SCHEDULE 14A
Information Required in Proxy Statement
(Rule 14a-101)
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:
[ ] 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 S 240.14a-11(c) or
S 240.14a-12
Acceptance Insurance Companies Inc.
(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:
____________________________________________________________
<PAGE>
5) Total fee paid:
____________________________________________________________
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule
and the date of its filing.
1) Amount Previously Paid:
_____________________________________________________
2) Form, Schedule or Registration Statement No.:
_____________________________________________________
3) Filing Party:
_____________________________________________________
4) Date Filed:
_____________________________________________________
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
222 South 15th Street
Suite 600 North
Omaha, NE 68102
(402) 344-8800
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 28, 1998
To Shareholders:
Please take notice that the Annual Meeting of Shareholders of
Acceptance Insurance Companies Inc. (the "Company") will be held
at the Doubletree Hotel, 1616 Dodge Street, Omaha, Nebraska, on
May 28, 1998, at 10:00 a.m., local time. At the meeting,
shareholders will be asked to consider and vote upon the
following matters:
(1) The election of nine directors to hold office until the
Annual Meeting in 1999 or until the election and
qualification of their successors;
(2) The ratification of the appointment of Deloitte &
Touche LLP as the Company's principal independent
accountants; and
(3) Such other matters as may properly come before the
Meeting or any adjournment thereof.
Only shareholders of record at the close of business on April 22,
1998, will be entitled to vote at the Meeting or any adjournment
thereof. A list of shareholders entitled to notice of and to
vote at the Meeting will be available for inspection at the
offices of the Company during the ten days preceding the Annual
Meeting.
By Order of the Board of Directors,
Donn E. Davis
Secretary
Omaha, Nebraska
April 30, 1998
<PAGE>
Acceptance Insurance Co. Inc.
ACCEPTANCE INSURANCE COMPANIES INC.
222 South 15th Street
Suite 600 North
Omaha, NE 68102
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To The Shareholders:
Please take notice that the Annual Meeting of Shareholders of
Acceptance Insurance Companies Inc. (the "Company") will be held at the
Doubletree Hotel, 1616 Dodge Street, Omaha, Nebraska, on May 27, 1999, at
10:00 a.m., local time for the following purposes:
(1) To elect nine directors to hold office until the next Annual Meeting or
until the election and qualification of their successors;
(2) To ratify the appointment of Deloitte & Touche LLP as the Company's
principal independent accountants; and
(3) To consider and act upon any other matters that may properly come before
the Annual Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 20, 1999
as the record date for determining the shareholders having the right to vote at
the meeting or any adjournment thereof. A list of such shareholders will be
available for examination by a shareholder for any purpose germane to the
meeting during ordinary business hours at the offices of the Company at
222 South 15th Street, Suite 600 North, Omaha, Nebraska during the ten days
prior to the Annual Meeting.
You are requested to date, sign and return the enclosed proxy which is
solicited by the Board of Directors of the Company and will be voted in
accordance with the directions you give therein. Where no directions are
indicated Proxies will be voted "for" each of the proposals set forth in the
accompanying Proxy Statement as indicated in the accompanying proxy statement
and proxy. A return envelope is provided which requires no postage if mailed in
the United States. If mailed elsewhere, foreign postage must be affixed. The
giving of this Proxy will not affect your right to revoke such Proxy by
appropriate written notice, or to vote in person if you choose to attend the
meeting.
By Order of the Board of Directors,
J. Michael Gottschalk, Secretary
Omaha, Nebraska
April 27, 1999
<PAGE>
ACCEPTANCE INSURANCE COMPANIES INC.
222 South 15th Street
Suite 600 North
Omaha, NE 68102
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 1999
I. INTRODUCTION
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of Acceptance Insurance Companies Inc., a Delaware
corporation (the "Company"), of Proxies in the accompanying form for the Annual
Meeting of the Shareholders of the Company to be held at 10:00 a.m., local
time, May 27, 1999, at the Doubletree Hotel, 1616 Dodge Street, Omaha,
Nebraska, or at any adjournments thereof (the "Annual Meeting" or the
"Meeting"). The principal offices of the Company are located at 222 South 15th
Street, Suite 600 North, Omaha, Nebraska 68102. This Proxy Statement and the
accompanying form of Proxy were first sent to shareholders on or about April
27, 1999.
VOTING AND PROXIES
Record Date; Voting Rights
Only holders of record of the Company's Common Stock at the close of
business on April 20, 1999 (the "Record Date"), will be entitled to notice of
and to vote at the Annual Meeting or any adjournment thereof. Shareholders of
record on the Record Date are entitled to one vote per share on any matter that
may properly come before the Annual Meeting. As of the Record Date, there were
14,243,857 shares of Common Stock, $.40 par value, outstanding and entitled to
vote. The presence, either in person or by properly executed Proxy, of the
holders of a majority of the outstanding shares of Common Stock is necessary to
constitute a quorum at the Meeting.
Shares of Common Stock entitled to vote and represented by properly
executed, returned and unrevoked proxies will be considered present at the
meeting for purposes of determining a quorum, including shares with respect to
which votes are withheld, abstentions are cast or there are broker non-votes.
Matters to be Voted Upon; Vote Required
At the Annual Meeting, shareholders will be asked to consider and vote upon the
following:
(1) The election of nine directors to hold office until the next
Annual Meeting or until the election and qualification of their successors.
Nominees receiving a plurality of the votes cast at the Meeting will be elected
as directors of the Company. Consequently, votes withheld and broker non-votes
will have no impact on the election of directors.
(2) The ratification of the appointment of Deloitte & Touche LLP as
the Company's principal independent accountants. Ratification of the
appointment of the accountants requires the affirmative vote of a majority of
the votes cast at the Meeting. Abstentions will have the same effect as a vote
against ratification. Broker non-votes will not be considered shares entitled
to vote and will not be counted as votes for or against the ratification.
