Large Shareholder of 21st Century Insurance Group Offers to Become Next CEO
25 January 2000
Large Shareholder of 21st Century Insurance Group Offers to Become Next CEO
BLOOMINGTON, Ill.--Jan. 25, 2000--Gregory M. Shepard, Chairman and President of American Union Insurance Company "AUIC", announced today he was offering to serve as chief executive officer of 21st Century Insurance Group. AUIC owns 5,505,100 shares of the common stock of 21st Century, representing 6.34% of the outstanding common stock as of September 30, 1999.Shepard's statement follows the January 24, 2000 announcement by 21st Century Insurance Group that William L. Mellick had resigned, effective February 4, 2000, as Vice Chairman of the Board, President and CEO of 21st Century Insurance Group, 21st Century Insurance Company, 21st Century Casualty Company and 21st Century Insurance Company of Arizona. Mellick had been a member of the company's Board of Directors since 1995. He joined the company in 1979, and at various times has served as Vice President, Senior Vice President and Group Vice President. He assumed the positions of Chief Operating Officer and Executive Vice President in 1993, President in 1994 and Chief Executive Officer on March 1, 1995.
Shepard, an attorney, joined AUIC in 1981 as a Vice President. He assumed the positions of Chairman and President of AUIC in 1985. Shepard has been a member of 21st Century Insurance Group's Board of Directors since 1995.
Shepard stated, "I have long shared the 21st Century mission to expand the great 21st Century franchise to be the premier personal automobile insurer in the West."
"I now hope the 21st Century Board recognizes that I have the desire, ability and enthusiasm to lead and best serve the interests of the Company and its shareholders."
"If selected as the next CEO, I'd do my best to see to it that 21st Century outperformed the competition through lower overhead operations, lower rate levels, better customer service and more consumer access channels."
In furtherance of the interests of the Company and its shareholders Shepard states he would be willing to serve as CEO for $1.00 per year in salary and resign as Chairman and President of AUIC.
Shepard has submitted a shareholder proposal and supporting statement to 21st Century for inclusion in the proxy materials for the May 2000 annual shareholders' meeting. The shareholder proposal proposes that: "the shareholders of 21st Century Insurance Group recommend that the Audit Committee of the board of directors immediately engage the services of a nationally recognized investment banking firm, with which the Company and its majority holder, American International Group, Inc. "AIG", have minimal current investment banking involvement, to explore all alternatives to enhance the value of the Company, including, but not limited to, the possible sale, merger of the Company, or premium tender share repurchase of a substantial amount of the stock of the Company, and for the board of directors to present to the shareholders a plan for maximizing shareholder value within three (3) months of the annual shareholders' meeting to be held in May 2000."
AUIC, a Bloomington, Illinois property and casualty insurer founded in 1916, is owned 50% by Gregory M. Shepard and 50% by Tracy M. Shepard, who are brothers. Tracy M. Shepard serves as a Director and Executive Vice President of AUIC.
21st Century Insurance Group is the ninth-largest personal auto insurance stock company in the United States. Founded in 1958, the company was a pioneer of the direct-to-consumer marketing of personal automobile insurance, now available in California, Arizona, Nevada, Oregon and Washington. The company also provides home insurance in California. 21st Century Insurance Group is headquartered at 21st Century Plaza, 6301 Owensmouth Avenue, Woodland Hills, California, 91367, and its Internet address is www.21stcenturyinsurance.com.