<PAGE> 1
SCHEDULE 14A
Information Required in Proxy Statement
(Section 240.14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant ( )
Filed by a Party other than the Registrant ( X )
Check the appropriate box:
( ) Preliminary Proxy Statement
( X ) Definitive Proxy Statement
( ) Definitive Additional Materials
( ) Soliciting Material Pursuant to Sections 240.14a-11(c) or
240.14a-12
SAFECO CORPORATION
(Name of Registrant as Specified In Its Charter)
Rod A. Pierson
Senior Vice President and Secretary
(Name of Person 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)(1), or
14a-6(j)(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:
not applicable
---------------------------------------------------------
2) Aggregate number of securities to which transaction
applies:
not applicable
---------------------------------------------------------
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:
not applicable
---------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
not applicable
---------------------------------------------------------
( ) 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 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> 2
[LOGO]
SAFECO CORPORATION
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 4, 1994
Seattle, March 15, 1994
To Our Shareholders:
Notice is hereby given that the Annual Meeting of Shareholders of SAFECO
Corporation (the "Corporation") will be held on May 4, 1994, at 11:00 A.M. in
the Auditorium, SAFECO Plaza, 4333 Brooklyn Avenue N.E., Seattle, Washington,
for the following purposes, as set forth in the accompanying proxy statement:
1. To elect one (1) nominee to serve as a director for a two-year term to expire
in 1996, and four (4) nominees to serve as directors for three-year terms to
expire in 1997.
2. To consider and act upon such other matters as may properly come before the
meeting.
The Board of Directors has established the close of business on March 7, 1994,
as the record date for the determination of shareholders entitled to receive
notice of and to vote at the Annual Meeting of Shareholders and any adjournment
thereof.
YOU ARE URGED TO REVIEW CAREFULLY THE ACCOMPANYING PROXY STATEMENT, AND SIGN AND
RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING.
Your proxy may be revoked by you at any time before it has been voted. You may
substitute a representative other than those named in the enclosed proxy if you
desire. The individuals named are the present members of the Executive Committee
of the Board of Directors.
You are cordially invited to attend the Annual Meeting of Shareholders in
person, if it is convenient for you to do so.
/s/ ROGER H. EISTI
---------------------------
Roger H. Eigsti
Chairman, CEO and President
<PAGE> 3
March 15, 1994
SAFECO CORPORATION
SAFECO Plaza, Seattle, Washington 98185
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- MAY 4, 1994
This statement is furnished in connection with the Annual Meeting of
Shareholders of SAFECO Corporation (the "Corporation") to be held on May 4,
1994. Shareholders of record at the close of business on March 7, 1994, are
entitled to vote at the meeting either in person or by proxy.
Your proxy in the enclosed form is solicited by the Board of Directors of the
Corporation. The shares represented by the proxies received will be voted at the
meeting.
OUTSTANDING SHARES AND VOTE REQUIRED
On March 7, 1994, there were 62,951,381 shares of Common Stock of the
Corporation outstanding, all of which will be entitled to vote at the Annual
Meeting of Shareholders to be held on May 4, 1994. Each shareholder is entitled
to one vote for each share of Common Stock held of record in such person's name
on the record date. Under Washington law and the Corporation's Articles of
Incorporation, a quorum consisting of a majority of the shares eligible to vote
must be represented in person or by proxy to elect directors and to transact any
other business that may properly come before the meeting. Action on any matter,
other than the election of directors, is approved if the votes cast in favor of
the action exceed the votes cast against it. Abstention from voting or nonvoting
by brokers will have no effect since such actions do not represent votes cast by
shareholders. In any election of directors, the nominees elected are those
receiving the greatest number of votes cast by the shares entitled to vote, up
to the number of directors to be elected by such shares. Any action other than a
vote for a nominee will have the effect of voting against the nominee.
SOLICITATION OF PROXIES
The persons named as proxies were selected by the Board of Directors and are the
present members of the Executive Committee of the Board. Your proxy may be
revoked by you at any time before it has been voted by notifying the Secretary
to the Board of Directors, SAFECO Corporation, SAFECO Plaza, Seattle,
Washington, 98185, in writing of such revocation. Georgeson & Company Inc., New
York City, has been retained to solicit proxies personally or by mail, telephone
or telegram through approximately 40 employees at a cost anticipated to be
$6,000 plus reasonable out-of-pocket expenses,
--2--
<PAGE> 4
which will be paid by the Corporation. Management does not expect to solicit
proxies except through the mail; however, if proxies are not promptly received,
salaried employees of the Corporation may solicit proxies from some shareholders
personally, by telephone or telegram.
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. At the 1994 Annual Meeting
of Shareholders, one nominee will be elected to serve a two-year term until the
1996 Annual Meeting of Shareholders and four nominees will be elected to serve
three-year terms until the 1997 Annual Meeting of Shareholders and until their
successors are elected and qualified. At its August 4, 1993 meeting, the Board
of Directors elected Boh A. Dickey, the Corporation's Executive Vice President
and Chief Financial Officer, a director. Unless otherwise stated, each
individual described below has served for at least five years in the position
indicated. All nominees are presently directors.
NOMINEES FOR DIRECTOR
CLASS I -- TERM EXPIRES AT 1996 ANNUAL SHAREHOLDERS' MEETING
BOH A. DICKEY, 49, is Executive Vice President and Chief Financial Officer of
the Corporation and Chairman of the Board of Trustees of the SAFECO mutual
funds. Mr. Dickey has been an executive officer of the Corporation since 1982,
and a director of the Corporation since 1993. Mr. Dickey is a director of
Capital Guaranty Corporation.
CLASS II -- TERM EXPIRES AT 1997 ANNUAL SHAREHOLDERS' MEETING
ROBERT S. CLINE, 56, is Chairman and Chief Executive Officer of Airborne Freight
Corporation, Seattle, Washington, an air freight carrier. Mr. Cline has been a
director of the Corporation since 1992 and is a director of Seafirst Corporation
and Metricom, Inc.
JOSHUA GREEN III, 57, is Chairman and Chief Executive Officer of the Joshua
Green Corporation, Seattle, Washington, commercial properties and investments.
Mr. Green has been a director of the Corporation since 1981 and is Chairman of
U. S. Bank of Washington, N.A., and a director of U. S. Bancorp.
WILLIAM G. REED, JR., 55, is Chairman and Chief Executive Officer of Simpson
Investment Company, Seattle, Washington, a forest products holding company. Mr.
Reed has been a director of the Corporation since 1974 and is a director of
Microsoft Corporation and Washington Mutual Savings Bank.
