<PAGE>
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 Section 240.14a-12
SAFECO CORPORATION
- --------------------------------------------------------------------------------
(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:
-------------------------------------------------------------------------
(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE>
Notice of
2000 Annual Meeting
of Shareholders
and Proxy Statement
[LOGO OF SAFECO]
<PAGE>
SAFECO CORPORATION
----------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 3, 2000
----------------
Seattle, Washington
March 17, 2000
To Our Shareholders:
The Annual Meeting of Shareholders of SAFECO Corporation (the "Corporation")
will be held on May 3, 2000, at 11:00 a.m. in the SAFECO 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 four nominees to serve as directors for three-year terms to
expire in 2003; and
2. To consider and act upon such other matters as may properly come before
the Annual Meeting.
The Board of Directors has established the close of business on March 2,
2000, as the record date for the determination of shareholders entitled to
receive notice of and to vote at the Annual Meeting and any adjournment or
postponement thereof.
YOU ARE URGED TO REVIEW CAREFULLY THE ACCOMPANYING PROXY STATEMENT AND TO
COMPLETE, SIGN, DATE 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 in the proxy are the present members of
the Executive Committee of the Board of Directors.
You are cordially invited to attend the Annual Meeting in person if it is
convenient for you to do so.
/s/ Roger H. Eigsti
Roger H. Eigsti
Chairman and Chief Executive Officer
<PAGE>
SAFECO CORPORATION
SAFECO Plaza, Seattle, Washington 98185
----------------
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--MAY 3, 2000
----------------
This Proxy Statement is furnished in connection with the Annual Meeting of
Shareholders of SAFECO Corporation (the "Corporation") to be held on May 3,
2000 (the "Annual Meeting"). Shareholders of record at the close of business
on March 2, 2000, are entitled to vote at the Annual 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 in accordance with your directions.
The approximate date of the mailing of this Proxy Statement and the enclosed
form of proxy is March 17, 2000.
OUTSTANDING SHARES AND VOTE REQUIRED
On March 2, 2000, there were 127,617,967 shares of the Common Stock of the
Corporation ("Common Stock") outstanding, all of which will be entitled to
vote at the Annual Meeting to be held on May 3, 2000. 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
Restated Articles of Incorporation, a quorum consisting of a majority of the
shares entitled to vote must be represented in person or by proxy for the
transaction of business at the Annual Meeting.
Directors are elected by a majority of the votes cast by shares present, in
person or by proxy, and entitled to vote at the Annual Meeting. Votes withheld
with respect to the election of directors will not be counted either in favor
of or against the election of the nominees.
Brokers who hold shares for the account of their clients may vote their
clients' proxies in the brokers' own discretion as to the election of
directors if the clients have not furnished voting instructions by 10 days
prior to the Annual Meeting. Proxies solicited by the Board of Directors will
be voted in favor of each of the director nominees unless shareholders direct
otherwise in their proxies.
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 Shareholder
Communications Inc., New York, New York, has been retained to solicit proxies
personally or by mail, telephone or telegram at a cost anticipated to be
$6,000 plus reasonable out-of-pocket expenses, which will be paid by the
Corporation. Banks and brokers will be reimbursed for their reasonable
expenses in forwarding proxy solicitation materials to shareholders.
Management does not expect to solicit proxies except through the mail;
however, if proxies are not promptly received, employees of the Corporation
may solicit proxies personally, by telephone or fax.
1
<PAGE>
ELECTION OF DIRECTORS
The Board of Directors is divided into three classes. At the 2000 Annual
Meeting of Shareholders, four nominees will be elected to serve three-year
terms until the 2003 Annual Meeting of Shareholders and until their successors
are elected and qualified.
Unless otherwise stated, each individual described below has served for at
least five years in the position indicated. All nominees are presently
directors of the Corporation.
NOMINEES FOR DIRECTOR
Class II--Term Expires at the 2000 Annual Meeting of Shareholders
Joshua Green III, 63, is Chairman and Chief Executive Officer of the Joshua
Green Corporation, a family investment firm, and Chairman of its wholly-owned
subsidiary, Sage Manufacturing Corporation. Mr. Green has been a director of
the Corporation since 1981. He is also a director of U.S. Bancorp.
William G. Reed, Jr., 61, was the Chairman of Simpson Investment Company, a
forest products holding company, until his retirement in 1996. He continues to
serve as a director of Simpson Investment Company. Mr. Reed has been a
director of the Corporation since 1974. He is also a director of Microsoft
Corporation, PACCAR Inc., The Seattle Times, Washington Mutual, Inc. and
Washington Mutual Bank.
Norman B. Rice, 56, is President and Chief Executive Officer of the Federal
Home Loan Bank of Seattle. Mr. Rice joined the Federal Home Loan Bank of
Seattle in March 1998 as its executive vice president. Mr. Rice served two
terms as the Mayor of the City of Seattle from 1990 through 1997 and served
three terms as a member of the City of Seattle Council from 1979 until 1990.
Mr. Rice has been a director of the Corporation since 1999.
Judith M. Runstad, 55, is of counsel to the Seattle law firm Foster Pepper &
Shefelman PLLC. Mrs. Runstad has been a director of the Corporation since
1990. She is also a director of Wells Fargo & Company and Potlatch
Corporation. She is past Chairman of the Board of the Federal Reserve Bank of
San Francisco.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" EACH OF THE
DIRECTOR NOMINEES.
