SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss. 240.14a-11(c) or ss. 240.14a-12
Frontier Adjusters of America, Inc.
-----------------------------------------------
(Name of Registrant as Specified in Its Charter)
Patric Greer
-----------------------------------------------
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(l), or 14a-6(i)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
----------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
----------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11.*
----------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------------
*Set forth the amount on which the filing fee is calculated and state how it was
determined.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_______________________________________________
2) Form Schedule or Registration Statement No.: _________________________
3) Filing Party:_________________________________________________________
4) Date Filed:___________________________________________________________
<PAGE>
FRONTIER ADJUSTERS OF AMERICA, INC.
----------------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OCTOBER 13, 1995
----------------------------------------
The Annual Meeting of Shareholders of Frontier Adjusters of America,
Inc., an Arizona corporation (the "Company"), will be held on Friday, October
13, 1995 at 9:00 a.m. (Phoenix, Arizona time) at the Company's principal
executive office located at 45 East Monterey Way, Phoenix, Arizona for the
following purposes:
1. To elect directors to serve until the next annual meeting of
shareholders and until their successors are elected and qualified.
2. To ratify the appointment of McGladrey & Pullen, LLP, Certified
Public Accountants, as the auditors of the Company for the Company's fiscal year
ending June 30, 1996.
3. To transact such other business as may properly come before
the meeting or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record as of the close of business on August 18,
1995 are entitled to notice of, and to vote at, the meeting and adjournment
thereof.
All shareholders are cordially invited to attend the meeting in person.
To assure your representation at the meeting, however, you are urged to mark,
sign, date and return the enclosed proxy card as promptly as possible in the
postage-prepaid envelope enclosed for that purpose. Any shareholder attending
the meeting may vote in person even if he or she previously has returned a
proxy.
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN.
SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING ARE REQUESTED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY IN THE ENVELOPE PROVIDED.
By Order of the Board of Directors,
James S. Rocke
James S. Rocke
Secretary
Phoenix, Arizona
September 10, 1995
<PAGE>
FRONTIER ADJUSTERS OF AMERICA, INC.
----------------------------------------
PROXY STATEMENT
----------------------------------------
GENERAL
The enclosed Proxy is solicited on behalf of Frontier
Adjusters of America, Inc. an Arizona corporation (the "Company"), by the
Company's board of directors (the "Board of Directors") for use at the Annual
Meeting of Shareholders to be held on Friday, October 13, 1995 at 9:00 a.m.
(Phoenix, Arizona time) (the "Meeting"), and at any and all adjournments
thereof, for the purposes set forth in this proxy statement and in the
accompanying Notice of Annual Meeting of Shareholders. The Meeting will be held
at the Company's principal executive office, located at 45 East Monterey Way,
Phoenix, Arizona 85012.
These proxy solicitation materials were mailed to all
shareholders entitled to notice of, and to vote at, the Meeting on or about
September 10, 1995.
RECORD DATE
The Board of Directors has fixed the close of business on
August 18, 1995 as the record date (the "Record Date") for the determination of
shareholders entitled to notice of, and to vote at, the Meeting.
REVOCABILITY OF PROXIES
Any person giving a proxy may revoke the proxy at any time
before its use by delivering to the Secretary of the Company written notice of
revocation or a duly executed proxy bearing a later date, or by attending the
Meeting and voting in person.
VOTING SOLICITATION
As of the close of business on the Record Date, there were
4,690,898 shares of the Company's common stock, par value $.01 per share
("Common Stock"), outstanding excluding 141,112 shares held by the Company as
treasury stock. The Company has no other category of stock outstanding. The
presence in person or by proxy of the holders of a majority of the outstanding
shares of Common Stock is required to constitute a quorum at the meeting.
Votes cast by proxy or in person at the Meeting will be
tabulated by the election inspectors appointed for the Meeting and will
determine whether a quorum is present. The election inspectors will treat
abstentions as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the approval of any matter submitted to the stockholders for a vote. If a broker
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
Shareholders have cumulative voting rights in the election of
directors. Each shareholder is entitled to that number of votes equal to the
number of shares of Common Stock owned by him or her multiplied to that number
of directors to be elected. The shareholder may cumulate the shares of Common
Stock and give one nominee all of the shareholder's votes or may distribute his
or her votes on the same principle among as many nominees as he or she thinks
fit to serve. The enclosed proxy does not seek discretionary authority to
cumulate votes in the election of directors.