<PAGE>
Directors and certain executive officers of the Company and their affiliates
own 5,146,379 shares of Common Stock, approximately 36% of the total
outstanding shares, and have advised the Company that they intend to vote FOR
the election of the director nominees and ratification of the appointment of
Deloitte & Touche LLP as the Company's principal independent public
accountants.
Solicitation of Proxies
The Company has borne and will bear all costs of this solicitation.
Following the original mailing of this Proxy Statement and accompanying
materials, directors and officers and other employees of the Company may
solicit, without additional compensation, or may engage others to solicit,
Proxies by any appropriate means, including personal interview, mail, telephone
and facsimile or telegraph. Arrangements also will be made with brokerage
houses and other custodians, nominees and fiduciaries, which are holders of
record of the Company's Common Stock, to forward Proxy soliciting material to
the beneficial owners of such shares, and the Company will reimburse such
holders of record for their reasonable expenses incurred in connection
therewith.
Any Proxy given pursuant to this solicitation may be revoked by the
person giving it at any time before it is voted. Proxies may be revoked by
(i) filing with the Secretary of the Company, at or before the Annual Meeting,
a written notice of revocation bearing a later date than the Proxy, (ii) duly
executing a Proxy relating to the same shares, bearing a later date, and
delivering it to the Secretary of the Company at or before the Annual Meeting,
or (iii) attending the Annual Meeting and voting in person (although attendance
at the Annual Meeting will not in and of itself constitute a revocation of the
Proxy).
Board Recommendation
Properly executed Proxies will be voted in accordance with
shareholders' directions. If no directions are given, Proxies will be voted
FOR the election of the director nominees and the ratification of the
appointment of the Company's principal independent public accountants. The
Board of Directors recommends a vote FOR each of the matters submitted to
shareholders for approval at the Annual Meeting.
SUBMISSION OF SHAREHOLDER PROPOSALS
Any proposal which a holder of Common Stock intends to present at next
year's annual meeting of shareholders must be received by the Secretary of the
Company, at the address appearing on the first page of this Proxy Statement, no
later than December 29, 1999, in order to be included in the Proxy Statement
and the form of Proxy relating to that meeting.
II. MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
At the Annual Meeting the shareholders will consider and vote upon:
(1) the election of directors to hold office until the next Annual Meeting or
until the election and qualification of their successors; and (2) the
ratification of the appointment of Deloitte & Touche LLP as the Company's
principal independent accountants for 1999.
PROPOSAL 1 -ELECTION OF DIRECTORS
At the Annual Meeting, shareholders will be asked to elect a board of
nine directors to hold office until the next Annual Meeting or until the
election and qualification of their successors. The following table sets forth
information regarding nominees for election to the Company's Board of
Directors. All of the nominees currently serve as directors of the Company.
If a nominee is unable to serve or, for good cause, will not serve, the Proxy
confers discretionary authority to vote with respect to the election of any
person to the board.
<TABLE>
<CAPTION>
Nominees
Position, Principal Occupations
Name and Age and Other Directorships
<S> <C>
Jay A. Bielfield(1), 53 . . . . . . . . . . . . . . . .Mr. Bielfield has been a director of the Company since December 1992.
Mr. Bielfield is an employee of Little Caesar International, Inc.
Kenneth C. Coon(2), 48. . . . . . . . . . . . . . . Mr. Coon is Chairman and Chief Executive Officer of the Company and has been
a director of the Company since December 1992. He served as Interim Chief
Executive Officer of the Company beginning in February 1992, and as Chairman
and President from December 1992 until March 1994 when he was elected
Chairman and Chief Executive Officer. Mr. Coon has been President and Chief
Executive Officer, and a director, of Acceptance Insurance Holdings Inc.
since its formation and of each of its subsidiaries since their formation or
acquisition. Since August 1993 he also has served as a director of The
Redland Group, Inc. and each of its subsidiaries, all of which are
subsidiaries of the Company.
Edward W. Elliott, Jr.(2)(4), 55. . . . . . . . . . Mr. Elliott has been a director of the Company since December 1992.
Mr. Elliott is Vice-Chairman and Chief Financial Officer of Franklin
Enterprises, Inc., a private investment management firm located in
Deerfield, Illinois. Mr. Elliott also serves as a director of Warehouse
Club, Inc.
Robert LeBuhn(3), 66. . . . . . . . . . . . . . . . . Mr. LeBuhn has been a director of the Company since December 1992.
Mr. LeBuhn is a private investor. He was Chairman of Investor International
(U.S.), Inc., an investment firm in New York, New York, until September
1994. Mr. LeBuhn serves as a director of USAir Group, Inc., Cambrex Corp.,
and Enzon, Inc.
Michael R. McCarthy(2)(4), 47. . . . . . . . . . Mr. McCarthy has been a director of the Company since December 1992.
Mr. McCarthy has been Chairman and a director of McCarthy & Co., a firm
engaged in the investment banking business in Omaha, Nebraska, since it was
organized in 1986. He also is a director and Chairman of McCarthy Group,
Inc., an investment and merchant banking firm and the parent of
McCarthy & Co.
John P. Nelson(2), 58 . . . . . . . . . . . . . . . . .Mr. Nelson has been President and Chief Operating Officer of the Company
since March 1994, and a director since August 1993. Mr. Nelson serves as
either Chairman or President and a director of The Redland Group, Inc. and
each of its insurance subsidiaries, all of which are subsidiaries of the
Company. Since August 1993 he also has served as a director of Acceptance
Insurance Holdings Inc. and each of its subsidiaries.
R. L. Richards(1), 50 . . . . . . . . . . . . . . . . .Mr. Richards has been a director of the Company since January 1991.
Mr. Richards serves as Managing Director of RDT Limited, a private
investment company located in Dublin, Ohio. Prior to the organization of RDT
Limited in December 1994 he served as President and director of its
predecessor and has held various positions with that company since 1978.
Mr. Richards also serves as a director of United Magazine Company.