CONTINUING DIRECTORS
Class III--Term Expires at the 2001 Annual Meeting of Shareholders
Robert S. Cline, 62, is Chairman and Chief Executive Officer of Airborne
Freight Corporation, an air freight carrier. Mr. Cline has been a director of
the Corporation since 1992. He is also a director of Metricom, Inc. and
Esterline Technologies Corp.
Roger H. Eigsti, 57, is Chairman and Chief Executive Officer of the
Corporation. Mr. Eigsti has been a director of the Corporation since 1988. He
is also a director of Washington Mutual, Inc. and Washington Mutual Bank.
John W. Ellis, 71, was Chairman and Chief Executive Officer of the corporate
general partner of The Baseball Club of Seattle, L.P., the owner of the
Seattle Mariners baseball team, until his retirement in 1999. Mr. Ellis is a
director of Puget Sound Energy, Inc. and was its Chief Executive Officer from
1976 to 1992 and its Chairman from 1987 to 1993. Mr. Ellis has been a director
of the Corporation since 1981. He is also a director of Washington Mutual,
Inc. and Washington Mutual Bank, UTILX Corporation and Associated Electric &
Gas Insurance Services, Ltd. Under the terms of the Corporation's retirement
policy for directors, Mr. Ellis will retire as a director at the Corporation's
2001 Annual Meeting of Shareholders.
2
<PAGE>
William W. Krippaehne, Jr., 49, is President and Chief Executive Officer of
Fisher Companies Inc., the primary subsidiaries of which are engaged in
broadcasting, flour milling and real estate ownership and development. Mr.
Krippaehne has been an executive officer of Fisher Companies since 1982 and a
director of the Corporation since 1996.
Class I--Term Expires at the 2002 Annual Meeting of Shareholders
Phyllis J. Campbell, 48, is President of U.S. Bank, Washington, a division of
U.S. Bancorp. Ms. Campbell has been a director of the Corporation since 1994.
She is also a director of Puget Sound Energy, Inc.
Boh A. Dickey, 55, is President and Chief Operating Officer of the
Corporation. Mr. Dickey has been an executive officer of the Corporation since
1982 and a director of the Corporation since 1993. He is also Chairman of the
Board of Trustees for the SAFECO mutual funds.
William P. Gerberding, 70, is President Emeritus of the University of
Washington, where he served as President from 1979 until his retirement in
1995. Dr. Gerberding has been a director of the Corporation since 1981. He is
also a director of Washington Mutual, Inc. and Washington Mutual Bank.
Paul W. Skinner, 52, is President of Skinner Corporation, an investment
company. Mr. Skinner has been a director of the Corporation since 1988.
OWNERSHIP OF THE CORPORATION'S COMMON STOCK
The following table provides information as of February 4, 2000, with regard
to the ownership of the Common Stock by directors, the Corporation's chief
executive officer and four other most highly compensated executive officers,
and all directors and executive officers as a group. Total beneficial
ownership of the outstanding Common Stock is less than 1% in the case of each
individual listed below except as follows: 2.0% for Mr. Green, 2.3% for Mr.
Krippaehne, and 5.2% for all 16 directors and executive 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 4,515,600 shares held by
The SAFECO Employees' Profit Sharing Retirement Plan, as to which the members
of that plan's Investment Committee (Messrs. Cline, Ellis, Gerberding,
Krippaehne, 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.
3
<PAGE>
<TABLE>
<CAPTION>
Number of Shares
Beneficially
Owned and Nature Number of Shares
of Beneficial Acquirable Within
Name Ownership 60 Days(1)
---- ---------------- -----------------
<S> <C> <C>
Phyllis J. Campbell................... 1,000 --
Robert S. Cline....................... 7,000 --
Boh A. Dickey......................... 60,965 143,100
Roger H. Eigsti....................... 119,299 212,460
John W. Ellis......................... 14,024 --
William P. Gerberding................. 2,400 --
Joshua Green III...................... 2,547,432(2) --
William W. Krippaehne, Jr. ........... 3,005,462(3) --
William G. Reed, Jr. ................. 167,749(4) --
Norman B. Rice........................ 0 --
James W. Ruddy........................ 9,500 35,500
Judith M. Runstad..................... 3,500 --
Paul W. Skinner....................... 288,720(5) --
W. Randall Stoddard................... 8,001 15,900
Randall H. Talbot..................... 20,495 26,250
All directors and executive officers
as a group (16 persons).............. 6,264,027 462,560
</TABLE>
- ---------------------
(1) Shares which may be purchased within 60 days by exercise of options
granted under the SAFECO Long-Term Incentive Plan of 1997 and the SAFECO
Incentive Plan of 1987.
(2) Represents 2,546,832 shares owned by the Joshua Green Corporation in
which Mr. Green has a substantial interest with voting and investment
power, and 600 shares owned by his spouse.
(3) Includes 3,002,376 shares owned by two corporations of which Mr.
Krippaehne is an officer and director and for which he thereby has shared
voting and investment power, and 372 shares owned by Mr. Krippaehne's
spouse. Mr. Krippaehne 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 corporations.
(4) Includes 7,772 shares owned by Mr. Reed's spouse and 5,000 shares owned
by a charitable foundation for which Mr. Reed has sole voting and
investment power. Mr. Reed disclaims any beneficial interest in the
shares owned by the charitable foundation.
