Rosewood Wants Ex-Allstate Chief on 1st Executive Board

First Executive Corp.’s third-largest and often dissident shareholder, Rosewood Financial, proposed that First Executive’s seven-member board be expanded by one and that Donald F. Craib Jr., former chairman and chief executive of Allstate Insurance Group, be given a seat.

Rosewood, the Dallas-based investment arm of heiress Caroline Rose Hunt, owns a 9.9% stake in First Executive. First Executive’s board earlier this year rejected a proposal by Rosewood to buy the company for $6 per share in cash and stock. One condition of the rejected offer was that Fred Carr, First Executive’s chairman and chief executive, resign.

Rosewood’s proposal to put Craib on the board was contained in a letter disclosed Monday in a filing by Rosewood with the Securities and Exchange Commission. The letter notes that when Craib retired as head of Allstate in 1986, he “won praise from a broad range of industry, financial and media observers” and helped dramatically increase its life insurance business. Allstate is a unit of Sears, Roebuck and Co.

In the letter, Rosewood said adding Craib to the board would improve the company’s public image and help restore the confidence of policyholders and investors. First Executive’s stock price and life insurance business have been hurt substantially by the drastic decline in market value of the company’s junk bond investments.

A First Executive spokesman said the suggestion will be reviewed at the next board meeting. The spokesman declined to comment on whether the company might go along with it.

Rosewood declined to say if it is considering mounting a proxy fight to seat Craib if First Executive refuses. A spokesman said the firm is still weighing whether to make another attempt to gain control of First Executive. “We’re still examining our alternatives,” he said.