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<PAGE> 5
JUDITH M. RUNSTAD, 49, is a partner of the Seattle law firm of Foster Pepper &
Shefelman. Mrs. Runstad has been a director of the Corporation since 1990 and is
Deputy Chair and a director of the Federal Reserve Bank of San Francisco.
GEORGE H. WEYERHAEUSER, 67, is Chairman and a director of Weyerhaeuser Company,
Tacoma, Washington, a forest products company, and was its Chief Executive
Officer from 1966 until his retirement in 1991. Mr. Weyerhaeuser has been a
director of the Corporation since 1978 and is a director of The Boeing Company
and Chevron Corporation.
DIRECTORS WHOSE TERMS EXPIRE AFTER 1994
CLASS III -- TERM EXPIRES AT 1995 ANNUAL SHAREHOLDERS' MEETING
ROGER H. EIGSTI, 51, is Chairman, Chief Executive Officer and President of the
Corporation. Mr. Eigsti has been an executive officer of the Corporation or its
subsidiaries since 1980 and a director of the Corporation since 1988. Mr. Eigsti
is a director of Washington Mutual Savings Bank.
JOHN W. ELLIS, 65, is Chairman and Chief Executive Officer of The Baseball Club
of Seattle, Inc., the owner of the Seattle Mariners baseball team, Seattle,
Washington. Mr. Ellis is a director of Puget Sound Power & Light Company and was
its Chairman from 1987 to 1993 and its Chief Executive Officer from 1976 to
1992. Mr. Ellis has been a director of the Corporation since 1981 and is a
director of Washington Mutual Savings Bank, UTILX Corporation and Associated
Electric & Gas Insurance Services, Ltd.
DONALD G. GRAHAM, JR., 70, is Chairman of Fisher Companies Inc., Seattle,
Washington, whose primary subsidiaries are engaged in broadcasting, flour
milling and real estate ownership and development, and was its Chief Executive
Officer from 1974 until his retirement in 1993. Mr. Graham has been a director
of the Corporation since 1979.
HAROLD W. HAYNES, 71, is the retired Executive Vice President and Chief
Financial Officer of The Boeing Company, Seattle, Washington, an aerospace
manufacturer. Mr. Haynes has been a director of the Corporation since 1982 and
is a director of Itel Corporation.
HENRY T. SEGERSTROM, 70, is Managing Partner of C. J. Segerstrom & Sons, Costa
Mesa, California, a diversified real estate partnership. Mr. Segerstrom has been
a director of the Corporation since 1984 and is a director of SCEcorp, Southern
California Edison Company, and Urban Shopping Centers, Inc.
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<PAGE> 6
CLASS I -- TERM EXPIRES AT 1996 ANNUAL SHAREHOLDERS' MEETING
WILLIAM P. GERBERDING, 64, is President of the University of Washington. Dr.
Gerberding has been a director of the Corporation since 1981 and is a director
of Washington Mutual Savings Bank and a member of the Washington State Executive
Board of U S WEST Communications.
CALVERT KNUDSEN, 70, is a director and the retired Chairman and Chief Executive
Officer of MacMillan Bloedel, Ltd., Vancouver, British Columbia, a forest
products company. Mr. Knudsen has been a director of the Corporation since 1979
and is a director of Cascade Corporation, Penwest Limited, Portland General
Corporation and Portland General Electric Co., Seafirst Corporation and
Seattle-First National Bank, West Fraser Timber Co., Ltd., and MacDonald
Dettwiler & Associates.
TONI REMBE, 57, is a partner of the law firm of Pillsbury, Madison and Sutro,
San Francisco, California. Miss Rembe has been a director of the Corporation
since 1981 and is a director of Potlatch Corporation, Pacific Telesis Group and
American President Companies, Ltd.
PAUL W. SKINNER, 46, is President of Skinner Corporation, Seattle, Washington,
an investment company. Mr. Skinner has been a director of the Corporation since
1988 and is a director of The Seattle Times, Seafirst Corporation and
Seattle-First National Bank.
OWNERSHIP OF THE CORPORATION'S COMMON STOCK
The table below provides information as of February 8, 1994, with regard to the
ownership of the Corporation's Common Stock by directors, nominees for director,
the Corporation's Chief Executive Officer and other four most highly compensated
executive officers, and by all directors, nominees and officers as a group.
Total beneficial ownership of the Corporation's outstanding Common Stock is less
than one percent in the case of each individual listed below except as follows:
5.81% for Mr. Graham, 2.02% for Mr. Green, and 8.9% for all 20 directors,
nominees and officers as a group (including shares subject to stock options
which may be exercised within 60 days). The holdings shown in the table do not
include 2,357,800 shares held by The SAFECO Employees' Profit Sharing Retirement
Plan, as to which the members of the Investment Committee of the Profit Sharing
Retirement Plan (Messrs. Cline, Ellis, Gerberding, Haynes, Knudsen, Reed and
Skinner) share voting and investment power and certain members of management may
be deemed to share investment power by reason of their positions.
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<PAGE> 7
<TABLE>
<CAPTION>
AMOUNT AND NATURE ACQUIRABLE WITHIN
NAME OF BENEFICIAL OWNERSHIP 60 DAYS (1)
<S> <C> <C>
Robert S. Cline 1,000 --
Boh A. Dickey 14,171 18,946
Roger H. Eigsti 34,074 22,006
John W. Ellis 4,512 --
William P. Gerberding 1,000 --
Donald G. Graham, Jr. 3,656,894(2) --
Joshua Green III 1,273,716(3) --
Harold W. Haynes 3,000 --
Richard W. Hubbard 29,000 5,188
Calvert Knudsen 4,000 --
Dan D. McLean 5,838 --
William G. Reed, Jr. 335,898(4) --
Toni Rembe 2,250 --
Judith M. Runstad 1,000 --
Henry T. Segerstrom 4,000(5) --
Paul W. Skinner 140,460(6) --
George H. Weyerhaeuser 27,800(7) --
Richard E. Zunker 6,969(8) 4,628
All directors, nominees and officers
as a group (20 persons) 5,547,705 58,018
</TABLE>
- ---------------
(1) Shares which may be purchased within 60 days pursuant to the Corporation's
Stock Option Plan or the SAFECO Incentive Plan of 1987.
(2) Includes (i) 2,998,649 shares owned by three corporations of which Mr.