(5) Includes 258,120 shares owned by Skinner Corporation in which Mr. Skinner
has a substantial interest with voting and investment power and 26,600
shares owned by trusts of which Mr. Skinner is a co-trustee and for which
he thereby has shared voting and investment power. Mr. Skinner disclaims
any beneficial interest in the shares owned by the trusts.
In addition, AMVESCAP PLC, 11 Devonshire Square, London EC2M 4YR, England,
reported in a Schedule 13G filed with the Securities and Exchange Commission
("SEC") that in the aggregate its subsidiaries had shared voting power and
investment discretion with respect to 6,744,372 shares, or 5.19%, of the
Common Stock, at December 31, 1999. The subsidiaries, which are investment
management companies and advisers, hold the shares on behalf of their clients,
none of which holds more than 5% of the Common Stock.
The Prudential Insurance Company of America, an insurance company and
investment adviser, 751 Broad Street, Newark, New Jersey 07102-3777, reported
in a Schedule 13G filed with the SEC that it may have direct or indirect
voting and/or investment discretion over 8,083,848 shares, or 6.22%, of the
Common Stock at December 31, 1999, which are held for the benefit of its
clients.
4
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16 of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), directors and officers of the Corporation are required to report their
holdings of and transactions in the Corporation's Common Stock to the SEC. To
the Corporation's knowledge, based solely on a review of the copies of such
reports furnished to the Corporation and written representations that no other
reports were required, during 1999 all persons subject to the Section 16
reporting 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 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 the independent auditors,
reviews the results of completed audits, and regularly reviews the
Corporation's approach to business ethics and compliance with the law. The
Compensation Committee passes upon all salary increases where the proposed
salary is $150,000 per year or more, reviews salary administration policy,
administers the Corporation's stock-based incentive plan, 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, fees to be paid to
directors, and stock option grants to directors.
During 1999 the Board held five meetings, the Audit, Compensation, Executive
and Finance Committees each held four meetings, and the Nominating Committee
held one meeting. All current directors 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
<C> <S>
Audit Messrs. Gerberding, Green, Krippaehne, Skinner and Mrs.
Runstad (Chair).
Compensation Messrs. Cline (Chair), Ellis, Reed and Ms. Campbell.
Executive Messrs. Eigsti (Chair), Cline, Ellis, Green and Mrs. Runstad.
Finance Messrs. Cline, Dickey, Eigsti, Ellis (Chair), Gerberding,
Krippaehne, Reed, Rice and Skinner.
Nominating Messrs. Ellis, Green (Chair), Reed and Ms. Campbell.
</TABLE>
5
<PAGE>
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 current director fees are an annual
retainer of $30,000 and fees of $1,500 for attendance at any Board meeting and
$1,000 for attendance at any committee meeting. The Chair of the Finance
Committee receives an annual retainer of $4,000 and a $1,000 fee for
attendance at any meeting of the Corporation's management investment
committee. The other committee chairs receive an annual retainer, as follows:
Chair of the Compensation Committee--$4,000; Chair of the Audit Committee--
$3,000; and Chair of the Nominating Committee--$1,000. Directors are also
reimbursed for reasonable travel expenses.
In addition, following each annual meeting of shareholders, each non-employee
director of the Corporation is granted a non-qualified option to purchase
2,000 shares of Common Stock. The options vest and become fully exercisable on
the date of the next annual meeting of shareholders, have a term of ten years
and have an exercise price equal to the fair market value of the Common Stock
on the date of grant. The first grant was made May 5, 1999.
Non-employee directors may elect to defer all or part of their annual retainer
and meeting fees and all or part of the gain realized on exercise of their
stock options, provided the exercise price is paid in shares of Common Stock,
in each case under the terms of the SAFECO Corporation Deferred Compensation
Plan for Directors. Amounts deferred under that plan are credited with
earnings tied to the performance of designated measurement funds.
ANNUAL REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
Compensation Committee
Four outside directors of the Corporation, none of whom has been or is an
employee of the Corporation and all of whom qualify as "non-employee
directors" for purposes of administering the Corporation's stock option
program under Section 16 of the Exchange Act, comprise the Compensation
Committee of the Board of Directors ("Committee"). The Committee is
responsible for reviewing the Corporation's salary administration policy,
approving salaries of $150,000 or greater, administering the Corporation's
stock-based incentive plan, and approving changes to the Corporation's
employee benefit plans. The members of the Committee, which met four times
during 1999, are Robert S. Cline (Chair), Phyllis J. Campbell, John W. Ellis,
and William G. Reed, Jr.
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").
All employees of the Corporation's property and casualty, life, credit and
asset management subsidiaries, other than a few employees covered by special
incentive plans (collectively, "Non-Participating Employees"), participate in
the same compensation and retirement plans. 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 shareholder returns over
time.
4. Maintain an appropriate balance between base salary and short- and
long- term incentive opportunities.
6
<PAGE>
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: The Corporation's executive officers participate in a non-
discretionary cash bonus plan which applies to all employees with at least
one year of service (other than Non-Participating Employees). An annual
bonus pool is established under a fixed formula based on weighted elements
of the pre-tax results of the Corporation's major business lines and the
investment income of the property and casualty subsidiaries. In years for
which the bonus pool is large enough to pay the maximum bonus levels,
employees with three years or more of service receive a bonus equal to 10%
of base salary. In years when the fixed formula does not provide a
sufficient pool to pay the maximum bonus levels to all eligible employees,
bonus payments made to all employees are reduced proportionately. The
percentage of salary paid as a bonus to all employees with three years of
service, including the Named Executive Officers, was 0.0% for 1999, 6.2%
for 1998 and 10% for 1997.
