<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / 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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
American Bankers Insurance Group, Inc.
- --------------------------------------------------------------------------------
(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/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) 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:
/ / 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
AMERICAN BANKERS INSURANCE GROUP, INC.
11222 QUAIL ROOST DRIVE, MIAMI, FLORIDA 33157-6596 (305) 253-2244
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1996
To: All Shareholders
The Annual Meeting of the Shareholders of American Bankers Insurance Group,
Inc. (the "Company"), a Florida corporation, will be held on May 22, 1996 at
10:00 a.m., Eastern time, in the Auditorium of the Company's headquarters, 11222
Quail Roost Drive, Miami, Florida 33157-6596, for the following purposes:
1. To elect five directors.
2. To consider and act upon such other matters as may properly come before
the meeting or any and all postponements or adjournments thereof.
Only shareholders of record at the close of business on March 29, 1996 are
entitled to notice of and to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Leonardo F. Garcia
-----------------------------------
Leonardo F. Garcia
Secretary
April 19, 1996
Miami, Florida
- --------------------------------------------------------------------------------
THE FORM OF PROXY IS ENCLOSED. TO ASSURE THAT YOUR SHARES WILL BE VOTED AT THE
MEETING, PLEASE COMPLETE AND SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN
THE ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES.
SENDING A PROXY WILL NOT AFFECT YOUR RIGHT TO VOTE IN PERSON IF YOU ATTEND THE
MEETING.
- --------------------------------------------------------------------------------
<PAGE> 3
AMERICAN BANKERS INSURANCE GROUP, INC.
11222 QUAIL ROOST DRIVE, MIAMI, FLORIDA 33157-6596 (305) 253-2244
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 22, 1996
The enclosed proxy is solicited by and on behalf of the Board of Directors
of American Bankers Insurance Group, Inc. (the "Company") for use at the
Company's Annual Meeting of Shareholders (the "Meeting") to be held on
Wednesday, May 22, 1996, at 10:00 a.m., Eastern time, in the Auditorium of the
Company's headquarters, 11222 Quail Roost Drive, Miami, Florida 33157-6596, and
at any adjournment or postponement thereof. The Company plans to mail this Proxy
Statement and the accompanying form of proxy to the Company's shareholders on or
about April 19, 1996.
Any person signing and mailing the enclosed proxy may revoke it any time
before it is voted by giving written notice of revocation to the Company by
mailing to the Company a later dated proxy which is received by the Company
prior to the Meeting or by voting in person at the Meeting.
The expense of this solicitation will be borne by the Company. In addition
to solicitation by mail, arrangements will be made with brokers and other
custodians, nominees and fiduciaries to send proxy material to their principals
and the Company will, upon request, reimburse them for reasonable expenses in so
doing. Solicitation of proxies from some shareholders may be made by the
Company's officers and regular employees by telephone, facsimile, or in person
after the initial solicitation.
All voting rights are vested exclusively in the holders of the Company's
common stock, $1.00 par value ("Common Stock"), with each share entitled to one
vote. Only shareholders of record at the close of business on March 29, 1996 are
entitled to notice of and to vote at the Meeting or any adjournments or
postponements thereof. Shareholders have no dissenters' rights of appraisal in
connection with any matter being presented at the Meeting. On March 29, 1996,
the Company had 20,418,972 shares of common stock outstanding, of which
20,418,972 are entitled to vote (see "PRINCIPAL SHAREHOLDERS" on Page 2 and
"SECURITY HOLDINGS OF MANAGEMENT" on Pages 3 and 4).
The Florida Business Corporation Act, the Company's Second Amended and
Restated Articles of Incorporation, the Company's By-laws and the Securities
Exchange Act of 1934, as amended (the "Securities Exchange Act") contain
requirements governing the actions of the Company's Shareholders at the Meeting.
According to the Company's By-laws, a majority of the shares outstanding on
March 29, 1996 must be present, either by person or by proxy, at the Meeting to
constitute a quorum. With respect to the election of directors, the Florida
Business Corporation Act provides that the directors who obtain the most
affirmative votes of the shares that are actually voted on the election of
directors are elected by plurality. Consequently, abstentions and broker
non-votes on the election of directors have no legal effect.
<PAGE> 4
PRINCIPAL SHAREHOLDERS
The following persons are the only persons who on March 31, 1996, to the
knowledge of the Company, owned beneficially more than 5% of the Company's
shares of Common Stock outstanding and entitled to vote at the Meeting.