With respect to all other matters to be submitted to
shareholders at the Meeting, each shareholder is entitled to one vote per share
with respect to each matter presented. The affirmative vote of the holders of a
majority of the shares of Common Stock then represented at the Meeting will
constitute the act of the shareholders.
See "Security Ownership of Principal Shareholders and
Management" with respect to the percentage of the outstanding shares of Common
Stock beneficially owned by the Company's directors and executive officers.
The cost of this solicitation will be borne by the Company. In
addition, the Company may reimburse brokerage firms and other persons
representing beneficial owners of shares for expenses incurred in forwarding
solicitation material to such beneficial owners. Proxies also may be solicited
by certain of the Company's directors and officers, personally or by telephone
or telegram, without additional compensation.
The 1995 Annual Report to Stockholders, which was mailed to
stockholders with or preceding this Proxy Statement, contains financial and
other information about the activities of the Company but is not incorporated
into this Proxy Statement and is not to be considered a part of these proxy
soliciting materials. The information contained in the "Report of Compensation
Committee" below and "Company Performance" below shall not be deemed "filed"
with the Securities and Exchange Commission or subject to Regulations 14A or 14C
or to the liabilities of Section 18 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of the close of business on the Record Date, there were
4,640,898 shares of Common Stock outstanding excluding 141,112 shares held by
the Company as treasury stock. The following table sets forth the beneficial
ownership of shares of Common Stock as of the close of business on the Record
Date by each person known to the Company to own more than five percent of the
outstanding shares of Common Stock, by each director of the Company and by all
directors and executive officers of the Company as a group, which information as
to beneficial ownership is based upon statements furnished to the Company by
such persons:
Amount of Beneficial Ownership
------------------------------
Common Stock $.01 Par Value
------------------------------
Name and Address(1) Number of Shares Percent
---------------------------------------- ---------------- -------
William W. Strawther, Jr. and
Marjorie A. Strawther, his wife (3) 442,138 9.52%
7108 North 15th Street
Phoenix, Arizona 85020
William J. Rocke and Garnet Rocke, his wife (4) 440,550 9.44%
P. O. Box 7641
Phoenix, Arizona 85011
George M. Hill (5) 173,390 3.74%
Jean E. Ryberg (6) 138,871 2.97%
Louis T. Mastos and Eva B. Mastos, his wife (7) 208,703 4.50%
Merlin J. Schumann and Donna L. Schumann, his wife 20,114 *
James S. Rocke (8) 440,086 9.42%
R. Scott Younker and Sandra L. Younker, his wife 93,469 2.01%
Patric R. Greer and Nancy S. Greer, his wife (9) 44,599 *
All officers and directors as a group
(nine persons) (10) 1,711,920 36.00%
------------------------------------- ---------------------------
*Less than 1%
(1) The number of shares shown in the table, including the notes thereto, have
been rounded to the nearest whole share. Includes, when applicable, shares
owned of record by such person's minor children and spouse and by other
related individuals and entities over whose shares of Common Stock such
person has custody, voting control or power of disposition. Also includes
shares of Common Stock that the identified person had the right to acquire
within 60 days of August 1, 1995 by the exercise of stock options.
(2) The percentages shown include the shares of Common Stock which the person
will have the right to acquire within 60 days of August 1, 1995. In
calculating the percentage of ownership, all shares of Common Stock which
the identified person will have the right to acquire within 60 days of
August 1, 1995 upon the exercise of stock options are deemed to be
outstanding for the purpose of computing the percentage of the shares of
Common Stock by any other person.
(3) Held as trustees under Trust Agreement, dated June 7, 1989, establishing
the William W. Strawther, Jr. and Marjorie A. Strawther Living Trust, of
which Mr. and Mrs. Strawther are beneficiaries. Excludes an aggregate of
200,000 shares beneficially owned by Mr. and Mrs. Strawther's son, in
which shares Mr. and Mrs. Strawther disclaim any beneficial interest.
(4) Includes 290,000 shares held by Old Frontier Investment, Inc., of Arizona,
of which Mr. Rocke holds 51% of the outstanding stock. Includes 26,936
shares subject to a currently exercisable stock option at $3.7125 per
share.
