ELECTION OF DIRECTORS
NOMINEES. At the Annual Meeting, three (3) directors are to be elected,
each to hold office for a three-year term or until a successor is elected
and qualified. Messrs. Gerald D. Stephens and Robert O. Viets are Class II
directors who were elected by the shareholders in 1995 for three-year terms
expiring in 1998. Mr. Haayen is currently a member of the Board as a Class
I director. In order to comply with provisions of the Company's By-Laws
requiring director classes to be as nearly equal in number as possible, Mr.
Haayen intends to resign as a Class I director and is being nominated as a
Class II director. As a Class I director, Mr.
Haayen's term would have expired in 2000. If elected as a Class II
director, Mr. Haayen's term will expire in 2001.
VOTING OF PROXIES. Unless otherwise instructed, the shares represented by
the enclosed Proxy will be voted for the election of the three nominees
named above. The affirmative vote of a plurality of the shares present in
person or represented by Proxy at the Annual Meeting and entitled to vote
is required for the election of directors. Votes will be tabulated by an
Inspector of Election appointed at the Annual Meeting. Shares may be voted
for, or withheld from, each nominee. Shares that are withheld and broker
non-votes have no effect on determinations of plurality except to the
extent that they affect the total votes received by any particular nominee.
There is no cumulative voting for the directors under the Company's
Articles of Incorporation.
SUBSTITUTE NOMINEES. The Board of Directors has no reason to believe that
any nominee will be unable to serve if elected. In the event that any
nominee shall become unavailable for election, the shares represented by
the enclosed Proxy will be voted for the election of a substitute nominee
selected by the persons named in the enclosed Proxy unless the Board of
Directors should determine to reduce the number of directors pursuant to
the Company's By-Laws.
DIRECTOR AND NOMINEE INFORMATION. The following includes certain
information with respect to the current directors and nominees to the Board
of Directors furnished to the Company by such individuals:
NAME AGE SINCE OCCUPATION
Richard J. Haayen 73 1993 Chairman and CEO of Allstate
Insurance Company in Northbrook,
(to be elected for a term Ill., until his retirement in 1989.
of three years expiring Currently Executive-In-Residence at
in 2001) Southern Methodist University in Dallas,
Gerald D. Stephens 65 1965 Mr. Stephens founded the Company
in 1965 and has been President
(to be elected for a term since 1972.
of three years expiring
Robert O. Viets (1) 54 1993 President and CEO since 1988 of
Cilcorp Inc., a holding company
(to be elected for a term of three in Peoria, Ill., whose principal
years expiring in 2001) business subsidiary is Central
Illinois Light Company ("CILCO").
Mr. Viets joined CILCO in 1973 and
held various managerial and officer
positions until his promotion to
President and CEO.
Certain information concerning the remaining directors, whose terms expire
either in 1999 or 2000, is set forth as follows based upon information
furnished to the Company by such individuals:
Bernard J. Daenzer 82 1972 Owner of Daenzer Associates, Key
Largo, Fla., an insurance
consulting services firm since
1980. Formerly President and
(term expiring in 2000) Chairman of Wolhreich and Anderson
Insurance Companies and the Howden
Swan Insurance Agencies until his
retirement in 1980.
William R. Keane 81 1966 Former Vice President, Contacts,
Inc. (contact lens laboratory)
(term expiring in 1999) in Chicago, Ill., until retirement
Gerald I. Lenrow 70 1993 Consultant to General
(term expiring in 1999) Reinsurance Corporation since
1996. Former partner in the
international accounting firm of
Coopers & Lybrand LLP until 1990,
following which he served as its
consultant until joining General
Jonathan E. Michael 44 1997 Executive Vice President of the
Company; President, Chief
(term expiring in 2000) Operating Officer of RLI
Insurance Company and Mt. Hawley
Insurance Company, the Company's
wholly-owned subsidiaries. Mr.
Michael commenced employment with
the Company as Chief Accountant
PICTURE in 1982.
Edwin S. Overman 75 1987 President Emeritus of the
(term expiring in 1999) Insurance Institute of America,
a national educational organization
in Malvern, Pa., since his
retirement as President of the
Institute in 1987.
Edward F. Sutkowski (2) 59 1975 President of the law firm of
Sutkowski & Washkuhn Ltd. in
(term expiring in 2000) Peoria, Ill., since 1965.
(1) Mr. Viets is a director of Cilcorp Inc. in Peoria, Illinois, and
Consumers Water Company in Portland, Maine, whose securities are registered
pursuant to Section 12 or subject to the requirements of Section 15(d) of
the Securities and Exchange Act of 1934.
(2) Mr. Sutkowski is associated with the law firm of Sutkowski & Washkuhn
Ltd., which has provided legal services to the Company prior to and during
1997. It is expected that the Company's relationship with Sutkowski &
Washkuhn Ltd. will continue in the future.
AUDIT COMMITTEE. The Company's Audit Committee, comprised of outside
directors Messrs. Haayen, Keane, Lenrow and Viets, met two times in 1997 to
consider an outside audit firm and to discuss the planning of the Company's
annual outside audit and its results. The Audit Committee also monitored
the Company's management of its exposures to risk of financial loss,
assessed the auditors' performance, reviewed the adequacy of the Company's
internal controls, and the extent and scope of audit coverage, monitored
selected financial reports, and made audit and auditor engagement
recommendations to the Board of Directors.
EXECUTIVE RESOURCES COMMITTEE. The Company's Executive Resources
Committee, comprised of outside directors Messrs. Daenzer, Haayen, Lenrow
and Overman, met one time in 1997 to review and recommend the compensation
of the executive officers and other officers of the Company. The Committee
also evaluated executive performance, executive back-up plans, examined the
officer development program, and was responsible for searching, enlisting
and maintaining a file of prospective new Board members and potential
executive officers. The Committee administers the Company's Stock Option
Plans through a committee comprised of outside directors Messrs. Daenzer,
Haayen, Keane, Overman and Viets.