Position, Principal Occupations
Name and Age and Other Directorships
David L. Treadwell(3), 44 . . . . . . . . . . . . . . Mr. Treadwell has been a director of the Company since December 1992.
Mr. Treadwell is President of Prechter Holdings, Inc., which is responsible
for a portfolio of investments, including operating businesses in automotive
supply, newspaper publishing, real estate development and residential
construction.
Doug T. Valassis(3), 46 . . . . . . . . . . . . . . . Mr. Valassis has been a director of the Company since December 1992.
Mr. Valassis is President and Chief Operating Officer and a director of
Franklin Enterprises, Inc., an investment management firm in Deerfield,
Illinois, and is a director of Warehouse Club, Inc. He also serves as a
director and officer of Lindner Investments, Massachusetts Trust, a complex
of six investment funds; and as a director of each of the six funds.
<FN>
(1) Member of the Audit Committee of the Company.
(2) Member of the Executive Committee of the Company.
(3) Member of the Compensation Committee of the Company.
(4) Member of the Nominating Committee of the Company.
</FN>
</TABLE>
PROPOSAL 2 -RATIFY APPOINTMENT OF INDEPENDENT
PUBLIC ACCOUNTANTS
At the Annual Meeting shareholders also will be asked to ratify the
Board of Director's appointment of Deloitte & Touche LLP as the Company's
principal independent accountants for 1999. The appointment of independent
accountants by the Board of Directors is submitted for ratification by the
shareholders. Although shareholder approval is not required, if the
shareholders do not ratify the appointment, the Board of Directors will
reconsider the matter.
Representatives of Deloitte & Touche LLP will be present at the Annual
Meeting, will have an opportunity to make a statement if they desire to do so
and will be available to respond to appropriate questions presented by
shareholders.
III. INFORMATION ABOUT THE COMPANY, DIRECTORS AND
EXECUTIVE OFFICERS
MEETINGS OF THE BOARD OF DIRECTORS AND COMMITTEES THEREOF
The Board of Directors met four times in 1998. All of the nominees
for director served on the Board of Directors throughout 1998. There are four
committees of the Board, an Executive Committee, an Audit Committee, a
Nominating Committee and a Compensation Committee.
The Executive Committee may exercise certain limited powers of the
Board of Directors. It met four times in person and seven additional times by
teleconference in 1998. The Audit Committee has authority to review internal
audit and financial controls, and to recommend to the Board the independent
public accountants to serve as auditors, review with the independent auditors
the annual audit plan, the financial statements, the auditor's report and their
evaluation and recommendations concerning the Company's internal controls, and
approve the types of professional services for which the Company may retain the
independent auditors. The Audit Committee met once in 1998. The Compensation
Committee reviews the compensation of the executive officers of the Company,
and makes recommendations to the Board of Directors regarding such compensation
and awards under the various compensation plans adopted by the Company. The
Compensation Committee met once in 1998. The Nominating Committee recommends
director nominees to the Board of Directors. The Nominating Committee did not
meet formally in 1998.
During 1998, each director participated in at least 75% of the meetings or
actions by consent of the Board of Directors and each committee on which he
sat.
COMPENSATION OF DIRECTORS
Members of the Board of Directors who are not full-time employees of
the Company receive an annual retainer of $10,000 plus $1,000 for attendance at
each meeting of the Board of Directors, $1,000 for attendance at each meeting
of a Committee on which the director sits occurring other than on a day when
the directors meet, and $500 for each such meeting occurring on a day when the
directors meet. Non-employee directors who serve as Chairman of a Board
Committee, receive an additional $3,000 annual retainer.
EXECUTIVE OFFICERS
The individuals identified below are the executive officers of the
Company who have been appointed by the Board of Directors. Executive officers
normally are appointed annually by the Board of Directors and serve at the
pleasure of the Board.
<TABLE>
<CAPTION>
<S> <C>
Kenneth C. Coon, 48 . . . . . . . . . . . . . . . . .Chairman and Chief Executive Officer of the Company and a director of the
Company since December 1992. He served as Interim Chief Executive Officer of
the Company beginning in February 1992, and as Chairman and President from
December 1992 until March 1994 when he was elected Chairman and Chief
Executive Officer. Mr. Coon has been President and Chief Executive Officer and
a director of Acceptance Insurance Holdings Inc. since its formation and of
each of its subsidiaries since their formation or acquisition. Since August
1993 has served as a director of The Redland Group, Inc. and each of its
subsidiaries, all of which are subsidiaries of the Company.
John P. Nelson, 58. . . . . . . . . . . . . . . . . .President and Chief Operating Officer of the Company since March 1994, and a
director since August 1993. Mr. Nelson serves as either Chairman or President
and a director of The Redland Group, Inc. and each of its insurance
subsidiaries, all of which are subsidiaries of the Company. Since August 1993
he also has served as a director of Acceptance Insurance Holdings Inc. and
each of its subsidiaries.
G. Thomas Bolton, 53. . . . . . . . . . . . . . . . .Senior Vice President, Claims Administration since January 1996. Mr. Bolton
came to Acceptance from Arthur Andersen LLP, where he was a Property and
Casualty Claims Consultant. Prior to that time he was employed for 16 years
by, and was the Eastern Territorial Claim Executive and Assistant Vice
President for, the Home Insurance Group.
Greg D. Ewald, 45 . . . . . . . . . . . . . . . . . .Senior Vice President -Reinsurance of the Company since October 1993.
Mr. Ewald has been Vice President of Underwriting for Acceptance Insurance
Company and Acceptance Indemnity Insurance Company since April 1990. Prior
thereto, Mr. Ewald was Vice President, Treaty Underwriting, at Underwriters
Reinsurance Company.
Stephen T. Fitzpatrick, 52 . . . . . . . . . . . . . Chief Underwriting Officer of the Company since February 1999. Mr. Fitzpatrick
joined Acceptance Insurance Company in 1994 to establish the Company's Itasca,
Illinois office, which he continues to manage. He previously held various
local, regional and national underwriting and other positions with Nordstern
Insurance Company, Home Insurance Company and Chubb Insurance Companies.