Stock-Based Incentive Program: A shareholder-approved stock-based incentive
program has been an element of compensation since the early 1960s. The
purpose of the program is to encourage selected, key employees of the
Corporation and its subsidiaries to remain employed with the Corporation,
to participate in ownership of the Corporation, to advance the interests of
the Corporation's shareholders and to increase the value of the Common
Stock. All of the Corporation's executive officers participate in the
stock-based incentive program.
Under the shareholder-approved SAFECO Long-Term Incentive Plan of 1997
("Plan"), the Committee in its sole discretion may grant to selected, key
employees of the Corporation and its subsidiaries stock options, restricted
stock rights ("RSRs") and performance stock rights ("PSRs") in amounts and
on terms consistent with the Plan.
Grants of stock options, RSRs and PSRs 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 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. Although the Committee does not establish any set value to award
under the Plan to any individual, the Committee does consider previous
grants as well as the different nature of stock options, PSRs and RSRs in
making awards under the Plan.
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 first,
second, third and fourth anniversaries of the grant date. Each of the Named
Executive Officers received a stock option grant in 1999. In addition, in
1999 the Committee granted non-qualified, performance stock options to the
Named Executive Officers. The vesting of these options is tied to and
contingent upon the Common Stock price attaining levels of 150%, 175% and
200% of the award price within five years of the grant date. If the Common
Stock price fails to reach at least 150% of the award price during the
five-year period, then no shares will become vested under these options.
The Committee believes the award of these stock options directly links an
increase in the compensation of the Named Executive Officers to a
significant increase in the market price of the Common Stock, and,
consequently, a significant increase in shareholder value. The Committee
has never rescinded an outstanding option and reissued it at a lower
exercise price.
PSRs entitle the holder to receive a specific number of shares of Common
Stock on the settlement date, or cash equal to the closing market price of
such shares, if specified performance goals for a three-year performance
period have been met. In May 1997 and February 1998 and 1999, PSRs were
awarded to the Named Executive Officers. These PSRs provide for annual
payouts of a portion of the total award based on
7
<PAGE>
achievement of performance goals over the one-, two-, and three-year
performance cycles within each three-year performance period. The
performance goals are customized for each Named Executive Officer.
Performance goals include, as appropriate, the return on equity for the
Corporation, its property and casualty or life and investments operations;
the change in the Common Stock price compared to the average change in the
price of the common stock of the companies that comprise the peer index
("Stock Price Comparison"); the increase in the Corporation's operating
earnings per share; the combined ratio, the net personal lines expense
ratio and the annual growth in premiums for the property and casualty
operations; and the increase in pretax operating income for the life and
investments operations. For Mr. Eigsti the three performance goals for each
grant are the Corporation's return on equity, increase in operating
earnings per share and the Stock Price Comparison. For the three-year
performance cycle ended December 31, 1999 under the 1997 grant, the two-
year performance cycle ended December 31, 1999 under the 1998 grant and the
one-year performance cycle ended December 31, 1999 under the 1999 grant,
the Committee concluded that no Named Executive Officer earned any payout
based on the degree of achievement of the specified goals, except for Mr.
Talbot who earned payments for the one-year performance cycle under the
1999 grant.
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 anniversaries of the grant date. Holders of
RSRs are paid amounts equivalent to the dividends that would be paid on the
same number of shares of Common Stock.
Retirement Program: Three basic tax-qualified plans, including a profit-
sharing plan, comprise the Corporation's retirement program and are
available on the same basis to all employees. In addition, the Corporation
has three supplemental plans to restore benefits which cannot be included
in the tax-qualified retirement plans. Since Common Stock constituted 20%
of the assets of the profit-sharing plan at December 31, 1999, all
participants in that plan, including the Named Executive Officers, 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.
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 (i) customary financial measures with respect to the Corporation
(e.g., the compounded annual return to shareholders, the Common Stock price
and the common stock prices of comparable companies); (ii) the combined ratio
of the Corporation's property and casualty subsidiaries and the combined
ratios of competitors; (iii) the revenue and premium growth of the
Corporation's operating subsidiaries; (iv) the Corporation's financial
strength and asset management; and (v) the ratings assigned to the
Corporation, its subsidiaries or securities by A.M. Best Insurance Services,
Standard & Poor's Ratings Group ("S&P"), Moody's Investors Service, Inc., and
Duff & Phelps Credit Ratings Company.
The directors annually review graphs that compare the cumulative total return
to shareholders of the Corporation with the S&P 500 and with the returns of a
self-constructed peer group comprised of companies that are in the same lines
of business as the Corporation's major operating subsidiaries ("Peer Index"),
with their returns weighted according to the component companies' respective
market capitalization, on a five- and ten-year basis.
Set forth below are graphs that compare the cumulative total return to
shareholders of the Corporation with the S&P 500 and the Peer Index, with the
returns of the companies in the Peer Index each weighted according to its
respective market capitalization. The ten-year period graph is also included
as its time period may more adequately reflect returns for the long-term
shareholder and option holder. The graphs reflect the historical performance
of the Corporation and are not indicative of future performance.