Graham is an officer and/or director, 24,863 shares owned by a charitable
foundation of which he is a trustee, 54,648 shares owned by a charitable
trust of which he is a co-trustee, 11,180 shares owned by a trust estate of
which he is a co-trustee, and thereby in each such case shares voting power
and investment power with respect to such shares; and (ii) 509,200 shares
owned by three decedents' estates of which he is executor and 2,700 shares
owned by a trust estate of which he is the sole trustee, and thereby in each
such case holds the voting power and investment power with respect to such
shares. Mr. Graham disclaims any beneficial interest in any of the shares
referred to in this footnote, other than such indirect interest he may have
as a stockholder of said three corporations. Mr. Graham's business address
is 1525 One Union Square, Seattle, WA 98101.
(3) Includes 1,273,416 shares owned by the Joshua Green Corporation in which Mr.
Green has a substantial interest with voting control and investment power.
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<PAGE> 8
(4) Includes (i) 250,347 shares owned by two trusts of which Mr. Reed is a
co-trustee and beneficiary, (ii) 3,886 shares owned by Mr. Reed's spouse,
and (iii) 73,343 shares owned by Mr. Reed's children.
(5) Owned by a trust of which Mr. Segerstrom is co-trustee.
(6) Includes 129,060 shares owned by Skinner Corporation in which Mr. Skinner
has a substantial interest and 9,400 shares owned by trusts of which Mr.
Skinner is a trustee. Mr. Skinner disclaims any beneficial interest in the
shares owned by the trusts.
(7) Includes 12,600 shares owned by trusts of which Mr. Weyerhaeuser is
co-trustee.
(8) Includes 400 shares owned by his spouse.
In addition, INVESCO PLC, 11 Devonshire Square, London EC2M 4YR, England,
reported in a Schedule 13G filed with the Securities and Exchange Commission
("SEC") that its subsidiaries had voting power and investment discretion with
respect to 3,279,302 shares, or 5.2% of the Corporation's Common Stock, at
December 31, 1993. The subsidiaries, investment advisers, hold the shares on
behalf of their clients, none of which holds more than 5% of the Corporation's
shares.
Under Section 16 of the Securities Exchange Act of 1934, as amended, directors
and officers of the Corporation are required to report their holdings of and
transactions in the Corporation's stock to the SEC. To the Corporation's
knowledge, based solely on review of the copies of such reports furnished to the
Corporation and written representations that no other reports were required,
during 1993 all persons subject to the Section 16 filing requirements with
respect to the Corporation filed the required reports on a timely basis.
COMMITTEES OF THE BOARD
The Board of Directors of the Corporation presently has these standing
committees: Executive, Finance, Audit, Compensation and Nominating. Except for
certain fundamental corporate acts reserved to the full Board under Washington
law, the Executive Committee has broad authority, when the Board is not in
session, to exercise all of the powers of the Board in management of the
business of the Corporation. The Finance Committee has general supervision over
the investments of and all matters of financing by the Corporation. The Audit
Committee recommends independent auditors for selection by the Board of
Directors, reviews plans for upcoming audits with such auditors, and, after an
audit has been completed, reviews the results of that audit. The Compensation
Committee passes upon all salary increases where the proposed salary exceeds
$125,000 per year, reviews salary administration policy, administers the
Corporation's stock option program, and approves all material changes in
employee benefit programs. The Nominating Committee reviews qualifications of
candidates for board membership, recommends to the Executive Committee
candidates for membership on the Board and the annual slate of nominees for
director, and recommends to the Board criteria for board membership, composition
of the Board, tenure of directors and fees to be paid to directors. The
Nominating Committee will consider persons for board
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<PAGE> 9
membership recommended by shareholders. Recommendations supported by a
description of such persons' background and experience and written consents of
such persons to serve should be addressed to the Secretary to the Board of
Directors, SAFECO Corporation, SAFECO Plaza, Seattle, Washington 98185. This
information must be received by November 15, 1994, for such persons to be
considered for nomination by the Board for election at next year's annual
meeting of shareholders.
During 1993 the Compensation Committee held five meetings, the Board, Executive
and Finance Committees each held four meetings, the Audit Committee held three
meetings, and the Nominating Committee met once. All directors, other than Ms.
Runstad, attended at least 75% of the Board and committee meetings they were
eligible to attend. The present members of each committee are:
<TABLE>
<CAPTION>
COMMITTEE MEMBERS
<S> <C>
Executive Messrs. Eigsti (Chairman), Ellis, Graham, Green and Weyerhaeuser.
Finance Messrs. Cline, Dickey, Eigsti, Ellis (Chairman), Gerberding, Haynes,
Knudsen, Reed and Skinner.
Compensation Messrs. Cline, Ellis, Haynes, Reed, Weyerhaeuser (Chairman) and Miss
Rembe.
Audit Messrs. Gerberding, Graham (Chairman), Green and Mrs. Runstad.
Nominating Messrs. Ellis, Green (Chairman) and Reed.
</TABLE>
COMPENSATION OF DIRECTORS AND OFFICERS
COMPENSATION OF DIRECTORS
Directors of the Corporation, except those who are also employees, receive fees
for their services as directors. The director fees are: an annual retainer of
$20,000, a $1,200 fee for attendance at any Board meeting, and a $1,000 fee for
attendance at any committee meeting. In addition, the Chairman of the Finance
Committee receives an annual retainer of $5,000 and a $1,000 fee for attendance
at any meeting of the management investment committee. Directors are also
reimbursed for reasonable travel expenses.
ANNUAL REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors ("Committee") is comprised
of six directors none of whom has been or is an employee of the Corporation and
all of whom qualify as disinterested persons for purposes of administering the
Corporation's stock option program under Section 16 of the Securities Exchange
Act of 1934. The Committee is responsible for reviewing the Corporation's salary
administration policy, approving salaries which are greater than $125,000,
administering the Corporation's stock option program, and approving changes to
the Corporation's employee benefit plans. The members of the Committee, which
met five times during 1993, are George H. Weyerhaeuser, Chairman, Robert S.
Cline, John W. Ellis, Harold W. Haynes, William G. Reed, Jr., and Toni Rembe.
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<PAGE> 10
APPROACH TO COMPENSATION
This report discusses the compensation policies applicable to the Corporation's
executive officers, including the Chief Executive Officer and four other most
highly compensated executives ("Named Executive Officers"). With the exception
of stock options and restricted stock rights, all major compensation and
retirement plans apply equally to all employees of the Corporation's property
and casualty, life, credit and asset management subsidiaries ("Employees"). The
Corporation's compensation policies and plans are intended to:
1. Attract and retain high-caliber personnel on a long-term basis.
2. Encourage the creation of shareholder value.
3. Link compensation to business results and shareholders' returns over
time.