<TABLE>
<CAPTION>
PERCENTAGE
AMOUNT AND OF SHARES
NATURE OF OUTSTANDING
BENEFICIAL AND ENTITLED
TITLE OF CLASS NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP TO VOTE
- ----------------------------------------------------------------- ---------- ------------
<S> <C> <C> <C>
$1.00 Par Value FMR Corp. 2,621,898 (a) 12.8%
Common Stock 82 Devonshire Street
Boston, Massachusetts 02109
Barnett Banks Trust Co., N.A. as Trustee 1,751,993 (b) 8.6%
of
The American Bankers Insurance Group,
Inc.
Leveraged Employee Stock
Ownership Trust
9000 South Side Boulevard
Building 100
Jacksonville, Florida 32256
R. Kirk Landon 1,781,391 (c) 8.7%
11222 Quail Roost Drive
Miami, Florida 33157-6596
</TABLE>
- ---------------
(a) Based upon information supplied to the Company, FMR Corp. and certain
affiliates ("FMR") beneficially own 2,621,898 shares of Common Stock and
have sole dispositive power over these shares. FMR has sole voting power
with respect to 263,579 of the shares and no voting power with respect to
the remaining shares. Power to vote the remaining shares resides with the
Boards of Trustees of the investment companies for which FMR acts as
investment advisor.
(b) The American Bankers Insurance Group, Inc. Leveraged Employee Stock
Ownership Trust is the beneficial owner of 1,751,993 shares. The Trustee,
Barnett Banks Trust Co., N.A., has sole voting power with respect to 558,087
shares and shared voting power with respect to 1,193,906 shares.
(c) Includes 475,938 shares owned by Mr. Landon directly; 40,500 Restricted
Shares under the 1991 Stock Option/Restricted Stock Award Plan owned by Mr.
Landon directly; 685,225 shares owned by the Landon Corporation, of which
Mr. Landon is the controlling shareholder; 110,000 shares owned by Mr.
Landon's spouse; 33,000 shares owned by R. Kirk/B. Landon Foundation, of
which Mr. Landon is a director; 6,603 shares allocated under the Company's
Leveraged Employee Stock Ownership Plan; 82,843 options to purchase shares
granted under the 1987 Executive Stock Option/Dividend Accrual Plan; 13,482
shares acquirable under the 1994 Amended and Restated Directors' Deferred
Compensation Plan; 80,000 shares acquirable upon conversion of a convertible
debenture due May 24, 1999 under the 1994 ABIG Key Executive Debenture Plan;
and 253,800 shares held by a trust established pursuant to the Last Will and
Testament of Dorothy P. Landon, of which Mr. Landon (together with Ms. Mary
Jane Melrose and Northern Trust Co., Chicago, Illinois) is trustee. Neither
Mr. Landon nor a member of his immediate family have a pecuniary interest in
the shares held by the Trust. Includes 20,000 shares subject to option
exercise granted by Mr. Landon to Jack Kemp on May 24, 1995. The options are
exercisable at $29.00 per share and expire on May 24, 2000.
2
<PAGE> 5
SECURITY HOLDINGS OF MANAGEMENT
The following table sets forth the amount of Common Stock beneficially
owned by each director, director emeritus, named executive officers, and
directors and executive officers of the Company as a group as of March 29, 1996:
<TABLE>
<CAPTION>
AMOUNT OF
SHARES PERCENTAGE
BENEFICIALLY OF
NAME OWNED OWNERSHIP
- ------------------------------------------------------------------- ------------ ----------
<S> <C> <C>
William H. Allen, Jr............................................... 4,185(a) *
Nicholas A. Buoniconti............................................. 5,589(b) *
Armando M. Codina.................................................. 19,548(c) *
Peter J. Dolara.................................................... 1,695(d) *
Gerald N. Gaston................................................... 318,954(e) 1.6%
Bernard Janis**.................................................... 2,359(f) *
Daryl L. Jones..................................................... 3,526(g) *
James F. Jorden.................................................... 4,630(h) *
Jack F. Kemp....................................................... 21,000(i) *
John P. Laborde**.................................................. 500(j) *
R. Kirk Landon..................................................... 1,781,391(k) 8.7%
Malcolm G. MacNeill................................................ 36,829(l) *
Eugene M. Matalene, Jr............................................. 4,000(m) *
Albert H. Nahmad................................................... 31,739(n) *
Nicholas J. St. George............................................. 6,156(o) *
Robert C. Strauss.................................................. 5,724(p) *
George E. Williamson II............................................ 16,635(q) *
Eugene E. Becker................................................... 101,395(r) *
Jay R. Fuchs....................................................... 42,838(s) *
Floyd G. Denison................................................... 53,886(t) *
Directors and Executive Officers as a Group*** (25 persons
including those named above)..................................... 2,576,076(u) 12.6%
</TABLE>
- ---------------
(a) Includes 185 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(b) Includes 2,589 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(c) Includes 10,548 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(d) Includes 695 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 1,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(e) Includes 136,582 shares owned by Mr. Gaston directly; 33,000 Restricted
Shares under the 1991 Stock Option/Restricted Stock Award Plan owned by Mr.