J. Michael Gottschalk, 54 . . . . . . . . . . . . . .Chief Legal Officer, General Counsel and Secretary of the Company since
August, 1998. For the prior 25 years Mr. Gottschalk was a member of the Kutak
Rock law firm and engaged in the private practice of law.
Kim R. Gibson, 41 . . . . . . . . . . . . . . . . . .President, American Agrisurance and certain subsidiaries since January, 1996,
Vice President of Redland Insurance Company and American Growers since 1990.
Mr. Gibson joined American Agrisurance as an adjuster in 1981 and has held
various positions in that company.
Richard C. Gibson, 63 . . . . . . . . . . . . . . . .Executive Vice President of The Redland Group, Inc. since August 1993, and
effective January 1996, President of American Growers Insurance Company and
Chairman and Chief Executive Officer of American Agrisurance, Inc., a
wholly-owned marketing subsidiary of the Company. Mr. Gibson served as
President of American Agrisurance, Inc., from its formation in November 1976
until January 1996. From 1973 through 1976, Mr. Gibson was Vice President and
Marketing Manager of Blakley Crop Hail and prior to that time, from 1964
through 1973, he was Branch Manager of the Crop Division of the Insurance
Company of North America.
Robert W. Haney, 57 . . . . . . . . . . . . . . . . .Senior Vice President of Claims Litigation of the Company since July 1993. For
the prior 11 years, Mr. Haney was Assistant Vice President of Claims for
Empire Fire & Marine Insurance Company.
Karl Heinz-Lenk, 59. . . . . . . . . . . . . . . . . Vice President, Information Systems, for the Company since May, 1996.
Mr. Heinz-Lenk was employed by Unisys Corporation for 15 years prior to
joining the Company.
Peter A. Knolla, 52 . . . . . . . . . . . . . . . . .Assistant Secretary, Legal Affairs of the Company since December 1992 and
Secretary of the majority of the Acceptance subsidiaries since July 1991.
Prior to that time he was associated with the Central National Insurance Group
and Empire Fire and Marine Insurance Company for 15 years.
Georgia M. Mace, 49 . . . . . . . . . . . . . . . . .Treasurer and Chief Financial Officer of the Company since May 1992. Ms. Mace
has been Treasurer and Chief Financial Officer of Acceptance Insurance Company
since its formation and of each of the Acceptance subsidiaries since their
formation or acquisition. She also has served as a director of Acceptance
Insurance Company and Phoenix Indemnity Insurance Company since their
formation. Ms. Mace formerly was Treasurer of Cornhusker Casualty, a division
of Berkshire Hathaway.
Raymond N. Siebert, 51. . . . . . . . . . . . . . . Chief Administrative Officer for the Company since May 1995. Prior to that,
Mr. Siebert was an Assistant Vice President for Systems and Operations for the
Home Insurance Company. Mr. Siebert held various administrative and operations
support positions at Home Insurance for 13 years. He also has held positions in
a similar capacity for the Illinois FAIR Plan, Chubb and Son, and Allstate
Insurance Co., beginning in 1975.
Bruce W. Slaughter, 62. . . . . . . . . . . . . . . Senior Vice President of Redland Insurance Company since October of 1995.
Prior to joining Acceptance in October 1994, Mr. Slaughter was Executive Vice
President of Home Insurance Company. He previously was Vice President with
Chubb Insurance Group, having been with that company for 24 years.
Joseph G. Smith, 44 . . . . . . . . . . . . . . . . President of Phoenix Indemnity Insurance Company since August, 1998. Beginning
in 1993 Mr. Smith served as the Company's Vice President of Budget, Audit and
Strategic Planning, and was Vice President and Treasurer of Redland Insurance
Company from September 1982 to October 1994. Prior to joining Redland,
Mr. Smith worked as a certified public accountant with Ernst & Whinney for six
years.
Thomas D. Stamm, 52 . . . . . . . . . . . . . . . . Senior Vice President of Acceptance Insurance Company since October 1993. Prior
to that time, Mr. Stamm was a founding officer and Senior Vice President of
Underwriting for the Scottsdale Insurance Company. Previously Mr. Stamm was a
Vice President of Underwriting for Great Southwest Fire Insurance Company for
10 years.
John R. Svoboda, 46 . . . . . . . . . . . . . . . . Vice President -Regulatory Affairs for the Company since July 1991, Mr. Svoboda
has been with the Company since 1987. For the prior 13 years Mr. Svoboda was a
Senior Examiner with the Nebraska Department of Insurance.
</TABLE>
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth for each of the three years ended
December 31, 1998, the compensation paid by the Company to its Chief Executive
Officer and the four most highly compensated executive officers receiving total
compensation in excess of $100,000 annually.
<TABLE>
<CAPTION>
Summary Compensation Table
Long Term
Annual Compensation Compensation
Deferred Securities
Name and Cash Bonus Underlying Other
Principal Position Year Salary Bonus(1) Payable(2) Option Compensation(3)
<S> <C> <C> <C> <C> <C> <C>
Kenneth Coon 1998 $280,176 $479,600 $ 0 0 $324,676 (4)
Chairman, Chief Executive 1997 274,374 414,283 0 0 372,938 (4)
Officer and Director 1996 275,875 166,163 120,663 280,000 24,602(5)
John Nelson 1998 259,100 330,000 0 0 29,376
President, Chief Operating 1997 252,088 285,885 0 0 26,899
Officer and Director 1996 253,750 94,160 83,160 220,000 17,396
Richard Gibson 1998 216,460 140,000 0 0 17,775
Chairman and Chief
Executive 1997 209,463 158,601 0 0 11,521
Officer, American 1996 203,850 87,400 23,400 70,000 0
Agrisurance, Inc.