(5) Excludes 50,000 shares held by Nell S. Hill, Mr. Hill's wife, and 112,243
shares held by Mr. Hill's children and grandchildren, in which shares he
disclaims any beneficial interest.
(6) Includes 29,629 shares subject to a currently exercisable stock option at
$3.375 per share.
(7) Includes 180,180 shares which are held in a trust under an agreement dated
February 10, 1981, in which Mr. and Mrs. Mastos hold equal beneficial
interests, and 25,523 shares which are held by the Louis T. Mastos &
Associates, Inc. Employees Profit Sharing Plan, of which he is a trustee
and the majority beneficial owner.
(8) Includes 290,000 shares held by Old Frontier Investment, Inc. of Arizona
of which Mr. Rocke holds 49% of the outstanding stock. Includes 26,936
shares subject to a currently exercisable stock option at $3.7125 per
share.
(9) Includes 29,629 shares subject to a currently exercisable stock option at
$3.375 per share.
(10) Excludes all duplicate reporting of holdings.
To the best of knowledge of the Company, no person or groups of persons,
other than officers and directors, beneficially own more than five percent of
the Frontier Adjusters of America, Inc. Common Stock (based upon present records
of the transfer agent).
PROPOSAL ONE
ELECTION OF DIRECTORS
NOMINEES
A Board of nine directors is to be elected at the Meeting. The
nominees for directors are Patric R. Greer, George M. Hill, Louis T. Mastos,
William J. Rocke, Jean E. Ryberg, Merlin J. Schumann, William W. Strawther, Jr.,
R. Scott Younker and James S. Rocke, all of whom currently are directors of the
Company. In the absence of direction by shareholders executing proxies, the
persons named in the enclosed proxy will vote FOR the nominees named herein. In
the event that any nominee of the Company is unable or declines to serve as a
director at the time of the Meeting, the proxies will be voted for any nominee
designated by the current Board of Directors to fill the vacancy. It is not
presently expected that any nominee will be unable or will decline to serve as a
director. The term of office of each person elected as a director will continue
until the next annual meeting of shareholders and until a successor has been
elected and qualified. Biographical information with respect to the nominees for
directors is set forth below and under the heading "Information Concerning
Directors and Executive Officers of the Company".
INFORMATION CONCERNING DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth certain information regarding
the Company's directors and executive officers:
Name Age Position(s) With the Company Director Since
---- --- ---------------------------- --------------
Patric R. Greer 40 Director, Controller 1994
George M. Hill 87 Director, Vice President, Assistant 1978
Secretary, Member Audit Committee
Louis T. Mastos 74 Director, Member Audit Committee, 1978
Member Compensation Committee
James S. Rocke 27 Director, Secretary/Treasurer 1993
William J. Rocke 71 Director, Chairman of the Board, 1975
Chief Executive Officer
Jean E. Ryberg 63 Director, President 1975
Merlin J. Schumann 51 Director, Member Audit Committee, 1984
Member Compensation Committee
William W. Strawther, Jr. 69 Director, Vice Chairman of the Board 1978
R. Scott Younker 59 Director 1992
PATRIC R. GREER is a certified public accountant and has
been with the Company as Controller since 1985. Mr. Greer was appointed a
Director of the Company in October 1994. Mr. Greer graduated from Northern
Arizona University with a B.S. degree in accounting. An employment agreement
between Mr. Greer and the Company provides that Mr. Greer will be the
controller of the Company through June 30, 2000.
GEORGE M. HILL has been associated with the Company in an
advisory capacity for more than 25 years, has been a Vice President of the
Company since 1985 and has been the Assistant Secretary of the Company since
1990. He has been a senior partner in the Phoenix law firm of Hill & Savoy for
over 30 years. Mr. Hill is a Director and Secretary of National Car Rental,
Phoenix, Denver and Colorado Springs, and Director and Vice President of Precise
Metal Products Co., Phoenix and Salt Lake City.
LOUIS T. MASTOS has been the President of Louis T. Mastos &
Associates, Inc., a managing general agency located in Reno, Nevada, since 1971.
He is past President of the American Association of Managing General Agents. He
was the Insurance Commissioner of the State of Nevada from 1965 to 1971 and
currently serves on the Board of Directors of Western Acceptance Corp. from 1987
to 1991.