4. Maintain an appropriate balance between base salary and short- and
long-term incentive opportunities.
ELEMENTS OF COMPENSATION
The following are the basic elements of compensation for executive officers of
the Corporation:
SALARY: Salaries are administered on an individual, subjective basis for
all Employees, including executive officers. With respect to compensation
paid to executive officers the Committee regularly reviews information
concerning compensation practices and levels of other companies. Salaries
of executive officers are not, however, targeted for any specific level
relative to salaries paid by other companies.
BONUS: An annual bonus plan applies to all Employees with at least one year
of service. A cash bonus of up to 10% of annual salary is paid to each
Employee who has at least three years of service. An annual bonus pool is
established for all eligible Employees according to a formula based on the
Corporation's pre-tax results. Under the formula, the bonus pool consists
of 10% of the sum of the following pre-tax items: the underwriting results
for the property and casualty subsidiaries; the operating results for the
life subsidiaries, SAFECO Credit Company and the Corporation's asset
management subsidiaries; and 20% of the investment income of the property
and casualty subsidiaries.
The percentage of salary paid as a bonus to all Employees with three years
of service, including the Named Executive Officers, for 1993, 1992 and 1991
was 10%, 10%, and 5.77%, respectively.
STOCK OPTION PROGRAM: A shareholder-approved stock option program has been
an element of compensation since the early 1960s. The purpose of the
program is to induce selected, key employees of the Corporation and its
subsidiaries to remain employed with the Corporation, to participate in the
ownership of the Corporation, to advance the interests of the Corporation
and to increase the value of the Corporation's Common Stock.
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<PAGE> 11
Most recently the shareholders approved the SAFECO Incentive Plan of 1987
("Plan"). Under the Plan the Committee in its sole discretion may grant to
selected, key employees of the Corporation and its subsidiaries stock
options and restricted stock rights ("RSRs") in amounts and on terms
consistent with the Plan.
Grants of stock options and RSRs are made on an individual basis. The
Committee makes a subjective judgment in connection with each grant and
considers the individual's responsibilities, potential for advancement,
current salary, previous grants, the current price of the Corporation's
Common Stock, the performance of the Common Stock over time and, for all
individuals other than the chief executive officer, the recommendation of
the chief executive officer.
Stock options are awarded at the closing market price of the Common Stock
on the grant date and typically vest in 25% increments on the second,
third, fourth and fifth anniversary of the grant date. The Committee has
never rescinded an outstanding option and reissued it at a lower exercise
price.
RSRs entitle the holder to receive a specified number of shares of Common
Stock or cash equal to the closing market price of such shares on the
vesting date. RSRs typically vest and are settled in 25% increments on the
first, second, third and fourth anniversary of the grant date. Holders of
RSRs are paid amounts equivalent to the dividends which would be paid on
the same number of shares of the Common Stock.
Under the stock option program, as of December 31, 1993, there were 141
participants; outstanding options to purchase an aggregate of 914,231
shares of Common Stock; outstanding RSRs entitling the holders to receive
an aggregate of 44,418 shares of Common Stock; and 1,224,179 shares of
Common Stock available for additional options and RSRs.
RETIREMENT PROGRAM: Three basic tax-qualified plans comprise the
Corporation's retirement program and are available on the same basis to all
Employees: the Savings Plan, the Profit-Sharing Plan and the Cash Balance
Plan. In addition, there are two supplemental retirement plans to provide
for benefits which cannot be included in the tax-qualified plans. These
plans are described in more detail elsewhere in this proxy statement. Since
the Corporation's Common Stock constitutes 33% of the assets of the
Profit-Sharing Plan at December 31, 1993, all participants in the Plan have
a significant, indirect ownership in the Corporation and an additional
incentive to advance its interests and to increase the value of its Common
Stock.
OTHER EMPLOYEE BENEFITS: The Corporation offers other benefit plans (e.g.,
vacation; sick leave; medical, disability, life and accident insurance) to
executive officers on the same basis as offered to all Employees. In
addition, certain benefits, e.g., payment for annual medical exams and club
dues, are provided by the Corporation to some executives, including the
Named Executive Officers.
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<PAGE> 12
CONSIDERATIONS IN CONNECTION WITH COMPENSATION LEVELS
CORPORATE PERFORMANCE.
The directors regularly review the Corporation's performance and the degree to
which investment returns have been generated for shareholders. This includes
review of customary financial measures with respect to the Corporation, e.g.,
compounded annual return to shareholders, the Corporation's Common Stock price
and the common stock prices of comparable companies, the combined ratio of the
Corporation's property and casualty subsidiaries and the combined ratios of
competitors, the revenue and premium growth of the Corporation's operating
subsidiaries, financial strength and asset management, and consideration of the
ratings assigned to the Corporation, its subsidiaries or securities by A.M. Best
Insurance Services, Standard & Poor's Corporation and Moody's Investors Service,
Inc.
The directors annually review graphs that compare the cumulative total return to
shareholders of the Corporation with the Standard & Poor's 500 and a peer group
comprised of the Standard & Poor's Property-Casualty and Multi-Line Insurance
Indices on a five-and ten-year basis. These graphs are set forth below. The
ten-year period graph is included as its time period may more adequately reflect
returns for the long-term shareholder and option holder. Dividend reinvestment
has been assumed and the returns of each company have been weighted to reflect
relative stock market capitalization.
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<PAGE> 13
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG SAFECO, S&P 500, AND PEER INDEX*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) SAFECO S&P 500 PEER INDEX*
<S> <C> <C> <C>
1988 100 100 100
1989 169 132 142
1990 149 128 122
1991 229 167 157
1992 277 179 181
1993 274 197 194
</TABLE>
* Comprised of the 10 Companies in the S&P Property-Casualty (excluding SAFECO)
and S&P Multi-Line Insurance Indices which are as follows:
P&C Companies: Chubb, GenRe, St. Paul, USF&G, and Continental
Multi-Line Companies: Aetna, Cigna, CNA, Travelers, and AIG
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<PAGE> 14
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN
AMONG SAFECO, S&P 500, AND PEER INDEX*
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) SAFECO S&P 500 PEER INDEX*
<S> <C> <C> <C>
1983 100 100 100
1984 124 106 112
1985 181 140 174
1986 216 166 181
1987 230 174 169
1988 206 203 182
1989 349 268 258
1990 307 260 222
1991 472 339 288
1992 571 364 328
1993 586 401 353
</TABLE>
* Comprised of the 10 Companies in the S&P Property-Casualty (excluding SAFECO)
and S&P Multi-Line Insurance Indices which are as follows:
P&C Companies: Chubb, GenRe, St. Paul, USF&G and Continental
Multi-Line Companies: Aetna, Cigna, CNA, Travelers, and AIG
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<PAGE> 15
The financial integrity and stability of the Corporation and its subsidiaries
are of critical importance. One measure of these are the following claims-paying
ratings given by independent rating services.