Thomas Stamm 1998 173,807 79,466 0 0 12,630
Sr. Vice President,
Acceptance 1997 166,339 56,700 0 0 11,152
Insurance Company 1996 154,705 40,078 22,078 55,000 9,739
Kim Gibson 1998 148,883 86,000 0 0 11,712
President and Chief
Operating 1997 139,750 98,467 0 0 9,020
Officer, American 1996 130,000 52,667 12,667 70,000 9,133
Agrisurance, Inc.
<FN>
(1)Reflects amounts paid under the Management Incentive Compensation Plan
adopted by the Company pursuant to which cash bonuses may be awarded to
executives and key employees of the Company and its subsidiaries measured
principally on Company earnings and individual performance. Amounts paid during
a given year reflect incentive compensation earned during the prior year.
(2)The amounts reflect cash bonuses earned by the named executive offices and
payable in the next year.
(3)Except where indicated, these amounts reflect the Company's contribution on
behalf of such persons to Defined Contribution Plans maintained by the Company.
(4)Includes $254,978 paid in 1998 and $300,957 paid in 1997 to Mr. Coon for the
income tax benefit received by the Company for its recognition of compensation
to him in connection with the exercise of non-qualified stock options.
(5)Includes $2,500 paid to Mr. Coon in 1996 as director fees by a former
subsidiary of the Company.
</FN>
</TABLE>
Stock Options and Stock Appreciation Rights
During the year ended December 31, 1998 the Company did not grant stock options
or stock appreciation rights to any executive officer of the company whose
compensation is reported in the summary compensation table.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND l
FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning options exercised
during 1998, and the number and value of unexercised options at the end of
1998, for executive officers of the Company whose compensation is reported in
the summary compensation table.
<TABLE>
<CAPTION>
Number of Securities Value* of Unexercised
Number of Underlying Unexercised In-the-Money
Shares Acquired Value Options at Fiscal Options at Fy-End
Name on Exercise Realized Year End Exercisable/Unexercisable
<S> <C> <C> <C> <C>
Kenneth Coon 25,000 381,250 214,500 Exercisable Options $776,761
Chairman, Chief Executive 185,500 Unexercisable Options 100,625
Officer and Director
John Nelson 0 0 110,500 Exercisable Options 153,839
President, Chief Operating 139,500 Unexercisable Options 43,125
Officer and Director
Richard Gibson 0 0 28,000 Exercisable Options 7,784
Chairman and Chief Executive 42,000 Unexercisable Options 0
Officer, American Agrisurance,
Inc.
Tom Stamm 0 0 39,500 Exercisable Options 137,991
Sr. Vice President, Acceptance 35,500 Unexercisable Options 14,375
Insurance Company
Kim Gibson 0 0 35,500 Exercisable Options 50,909
President and Chief Operating 44,500 Unexercisable Options 14,375
Officer, American Agrisurance,
Inc.
<FN>
* Calculated as the difference between the option exercise price and the
closing price per share on the New York Stock Exchange on December 31, 1998.
</FN>
</TABLE>
Kenneth C. Coon, Chairman and Chief Executive Officer of the Company,
is employed under an employment agreement. Under this agreement, upon
termination of his employment without cause or in certain circumstances by him,
the Company is obligated to pay him the amount of his base salary remaining
payable over the balance of his employment term (currently ending December 31,
2000, subject to annual automatic one year extensions unless terminated by
either party upon one year's notice prior to each January 1), the amount of his
highest annual cash bonus earned multiplied by the number of full and partial
years remaining in his employment term, and the amount of any incentive,
profit-sharing bonus, stock option or other plan accrued on his behalf.
Similar payments are due upon the death or disability of Mr. Coon.
John P. Nelson and Richard C. Gibson, respectively the President and
Chief Operating Officer of the Company, and Chairman and Chief Executive
Officer of American Agrisurance, Inc., one of the Company's subsidiaries, are
each employed pursuant to identical employment agreements for a term currently
ending December 31, 1999, but subject to annual automatic one-year extensions,
unless terminated by either party upon 45 days notice prior to each January 1.
Report of the Compensation Committee on Executive Compensation
In 1993, the Committee developed the current compensation program
covering the Company's Chief Executive Officer, and other executive officers
and key employees. Compensation is composed of a combination of salary,
incentive cash bonuses and stock option grants. The Committee believes that,
when operating goals established for the Company are met, it is in the
Company's best interest to maintain the level of experienced executives and
key employees who delivered such results by allowing such persons to
participate in the Company's profits.
The Company intends that the salary portion of executive compensation,
while intended to be competitive in the market place for comparable positions,
is not intended as the principal vehicle for rewarding high-level performance
by such executives. Rather, over time, the compensation policy will limit
salary increases largely to reflect inflation and increased responsibility.
The Management Incentive Compensation Plan, calling for the payment of cash
bonuses in accordance with the provisions of the Plan, is the Company's vehicle
or rewarding superior performance.
The Management Incentive Compensation Plan includes the following:
(a) Early each year, the Committee, working with the Chief Executive Officer
and other key executives, will establish overall Company performance goals, as
a target net earnings per share for the year. The senior executive of each
staff and operating division, working with the Chief Executive Officer and the
Committee, will set individual performance goals for key employees within
their division, which are tied to the Company's strategic plan for such
division for that year. These individual performance goals are intended to be
objective and identifiable in order to measure the degree of performance by the
executives and key employees.
(b) The maximum bonus payable is established as a percentage of base salary
which ranges from 200% for the Chief Executive Officer down to 20% for lower
level key employees. There also is established, as a percentage of bonus
payable, the extent to which the amount of bonus will be based upon meeting
Company goals, and the extent to which the bonus will be based upon meeting
individual goals. Not more than 20% of the maximum bonus payable may be
granted at the discretion of the Committee. Attainment of Company goals is
weighted more heavily for senior executives (70% for the Chief Executive
Officer), while individual goals are weighted more heavily for executives and
key employees at the staff and division levels.