JAMES S. ROCKE has been employed by the Company since 1982
and currently is an adjuster in the Company's Phoenix office. Mr. Rocke was
elected Secretary/Treasurer of the Company on January 29, 1993. Mr. Rocke
graduated from Arizona State University in 1991 with a B.S. degree in
Finance. Mr. Rocke is the son of William J. Rocke.
WILLIAM J. ROCKE is the founder of the Company and has
served as President of the Company and its predecessor entities since 1957.
Mr. Rocke has been in the claims adjusting business since 1952. He has a law
degree from the University of Denver and is a member of the Colorado Bar
Association. The employment agreement between Mr. Rocke and the Company
provides that Mr. Rocke will be the Chief Executive Officer of the Company
through June 30, 2000. Mr. Rocke is the father of James S. Rocke.
JEAN E. RYBERG has been employed by the Company and its
predecessors since 1962. She has held several positions with the Company and has
been the Secretary/Treasurer of the Company and its predecessor entities since
1975. She also manages the Company's claims adjusting operations in Phoenix,
Arizona. The employment agreement between Mrs. Ryberg and the Company provides
that Mrs. Ryberg will be an executive officer of the Company through June 30,
2000.
MERLIN J. SCHUMANN has been a certified public accountant with
the firm of Murray & Murray, P.C., located in Phoenix, Arizona, for over 20
years. Since December, 1990, Mr. Schumann has also held the position of General
Securities Representative with H. D. Vest Investment Securities, Inc., a stock
brokerage and investment counseling firm located in Irving, Texas.
WILLIAM W. STRAWTHER, JR. was the President and principal
shareholder of Continental American Securities, Inc., located in Phoenix,
Arizona from 1970 through 1982. He is a former member of the National Board of
Governors of the National Association of Securities Dealers, Inc. He has been an
independent business consultant since 1982.
R. SCOTT YOUNKER has been a licensee of the Company in
Prescott, Arizona since 1979. He has been engaged in the claims adjusting
business for 32 years.
All directors are elected at each annual meeting of the
Company's shareholders for a term of one year and hold office until their
successors are elected and qualified. All officers serve at the discretion of
the Board of Directors.
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Company's Board of Directors met four times in fiscal year
1995, and all members attend 75% or more of those meetings. The Board has two
committees, an audit committee and a compensation committee.
Board members are reimbursed for expenses incurred while
attending Board meetings, and each director, including employees of the Company,
are paid $750 per Board meeting attended. During fiscal 1995, each director,
except for Mr. Greer, received $3,000 for attendance at Board meetings. Mr.
Greer was appointed to the Board of Directors on October 9, 1994 and received
$2,250 for attendance at Board meetings during fiscal 1995.
The Company has a standing audit committee of the Board of
Directors of which Messrs. Hill, Mastos, and Schumann are members. The
Committee held one meeting during the 1995 fiscal year.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's compensation committee of the Board of
Directors consists of Messrs. Mastos and Schumann. Messrs. Mastos and
Schumann have not nor are they presently serving as officers of the Company.
The committee did not meet separately during the 1995 fiscal year, however,
they did meet in July of 1995.
EXECUTIVE COMPENSATION
<TABLE>
<CAPTION>
Annual Compensation(1)
----------------------
a b c d e i
--------------------------- ---- --------- --------- ------------- ------------
Other Annual All Other
Compensation Compensation
Name and Principal Position Year Salary($) Bonus($) ($) (2) ($) (3)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Willliam J. Rocke, CEO, 1995 206,636 50,000 -- 23,670
Chairman, Director 1994 196,796 50,000 -- 32,250
1993 187,425 46,210 -- 33,750
Jean E. Ryberg, President 1995 145,861 50,000 -- 29,168
President, Director 1994 138,915 50,000 -- 32,250
Director 1993 132,300 46,210 -- 33,064
(1) Columns f, g and h have been omitted as there has been no compensation
awarded to, earned by or paid to any of the named executives in any fiscal
year covered by these columns.
(2) No perquisites were received by any person named above greater than the
lesser of $50,000 or 10% of salary plus bonus.
(3) "All Other Compensation" includes (i) directors fees of $3,000 in fiscal
1995, $2,250 in fiscal 1994 and $3,750 in fiscal 1993 for both Mr. Rocke
and Mrs. Ryberg; (ii) profit sharing contributions of $20,670 for the year
ended June 30, 1995 and $30,000 each year for the years ended June 30,
1994 and 1993 for Mr. Rocke and $26,168, $30,000 and $29,314 for Mrs.