Gaston directly; 6,603 shares allocated under the Company's Leveraged
Employee Stock Ownership Plan; 71,636 shares acquirable under the 1987
Executive Stock Option/Dividend Accrual Plan; 70,000 shares acquirable upon
conversion of a convertible debenture due May 24, 1999 under the 1994 ABIG
Key Executive Debenture Plan; and 1,133 shares owned by Mr. Gaston's son.
(f) Director Emeritus.
(g) Includes 1,526 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(h) Includes 2,000 shares acquirable under the 1994 Non-Employee Directors'
Stock Option Plan.
3
<PAGE> 6
(i) Includes 1,000 shares acquirable under the 1994 Non-Employee Directors'
Stock Option Plan and 20,000 shares acquirable by Mr. Kemp upon the
exercise of options granted by Mr. Landon to Mr. Kemp. See footnote (c)
under "Principal Shareholders," of this Proxy Statement.
(j) Director Emeritus.
(k) See footnote (c) under "Principal Shareholders," of this Proxy Statement,
which sets forth shares that may be deemed to be beneficially owned by Mr.
Landon.
(l) Includes 5,000 shares owned by Mr. MacNeill's wife; 305 shares owned by his
daughter; 17,942 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(m) Includes 2,000 shares acquirable under the 1994 Non-Employee Directors'
Stock Option Plan.
(n) Includes 26,000 shares owned by Watsco, Inc.; 2,729 shares acquirable under
the 1994 Amended and Restated Directors' Deferred Compensation Plan; 10
shares owned by Mr. Nahmad's son and 2,000 shares acquirable under the 1994
Non-Employee Directors' Stock Option Plan.
(o) Includes 3,146 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(p) Includes 2,724 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(q) Includes 14,635 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 2,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(r) Includes 29,500 shares owned by Mr. Becker directly, 21,300 Restricted
Shares under the 1991 Stock Option/Restricted Stock Award Plan owned by Mr.
Becker directly; 5,431 shares allocated under the Company's Leveraged
Employee Stock Ownership Plan; 4,899 shares owned by Mr. Becker's wife;
5,600 Restricted Shares under the 1994 Senior Management Stock Option Plan
owned by Mr. Becker directly; and 34,665 shares acquirable under the 1987
Executive Stock Option/Dividend Accrual Plan.
(s) Includes 16,300 shares owned by Mr. Fuchs directly; 18,000 Restricted
Shares under the 1991 Stock Option/Restricted Stock Award Plan owned by Mr.
Fuchs directly; 4,400 Restricted Shares under the 1994 Senior Management
Stock Option Plan owned by Mr. Fuchs directly; and 4,138 shares allocated
under the Company's Leveraged Employee Stock Ownership Plan.
(t) Includes 19,769 shares owned by Mr. Denison directly; 9,000 Restricted
Shares under the 1991 Stock Option/Restricted Stock Award Plan owned by Mr.
Denison directly; 4,229 shares allocated under the Company's Leveraged
Employee Stock Ownership Plan; 3,200 Restricted Shares under the 1994
Senior Management Stock Option Plan owned by Mr. Denison directly; 17,678
shares acquirable under the 1987 Executive Stock Option/Dividend Accrual
Plan; and 10 shares owned by Mr. Denison's son.
(u) The 20,000 shares subject to an option granted by Mr. Landon to Mr. Kemp
have only been counted once in determining the total number of amount of
shares beneficially owned and percentage of ownership by the Directors and
Executive Officers as a group. See footnote (i) above and footnote (c)
under "Principal Shareholders," of this Proxy Statement.
* Denotes less than 1% ownership.
