Texas.
PAUL L. CLANCY (42): Mr. Clancy has served as Secretary of the Company since
1992. Mr. Clancy is also the Secretary of Acap and is the Executive Vice
President and Secretary of each of the Company's life insurance subsidiaries.
Prior to joining the Company and its affiliates in 1991, Mr. Clancy served as
Vice President of HBJ Insurance Companies, Orlando, Florida (1987-July 1991).
Mr. Clancy has worked in the insurance industry since 1979 in both
administrative and consulting capacities.
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is information with respect to shares of each class of equity
securities of Acap, the Company and InsCap beneficially owned by directors of
the Company, naming them, and by all directors and officers of the Company as a
group, as of March 27, 1995.
5
<PAGE>
<TABLE>
<CAPTION>
- - -------------------------------------------------------------------------------
Amount and Nature of
Name of Beneficial Owner (1) Beneficial Ownership (2) Percent of Class (3)
- - -------------------------------------------------------------------------------
ACAP
Common Stock
-------------------------
<S> <C> <C>
William F. Guest 5,582 (4) 65.29%
John D. Cornett 178 (5) 2.08%
All Officers and Directors 5,794 (6) 67.23%
Series A Preferred Stock
------------------------
William F. Guest 12,000 (4) 16.22%
R. Wellington Daniels 2,000 (7) 2.70%
All Officers and Directors 14,000 18.92%
THE COMPANY
Common Stock
------------------------
William F. Guest 1,751,263 (4) 63.36%
R. Wellington Daniels 22,000 (7) *
C. Stratton Hill, Jr., M.D. 4,000 (8) *
John D. Cornett 10,000 (5) *
All Officers and Directors 1,797,263 (6) 64.05%
INSCAP
Common Stock
------------------------
William F. Guest 380,514 (4) 43.23%
R. Wellington Daniels 37,000 4.20%
John D. Cornett 11,000 1.25%
Frank E. Hartung 56,610 6.43%
All Officers and Directors 485,124 55.11%
</TABLE>
(1) The address of each of the officers and directors is c/o Fortune National
Corporation, 10555 Richmond Avenue, Houston, Texas 77042.
(2) Except as otherwise indicated, the beneficial owner of the shares exercises
sole voting and investment powers.
(3) Percentages are calculated on the basis of the amount of outstanding
securities plus, for each person or group, any securities that person or
group has the right to acquire within 60 days pursuant to option,
conversion privileges or other rights. An asterisk signifies less than 1%.
6
<PAGE>
(4) The Acap Common Stock shown as owned by Mr. Guest includes 127 shares owned
indirectly by him through a trust for which he acts as trustee, 34 shares
attributed to him by virtue of options granted to him to purchase same, and
5,421 shares owned indirectly by him through InsCap, the Company's ultimate
parent, of which company Mr. Guest is deemed to be the controlling
stockholder. The Acap Series A Preferred Stock shown as owned by Mr. Guest
includes 7,300 shares owned directly by him, 900 shares indirectly owned by
him through a trust for which Mr. Guest acts as trustee, and 3,800 shares
owned indirectly by him through InsCap. The Company Common Stock shown as
owned by Mr. Guest includes 90,200 shares issuable in exchange for 7,300
shares of the Acap Series A Preferred Stock directly owned by him and 900
shares indirectly owned by him through a trust for which Mr. Guest acts as
trustee, 15,000 shares attributable to him by virtue of options granted to
him to purchase same, and 1,604,263 owned indirectly by him through InsCap
and 41,800 shares issuable to InsCap in exchange for 3,800 shares of the
Acap Series A Preferred Stock owned by InsCap. Mr. Guest has pledged
304,861 of his InsCap shares to a bank in Houston as security for a loan.
(5) Of the shares of Acap Common Stock and Company Common Stock shown as owned
by Mr. Cornett, 34 shares of the Acap Common Stock and 10,000 shares of
Company Common Stock are attributed to him by virtue of options granted to
him to purchase same.
(6) The shares of Acap Common Stock and Company Common Stock shown as owned by
all officers and directors of the Company include 102 shares of Acap Common
Stock and 35,000 shares of Company Common Stock the beneficial ownership of
which is attributed to officers of the Company by virtue of options granted
to such officers to purchase such shares. Also included are 90,200 shares
of Company Common Stock attributable to Mr. Guest which are issuable in
exchange for 8,200 shares of the Acap Preferred Stock owned by him directly
and indirectly, and 22,000 shares of Company Common Stock attributable to
Mr. Daniels which are issuable in exchange for 2,000 shares of the Acap
Series A Preferred Stock owned by him indirectly, all as set forth in Notes
(4) and (7).
(7) The 2,000 shares of the Acap Series A Preferred Stock and the 22,000 shares
of Company Common Stock issuable in exchange for such shares shown as owned
by Mr. Daniels are owned by Mr. Daniels' wife.