8
<PAGE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG SAFECO, S&P 500 AND PEER INDEX
[PERFORMANCE CHART OF SAFECO]
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998 1999
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
SAFECO 100 136 160 204 185 111
S&P 500 100 138 169 225 289 351
Peer Index 100 154 188 281 249 196
</TABLE>
Assumes $100 invested on December 31, 1994 in SAFECO Common Stock, the S&P
500 and the Peer Index.
. Total return assumes reinvestment of dividends.
. Measurement dates are the last trading day of the calendar year shown.
. Peer Index: Allstate, Chubb, Cincinnati Financial, CNA, Ohio Casualty,
Progressive, St. Paul and Travelers Property and Casualty.
9
<PAGE>
COMPARISON OF TEN YEAR CUMULATIVE TOTAL RETURN
AMONG SAFECO, S&P 500 AND PEER INDEX
[PERFORMANCE CHART OF SAFECO]
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SAFECO 100 88 135 164 162 160 218 257 326 296 178
S&P 500 100 97 126 136 150 152 209 257 342 440 533
Peer Index 100 97 131 157 150 136 209 256 382 339 266
</TABLE>
Assumes $100 invested on December 31, 1989 in SAFECO Common Stock, the S&P
500 and the Peer Index.
. Total return assumes reinvestment of dividends.
. Measurement dates are the last trading day of the calendar year shown.
. Peer Index: Allstate, Chubb, Cincinnati Financial, CNA, Ohio Casualty,
Progressive, St. Paul and Travelers Property and Casualty.
Individual Performance
In connection with compensation for individual executive officers, the
Committee consulted with the chief executive officer and exercised 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 each stock option, PSR or RSR, the
Committee considered the amount and terms of any previous awards, the current
price of the Common Stock and the performance of the Common Stock over time.
In connection with the Committee's consideration of compensation for the
Corporation's executive officers, including Mr. Eigsti, the Committee reviewed
information regarding compensation practices and levels of competitors of the
Corporation and its operating subsidiaries (including the companies that
comprise the Peer Index) as well as non-competing companies of a similar size
to the Corporation or its operating subsidiaries. Detailed compensation
information was obtained from the proxy statements of publicly-held companies.
In addition, the Committee reviewed compensation information compiled by two
independent consulting firms as well as that collected by the Corporation's
Human Resources Department.
10
<PAGE>
The purpose of this review was 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. For 1999 the Committee confirmed that its approach to
compensation was suitable to the achievement of the general purposes of the
Corporation's compensation policies and plans. The Committee did 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 salary
and awards of stock options, RSRs and PSRs. In connection with his
compensation, the Committee took into account the cumulative total return to
the Corporation's shareholders and the other financial measures listed above
under "Corporate Performance." Given the financial results for the Corporation
for 1999, no change in Mr. Eigsti's salary was made for 2000. As discussed
above, the Committee concluded that the award of a non-qualified, performance
stock option should be effective in directly linking this portion of Mr.
Eigsti's compensation to a significant increase in the market price of the
Common Stock and consequently a significant increase in shareholder value.
The calculations of the annual bonus and the 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 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 Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code"), 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 an annual limit of $1 million per
employee. The Corporation may pay compensation that exceeds this limit. As
Messrs. Eigsti and Dickey elected to defer a portion of their compensation for
1999, all compensation paid to officers qualified for federal income tax
deduction.
This report shall not be deemed incorporated by reference by any general
statement incorporating by reference the proxy statement into any filing under
the Securities Act of 1933 or the Securities Exchange Act of 1934, except to
the extent that the Corporation specifically incorporates this information by
reference, and shall not otherwise be deemed filed under those Acts.
This report is submitted over the names of the members of the Compensation
Committee:
Robert S. Cline, Chair
Phyllis J. Campbell
John W. Ellis
William G. Reed, Jr.
11
<PAGE>
COMPENSATION OF NAMED EXECUTIVE OFFICERS
Summary Compensation Table
The amount of all compensation paid to the Named Executive Officers for
services in all capacities to the Corporation and its subsidiaries during the
past three years is stated below. Annual compensation includes amounts
deferred at the officer's election.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Annual Compensation Compensation Awards
--------------------------------------------
Securities
Underlying
Restricted Options/ All Other
Name and Principal Salary Bonus (3) Stock Awards SARs Compensation
Position Year ($) ($) (4)($) (#) ($)
- ------------------ ---- --------- ----------------------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
R.H. Eigsti 1999 900,000 0 450,015 150,000 63,840(5)
Chairman and 1998 830,000 52,163 513,750 50,000 82,348
Chief Executive Officer 1997 763,333 138,497 475,000 50,000 103,186
B.A. Dickey 1999 625,000 0 312,491 90,000 44,278(6)
President and 1998 575,000 36,137 354,488 30,000 57,048
Chief Operating Officer 1997 512,500 92,710 300,200 30,000 69,279
W.R. Stoddard (1) 1999 335,000 0 167,494 45,000 23,649(7)
President of the 1998 300,000 18,854 128,438 15,000 29,764
Corporation's 1997 241,667 56,071 76,000 6,500 32,669
Property & Casualty
Subsidiaries
R.H. Talbot (2) 1999 325,000 60,552 162,486 45,000 22,937(8)
President of the 1998 299,431 18,854 103,672 15,000 29,741
Corporation's
Life & Investments
Subsidiaries
J.W. Ruddy 1999 305,000 0 152,509 36,000 21,515(9)
Senior Vice President 1998 280,000 17,597 118,163 12,000 27,780
and General Counsel 1997 240,417 42,691 91,200 7,000 32,500
</TABLE>
- ---------------------
(1) Mr. Stoddard became President of the Corporation's property and casualty
subsidiaries on July 1, 1997.