INSURANCE RATINGS: CLAIMS-PAYING ABILITY
<TABLE>
<CAPTION>
S&P MOODY'S A. M. BEST
<S> <C> <C> <C>
Property/Casualty Subsidiaries AAA Aa1 A++
Life Subsidiaries AA Aa2 A+
</TABLE>
INDIVIDUAL PERFORMANCE
In connection with compensation for individual executive officers, the Committee
consults with the Chief Executive Officer and exercises its subjective judgment
in evaluating each individual's leadership and managerial abilities, achievement
of business unit and corporate objectives, potential for advancement or
promotion and the relative value of the individual's performance in the overall
achievement of the Corporation's objectives. In addition in connection with the
award of a stock option or RSR, the Committee considers the amount and terms of
any previous award, the current price of the Corporation's Common Stock and the
performance of the Common Stock over time.
The Committee regularly reviews information regarding compensation practices and
levels of competitors of the Corporation and its operating subsidiaries as well
as non-competing companies of a similar size to the Corporation or its operating
subsidiaries. Detailed compensation information is obtained from the proxy
statements of publicly-held companies. In addition, the Committee reviews
compensation information compiled by two independent consulting firms as well as
that collected by the Corporation's Personnel Department.
The purpose of this review is to confirm that the Committee's approach to
compensation continues to be appropriate given the Corporation's lines of
business, size and culture and the geographic location of the Corporation's
executive officers. The Committee does not engage in this review for the purpose
of targeting any element of compensation, including salaries, paid to the
Corporation's executive officers at, below or above the median paid by any other
company or group of companies.
CONSIDERATIONS IN CONNECTION WITH MR. EIGSTI'S COMPENSATION
The Committee made subjective judgments with respect to Mr. Eigsti's 1993 salary
and awards of stock options and RSRs. With respect to Mr. Eigsti's salary and
awards of stock options the Committee took into account the fact that Mr. Eigsti
assumed the position of Chairman of the Board of Directors on May 5, 1993 in
addition to being president and chief executive officer of the Corporation, as
well as both historical and competitive compensation levels for his
responsibilities.
--14--
<PAGE> 16
The calculations of the annual bonus and contributions or accruals with respect
to the Corporation's retirement plans are made pursuant to the terms of those
plans which apply to all Employees. Consequently, the Committee does not
separately determine the amount or the payment of any such bonus, contribution
or accrual for Mr. Eigsti or any other executive officer.
ADDITIONAL INFORMATION
The tables under "Compensation of Named Executive Officers" accompany this
report and reflect the decisions covered by the foregoing discussion.
Under the Omnibus Budget Reconciliation Act of 1993, beginning in 1994 the
federal income tax deduction for certain types of compensation paid to the chief
executive officer and four other most highly-paid officers of publicly-held
companies is subject to a limit of $1 million per employee. The Committee is
aware of the limit but is not obligated to approve only compensation that falls
within the limit.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any filing under
the Securities Act of 1933 or under the Securities Exchange Act of 1934, except
to the extent that the Corporation specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such Acts.
This report is submitted over the names of the members of the Compensation
Committee:
GEORGE H. WEYERHAEUSER, CHAIRMAN
ROBERT S. CLINE
JOHN W. ELLIS
HAROLD W. HAYNES
WILLIAM G. REED, JR.
TONI REMBE
--15--
<PAGE> 17
COMPENSATION OF NAMED EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
The amount of all compensation paid to the Named Executive Officers for services
in all capacities to the Corporation and its subsidiaries during the past three
years is stated below.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
NAME AND ANNUAL COMPENSATION ALL OTHER
PRINCIPAL POSITION YEAR COMPENSATION AWARDS COMPENSATION
SECURITIES
RESTRICTED UNDERLYING
STOCK OPTIONS/
SALARY BONUS (4) AWARDS (5) SARS
($) ($) ($) (#) ($)
<S> <C> <C> <C> <C> <C> <C>
R. H. Eigsti 1993 $516,667 $51,667 $228,600 15,000 $ 90,427(6)
Chairman, Chief 1992 450,000 45,000 186,500 15,000 62,737
Executive Officer & 1991 336,667 19,422 129,200 8,500 39,977
President (1)
B. A. Dickey 1993 326,667 32,667 152,400 10,000 56,923(7)
Executive V.P. & Chief 1992 300,000 30,000 125,888 10,000 41,864
Financial Officer (2) 1991 235,000 13,577 98,800 5,800 28,350
R. W. Hubbard 1993 233,333 23,333 25,400 0 40,463(8)
Senior V.P. & Treasurer 1992 216,667 21,667 48,956 0 29,827
1991 198,333 11,442 53,200 0 23,897
D. D. McLean 1993 225,000 22,500 88,900 5,000 38,995(9)
President of the 1992 180,000 18,000 41,963 5,000 24,645
Corporation's Property 1991 161,167 9,327 34,200 0 19,413
& Casualty
Subsidiaries (3)
R. E. Zunker 1993 214,583 21,458 88,900 5,000 37,157(10)
President of the 1992 200,000 20,000 83,925 4,500 27,383
Corporation's Life 1991 180,000 10,384 83,600 4,500 21,688
Subsidiaries
</TABLE>
- ---------------
(1) Mr. Eigsti became Chief Executive Officer of the Corporation on January 1,
1992, and Chairman of the Board of Directors of the Corporation on May 5,
1993.
(2) Mr. Dickey became Executive Vice President of the Corporation on January 1,
1992, and a director of the Corporation on August 4, 1993.
--16--
<PAGE> 18
(3) Mr. McLean became President of the Corporation's property & casualty
subsidiaries on January 1, 1993.
(4) A cash bonus of up to 10% of annual salary is paid to each employee of the
insurance, credit and asset management operations who has at least three
years of service when the pre-tax results from such operations support such
a bonus. The percent of salary paid as a bonus for 1993, 1992 and 1991 was
10%, 10% and 5.77%, respectively.
(5) Restricted stock rights (RSRs) are awarded under the Corporation's stock
option program and entitle an employee who remains continuously employed by
the Corporation or its subsidiaries for a stated number of years to receive
a specified number of shares of Common Stock or cash equal to the fair
market value of such shares on the settlement date. Holders of RSRs are
entitled to receive an amount equivalent to the dividends which would be
paid on an equivalent number of shares of the Common Stock. The dollar
amounts in this column are determined by multiplying the number of shares
covered by an RSR by the closing market price of the Common Stock on the
grant date.
