ALLSTATE FINANCIAL CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING
NOVEMBER 1, 1995
The undersigned, having received the Notice of Annual Meeting,
Proxy Statement and Annual Report of Allstate Financial Corporation
for the year ended December 31, 1994, hereby appoint(s) Craig
Fishman, Eugene Haskin and Lawrence M. Winkler and each of them,
with full power of substitution, proxies of the undersigned to vote
all shares of the undersigned in Allstate Financial Corporation at
the Annual Meeting of Shareholders to be held on November 1, 1995
and at any adjournments thereof.
1. Election of Directors Authority to Withhold Authority
Vote to Vote
For Nominee For Nominee
Craig Fishman ____________ _________________
Eugene Haskin ____________ _________________
Lawrence M. Winkler ____________ _________________
James C. Spector ____________ _________________
Alan L. Freeman ____________ _________________
David M. Campbell ____________ _________________
William H. Savage ____________ _________________
2. In their discretion, the proxies are authorized to vote upon
matters not known to the Board of Directors as of the date of
the accompanying proxy statement, and to vote for any nominee
of the Board whose nomination results from the inability of
an above named nominee to serve.
UNLESS OTHERWISE INDICATED IN THE BLANKS PROVIDED, THE PROXIES
SHALL VOTE FOR THE ELECTION OF THE NOMINEES LISTED ABOVE.
Please sign exactly as name appears below.
DATED ____________, 1995
_________________________________
Signature
_________________________________
Signature if held jointly
When shares are held by joint
tenants, both should sign. When
signing as attorney, executor,
administrator, trustee or
guardian, please give full title.
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.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY USING THE
ENCLOSED ENVELOPE.
<PAGE>
ALLSTATE FINANCIAL CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
--------------------
The Annual Meeting of Shareholders of Allstate Financial
Corporation will be held at the Sheraton National Hotel, 900 South
Orme Street, Arlington, Virginia 22204, on November 1, 1995, at
11:00 A.M., for the following purposes:
1. To elect seven Directors for terms which will expire at the
Annual Meeting of Shareholders to be held in 1996.
2. To transact such other business as may properly come before
the meeting.
September 29, 1995
BY THE ORDER OF THE BOARD OF DIRECTORS
Lawrence M. Winkler
Secretary
---------------------------
PLEASE VOTE, SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY
IN THE ENCLOSED ENVELOPE.
A proxy card and postage free envelope are enclosed.
<PAGE>
ALLSTATE FINANCIAL CORPORATION September 29, 1995
2700 SOUTH QUINCY STREET
ARLINGTON, VIRGINIA 22206
PROXY STATEMENT
INTRODUCTION
The enclosed proxy is solicited by the Board of Directors of
Allstate Financial Corporation (the "Company") for use at the
Annual Meeting of Shareholders to be held at 11:00 A.M., at the
Sheraton National Hotel, 900 South Orme Street, Arlington, Virginia
22204 on November 1, 1995, and at any adjournment thereof (the
"Annual Meeting"). This proxy is first being sent to shareholders
on September 29, 1995.
In addition to solicitation by mail, officers, directors and
employees of the Company may solicit proxies by telephone,
telegraph or in person. None of these persons will receive
compensation but will be reimbursed for actual expenses in
connection therewith. Expenses in connection with the solicitation
of proxies, including the reasonable expenses of brokers,
fiduciaries and other nominees in forwarding proxy material, will
be borne by the Company.
VOTING OF PROXIES
Each holder of the Company's common stock is entitled to vote
in person or by proxy for each share held of record on the record
date, September 25, 1995, on all matters to be voted upon at the
Annual Meeting. As of the record date, the Company had 2,655,128
shares of common stock outstanding.
The proxy in accompanying form will be voted as specified by
each shareholder, but if no specifications is made, each proxy will
be voted:
1. TO ELECT Messrs. Craig Fishman, Eugene Haskin, Lawrence M.
Winkler, James C. Spector, Alan L. Freeman, David W.
Campbell, and William H. Savage to terms of office as
Directors which will expire at the Annual Meeting of
Shareholders to be held in 1996 (see "Election of
Directors").