Ryberg for the years ended June 30, 1995, 1994 and 1993, respectively.
</TABLE>
OPTION/SAR EXERCISES AND HOLDINGS
The following table is a summary of all Company stock options
granted to the Named Executives during 1995. Individual grants are listed
separately for each Named Executive. In addition, this table shows the potential
gain that could be realized if the fair market value of the Company's common
shares were to appreciate at either 5% or 10% annual rate over the period of the
option term (5 years for Mr. Rocke and 10 years for Mrs. Ryberg).
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<CAPTION>
Individual Grants
------------------------------------------
% of Total
Options/SARs Potential Realizable
Number of Granted Value at
Securities to All Exercise Assumed Annual Rates of Stock
Underlying Employees or Base Expiration Price Appreciation for Option Term
Name Options/SARs in 1994 Price($/SH Date 5% 10%
---- ------------ ---------- ---------- ----------- ----------------------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Rocke 21,718 25.00 $2.75 1/20/00 15,501 36,462
Jean E. Ryberg 21,718 25.00 $2.50 1/20/05 34,146 86,532
</TABLE>
The following table shows Company stock options that were
exercised during fiscal 1995 and the number of shares and value of grants
outstanding as of June 30, 1995 for each Named Executive.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN FISCAL 1995 AND YEAR-END OPTION/SAR VALUES
<CAPTION>
Number of Securities Value of Unexercised,
Underlying Unexercised In-The-Money Options/SARs
Shares Options/SARs at 6/30/95(#) at 6/30/95 ($)
Acquired Value -------------------------- --------------------------
Name on Exercise(#) Realized($) Exercisable Unexercisable Exercisable Unexercisable
---------------- -------------- ----------- -------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C>
William J. Rocke -- -- 26,936 21,718 -- --
Jean E. Ryberg -- -- 29,629 21,718 -- 4,072
(a) Value of unexercised, in-the-money Company options based on a fair market
value of the Company's common stock of $2.6875 per share as of June 30,
1995.
</TABLE>
DIRECTOR'S COMPENSATION
Each director, including employees of the Company, are paid
$750 per Board meeting attended. During fiscal 1995, each director, except for
Mr. Greer, received $3,000 for attendance at Board meetings. Mr. Greer was
appointed to the Board of Directors on October 9, 1994 and received $2,250 for
attendance at Board meetings during fiscal 1995.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mr.
Rocke and Mrs. Ryberg, each for five-year terms, effective July 1, 1995 and
expiring June 30, 2000.
Mr. Rocke's agreement provides for an annual salary of
$225,000 with annual cost of living increases based upon the U.S. Department of
Labor's cost of living index, plus a bonus of three percent (3%) of the
Company's income before taxes and bonuses and 5% of the increase in the
Company's income before taxes and bonuses from the prior year.
Mrs. Ryberg's agreement provides for an annual salary of
$160,000 with annual cost of living increases based upon the U.S. Department of
Labor's cost of living index, plus a bonus of three percent (3%) of the
Company's income before taxes and bonuses and 5% of the increase in the
Company's income before taxes and bonuses from the prior year.
REPORT OF COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors is
comprised of Louis T. Mastos and Merlin J. Schumann, both outside directors of
the Company. The Committee establishes policies relating to the compensation of
employees. All decisions by the Compensation Committee relating to the
compensation of the Company's executive officers are reviewed by the full Board.
In accordance with recently adopted rules designed to enhance
disclosure of companies' policies toward executive compensation, the following
is a report submitted by the above-listed committee members in their capacity as
the Board's Compensation Committee, addressing the Company's compensation policy
as it relates to the named executive officers for fiscal 1995.
COMPENSATION POLICY
The goal of the Company's executive compensation policy is to
ensure that an appropriate relationship exists between executive pay and the
creation of shareholder value, while at the same time motivating and retaining
key employees. To achieve this goal, the Company's executive compensation
policies integrate annual base compensation with bonuses based upon corporate
performance. Annual cash compensation, together with equity-based, incentive
compensation is designed to attract and retain qualified executives and to
ensure that such executives have a continuing stake in the long-term success of
the Company. All executive officers and management are eligible to participate
in the Company's Incentive Stock Option Plan.
