21st Century Insurance
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
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Date
of report (Date of earliest event reported)
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May
10, 2006
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21st
Century Insurance Group
(Exact
Name of Registrant as Specified in Charter)
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Delaware
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0-6964
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95-1935264
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Number)
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(IRS
Employer Identification
No)
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6301
Owensmouth Avenue
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Woodland
Hills, California
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91367
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code
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(818)
704-3700
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Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Item
1.01 Entry into a Material Definitive Agreement.
The
information provided under Item 5.02 hereof is incorporated herein by
reference.
Item
5.02. Appointment of Principal Officers.
On
May 9,
2006, 21st Century Insurance Group, a Delaware corporation (the “Company”),
announced that its Board of Directors had appointed Steven P. Erwin the
Company’s Senior Vice President and Chief Financial Officer, effective May 8,
2006. As of May 8, 2006, Mr. Erwin assumed the responsibilities of the principal
financial officer for the Company from Jesus Zaragoza, the Company’s Vice
President and Controller who served as the Company’s principal financial officer
since April 7, 2006 pending the appointment of a new chief financial officer
for
the Company. The information contained in the Company’s press release dated May
9, 2006, in connection with the announcement is included as Exhibit 99.1 to
this
Current Report on Form 8-K and incorporated into this Item 5.02 by
reference.
Before
joining 21st Century Insurance, Mr. Erwin, who is 62 years old, served as
Executive Vice President and CFO with Health Net Inc. from 1998-2002 and with
U.S. Bancorp from 1994-1997. He was also Treasurer for BayBanks Inc. and Senior
Vice President, CFO and Treasurer for Old National Bancorporation, and has
served on the audit staffs at Coopers & Lybrand and Lockheed California
Co.
Pursuant
to a letter agreement between the Company and Mr. Erwin, Mr. Erwin’s employment
with the Company is on an at-will basis. Mr. Erwin’s initial base salary
is $400,000 per year, and he is eligible to participate in the Company’s annual
Short Term Incentive Program, with a minimum bonus of $200,000 for the year
2006, and participate in the Company’s Long Term Incentive Program, defined
benefit pension plan and Supplemental Executive Retirement Plan. The Company
will provide Mr. Erwin with a health plan, a company car or allowance and
temporary living expenses. Mr. Erwin was granted 150,000 stock options
with a strike price set to the closing price of the Company’s stock on the New
York Stock Exchange on the first day of Mr. Erwin’s employment, with such
options to vest rateably over three years. Additionally, Mr. Erwin will receive
a grant of 5,000 shares of stock that fully vest on his first day of employment
subject to a 24-month holding period. The information contained in the letter
agreement, dated May 5, 2006, is included as Exhibit 10.1 to this Current Report
on Form 8-K and incorporated into this Item 5.02 by reference.
The
Company's agreement with Mr. Erwin requires the Company to pay him severance
compensation of two and one half times his base salary subject to the Section
409 A requirements of the Internal Revenue Code in the following two instances:
(1) if at any time between six months prior or within three years after an
AIG
acquisition of the remaining outstanding shares of the Company's stock, Mr.
Erwin's employment is terminated for other than "cause" as defined or Mr. Erwin
resigns following a significant reduction in his compensation plan or benefits
or a request to relocate outside of Los Angeles or Orange Counties in California
or (2) if within five years of his hiring, Mr. Erwin is terminated other than
for "cause" or unrelated to an AIG acquisition or a change of control. In
the first instance, Mr. Erwin's options will fully vest upon an AIG
acquisition. In the second instance, Mr. Erwin's options will fully vest
and the expiration date of his options will be accelerated to the fifth
anniversary of his termination date if that date is earlier than the original
expiration date of the options.
Item 9.01.
Financial Statements and Exhibits.
(c) Exhibits.
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Exhibit
No.
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Description
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Employment
Letter between Steven P. Erwin and the Company, dated May 5,
2006.
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Press
release of 21st Century Insurance Group dated May 9,
2006.
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21ST
CENTURY INSURANCE GROUP
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Date:
May 10, 2006
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By:
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/s/
Richard A. Andre
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Name:
Richard A. Andre
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Title:
Senior Vice President
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