** Director Emeritus.
*** Information regarding the Executive Officers of the Company is contained in
the Company's 1995 Annual Report on Form 10-K.
4
<PAGE> 7
ITEM 1: ELECTION OF DIRECTORS
It is intended that the votes will be cast pursuant to the accompanying
Proxy for the nominees named below, unless otherwise directed. The Board of
Directors has no reason to believe that any nominee will become unavailable.
However, in the event that any of the nominees should be unavailable, proxies
solicited by the Board of Directors will be voted for the election of substitute
nominees designated by the Board of Directors.
According to the Company's Second Amended and Restated Articles of
Incorporation, directors of the Company are classified and are elected for
staggered terms of three years. Class I directors will be elected to office at
the Meeting. The nominees for Class I directorships are Messrs. Buoniconti,
Codina, Dolara, Matalene and St. George. Class II directors and Class III
directors will be elected in 1997 and 1998, respectively, and every third year
thereafter.
The names of the nominees and the directors who will continue in office,
the term for which they are nominated or have been elected, their ages, periods
of service, business experience during the last five years, and other
directorships are set forth.
The Company's operations are conducted through its subsidiaries, including
American Bankers Insurance Company of Florida ("ABIC"), American Bankers Life
Assurance Company of Florida ("ABLAC"), American Reliable Insurance Company
("ARIC"), Bankers American Life Assurance company ("BALAC"), Bankers American
Reinsurance Company ("BARC"), Bankers Insurance Company Limited ("BICL"),
Caribbean American Life Assurance Company ("CALAC"), Caribbean American Property
Insurance Company ("CAPIC"), Voyager Group, Inc. ("VGI"), Voyager Life and
Health Insurance Company ("VLHIC"), and Voyager Life Insurance company ("VLIC").
Certain of the Company's directors are also directors of its subsidiaries. In
addition, the following notes have the indicated meanings.
(a) Dates in parentheses indicate year in which a nominee first became a
director of ABIC or ABLAC.
(b) Member of Audit Committee.
(c) Member of Compensation and Nominating Committee.
(d) Member of Planning Committee.
(e) Member of Executive Committee.
(f) Member of Finance Committee.
(g) Member of Takeover Evaluation Committee.
5
<PAGE> 8
TO BE ELECTED FOR A TERM OF THREE YEARS
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE
COMPANY;
PRINCIPAL OCCUPATION FOR PAST 5
YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ------------------------------------------ ---------------------------------------------------
<S> <C> <C> <C>
NICHOLAS A. BUONICONTI(C)(D).............. Vice Chairman, Chief Operating 55 1993
Officer and Director, Columbia
Laboratories, Inc. (pharmaceutical
distribution), Hollywood, FL (since
1992); Partner, Nicholas A.
Buoniconti, P.A., (attorneys-
at-law), Miami, FL (1990-1992);
President and Chief Operating
Officer, UST, (conglomerate),
Greenwich, CT (1983-1989); Director,
BALAC (since 1993); Director,
Innkeepers USA (own and manage
hotels), Palm Beach, FL (since
1995); Director, The Sports
Authority (sporting goods), Ft.
Lauderdale, FL (since 1996).
ARMANDO M. CODINA(C)(D)(E)(G)............. Chairman of the Board of Codina 49 1987
Group Inc. (real estate
development), Coral Gables, FL
(since 1989); Director, Winn-Dixie
Stores, Inc. (food stores),
Jacksonville, FL (since 1987);
Director, BellSouth Corporation
(communications), Atlanta, GA (since
1992); Director, FPL Group
Inc.(electric utility), Juno Beach,
FL (since 1995); Director, AMR, Inc.
(airline), Dallas, TX (since 1994).
PETER J. DOLARA(D)(F)..................... Officer/Senior Vice President 58 1995
American Airlines (airline), Coral
Gables, FL (since 1967); Director,
Easter Seal Society of Dade County,
Miami, FL (since 1993); Director,
United Way of Dade County (since
1994).
EUGENE M. MATALENE, JR.(E)(F)(G).......... Managing Director, PaineWebber 48 1990
Incorporated (investment banking),
New York, NY (since 1987); Director,
Empire of Carolina, Inc. (toy
industry), Delray Beach, FL (since
1995).
NICHOLAS J. ST. GEORGE(B)(D).............. President, Chief Executive Officer 57 1983
(since 1979) and Director (since
1972) of Oakwood Homes Corporation
(manufacturer, retailer and
financier of mobile/manufactured
homes), Greensboro, NC; Director,
Legg Mason, Inc. (investment
banking), Baltimore, MD (since
1983).