FISCAL 1995 COMPENSATION
The Company's fiscal 1995 executive compensation consisted of:
(1) a base salary, (ii) bonuses based upon the Company's income before income
taxes and bonuses, and (iii) fixed contributions to a defined contribution
Profit Sharing Plan. Stock options are granted from time to time by the Board of
Directors. Options were granted in 1995 as the committee feels that options as a
stock-based performance compensation is an effective incentive for management to
create value for shareholders since the value of the option is directly related
to the Company's stock price.
The Company's 1995 compensation to named executives is best
exemplified by examining the salary paid to William J. Rocke, the Company's
Chairman and Chief Executive Officer which is based upon an employment agreement
entered into in 1990 after negotiations with the Board of Directors. The
agreement called for a base salary with five percent (5%) increases annually.
Additionally, the agreement provided for a bonus of three percent (3%) of the
Company's income before taxes and the bonuses. The base salary is believed to be
in the range of those of other executives in comparable companies, both
regionally and nationally. The bonus was tied to income and in prior years
caused compensation to increase, however bonuses did not increase in 1995 as
there was a maximum of $50,000 per executive.
The Committee believes that linking executive compensation to
corporate performance (i.e., income) provides incentive to the executives to
enhance the corporate performance and the shareholders interests. It was with
this in mind that committee recommended to the Board of Directors that the bonus
portion of executive compensation be revised effective July 1, 1995. The
committee believes that the new bonus arrangement will provide addition
incentive to the executive offices to further enhance the Company's performance.
The new bonus arrangement provides for a base bonus of three percent (3%) of the
Company's income before taxes and bonuses. An additional bonus of five percent
(5%) of the increase in the Company's income before taxes and bonuses from the
prior year will be paid to each named executive office. The new bonus
arrangement is effective until June 30, 2000 and it is the belief of the
committee that the compensation levels in 1995 and the ensuing five years will
reflect the Company's compensation policy.
Louis T. Mastos
Merlin J. Schumann
COMPANY PERFORMANCE
The following graph reflects a five-year comparison of
cumulative total returns for the Company's Common Stock, the American Stock
Exchange Market Value Index, and the Company's Peer Group of Stocks based on the
four-digit SIC Code Index. The total cumulative return on investment (change in
the year-end stock price plus reinvested dividends) for each of the periods and
indexes is based on the stock price or composite index at the end of fiscal
1990. The graph compares the performance of the Company with AMEX and Peer Group
Indexes with the investment weighted based upon market capitalization.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
(GRAPH)
Measurement Period Frontier Adjusters of American Stock Peer Group
(Fiscal Year Covered) America, Inc. Exchange of Stocks
1990 100 100 100
1991 111.49 99.35 109.04
1992 114.12 109.24 110.72
1993 103.06 119.44 115.30
1994 104.32 115.29 112.87
1995 114.09 138.73 130.90
CERTAIN TRANSACTIONS
Old Frontier Investment, Inc. of Arizona, of which William J.
Rocke and Garnet Rocke, his wife, are owners of 51% of the issued and
outstanding stock of said corporation and James S. Rocke owns the remaining 49%,
has entered into a license agreement with the Company pursuant to which it
operates, under standard terms and conditions, an insurance adjusting business
located in Scottsdale, Arizona, and is paid a 5% royalty on gross revenues
derived from services provided by others in certain other Arizona towns. The
Company paid that corporation $20,255 during fiscal year 1995 in connection with
such 5% royalty agreement.
George M. Hill, Vice President and Director of the Company, is
a senior partner in the law firm which acts as General Counsel to the Company.
During the fiscal year 1995, the Company paid such firm $88,544 for services
rendered and disbursements. Such fees will continue to accrue, pursuant to a
retainer agreement, at the rate of $6,650 per month effective September 1, 1995.
The Company paid its Vice Chairman, William W. Strawther, Jr.,
$20,000 during fiscal year 1995 for business and financial consulting services.
The Company believes that the cost of the Company for all of
the foregoing were and are competitive with charges for similar services and
facilities available from third parties.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Based solely on a review of the copies of such forms received by the
Company during the fiscal year ended June 30, 1995, and written representations
that no other reports were required, the Company believes that each person who,
at any time during such fiscal year, was a director, officer or beneficial owner
of more than 10% of the Company's Common Stock complied with all Section 16(a)
filing requirements during such fiscal year, except that (i) each of William J.