(8) All such shares of Company Common Stock are owned by Dr. Hill's children.
7
<PAGE>
BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors and beneficial owners of more than 10% of a registered
class of the Company's equity securities to file reports of ownership and
changes in ownership with the Securities and Exchange Commission ("SEC") and the
National Association of Securities Dealers, Inc. Officers, directors and
greater than 10% stockholders are required by SEC regulation to furnish the
Company with copies of all Section 16(a) forms they file.
Based solely upon a review of such forms furnished to the Company during or with
respect to its fiscal year ended December 31, 1994 by the persons and entities
filing same, the Company believes that during its fiscal year ended December 31,
1994 all beneficial ownership reports required to be filed pursuant to Section
16(a) by directors and officers of the Company and by beneficial owners of more
than 10% of the Company's outstanding Common Stock have been filed on a timely
basis.
EXECUTIVE COMPENSATION
The compensation paid by the Company and its affiliates for each of the last
three completed fiscal years to (i) the Chief Executive Officer ("CEO") and (ii)
each of the four most highly compensated executive officers, other than the CEO,
whose total annual salary and bonus exceeded $100,000, was as follows:
<TABLE>
<CAPTION>
- - ------------------------------------------------------
Name and Principal Position Year Salary Bonus
- - ------------------------------------------------------
<S> <C> <C> <C>
William F. Guest, 1994 $180,000 $18,000
CEO 1993 $180,000 -0-
1992 $180,000 -0-
John D. Cornett, 1994 $100,000 $10,000
Treasurer 1993 $100,000 -0-
1992 $100,000 -0-
</TABLE>
The preceding table excludes club memberships and certain other benefits in an
aggregate amount of less than 10% of the officer's annual salary. At December
31, 1994, Mr. Guest held unexpired options to purchase 34 shares of Acap's
Common Stock and 15,000 shares of the Company's Common Stock and Mr. Cornett
held unexpired options to purchase 34 shares of Acap's Common Stock and 10,000
shares of the Company's Common Stock. None of the options had fair market
values that exceeded the exercise price of the option.
8
<PAGE>
In May 1990 American Capitol entered into a supplemental disability income
agreement with Mr. Guest which provides for supplemental cash payments to Mr.
Guest or for his benefit in the event that he becomes disabled while employed by
American Capitol. The amount of such supplemental cash payments equals the
amount of premium with respect to a "key man" life insurance policy held by
American Capitol covering Mr. Guest which would be waived under the terms of the
policy in the event of Mr. Guest's disability.
In April 1994, American Capitol renewed for a period of three years an
employment agreement with Mr. Cornett pursuant to which Mr. Cornett serves as
President and Chief Operating Officer of American Capitol. The agreement
provides for an annual compensation of $100,000. In the event Mr. Cornett's
employment is terminated during the term of the agreement other than for cause,
the salary payable thereunder, under specified conditions and subject to certain
limitations, will continue for up to 18 months, less any amounts earned by Mr.
Cornett from other employment during such period. In addition, in April 1994,
American Capitol renewed a stock purchase agreement with Mr. Cornett which
provides that in the event of a change of control of American Capitol, Mr.
Cornett shall have the right to sell certain shares of Acap Common Stock or
Company Common Stock owned by him to American Capitol at a price per share
determined by reference to the consideration involved in the change of control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On December 6, 1993 the Company's Board of Directors approved a transaction with
Acap whereby the Company issued 115,890 shares of previously unissued shares of
Common Stock (1) in satisfaction of the Company's $148,955 debt to Acap and (2)
for Acap's commitment to pay all of the Company's routine expenses through the
year 1995.
InsCap is the immediate parent of the Company. See "Security Ownership of
Certain Owners" for the basis of control and the percentage of voting securities
owned.
INDEPENDENT AUDITORS
Financial statements of the Company and its consolidated subsidiaries are
included in the Company's Annual Report to Stockholders for 1994. KPMG Peat
Marwick has served as the independent auditors for the Company for the fiscal
year ended December 31, 1994. The Company anticipates that KPMG Peat Marwick
will be selected to serve in such capacity for the fiscal year ending December
31, 1995, subject to formal approval of such engagement by the Company's Audit
Committee. Representatives of KPMG Peat Marwick are expected to be present at
the Annual Meeting and will have the opportunity to make a statement if they
desire to do so and are also expected to be available to respond to appropriate
questions.
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<PAGE>
QUORUM FOR MEETING
The By-Laws of the Company require, for a quorum, the presence at the meeting,
in person or by proxy, of the holders of a majority of the shares of capital
stock of the Company entitled to vote.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the Company's 1996
Annual Meeting of Stockholders must be received in writing at the Company's
principal executive offices by December 11, 1995 so that it may be considered by
the Company for inclusion in the proxy statement and form of proxy or in the
information statement relating to that meeting.
By Order of the Board of Directors
Paul L. Clancy
Secretary
April 10, 1995
10