2. IN THE BEST JUDGEMENT of those named as proxies on the
enclosed form of proxy on any other matters to properly
come before the Annual Meeting.
<PAGE>
A shareholder who executes the enclosed proxy may revoke it at
any time before it is voted by giving written notice to the Secretary of the
Company or oral notice to the presiding officer at the Annual Meeting.
BENEFICIAL OWNERSHIP OF SHARES
The following table sets forth, as of September 25, 1995, the
amount of common stock of the Company which may be deemed beneficially owned:
(i) by each person known to the Company to be the beneficial owner of more
than 5% of the aggregate shares of the Company's outstanding common stock,
(ii) by each director of the Company and (iii) by all officers and directors as
a group.
Common Shares Percent of
Name and Address Beneficially Owned Class
- - ------------------ ------------------ ----------
Leon Fishman 258,750 9.75%
20191 E. Country Club Dr.
N. Miami Beach, FL 33180
Eugene Haskin 241,166 9.08%
4000 Island Blvd.
N. Miami Beach, FL 37160
Lawrence M. Winkler 6,667 .25%
1300 Crystal Drive
Arlington, VA 22202
James Spector 3,334 .13%
10580 SW 77 Terrace
Miami, FL 33173
Craig Fishman 833 .03%
2687 Hillsman Street
Falls Church, VA 22043
David W. Campbell 1,000 .04%
6410 Noble Rock Court
Clifton, VA 22024
William H. Savage 1,000 .04%
314 Franklin Street
Al exandria, VA 22314
Timothy G. Ewing 309,500 11.66%
Value Partners, Ltd.
2200 Ross Avenue
Dallas, TX 75201
Tweedy, Browne Company L.P. 223,200 8.41%
52 Vanderbilt Avenue
New York, NY 10017
For all Officers and Directors
as a group (six persons) 519,418 19.56%
ELECTION OF DIRECTORS
The Company's Articles of Incorporation provide that the
number of directors shall be ten or such lesser number as the Board
of Directors shall fix. The Board of Directors has fixed that
number at seven. There is only one class of directors and they are
all elected at the Annual Meeting.
Mr. Lawrence Winkler is the uncle of Mr. Craig Fishman,
General Counsel and Vice President of the Company.
Directors of the Company are elected to serve until the next
annual meeting of the shareholders of the Company and until their
respective successors are elected and qualified.
The nominees listed below will be candidates for election to
the Board of Directors at the annual meeting. The following
information is furnished with respect to the directors:
Principal Occupation Director
Name Age And Other Directorships Since
- - ------------------- --- ------------------------ --------
Craig Fishman 35 Vice President (commencing
April 1991) and General Counsel
(commencing February 1993) of
the Company. President of
Lifetime Options, Inc.
(commencing May 1994).
Associated with law firm of
White and Case in New York City
(1987 to April 1991)
Eugene Haskin 66 Consultant to the Company, 1982
Chairman of the Board; formerly
President of the Company (July, 1982
- May, 1989); Vice President of
the Company (May 1989- August 1989)
Lawrence M. Winkler 59 Secretary/Treasurer and Chief 1983
Financial Officer of the Company;
formerly Second Vice President
of the Company (July 1983 -May 1989)
James C. Spector 61 Consultant to the Company, formerly 1989
Executive Vice President of the
Company (February 1991 - October
1993); formerly Senior Vice President,
Heller Financial, Inc. (July 1985 -
September 1987)
Alan L. Freeman 54 Currently Managing Partner of Freeman,
Buczyner & Gero (an accounting firm).
Previously Partner with Deloitte &
Touche (1989-1991); and Partner with
Shapiro, Fleischmann & Co. (1966-1989)
David W. Campbell 48 Currently a private investor. Formerly
President and Chief Executive Officer
of Ameribanc Savings Bank ("ASB") in
Annandale, Virginia (June 1990 - March
1995); prior to that, he was Executive
Vice President and Chief Operating
Officer of ASB (1984 to June 1990).
Mr. Campbell was also a director of
ASB (1988 to March 1995). He served
as a Trustee of the Ameribanc
Investors Group from 1992 to March 1995.