In 1993 the Corporation awarded RSRs to the named executives in the
following amounts: 3,600 for Mr. Eigsti, 2,400 for Mr. Dickey, 400 for Mr.
Hubbard, 1,400 for Mr. McLean, and 1,400 for Mr. Zunker. Each award was
made on February 3 and, with the exception of Mr. Hubbard's award, will
vest and be settled in 25% installments on the first, second, third and
fourth anniversary dates of the award. In Mr. Hubbard's case, 100% of the
award will vest on the first anniversary date of the award.
The following are the total number of RSRs held by the named executives
and the total value of such holding at December 31, 1993: for Mr. Eigsti,
9,175 RSRs with a value of $504,625; for Mr. Dickey, 6,425 RSRs with a
value of $353,375; for Mr. Hubbard, 2,313 RSRs with a value of $127,215;
for Mr. McLean 2,850 RSRs with a value of $156,750; and for Mr. Zunker,
4,375 RSRs with a value of $240,625.
(6) Includes net contributions to the Corporation's Profit-Sharing Plan of
$5,734; net contributions to the Corporation's Savings Plan of $9,434; and
allocations to non-qualified plans of $64,026 with respect to the
Profit-Sharing Plan and $11,233 with respect to the Savings Plan for
amounts which may not be contributed to the qualified plans because of
limitations imposed by the Internal Revenue Code of 1986, as amended,
("Non-Qualified Allocations").
(7) Includes net contributions to the Corporation's Profit-Sharing Plan of
$5,734 and Savings Plan of $9,434; and Non-Qualified Allocations of $38,122
with respect to the Profit-Sharing Plan and $3,633 with respect to the
Savings Plan.
(8) Includes net contributions to the Corporation's Profit-Sharing Plan of
$5,984 and Savings Plan of $9,333; and Non-Qualified Allocations of $25,146
with respect to the Profit-Sharing Plan.
--17--
<PAGE> 19
(9) Includes net contributions to the Corporation's Profit-Sharing Plan of
$6,818 and Savings Plan of $9,000; and Non-Qualified Allocations of $23,177
with respect to the Profit-Sharing Plan.
(10) Includes net contributions to the Corporation's Profit-Sharing Plan of
$7,859 and Savings Plan of $8,583; and Non-Qualified Allocations of $20,715
with respect to the Profit-Sharing Plan.
STOCK OPTION AWARDS
Information concerning grants of stock options to the Named Executive Officers
during 1993 is stated below. Under regulations of the Securities and Exchange
Commission the assumed rates of appreciation of 5% and 10% are required to be
used. These assumed appreciation rates are not based on the historic performance
of the Corporation's Common Stock or any other stock or stock index. Any
appreciation in the value of the stated stock options will occur only if the
Common Stock increases in value. Changes in the market price of the Common Stock
are dependent on the future performance of the Corporation as well as overall
stock market performance. There can be no assurance that the amounts or rates of
appreciation stated in the following table will be achieved.
Were one to apply the assumed rates of appreciation to the Common Stock of the
Corporation for the same ten-year period as required for options in the
following table, market capitalization would increase from $3.0 billion to $4.9
billion at the 5% rate and to $7.8 billion at the 10% rate. In addition, a
shareholder, unlike an option holder, would receive dividends paid by the
Corporation during that ten-year period.
OPTION GRANTS IN 1993
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
NUMBER OF VALUE AT ASSUMED ANNUAL
SECURITIES PERCENT OF RATES OF STOCK PRICE
UNDERLYING TOTAL OPTIONS APPRECIATION FOR OPTION
OPTIONS GRANTED TO EXERCISE TERM
GRANTED (1) EMPLOYEES IN PRICE (2) EXPIRATION 5% (3) 10% (4)
NAME (#) FISCAL YEAR ($/SH) DATE ($) ($)
<S> <C> <C> <C> <C> <C> <C>
R. H. Eigsti 15,000 10.90% $56.50 05/05/03 $532,989 $1,350,696
B. A. Dickey 10,000 7.27% 56.50 05/05/03 355,326 900,464
R. W. Hubbard 0 N/A N/A N/A N/A N/A
D. D. McLean 5,000 3.63% 56.50 12/31/00 123,773 292,123
R. E. Zunker 5,000 3.63% 56.50 05/05/03 177,663 450,232
</TABLE>
- ---------------
(1) Options to purchase the Corporation's Common Stock. No stock appreciation
rights were granted to any person named in this table. The grant date for
each option is May 5, 1993. For each option
--18--
<PAGE> 20
granted, 25% of the shares subject to this option become exercisable on the
second, third, fourth and fifth anniversary date of the option grant, so
long as employment with the Corporation or its subsidiaries continues. In
addition, the options (other than Mr. Zunker's options) are subject to
accelerated vesting in the event of a "change in control" of the
Corporation. Under the change in control provisions, to the extent not
already exercisable, options that have been outstanding for at least one
year will become exercisable in the event that (i) any person acquires
beneficial ownership of 25% or more of the Corporation's Common Stock or
(ii) the Corporation's shareholders approve a plan of liquidation or a
merger, consolidation, sale or other disposition of substantially all of the
Corporation's assets.
(2) The exercise price may be paid to the Corporation in cash, in shares of the
Corporation's Common Stock valued at fair market value on the date of
exercise, or in part cash and part stock. In addition, optionees may finance
the exercise price of an option through a subsidiary of the Corporation. The
interest rate on such loans fluctuates quarterly and is equal to the most
recently published applicable federal rate determined pursuant to Section
1274(d) of the Code.
(3) This rate of appreciation produces an ending market price of $92.00 per
share on May 4, 2003.
(4) This rate of appreciation produces an ending market price of $146.50 per
share on May 4, 2003.
STOCK OPTION EXERCISES
Information concerning exercises of stock options during 1993 by the Named
Executive Officers and the value of their unexercised options and stock
appreciation rights at December 31, 1993 is stated below:
AGGREGATED OPTION EXERCISES IN 1993
AND OPTION/SAR VALUES AT DECEMBER 31, 1993
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
SHARES SECURITIES UNDERLYING IN-THE-MONEY
ACQUIRED UNEXERCISED OPTIONS/SARS OPTIONS/SARS AT
ON VALUE AT DECEMBER 31, 1993 DECEMBER 31, 1993 (1)
EXERCISE REALIZED EXERCISABLE/ UNEXERCISABLE EXERCISABLE/ UNEXERCISABLE
NAME (#) ($) (#) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C>
R. H. Eigsti 6,855 $249,992 22,006 42,299 $559,064 $333,166
B. A. Dickey 2,500 112,031 18,946 30,654 499,159 286,535
R. W. Hubbard 8,950 301,412 5,188 2,962 128,282 62,943
D. D. McLean 2,375 65,328 0 12,500 0 88,750
R. E. Zunker 0 0 4,628 17,922 101,767 202,077
</TABLE>
- ---------------
(1) Based on $55.00, the last sale price of the Corporation's Common Stock on
December 31, 1993.