</TABLE>
6
<PAGE> 9
TO CONTINUE IN OFFICE FOR TWO YEARS
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE
COMPANY;
PRINCIPAL OCCUPATION FOR PAST 5
YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ------------------------------------------ ---------------------------------------------------
<S> <C> <C> <C>
WILLIAM H. ALLEN, JR.(B)(F)............... Vice Chairman, Nationsbank, N.A. 60 1992
(South) (banking), Miami, FL (since
1996); Chairman of the Board and
Chief Executive Officer,
Intercontinental Bank, (commercial
banking), Miami, FL. (1987-1995);
Director Winsloew Furniture Group
(furniture manufacturer and
distributor), Pompano Beach, FL
(since 1993); Director, Decorator
Industries (manufacturer of
accessories for hospitality,
recreation vehicle and manufactured
housing industries), Ft. Lauderdale,
FL (since 1995).
JACK F. KEMP(D)........................... Co-Director, Empower America (public 60 1995
policy/think tank), Washington, DC
(since 1993); Secretary, U.S.
Department of H.U.D., Washington,
D.C. (1990-1993); Director, Landair
Services (air transport service),
Greenville, TN (since 1993);
Director, Oracle (database software
provider), Redwood Shores, CA (since
1995); Director, Columbus Trust
Realty (self-managed
R.E.I.T. -- Real Estate Investment
Trust), Dallas, TX (since 1993);
Director, Cyrix (designer, developer
and manufacturer of high performance
processors for personal computers),
Richardson, TX (since 1993);
Director, World Corp. (air
transportation services and
transaction processing), Herndon, VA
(since 1995).
JAMES F. JORDEN(E)(F)(G).................. Senior Managing Partner, Jorden Burt 54 1982
Berenson & Johnson LLP
(attorneys-at-law), Miami, FL
(since 1988).
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE
COMPANY;
PRINCIPAL OCCUPATION FOR PAST 5
YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ------------------------------------------ ---------------------------------------------------
<S> <C> <C> <C>
R. KIRK LANDON(E)(F)(G)................... Chairman of the Board (since 1980), 66 1980)
Chief International Marketing (1957
Officer of the Company, ABIC and
ABLAC (1996) and Chief Executive
Officer of the Company (1980-1995);
Director (since 1982), President
(1977-1988) and Chief Executive
Officer (1979-1995) of ABIC;
Director (since 1980), President
(1979-1988) and Chief Executive
Officer (1979-1995) of ABLAC;
Director, CALAC (since 1980);
Director, CAPIC (since 1992);
Director, BICL (since 1990); Vice
Chairman, Board of Trustees, Barry
University, Miami Shores, FL (since
1983); Chairman and Director,
Federal Reserve Bank of Atlanta
(Miami Branch) Miami, FL (since
1991); Director, Mayor's Jewelers
(jewelry retailers), Coral Gables,
FL (since 1987).
ROBERT C. STRAUSS(B)(D)(E)(G)............. President and Chief Executive 54 1992
Officer, Cordis, a Johnson & Johnson
company (since 1996), Miami, FL;
Chairman, President, Chief Executive
Officer, Chief Financial Officer
(1983-1995) and Director (since
1987), Cordis Corporation,
(manufacturer of internal medical
devices), Miami Lakes, FL.
</TABLE>
TO CONTINUE IN OFFICE FOR ONE YEAR
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE
COMPANY;
PRINCIPAL OCCUPATION FOR PAST 5
YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ------------------------------------------ ---------------------------------------------------
<S> <C> <C> <C>
GERALD N. GASTON(E)(F)(G)................. President and Chief Executive 63 1980)
Officer of the Company (1996), Vice (1977
Chairman of the Board of the Company
(since 1980), Chief Operating
Officer of the Company (1982-1995);
Chief Executive Officer (1996),
Chief Operating Officer (1980-1995),
Chairman of the Board (since 1992)
and Vice Chairman of the Board
(1979-1992) of ABIC and ABLAC (since
1993); Chairman of the Board, ARIC,
VGI, VLIC, and VLHIC (since 1993);
and Director, BALAC (since 1990).