(c)The Plan ties the amount of bonus payable, as a percentage of the total
maximum, to an analysis of the degree to which goals are met, exceeded or not
met. This formula calls for payment of 75% of the maximum bonus where 100% of
the goals are achieved; an additional 1% of maximum bonus for each 1% that the
goals are exceeded (up to the maximum amount of bonus); a reduction of 2% of
maximum bonus for each 1% below 100% attainment of goals; with no bonus payable
if less than 75% of goals are obtained. The Committee may establish an
aggregate maximum amount of bonuses which may be granted in any year.
Effective June 1, 1996, the Company adopted an Executive Deferred
Compensation Plan. The Plan is a non-qualified deferred compensation
arrangement pursuant to which eligible employees may defer compensation by
having the Company pay over to the Plan and defer income tax liability on the
deferred amounts until the compensation is received by them. Only highly
compensated (in excess of $80,000 annually) or key management employees
selected by the Committee and who elect to participate in the Plan are eligible
under the Plan. The Company matches 100% of the first 5% of income deferred by
participants in the Plan.
The Committee believes that incentive stock options remain an
important aspect of executive compensation, particularly for the Chief
Executive Officer, Chief Operating Officer and senior executives. At present,
the award of incentive stock options is made at the discretion of the
Committee, although the Chief Executive Officer is consulted with respect to
the grant of stock options to the other senior executives.
The Committee has not yet adopted a policy with respect to qualifying
compensation paid to executive officers under Section 162(m) of the Internal
Revenue Code. The Committee deems it unnecessary at this time to adopt such a
policy, as it does not consider it eminent that annual compensation to any
executive officer will exceed $1 million. The Committee intends to monitor
executive compensation, including the value of compensation which may
ultimately be received by the Chief Executive Officer and other executive
officers, comprised of salary, cash bonuses and receipt of values under stock
option grants, and will address a policy to qualify compensation paid to
executive officers under Section 162(m) at the time it deems it necessary to
do so.
In all respects, the action of the Compensation Committee is subject
to approval by the Board of Directors. During 1998, based upon the foregoing
criteria applied to the 1997 year, the Board of Directors awarded the Chief
Executive Officer a 2.1% salary increase and a cash bonus in the amount of
$479,600.
Members of the Compensation Committee are:
Robert LeBuhn, Chairman
David L. Treadwell
Doug T. Valassis
STOCK PERFORMANCE GRAPHS
The following graph compares the performance of the Company's Common Stock
during the past five years to the Value Line Property and Casualty Insurance
Group and the Russell 2000 Index.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
Acceptance Insurance Companies, Russell 2000 Index
and Value Line Insurance: Property/Casualty Index
(Performance Results Through December 31, 1998)
[GRAPHIC OMITTED]
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
Acceptance Insurance Companies $123.71 $122.68 $162.89 $199.49 $167.01
Russell 2000 Index $100 $99.00 $125.89 $146.59 $179.13 $174.23
Insurance: Property/Casualty $98.02 $139.11 $177.86 $274.31 $278.49
</TABLE>
Assumes $100 invested at the close of trading December 31, 1993 in Acceptance
Insurance Companies common stock, Russell 2000 index, and Insurance:
Property/Casualty
*Cumulative total return assumes reinvestment of dividends.
(Source: Value Line, Inc. Factual material is obtained from sources believed to
be reliable, but the publisher is not responsible for any errors or omissions
contained herein.)
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon the Company's review of Forms 3, 4 and 5, and amendments
thereto, furnished during or with respect to the Company's 1998 fiscal year,
and separate written representations, no persons subject to Section 16 of the
Securities Exchange Act of 1934, as amended, ("Exchange Act") with respect to
the Company, failed to file on a timely basis reports required by Section 16(a)
of the Exchange Act during the Company's 1998 fiscal year or prior fiscal
years.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Doug T. Valassis, a director of the Company, is one of two individuals
controlling Brisbane Corporation, the Manager of VELP II, a principal
shareholder of the Company .
During the fiscal year ended December 31, 1998, the Company employed
McCarthy Group Asset Management, a wholly-owned subsidiary of McCarthy Group,
Inc., to furnish investment advisory services to the Company and paid
approximately $380,000 for such services. Michael R. McCarthy, a director of
the Company, is Chairman and the controlling shareholder of McCarthy Group,
Inc.
The Company contracts with Redland & Associates, Inc., to administer
health insurance benefits for its employees and to place property and casualty
coverages on behalf of the Company whereby Redland & Associates, Inc., receives
commissions from the insurance providers, which totalled $327,000 in 1998. In
addition, the Company pays commissions and fees to Redland & Associates, Inc.
in connection with insurance written and loss control activities, which
totalled $357,000 in 1998. Redland & Associates, Inc., reimburses the Company
for an allocable share of certain office occupancy expenses in the sum of
$9,000 in 1998. John P. Nelson, President and Chief Operating Officer and a
director of the Company, is Chairman of the Board and a principal shareholder
of Redland & Associates, Inc.
By virtue of the foregoing positions, relationships and interests, the
persons named above may have an indirect material interest in transactions and
business relationships between the Company and its subsidiaries and such
persons or their affiliates.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Principle Shareholders
The following table provides information as of April 20, 1999, with
respect to beneficial ownership of the Company's Common Stock by each person
known by the Company to be the beneficial owner of more than 5% of the
outstanding Common Stock.
<TABLE>
<CAPTION>
Sole Ownership Shared Ownership Total Ownership
Name of Number of Percent Number of Percent Number of Percent
Beneficial Owner Shares(1) of Class Shares(1) of Class Shares(1) of Class
<S> <C> <C> <C> <C> <C> <C>
VELP II, LLC (2)
Doug T. Valassis(3) 606,944(3) 4.3% 1,680,345(4) 11.8% 2,287,289 16.1%
D. Craig Valassis
Debra A. Lyomeis
Brisbane Corporation
1400 N. Woodward Avenue
Suite 270
Bloomfield Hills, MI 48304
McCarthy Group, Inc. 9,000 * 826,210(5) 5.8% 835,210 5.9%
Suite 450, One Pacific Place
1125 South 103rd Street
Omaha, NE 68124
John P. Nelson 318,216(6) 2.2% 612,095(7) 4.3% 930,311 6.5%
Acceptance Insurance Companies Inc.