--19--
<PAGE> 21
RETIREMENT PROGRAM
The Corporation's retirement program is comprised of three plans which qualify
for favorable tax treatment under the Internal Revenue Code of 1986, as amended
("Code"), and two non-qualified supplemental plans. The three qualified plans
are: The SAFECO Employees' Cash Balance Plan ("Cash Balance Plan"), The SAFECO
Employees' Profit Sharing Retirement Plan ("Profit-Sharing Plan") and The SAFECO
Employees' Savings Plan ("Savings Plan"). The two non-qualified plans are the
SAFECO Employees' Supplemental Retirement Plan A and the SAFECO Employees'
Supplemental Retirement Plan B ("Supplemental Plan A" and "Supplemental Plan B,"
respectively). The two non-qualified plans are designed to allocate to employees
amounts not eligible for contribution under the qualified plans because of
limitations imposed by the Code. All Employees are eligible to participate in
the plans.
The Profit-Sharing Plan and the Savings Plan are defined contribution plans
while the Cash Balance Plan is a defined benefit plan. With respect to the Cash
Balance and Profit-Sharing Plans, annually 5% of the Corporation's net profits,
as defined in those plans, is set aside and credited or contributed as follows:
The Cash Balance Plan is credited with an amount equal to 3% of the annual
compensation of participating employees plus 5% interest on the cumulative
amount credited for prior years (together, the "Accrued Benefit"). An additional
accrual percentage, as defined in the Cash Balance Plan, is credited for
non-highly compensated employees who were age 50 or older and had at least 15
years of service on January 1, 1989. The additional accrual percentage
terminates after 1993 or on termination of employment, if earlier. The portion
of the Accrued Benefit in excess of limitations imposed under Sections
401(a)(17) and 401(a)(26) of the Code is accrued in Supplemental Plan B.
The estimated annual benefits payable upon normal retirement to the Named
Executive Officers from the Cash Balance Plan and corresponding portion of
Supplemental Plan B are as follows: $34,896 for Mr. Eigsti, $27,855 for Mr.
Dickey, $4,814 for Mr. Hubbard, $8,428 for Mr. McLean, and $9,547 for Mr.
Zunker.
The balance of the 5% of net profits remaining (after crediting the Cash Balance
Plan with 3% of the participating employees' annual compensation) is contributed
to the Profit-Sharing Plan, up to a maximum of 12% of participants'
compensation, and allocated among participants based on their relative
compensation for the year. The portions of the Profit-Sharing contribution in
excess of limitations imposed under Sections 415 and 401(a)(17) of the Code are
credited to participants' accounts in Supplemental Plan A and Supplemental Plan
B, respectively.
The Savings Plan is funded by voluntary employee contributions not to exceed 6%
of compensation and contributions by the Corporation of 66 2/3% of the employee
contributions. The portion of the employer contributions to the Savings Plan in
excess of limitations imposed under Section 401(a)(17) of the Code is credited
to the participants' accounts in Supplemental Plan B.
--20--
<PAGE> 22
CHANGE IN CONTROL AGREEMENTS
Messrs. Eigsti, Dickey, Hubbard and Zunker are among several officers of the
Corporation or its subsidiaries who have agreements which provide for payments
to them under certain circumstances following a change in control of the
Corporation (as defined in the agreements). Under the agreements for Messrs.
Eigsti, Dickey and Hubbard, should the officer in question be discharged without
cause, or be demoted or given other good reason to resign following a change in
control, the agreements call for a lump sum payment of up to three times annual
salary and three years' continuation of life and health insurance in addition to
payment for accrued vacation and sick leave, amounts allocated but not yet paid
under the Corporation's bonus plan, and payment of certain retirement benefits.
In Mr. Zunker's case, the amount of the lump sum payment is the lesser of three
times annual salary or 2.99 times his average annual compensation (salary and
bonus) during the five years immediately preceding the change in control.
In addition, the stock options awarded to Messrs. Eigsti, Dickey, Hubbard,
McLean and certain other key employees of the Corporation under the
Corporation's stock option program provide that following a change in control of
the Corporation (as defined in the stock option plan), there will be 100%
vesting of options and stock appreciation rights which have been held for at
least one year.
CERTAIN TRANSACTIONS
The Corporation and its subsidiaries have transactions in the ordinary course of
business with other business entities of which certain of the Corporation's
directors and nominees for director are executive officers, partners or
shareholders. During the period January 1, 1993 to December 31, 1993 ("Covered
Period") the following directors and nominees for director of the Corporation
were executive officers or ten percent or more shareholders of the following
companies which (directly or through affiliates) engaged in insurance
transactions with subsidiaries of the Corporation in which the amount involved
exceeded $60,000: Callison's, Inc. -- Mr. Knudsen, Fisher Companies -- Mr.
Graham, Joshua Green Corporation -- Mr. Green, and The Ostrom Company -- Mr.
Knudsen. All such transactions were in the ordinary course of business of the
Corporation's subsidiaries.
Mrs. Runstad, a director of the Corporation, is a partner of the Seattle law
firm of Foster Pepper & Shefelman, which received fees for legal services
provided to the Corporation and its subsidiaries during the Covered Period.
Mr. Green, a director of the Corporation, is Chairman of U. S. Bank of
Washington, N.A. During the Covered Period a direct subsidiary of the
Corporation had a line of credit with U. S. Bank of Washington in the amount of
$20,000,000. The subsidiary did not borrow under such line during the Covered
Period, nor did it pay any loan fees or interest. The balance due under such
line at February 8, 1994 was zero.
--21--
<PAGE> 23
During the Covered Period, a subsidiary of the Corporation had an equipment
lease with South Coast Plaza Expansion, a California limited partnership in
which Mr. Segerstrom and members of his family have a material interest. A total
of $13,352 in lease payments were received by the subsidiary during the Covered
Period. The lease balance at February 8, 1994 was $50,069.
The terms of all such transactions were as fair to the Corporation and its
subsidiaries as could have been obtained from other sources.