(2) Mr. Talbot became President of the Corporation's life subsidiaries on
February 7, 1998.
(3) The dollar amounts in this column include (i) a cash bonus, (ii) in the
case of 1997, payments in settlement of PSRs awarded in 1997 for the one-
year performance cycle ended December 31, 1997, and (iii) in the case of
1999, payments in settlement of PSRs awarded in 1999 for the one-year
performance cycle ended December 31, 1999. 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 was 0% for 1999, 6.2% for 1998 and 10% for 1997.
PSRs are three-year grants pursuant to which annual payments of a portion of
the total award may be made based on achievement of specified performance
goals over the elapsed portion of the performance period. Performance goals
are established at the time of grant. With respect to the PSRs awarded to
the Named Executive Officers in 1999, only Mr. Talbot received a payment for
the one-year performance cycle ended December 31, 1999.
(4) RSRs 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 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.
12
<PAGE>
In 1999 the Corporation awarded RSRs to the following Named Executive
Officers in these amounts: 11,862 shares for Mr. Eigsti; 8,237 for Mr.
Dickey; 4,415 for Mr. Stoddard; 4,283 shares for Mr. Talbot; and 4,020 for
Mr. Ruddy. Each award will vest and be settled in 25% installments on the
first Wednesday in February 2000, 2001, 2002 and 2003, respectively.
These are the total number of RSRs held by the Named Executive Officers and
the total value of such holding at December 31, 1999: for Mr. Eigsti, 28,487
RSRs with a value of $708,614; for Mr. Dickey, 18,987 RSRs with a value of
$472,302; for Mr. Stoddard, 7,665 RSRs with a value of $190,667; for Mr.
Talbot, 6,158 RSRs with a value of $153,180 and for Mr. Ruddy, 7,495 RSRs
with a value of $186,438.
(5) Includes net contributions to the Corporation's profit-sharing plan of
$4,800, net contributions to the Corporation's savings plan of $6,400, and
allocations to non-qualified plans of $23,040 with respect to the profit-
sharing plan and $29,600 with respect to the savings plan for amounts
which may not be contributed to the qualified plans because of limitations
imposed by the Code ("Non-Qualified Allocations").
(6) Includes net contributions of $4,800 to the profit-sharing plan and $6,400
to the savings plan and Non-Qualified Allocations of $14,478 with respect
to the profit-sharing plan and $18,600 with respect to the savings plan.
(7) Includes net contributions of $4,800 to the profit-sharing plan and $6,400
to the savings plan and Non-Qualified Allocations of $5,449 with respect
to the profit-sharing plan and $7,000 with respect to the savings plan.
(8) Includes net contributions of $4,800 to the profit-sharing plan and $6,400
to the savings plan and Non-Qualified Allocations of $5,137 with respect
to the profit-sharing plan and $6,600 with respect to the savings plan.
(9) Includes net contributions of $4,800 to the profit-sharing plan and $6,400
to the savings plan and Non-Qualified Allocations of $4,515 with respect
to the profit-sharing plan and $5,800 with respect to the savings plan.
Stock Option Awards
Information concerning grants of stock options to the Named Executive Officers
during 1999 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 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 $5.2 billion to
$8.5 billion at the 5% rate and to $13.6 billion at the 10% rate based on the
$40.625 exercise price and from $3.7 billion to $5.9 billion at the 5% rate
and to $9.5 billion at the 10% rate based on the $28.313 exercise price. In
addition, a shareholder, unlike an option holder, would receive dividends paid
by the Corporation during that ten-year period.
13
<PAGE>
Option Grants in 1999
<TABLE>
<CAPTION>
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term
-------------------------------------------- -------------------
Number of
Securities Percent of
Underlying Total Options
Options Granted to Exercise
Granted Employees in Price(3) Expiration 5%(4) 10%(5)
Name (#) Fiscal Year ($/Sh) Date ($) ($)
- ---- ---------- ------------- -------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
R.H. Eigsti... 50,000(1) 7.38% 40.625 5/5/09 1,277,442 3,237,289
100,000(2) 14.77% 28.313 11/3/09 1,780,558 4,512,283
B.A. Dickey... 30,000(1) 4.43% 40.625 5/5/09 766,465 1,972,374
60,000(2) 8.86% 28.313 11/3/09 1,068,335 2,707,370
W.R.
Stoddard..... 15,000(1) 2.22% 40.625 5/5/09 383,233 971,187
30,000(2) 4.43% 28.313 11/3/09 534,167 1,353,685
R.H. Talbot... 15,000(1) 2.22% 40.625 5/5/09 383,233 971,187
30,000(2) 4.43% 28.313 11/3/09 534,167 1,353,685
J.W. Ruddy.... 12,000(1) 1.77% 40.625 5/5/09 306,586 776,949
24,000(2) 3.54% 28.313 11/3/09 427,334 1,082,948
</TABLE>
- ---------------------
(1) These options to purchase Common Stock were granted on May 5, 1999, and
25% of the shares subject to each option become exercisable on the first,
second, third and fourth anniversary dates of the option grant. Vesting is
accelerated upon a change in control of the Corporation.