Rocke, Jean E. Ryberg, James S. Rocke and Patric R. Greer filed late reports on
Form 5 covering one grant of stock options to each person pursuant to the
Company's 1987 Incentive Stock Option Plan and (ii) R. Scott Younker filed late
one report on Form 5 covering one transaction.
PROPOSAL TWO
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed McGladrey & Pullen, LLP,
independent public accountants, as the auditors of the Company, to serve as such
at the pleasure of the Board of Directors.
The shareholders of the Company are being asked to approve
this appointment. Approval of the proposal by the shareholders will require the
affirmative vote of the holders of a majority of the shares of Common Stock then
represented at the Meeting. In the absence of direction by shareholders
executing proxies, the persons named in the enclosed proxy will vote FOR this
proposal.
Audit services provided by McGladrey & Pullen, LLP during the
year ended June 30, 1995 consisted of the examination of consolidated financial
statements of the Company and its subsidiaries, reviews of information in
certain filings with the Securities and Exchange Commission and periodic
consultation regarding accounting and financial matters. The Company is informed
that neither McGladrey & Pullen, LLP nor any of its partners of associates has
any relationship with the Company, other than as independent auditors.
Certain financial statements of the Company appear in the
Company's 1995 Annual Report. A representative of McGladrey & Pullen, LLP will
be present at the Meeting and will be available to make a statement and to
respond to questions concerning the financial statements.
OTHER MATTERS
Management of the Company knows of no other matters which will
come before the Meeting. However, if any other matter should properly come
before the Meeting, it is the intention of the persons named in the enclosed
proxy to vote each proxy in accordance with their judgment on such matter.
SHAREHOLDER PROPOSALS
Proposals by shareholders which are intended to be presented
at the next annual meeting of shareholders of the Company must be received by
the Company on or before May 11, 1996 to be considered for inclusion in the
Company's proxy statement for the 1996 Annual Meeting of Shareholders.
By Order of the Board of Directors
James S. Rocke
James S. Rocke
Secretary
Phoenix, Arizona
September 10, 1995
<PAGE>
FRONTIER ADJUSTERS OF AMERICA, INC. THIS PROXY IS SOLICITED
P.O. Box 7680 ON BEHALF OF THE BOARD
Phoenix, Arizona 85011 OF DIRECTORS
P R O X Y
--------------------------------------------------------------------------------
The undersigned hereby appoints WILLIAM J. ROCKE and JEAN E. RYBERG as Proxies,
each with the power to appoint his or her substitute, and hereby authorizes
them, or either of them, to represent and to vote, as designated below, all the
shares of common stock of Frontier Adjusters of America, Inc. held of record by
the undersigned as of the close of business on August 18, 1995, at the annual
meeting of shareholders to be held on October 13, 1995 at 9:00 A.M. (Phoenix,
Arizona time) and at any adjournment thereof.
1. ELECTION OF DIRECTORS FOR all nominees listed below
(except as marked to the contrary below)______
WITHHOLD AUTHORITY
to vote for each nominee indicated by X______
[ ] William J. Rocke [ ] Jean E. Ryberg [ ] William W. Strawther, Jr.
[ ] Louis T. Mastos [ ] George M. Hill [ ] Merlin J. Schumann
[ ] Patric R. Greer [ ] R. Scott Younker [ ] James S. Rocke
2. To ratify the selection of McGladrey & Pullen, LLP, Certified Public
Accountants, as the auditors of Frontier Adjusters of America, Inc. for the
Company's fiscal year ending June 30, 1996.
FOR AGAINST ABSTAIN
----------------- ----------------- -------------------
3. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
This Proxy, when properly executed, will be voted in the manner directed herein
by the undersigned stockholder. If no direction is made, this Proxy will be
voted FOR Proposals 1 and 2 and, with respect to Proposal 3, as appropriate in
the Board's judgment.
Please sign exactly as the name appears below. When shares are held by joint
tenants, both should sign. When signing as attorney, as executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated:
--------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY
PROMPTLY, USING THE ENCLOSED ENVELOPE.
-------------------------------------------------------
Signature
-------------------------------------------------------
Signature if held jointly