A subsidiary of the Corporation extends credit to optionees under the
Corporation's stock option program at a rate, adjusted quarterly, equal to the
applicable federal rate determined pursuant to Section 1274(d) of the Code.
During the Covered Period the greatest amounts outstanding on such loans were
$140,857 for Mr. McLean, and a total of $213,636 for all executive officers as a
group. On February 8, 1994, the outstanding amounts were $112,215 for Mr. McLean
and $203,114 for all executive officers as a group.
COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
The members of the Compensation Committee of the Board of Directors during 1993
were George H. Weyerhaeuser, Chairman, Robert S. Cline, John W. Ellis, Harold W.
Haynes, William G. Reed, Jr., and Toni Rembe.
Mr. Ellis is Chairman of The Baseball Club of Seattle, Inc., the owner of the
Seattle Mariners baseball team. During 1993, subsidiaries of the Corporation
sponsored a baseball night for employees and purchased Mariners season tickets
at an aggregate cost of $84,000. Continued sponsorship and the purchase of
season tickets is planned for 1994.
Mr. Cline is Chairman and Chief Executive Officer of Airborne Freight
Corporation, to which subsidiaries of the Corporation paid fees totaling
$447,000 for air freight delivery services in 1993.
The terms of all such transactions were as fair to the Corporation and its
subsidiaries as could have been obtained from other sources.
AUDITING
Ernst & Young, the Corporation's independent auditors since 1987, has been
selected by the Audit Committee to be the auditors for the current year, subject
to the approval of the Board at its meeting on May 4, 1994. A representative of
Ernst & Young is expected to be present at the Annual Meeting of Shareholders
and will have the opportunity to make a statement if he desires to do so and to
respond to appropriate questions.
--22--
<PAGE> 24
SHAREHOLDER NOMINATIONS AND PROPOSALS
The Corporation's Bylaws require that shareholder nominations of persons for
election to the Board of Directors be received by the Secretary of the Board of
Directors of the Corporation at SAFECO Plaza, Seattle, Washington 98185, not
later than 10 days after the day public disclosure of the meeting date is made
or notice of the meeting is mailed to shareholders, whichever first occurs.
Therefore, notices of persons to be considered for election at the 1994 meeting
will be timely if received by March 25. The notice must contain the name,
address, telephone number, and number of shares of the Corporation's Common
Stock owned by the nominating shareholder and the information relating to each
nominee required with respect to nominees for director under the federal proxy
solicitation rules. The notice of nomination must be accompanied by each
nominee's written consent to being a nominee and statement of intention to serve
as a director if elected.
The Corporation's Bylaws further provide that for business to be properly
brought before the annual meeting by a shareholder, the shareholder must file a
written notice of intention to bring such business with the Secretary of the
Corporation at SAFECO Plaza, Seattle, Washington 98185, within the time frame
described above. Therefore, notices of business to be brought at the 1994
meeting must be received by March 25. The notice must contain the name, address,
telephone number and number of shares of the Corporation's Common Stock owned by
the shareholder intending to bring such business before the meeting, a
description of the business and reasons for conducting it at the annual meeting,
and any material interest of the shareholder in such business.
Under the federal proxy solicitation rules, in connection with preparation of
proxy material for the 1995 annual meeting of shareholders, any proposal
submitted by a shareholder for such meeting must be received by the Corporation
by November 15, 1994.
OTHER MATTERS
THE CORPORATION FILES AN ANNUAL REPORT ON FORM 10-K WITH THE SECURITIES AND
EXCHANGE COMMISSION. A COPY OF THE CORPORATION'S MOST RECENT FORM 10-K REPORT
WILL BE FURNISHED WITHOUT CHARGE TO ANY SHAREHOLDER WHO MAKES WRITTEN REQUEST TO
ROD A. PIERSON, SENIOR VICE PRESIDENT AND SECRETARY, SAFECO CORPORATION, SAFECO
PLAZA, SEATTLE, WASHINGTON 98185.
--23--
<PAGE> 25
The Board is not aware of any other matters to be presented for action at the
meeting. If any other matters come before the meeting, the persons named in the
enclosed proxy form will vote all proxies in accordance with their best
judgment.
All shares represented by the enclosed proxy, if returned prior to the meeting,
will be voted in the manner specified by the shareholder. If neither a specific
instruction is given nor authority withheld, the proxy will be voted for the
nominees set forth in this Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY AND THAT YOUR SHARES BE
REPRESENTED. SHAREHOLDERS ARE URGED TO VOTE, SIGN AND PROMPTLY RETURN THE
ACCOMPANYING FORM OF PROXY IN THE ENCLOSED ENVELOPE.
Dated: March 15, 1994 Roger H. Eigsti
Seattle, Washington Chairman, CEO & President
--24--
<PAGE> 26
SAFECO CORPORATION
Proxy Solicited on Behalf of the Board of Directors of the Corporation
for the Annual Meeting of Shareholders
May 4, 1994
The undersigned hereby appoints Roger H. Eigsti, John W. Ellis, Donald G.
Graham, Jr., Joshua Green III and George Weyerhaeuser, each with full power of
substitution, as the true and lawful attorneys, agents and proxies for the
undersigned, to attend the annual meeting of shareholders of SAFECO Corporation
to be held at the SAFECO Auditorium, SAFECO Plaza, Seattle, Washington, at
11:00 a.m. on May 4, 1994, or any adjournment thereof, and to represent and
vote all of the shares the undersigned would be entitled to vote if personally
present in the transaction of such business as may be properly come before the
meeting.
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. The proxies named
above cannot vote your shares unless you sign and return this card.
SEE REVERSE SIDE
[X] Please mark your votes as in this example
1. Election of Directors. For [ ] Withheld [ ]
Nominees: Robert S. Cline
Boh A. Dickey
Joshua Green III
William G. Reed, Jr.
Judith M. Runstad
George H. Weyerhaeuser
For, except vote withheld from the following nominee(s):
________________________________________________________
[ ] Change of Address
on Reverse Side
This proxy when properly executed will be voted in the
manner directed herein. In the event that no
designation (i.e., "For," "Withheld," "Against,"
"Abstain") is made, the proxies named on the reverse
side hereof intend to vote the shares to which this
proxy relates "For" Item 1. The proxies will vote in
their discretion on any other matters properly coming
before the meeting. The signer hereby revokes all
proxies heretofore given by the signer to vote at said
meeting or any adjournment thereof.
SIGNATURE(S)______________________________________ DATE_________________
NOTE: Please sign exactly as name appears
hereon. Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or
guardian, please give full title as such.