Suite 600 North
222 South 15th Street
Omaha, NE 68102
Neumeier Investment Counsel (8) 1,074,400 7.5% - * 1,074,400 7.5%
26435 Carmel Rancho Blvd.
Carmel, CA 93923
Wanger Asset Management, L.P. (9) - - 1,588,000 11.1% 1,588,000 11.1%
Acorn Investment Trust
227 West Monroe Street
Suite 3000
Chicago, IL 60606
<FN>
* Less than one percent.
(1) The column sets forth shares of Common Stock which are deemed to be
"beneficially owned" pursuant to Rule 13d-3 under the Securities Exchange Act
of 1934, as amended. For purposes of calculating the percentage of Common Stock
beneficially owned by any beneficial owner, but only as to such owner, the
shares of Common Stock issuable to such person under stock options or warrants
exercisable within 60 days are considered outstanding and added to the shares
of Common Stock actually outstanding.
(2) Based upon Amendment No. 4 to a Schedule 13D dated May 29, 1998 and filed
with the Securities and Exchange Commission jointly by Doug T. Valassis,
D. Craig Valassis, VELP II, LLC, Brisbane Corporation and Franklin Enterprises,
Inc.
(3) Doug T. Valassis directly owns 599,444 shares of Common Stock, and
immediately exercisable options to purchase 7,500 shares of Common Stock.
(4) Includes 1,680,345 shares of Common Stock held by VELP II, LLC and managed
by Brisbane Corporation, which is owned and controlled by Doug T. Valassis and
D. Craig Valassis. 450,000 shares of Common Stock beneficially owned by Linder
Growth Fund and 2,065 shares beneficially owned by Franklin Enterprises, Inc.
as to which Doug T. Valassis shares voting and dispositive powers.
(5) Includes 78,702 shares of Common Stock owned by McCarthy & Co., 4,080 share
of Common Stock owned by McCarthy & Co.'s 401(k) Plan, and 800 shares of Common
Stock managed by McCarthy & Co. d/b/a McCarthy Group Asset Management, an
investment advisor registered under Section 203 of the Investment Advisors Act
of 1940. McCarthy & Co. is a wholly owned subsidiary of McCarthy Group, Inc.
Michael R. McCarthy, the Chairman, Chief Executive Officer and a director of
McCarthy Group, Inc., also currently is a director of the Company.
(6) John P. Nelson directly owns 200,216 shares of Common Stock, and
immediately exercisable options to purchase 118,000 shares of common stock.
(7) Includes 117,540 shares of Common Stock held by a family corporation
controlled by Mr. Nelson, 3,884 shares of Common Stock held by Mr. Nelson's
wife, 108,200 shares of Common Stock held by Mr. Nelson's children and two
corporations controlled by Mr. Nelson and his children, 320,644 shares
controlled by Mr. Nelson through revocable proxies, 61,600 shares held by a
family limited partnership, one share held by the company's Employee Stock
Ownership Plan and 226 shares held as trustee of an irrevocable trust.
(8) Based on a Schedule 13G dated January 30, 1998, filed with the Securities
and Exchange Commission on behalf of Neumeier Investment Counsel. Neumeier
Investment Counsel is an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940.
(9) Based on Amendment No. 2 to a Schedule 13G dated January 27, 1999 and
filed with the Securities and Exchange Commission on behalf of Wanger Asset
Management, L.P., an investment advisor registered under Section 203 of the
Investment Advisors Act of 1940.
</FN>
</TABLE>
Management
The following table provides information as of April 20, 1998, with respect to
beneficial ownership of the Common Stock by each director and named executive
officer of the Company, individually, and by all directors and executive
officers of the Company as a Group.
<TABLE>
<CAPTION>
Common Stock
Number of Shares Percent of
Beneficially Owned (1) Class (2)
<S> <C> <C>
Jay A. Bielfield(3) 20,750 *
Kenneth C. Coon(4) 422,734 2.9%
Edward W. Elliott, Jr.(5) 660,548 4.6%
Kim Gibson(6) 38,008 *
Richard C. Gibson(7) 302,635 2.1%
Robert LeBuhn(8) 11,000 *
Michael R. McCarthy(9) 835,210 5.9%
John P. Nelson(10) 930,311 6.5%
R. L. Richards(11) 61,734 *
Thomas D. Stamm(12) 43,978 *
David L. Treadwell(13) 9,200 *
Doug T. Valassis(14) 2,287,289 16.1%
All directors and officers as a group (24 persons) 5,824,004 39.0%
<FN>
* Less than one percent.
(1) The column sets forth shares of Common Stock which are deemed to be
"beneficially owned" pursuant to Rule 13d-3 under the Securities Exchange Act
of 1934, as amended. Each of the persons in the table has sole voting and
investment power with respect to all shares beneficially owned by him or her,
except as described in the following footnotes.
(2) For purposes of calculating the percentage of Common Stock beneficially
owned by any beneficial owner, but only as to such owner, the shares of Common
Stock issuable to such person under stock options or warrants exercisable
within 60 days are considered outstanding and added to the shares of Common
Stock actually outstanding.
(3) Includes 2,500 shares owned by Mr. Bielfield's spouse and immediately
exercisable options to purchase 9,000 shares of Common Stock.
(4) Includes 1,216 shares of Common Stock owned by Mr. Coon's spouse, 12,774
shares of Common Stock held for Mr. Coon's account by the trustee of the
Employee Stock Ownership and Tax Deferred Savings Plan ("KSOP"), 1,717 shares
of Common Stock held for Mrs. Coon's account by the trustee of the KSOP, and
immediately exercisable options to purchase 232,000 shares of Common Stock.