(2) These options to purchase Common Stock were granted on November 3, 1999,
and become exercisable if, during the five-year period commencing with the
grant date, the Common Stock price attains 150%, 175% and 200% of the
exercise price. If these price levels are attained, then 50%, 75% and
100%, respectively, of the number of shares awarded become exercisable. If
the Common Stock price fails to attain at least 150% of the exercise price
within the five-year period, then none of the shares granted will become
exercisable. Vesting is accelerated upon a change in control of the
Corporation.
(3) The exercise price, which is the fair market value of the Common Stock on
the date of grant, may be paid to the Corporation in cash, in shares of
Common Stock valued at the closing market price 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.
(4) This rate of appreciation produces an ending market price of $66.18 on May
5, 2009 and $46.12 on November 3, 2009.
(5) This rate of appreciation produces an ending market price of $105.37 per
share on May 5, 2009 and $73.44 on November 3, 2009.
14
<PAGE>
Stock Option Exercises
Information concerning exercises of stock options during 1999 by the Named
Executive Officers and the value of their unexercised options at December 31,
1999 is stated below:
Aggregated Option Exercises in 1999
and Option Values at December 31, 1999
<TABLE>
<CAPTION>
Number of
Securities
Underlying
Unexercised Options Value of Unexercised
at December 31, in-the-Money Options at
1999 December 31, 1999(1)
Shares (#) ($)
Acquired Value ------------------- -------------------------
on Exercise Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- ---- ----------- -------- ------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
R.H. Eigsti... 3,678 55,400 212,400 237,500 124,851 0
B.A. Dickey... 12,600 254,363 143,100 142,500 79,650 0
W.R.
Stoddard..... 6,350 59,963 15,900 62,500 0 0
R.H. Talbot... 5,000 26,875 23,250 69,750 0 0
J.W. Ruddy.... 3,000 60,750 37,500 51,500 14,250 0
</TABLE>
- ---------------------
(1) Based on $24.875, the last sale price of the Corporation's Common Stock on
December 31, 1999.
Long-Term Incentive Plan Awards in 1999
Information concerning awards of performance stock rights during 1999 to the
Named Executive Officers is stated below:
Long-Term Incentive Plan Awards in 1999
<TABLE>
<CAPTION>
Estimated Future Payouts
under
Non-Stock-Price-Based
Number of Performance or Plans (1)
Shares, Units or Other Period Until -------------------------
Name Other Rights (#) Maturation or Payout Threshold (#) Maximum (#)
- ---- ---------------- -------------------- ------------- -----------
<S> <C> <C> <C> <C>
R.H. Eigsti.... 13,974 1999-2001 0 13,974
B.A. Dickey.... 9,704 1999-2001 0 9,704
W.R. Stoddard.. 5,201 1999-2001 0 5,201
R.H. Talbot.... 5,046 1999-2001 0 5,046
J.W. Ruddy..... 4,735 1999-2001 0 4,735
</TABLE>
- ---------------------
(1) The performance stock rights will vest and shares will become payable only
to the extent that specified performance goals (e.g., return on equity;
increases in operating earnings, income and stock price; expense levels;
and premium growth) are achieved. The awards cover a three-year
performance period, within which there are three performance cycles. Only
the shares relating to the second and third performance cycles (1999-2000
and 1999-2001, respectively) are included in this table. Any payment made
for the first performance cycle is reported in the Bonus column of the
Summary Compensation Table.
Retirement Program
The Corporation's retirement program is comprised of three plans which qualify
for favorable tax treatment under the Code and three 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 401(k) Savings Plan
("Savings Plan"). The three 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.
15
<PAGE>
The Profit-Sharing Plan and the Savings Plan are defined contribution plans
while the Cash Balance Plan is a defined benefit plan. 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"). The portion of the Accrued
Benefit in excess of limitations imposed under Section 401(a)(17) of the Code
is accrued in the SAFECO Employees' Supplemental Retirement Plan B
("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: $38,043 for Mr. Eigsti, $32,432 for Mr.
Dickey, $23,696 for Mr. Stoddard, $28,185 for Mr. Talbot and $25,855 for Mr.
Ruddy.
CHANGE IN CONTROL AND RETIREMENT AGREEMENTS
The Named Executive Officers 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, if the officer in question
is discharged without cause, demoted or given other good reason to resign
following a change in control of the Corporation or a specified subsidiary or
decides one year following a change in control to resign, then the agreements
call for a lump-sum cash payment of up to three times annual salary,
continuation of life and health benefits for three years, payment for accrued
vacation and sick leave, payment of amounts allocated under the Corporation's
bonus plan, payment of a pro rata portion of all contingent incentive
compensation awards, vesting of stock options, vesting and payment of PSRs (to
the extent deemed earned) and RSRs, and payment of certain retirement
benefits. Each agreement also provides that if any excise tax is levied on
payments made under the agreement, then an additional payment will be made so
that the net payments received by the officer under the agreement will equal
the amount that would have been paid had the excise tax not been levied.
The stock options awarded to the Named Executive Officers, as well as to other
key employees, under the SAFECO Long-Term Incentive Plan of 1997 (the "Plan")
and the predecessor incentive plan provide for accelerated vesting in the
event of a change in control of the Corporation. Moreover, under the terms of
the Plan, in such event all outstanding restricted stock right awards will
become immediately vested and payable in cash and, to the extent deemed earned
under the formula set forth in the Plan, all outstanding performance stock
rights will become immediately payable in cash.