William H. Savage 63 Since 1990 Mr. Savage has been
engaged in a variety of investment
ventures in real estate development
and banking. Since 1991, Mr. Savage
has served as Chairman of Island
Preservation Partnership, the owner
and developer of Dewees Island, a
1,200 acre oceanfront, barrier
island near Charleston, South
Carolina. He is the Chairman of the
Board of Knights Hill Corporation,
which owns and manages timberlands
in South Carolina. Since 1982, he
has been the Managing Partner of
Calvert Associate which owns an
apartment complex in Alexandria,
Virginia. Since 1977, he has been
the President of Richard United
Corporation, a real estate investment
company based in Alexandria, Virginia.
Directors who are not officers of the Company receive a fee of
$2,000 per board or committee meeting attended, plus reimbursement
for their expenses associated with attending these meetings.
Commencing November 1994, Directors who are not officers of the
Company receive a fee of $500 per special board or committee
meeting attended by conference telephone call. Directors who are
officers of the Company receive no compensation for serving as
directors, but are reimbursed for out-of-pocket expenses related to
attending board or committee meetings.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors appointed an Audit Committee in 1989.
The Audit Committee currently consists of Mr. Spector. The
committee met twice during the year ended December 31, 1994. The
Audit Committee reviewed the results of operations for 1993 and the
status of certain specific accounts.
The Board appointed a compensation committee during 1992.
Messrs. Haskin and Spector are currently serving on this committee.
The Compensation Committee met once in 1994.
The Board does not have a nominating committee. The functions
of this committee are performed by the Board of Directors.
During 1994 there were fourteen meetings of the Board of
Directors. Each of the directors of the Company attended at least
90% of the meetings of the Board of Directors during 1994.
EXECUTIVE COMPENSATION
The following tables provide certain summary information
concerning compensation paid or accrued by the Company to or on
behalf of the Company's Chief Executive Officer and each of the
four most highly compensated executive officers of the Company
whose total compensation exceeded $100,000 for the years ended
December 31, 1994, 1993 and 1992.
ANNUAL COMPENSATION
Name and Other Annual
Principal Position Year Salary Bonus Compensation (1)
- - ------------------ ---- -------- -------- ------------
Leon Fishman 1994 $375,000 $ -0- -
President & CEO 1993 $375,000 $ 48,442 -
1992 $347,500 $108,227 -
Bret Kelly 1994 $220,502 $ -0- -
Senior V.P. & COO 1993 $221,044 $ 15,000 -
1992 $210,624 $ 15,000 -
Lawrence Winkler 1994 $141,965 $ 2,500 -
Secy/Treasurer & 1993 $136,786 $ 10,000 -
1992 $130,772 $ 25,000 -
Craig Fishman 1994 $126,405 $ 2,500 -
V.P. & General 1993 $115,601 $ 15,600 -
Counsel 1992 $110,183 $ -0- -
LONG TERM COMPENSATION
<TABLE>
AWARDS
------
Name and Options/
Principal Position Year SAR Grants (2) All OtherCompensation (3)
- - ------------------ ---- -------------- ------------------------
<S> <C> <C> <C>
Leon Fishman 1994 - $3,000
President & CEO 1993 - $4,717
1992 7,500 $4,577
Bret Kelly 1994 - $3,000
Senior V.P. & COO 1993 - $4,720
1992 5,000 $4,500
Lawrence Winkler 1994 - $2,889
Secy/Treasurer & 1993 - $2,936
CFO 1992 5,000 $3,093
Craig Fishman 1994 - $2,578
V.P. & General 1993 - $2,624
Counsel 1992 2,500 $2,265
</TABLE>
In May 1994, the Board of Directors unanimously approved a reduction in the
exercise price of the options granted in 1992 to Mr. Winkler and Craig Fishman
to $6.50 per share from $14.00 per share. The reduced exercise price of $6.50
per share exceeded the per share market value of the Company's common stock at
the time of the reduction. The reduction in the exercise price of these options
was made to provide a supplemental performance incentive for Mr. L. Winkler and
Mr. C. Fishman.