(5) Includes 651,548 shares of Common Stock held in various trusts for which
the shareholder acts as a beneficiary, co-trustee or both, and immediately
exercisable options to purchase 9,000 shares of Common Stock.
(6)Includes immediately exercisable options to purchase 38,000 shares of
Common Stock.
(7) Includes immediately exercisable options to purchase 28,000 shares of
Common Stock.
(8) Includes immediately exercisable options to purchase 9,000 shares of
Common Stock.
(9) Includes immediately exercisable options to purchase 9,000 shares of
Common Stock. See also Note (5) under "Security Ownership of Certain
Beneficial Owners and Management -Principal Shareholders."
(10) Includes immediately exercisable options to purchase 118,000 shares of
Common Stock. See Note (6) under "Security Ownership of Certain Beneficial
Owners and Management -Principal Shareholders."
(11) Includes immediately exercisable options to purchase 9,000 shares of
Common Stock.
(12) Includes immediately exercisable option to purchase 42,000 shares of
Common Stock.
(13) Includes immediately exercisable options to purchase 9,000 shares of
Common Stock.
(14) Includes immediately exercisable options to purchase 7,500 shares of
Common Stock. Also see Notes (2), (3), and (4) under "Security Ownership of
Certain Beneficial Owners and Management -Principal Shareholders."
</FN>
</TABLE>
IV. OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors of the
Company does not know of any matters to be presented at the Annual Meeting
other than those specifically set forth herein. However, if other proper
matters should come before the Annual Meeting, or any adjournment thereof, the
persons named in the enclosed Proxy intend to vote the shares represented by
all Proxies held by them in accordance with their best judgment.
The proxy for the 2000 annual meeting of shareholders will confer on
the proxy holders discretionary authority to vote on any matter proposed by any
shareholder for consideration at the meeting. The Proxy Statement for the 2000
annual meeting will state how the proxy holders will vote with respect to any
matter proposed by a shareholder if the Company receives written notice of the
proposal from the proponent on or before March 12, 2000. The notice must be
submitted in writing and mailed by certified mail to the Company Secretary at
the Company's principal executive office.
The Company's Annual Report, including financial statements, is
being mailed, together with this Proxy Statement, to all stockholders entitled
to vote at the Annual Meeting. Such Annual Report is not to be considered,
however, part of this proxy solicitation material. Any stockholder who wishes
to receive a copy of the Form 10-K filed by the Company with the Securities and
Exchange Commission may obtain a copy without charge by writing to the Company.
Requests should be directed to the Secretary at the Company's principal
executive office.
Shareholders are urged to complete, sign and date the enclosed Proxy
and return it as promptly as possible in the envelope enclosed for that
purpose. The Proxy does not affect the right to vote in person at the Annual
Meeting.
By order of the Board of Directors
J. Michael Gottschalk, Secretary
Omaha, Nebraska
April 27, 1999
REVOCABLE PROXY
ACCEPTANCE INSURANCE COMPANIES INC.
ANNUAL MEETING OF SHAREHOLDERS
MAY 27, 1999
The undersigned, a shareholder of Acceptance Insurance Companies Inc.
( the "Company"), hereby appoints Kenneth C. Coon and J. Michael Gottschalk,
and each of them, attorneys, agents and proxies, with full power of
substitutions to each, for and in the name of the undersigned to vote, a
designated on the reserve side, all shares of Common Stock of the Company
which the undersigned would be entitled May 27, 1999, at 10:00 a.m., Local
Time, and at any adjournments thereof.
ELECTION OF DIRECTORS, Nominees:
Jay A. Bielfield, Kenneth C. Coon, Edward E Elliott, Jr., Robert LeBuhn,
Michael R. McCarthy, John P. Nelson, R.L. Richards, David L. Treadwell,
Doug T. Valassis
(change of address)
_______________________________
_______________________________
_______________________________
_______________________________
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card.)
You are encouraged to specify your choices by marking the appropriate boxes,
SEE REVERSE SIDE, but you need not mark any boxes if you wish to vote in
accordance with the Board of Directors' recommendations. None of the matters
intended to be acted upon by this proxy are related to or conditioned upon
approval of other matters. The proxies cannot vote your shares unless you sign
and return this Card.
SEE REVERSE
SIDE
[X] Please mark your votes SHARES IN YOUR NAME
as in this example.
1. Election of
Directors FOR[ ] WITHHELD [ ]
(see reverse)
For, except vote withheld from the following nominee(s):
2. Ratification of FOR [ ] AGAINST [ ] ABSTAIN [ ]
appointment of
Deloitte & Touche
LLP as the
Company's Principal
Independent Public
Accountants
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS AND, 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 DIRECTORS NAMED HEREIN AND FOR ALL OTHER
PROPOSALS SUBMITTED TO THE SHAREHOLDERS IN THIS PROXY. THE BOARD OF DIRECTORS
UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR AND
FOR ALL OTHER PROPOSALS SUBMITTED TO THE SHAREHOLDERS IN THIS PROXY. IN THEIR
DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING, INCLUDING THE ELECTION OF ANY PERSON TO THE
BOARD OF DIRECTORS WHERE A NOMINEE NAMED IN THE PROXY STATEMENT IS UNABLE TO
SERVE, OR, FOR GOOD CAUSE, WILL NOT SERVE.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Shareholders and the Proxy Statement and ratifies all that the proxies or any
of them or their substitutes may lawfully do or cause to be done by virtue
hereof and revokes all former proxies.
Change [ ]
of
Address
SIGNATURE (S)____________________________ DATE________________
SIGNATURE (S)____________________________ DATE________________
Joint Owner, if any
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or gaurdian,
please give full title as such.
PLEASE MARK, SIGN, DATE AND RETURN THIS
PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE. SHAREHOLDERS SHOULD NOT SEND ANY
STOCK CERTUFUCATES WITH THEIR PROXY CARDS.