CERTAIN TRANSACTIONS
In the ordinary course of business, the Corporation and its subsidiaries enter
into transactions with other business entities of which certain of the
Corporation's directors and nominees for director are executive officers,
partners or shareholders. The terms of all such transactions were as fair to
the Corporation and its subsidiaries as could have been obtained from third
parties.
Mrs. Runstad, a director of the Corporation, is of counsel to the Seattle law
firm of Foster Pepper & Shefelman PLLC, which received fees for legal services
provided to the Corporation and its subsidiaries during 1999.
AUDITING
Ernst & Young LLP, 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 of Directors at its meeting on May 3,
2000. A representative of Ernst & Young LLP is expected to be present at the
Annual Meeting and will have the opportunity to make a statement if he desires
to do so and to respond to appropriate questions.
16
<PAGE>
SHAREHOLDER PROPOSALS FOR THE 2001 ANNUAL MEETING
The Corporation's 2001 Annual Meeting of Shareholders will be held on May 2,
2001. Under the federal proxy solicitation rules, in connection with the
preparation of proxy materials for the 2001 Annual Meeting of Shareholders,
any proposal submitted by a shareholder to be considered for inclusion in the
Corporation's proxy materials for such meeting must be received by the
Corporation by November 17, 2000.
NOTICE REQUIREMENTS FOR SHAREHOLDERS TO BRING BUSINESS
AT AN ANNUAL MEETING
The Corporation's Bylaws provide that shareholders may nominate persons for
election to the Board of Directors only if a written notice of intention to
nominate has been received by the secretary to the Board of Directors at
SAFECO Plaza, Seattle, Washington 98185, not less than 90 days before the
scheduled date of the Annual Meeting of Shareholders. For the 2001 Annual
Meeting of Shareholders, such notice must be received by February 1, 2001. The
notice must contain the name, address, telephone number, and number of shares
of 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 a shareholder to bring other
business before an Annual Meeting of Shareholders, 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. For the 2001 Annual Meeting of Shareholders, such notice must
be filed by February 1, 2001. The notice must contain the name, address,
telephone number and number of shares of 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 meeting, and any material
interest of the shareholder in such business.
OTHER MATTERS
THE CORPORATION FILES AN ANNUAL REPORT ON FORM 10-K WITH THE SEC. 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 CHIEF FINANCIAL OFFICER, SAFECO CORPORATION, SAFECO PLAZA,
SEATTLE, WASHINGTON 98185.
The Board is not aware of any other matters to be presented for action at the
Annual Meeting. If any other matters come before the Annual Meeting, the
persons named in the enclosed proxy will vote all proxies in accordance with
their best judgment.
All shares represented by the enclosed proxy, if returned prior to the Annual
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 each of the director nominees.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY AND THAT YOUR SHARES BE
REPRESENTED. SHAREHOLDERS ARE URGED TO COMPLETE, SIGN, DATE AND PROMPTLY
RETURN THE ACCOMPANYING PROXY IN THE ENCLOSED ENVELOPE.
/s/ Roger H. Eigsti
Seattle, Washington Roger H. Eigsti
March 17, 2000 Chairman and Chief Executive Officer
17
<PAGE>
SAFECO CORPORATION
Proxy Solicited on Behalf of the Board of Directors of the Corporation
for the Annual Meeting of Shareholders
May 3, 2000
The undersigned hereby appoints Roger H. Eigsti, Robert S. Cline, John W.
Ellis, Joshua Green III and Judith M. Runstad, each with full power of
substitution, as the true and lawful attorneys and proxies for the undersigned,
to represent and vote the undersigned's shares at 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 3, 2000, or any adjournment or
postponement 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 properly come before the meeting.
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.
Change of Address: ________________
___________________________________
___________________________________
___________________________________ SAFECO CORPORATION
If you have written in the above P.O. BOX 11276
space, please mark the corresponding NEW YORK, N.Y. 10203-0276
box on the reverse side.
(Continued, and to be signed and dated, on reverse side.)
<PAGE>
v DETACH PROXY CARD HERE v
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES.
1. ELECTION OF DIRECTORS
FOR all nominees listed below [ ]
WITHHOLD AUTHORITY to vote for all nominees listed below [ ]
EXCEPTIONS* (as marked to the contrary below) [ ]
Nominees: Joshua Green III, William G. Reed, Jr., Norman B. Rice, Judith M.
Runstad.
INSTRUCTION: To withhold authority to vote for any individual nominee mark
the "Exceptions" box and write that nominee's name on the space
provided below.
*EXCEPTIONS _________________________________________________________________
This proxy when properly executed will be voted as directed herein. IF NO
DIRECTION IS GIVEN, THE PROXIES NAMED ON THE REVERSE SIDE 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
undersigned hereby revokes all prior proxies given by the undersigned to vote at
the meeting or any adjournment or postponement thereof.
Change of Address
Mark Here [ ]
Please sign exactly as name appears
hereon. Joint owners should each sign.
When signing as an attorney, executor,
administrator, trustee or guardian,
please give full title as such.
Dated: , 2000
----------------------------
-----------------------------------------
Signature
-----------------------------------------
Signature
Votes MUST be indicated
(x) in Black or Blue ink. [X]
Please Mark, Sign, Date and Return this Proxy Card Promptly Using the Enclosed
Envelope.