- - --------------------------------------
1) Does not include the value of various personal benefits provided to the
executives officers. The aggregate amount of other compensation provided
to each individual did not exceed the lesser of $50,000 or 10% of his
reported compensation.
2) No SARS have been granted.
3) Represents contributions to 401(k) plan.
INDIVIDUAL GRANTS IN LAST FISCAL YEAR
None.
AGGREGATE OPTIONS EXERCISED IN LAST YEAR AND VALUE AT YEAR END
<TABLE>
Shares Value of Unexercised
Acquired on Value Number of Unexercised In-the-Money Options/SARS
Name Exercise Realized Option/SAR at F/Y End (1) at F/Y End
- - ------------- ---------- -------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Exercisable/Unexercisable Exercisable/Unexercisable
Leon Fishman - - 37,500/ 5,000 $ -0- /$ -0-
Bret Kelly - - 11,667/ 3,333 $ -0- /$ -0-
Lawrence Winkler - - 13,334/ 3,333 $ -0- /$ -0-
Craig Fishman - - 833/ 1,667 $ -0- /$ -0-
</TABLE>
- - ---------------------------------------------
1) No SARS have been granted.
Two executive officers of the Company, Leon Fishman and Lawrence Winkler,
have employment contracts which currently expire in December 1995 and January
1996, respectively.
Mr. Fishman's employment agreement provides for annual compensation of
$375,000. In addition to his base salary, Mr. Fishman's employment agreement
provides for additional payments to him in the amount of 2% of the Company's
pre-tax net earnings above $3.0 million but less than $5.0 million per year plus
3% of the Company's pre-tax net earnings in excess of $5.0 million. The
agreement contains confidentiality and non-compete provisions, obligates the
Company to provide Mr. Fishman with the use of an automobile and to include Mr.
Fishman under any benefit plans that are available to employees generally. Mr.
Fishman normally is expected to spend at least three days per week at the
Company's office and the balance of each work week traveling on Company business
or discharging his official responsibilities at other locations. Mr. Fishman's
agreement also provides for the continuation of his compensation for 24 months
in the event of his death or if his employment is terminated by the Company
prior to the end of the term of the agreement, other than for cause.
Mr. Winkler currently receives an annual salary of $146,159 under an
employment agreement and is entitled under that agreement to receive an annual
bonus determined by the Compensation Committee or the Board. He is also
entitled to be included under any benefit plans that are available to employees
generally. The agreement contains confidentiality and non-compete provisions.
Mr. Winkler's agreement also provides for the continuation of his compensation
for 24 months in the event of his death or if his employment is terminated by
the Company prior to the end of the agreement, other than for cause.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The compensation committee of the Board of Directors is composed entirely
of outside directors. The committee was first established in December 1992 and
is responsible for establishing and administering the policies governing
executive compensation which includes base salary, bonuses and stock options.
The committee makes recommendations on executive compensation based on
several factors. Included in these factors are corporate success in achieving
key corporate objectives, financial performance of the Company, and long term
performance. The committee also reviews market data to insure that the
Company's compensation practices are reasonable and competitive within its
market place.
In May 1994, the committee recommended a $10,000 salary increase for Mr.
Winkler. Even though Leon Fishman's contract provided for a salary increase for
1994, it was not taken.
OTHER TRANSACTIONS
In January 1989, a corporation wholly owned by Lawrence M. Winkler, his
wife and a son of Eugene Haskin purchased an apartment building from the Company
for consideration in the form of a demand note to the Company in the principal
amount of $100,000. At December 31, 1994 the principal amount owing was
$100,000. The note is secured by the assets transferred and does not accrue
interest.
Certain members of the immediate families of Eugene Haskin and Leon
Fishman, directly or through trusts, have provided financing to Lifetime
Options, Inc., a Viatical Settlement Company ("Lifetime Options") a wholly owned
subsidiary of the Company, through unsecured loans with interest payable monthly
at an annual interest of 1% over the prime rate.
Lifetime Options' total indebtedness to members of Mr. Haskin's immediate
family was $15,146 at December 31, 1994 and $460,553 at December 31, 1993.
During 1994, at the request of members of Mr. Haskin's family, Lifetime Options
repaid $445,407 of long term indebtedness. During 1994 and 1993, Lifetime
Options paid aggregate interest on these loans of $16,267 and $40,306,
respectively.
Lifetime Options' total indebtedness to members of Leon Fishman's immediate
family was $43,642 and $62,302 at December 31, 1994 and 1993, respectively.
During 1994 and 1993, Lifetime Options paid aggregate interest of $8,780 and
$4,424, respectively. At various times during 1994, Leon Fishman loaned
Lifetime Options a total of $265,000 which was repaid in full by December 31,
1994. During the periods of indebtedness, Mr. Fishman received $2,467 of
interest. At December 31, 1993, Craig Fishman was owed $18,659 by Lifetime
Options. The level of borrowings from Craig Fishman increased at various
intervals during 1994 to $97,800. As of December 31, 1994 the indebtedness of
$97,800 was paid in full. Craig Fishman received interest from Lifetime Options
of $2,610 in 1994.
In February 1994, the Company made a loan in the amount of $1,000,000 to
Eugene Haskin, a director of the Company, and his wife. The loan was
unanimously approved by all members of the Board of Directors of the Company
(with one director absent and Mr. Haskin abstaining) and conformed to a previous
loan to an unrelated party. The loan bore interest at a rate equal to 2% per
month, was collateralized by a pledge of securities having a market value of
approximately $1,600,000 and was due on or before July 15, 1994. The loan,
together with all accrued interest thereon, was repaid on March 24, 1994.
On September 11, 1995, the Company issued an aggregate of $2,638,000 in
principal amount of Convertible Subordinated Notes (the "Notes") to Scoggin
Capital Management, L.P. and Selig Partners, LP (collectively, the "Scoggin
Stockholders"), in exchange for 447,200 shares of common stock (approximately
14%) of the Company owned by them. The Notes (i) mature on September 30, 2000;
(ii) bear interest at the initial rate of 10% per annum which rate may fluctuate
in accordance with the prime rate, but may not fall below 8% nor rise above 10%
per annum; (iii) are convertible into common stock of the Company at the rate
of $7.50 per share; and (iv) are subordinated to the Senior Indebtedness (as
defined) of the Company. Upon the occurrence of certain change of control
events, holders of the Notes have the right to have their Notes redeemed at
their face amount. The Notes were issued pursuant to an Indenture which imposes
certain covenants, restrictions and obligations on the part of the Company.
Shawmut Bank Connecticut, National Association is acting as Trustee under the
Indenture. In addition, the Scoggin Stockholders (i) have agreed not to convert
their Notes into common stock until March 1, 1997, (ii) are entitled to certain
demand and piggy-back registration rights with respect to their securities; and
(iii) are entitled to nominate up to two members of the Company's Board of
Directors (depending on their level of ownership of Company securities).
The Company has also agreed to make an exchange offer by which it would
agree to issue up to $2,162,000 in principal amount of Notes to the other
stockholders of the Company at the rate of 157.48 shares of common stock for
each $1,000 principal amount of Notes. Notes may only be issued in denominations
of $1,000 or multiples thereof. Messrs. Eugene Haskin and Leon Fishman have
agreed not to tender any of their common stock in exchange for Notes.
OTHER MATTERS
At this date, there are no other matters management intends to present or
has reason to believe others will present to the Annual Meeting. If other
matters now unknown to the management come before the meeting, those named as
proxies on the enclosed form of proxy will vote in accordance with their best
judgement.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Company has selected the firm of Deloitte & Touche, CPA's to serve as
the independent auditors for the Company for the current fiscal year. That firm
has served in this capacity for the Company since 1988. Representatives of
Deloitte & Touche are expected to be present at the Annual Meeting to respond
to appropriate questions.
SHAREHOLDERS PROPOSALS
If any shareholder desires to submit a proposal for action at the Annual
Meeting to be held in 1996, the proposal must be in proper form and received by
the Company no later than June 1, 1996.
PLEASE SIGN, DATE AND RETURN YOUR PROXY PROMPTLY.
September 29, 1995
BY ORDER OF THE BOARD OF DIRECTORS
Lawrence M. Winkler
Secretary