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE
COMPANY;
PRINCIPAL OCCUPATION FOR PAST 5
YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ------------------------------------------ ---------------------------------------------------
<S> <C> <C> <C>
DARYL L. JONES(F)......................... State of Florida Senator District 40 40 1994
(since 1992); Major/F16 Pilot, U.S.
Air Force Reserves (since 1989);
Attorney for Colson, Hicks, Edison,
Colson, Matthews & Gamba
(attorneys-at-law), Miami, FL.
(1991-1992); State of Florida
Representative District 118
(1990-1992); Attorney, Dade County
Attorney's Office (1988-1990).
MALCOLM G. MACNEILL(C).................... President, Great Smokey Mountains 68 1980)
Railway (railroad), Dillsboro, NC (1976
(since 1989); Chairman of the Board
of Frank R. MacNeill & Son, Inc.,
(general agents), Miami, FL
(1960-1994).
ALBERT H. NAHMAD(D)(E)(G)................. President, Chairman of the Board and 55 1993
Chief Executive Officer, Watsco,
Inc. (Nation's largest distributor
of residential central air
conditioners), Miami, FL (since
1973); Director, Panama Canal
Commission (since 1995); Board
member, Florida Council of 100
(advisory board to the Governor of
Florida) (since 1994); Chairman of
the Board of Directors, Miami
Children's Hospital Foundation,
Miami, FL (since 1990); Director
Mayor's Jewelers (jewelry retailers)
(since 1995); Director, Pediatrix
Medical Group (physician management
services) (since 1996).
GEORGE E. WILLIAMSON II(B)(C)............. President, Williamson Cadillac 50 1985
Company, (automobile dealer), Miami,
FL (since 1967); President,
Williamson Saturn, Inc., d/b/a
Saturn of Dadeland and Saturn of
West Dade (automobile dealer),
Miami, FL (since 1991 and 1995,
respectively); President, WWW
Enterprises d/b/a Williamson
Pontiac, Cadillac, Mazda (automobile
dealer), Miami, FL (since 1987);
Director, Northern Trust Bank of
Florida, N.A. (banking), Miami, FL
(since 1988).
</TABLE>
9
<PAGE> 12
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Jorden Burt Berenson & Johnson LLP, of which Mr. Jorden is a Senior
Managing Partner, serves as general counsel for the Company and its
subsidiaries. In 1995, the firm received $3,178,686 for legal services rendered
and costs incurred in that capacity.
Mr. St. George is President, Chief Executive Officer and Director of
Oakwood Homes Corporation. ABLAC has reinsurance agreements with Oakwood Homes
Corporation's insurance captives. In 1995, ABLAC ceded premium of $3,287,575 to
Oakwood Life Insurance Company, LTD. under these reinsurance contracts.
Mr. MacNeill is a major investor in the Cypress Insurance Company. American
Reliable Insurance Company, a subsidiary of the Company, has a reinsurance
agreement with Cypress Insurance Company. In 1995 $74,000 of premium was ceded
to the Cypress Insurance Company under this agreement.
Mr. Williamson is President of Williamson Cadillac Company, Williamson
Saturn Inc. and WWW Enterprises (automobile dealerships). In 1995, Mr.
Williamson's automobile dealerships sold ABLAC Credit Life, Health and
Disability policies. Total written premium by these dealerships was $63,355 in
1995.
The Company believes these transactions were made on terms no less
favorable than that which could have been received by unaffiliated third
parties.
THE BOARD OF DIRECTORS AND ITS STANDING COMMITTEES
BOARD OF DIRECTORS
The Board of Directors held four meetings during the year ended December
31, 1995. All directors attended at least 75% of the Board meetings and meetings
of the standing committees on which they served that were held during the period
when they served, with the exception of Messrs. Buoniconti, Kemp and MacNeill.
AUDIT COMMITTEE
The Board of Directors of the Company has an Audit Committee composed of
Messrs. Strauss, Allen, St. George and Williamson. During the year ended
December 31, 1995, the Audit Committee met four times.
At the direction of the Board of Directors, the Audit Committee recommends
the selection of the independent auditors to the Board of Directors; reviews the
arrangements and scope of the independent audit; reviews all financial
statements and reviews matters of concern to the Audit Committee, the auditors
or management relating to these statements or the results of any audit thereof;
considers the comments from the independent auditors with respect to any
weakness in internal controls and the consideration given or corrective action
taken by management; reviews internal accounting procedures and controls with
the internal financial and accounting staff; reviews the activities, reports and
recommendations of the internal auditors and management's supervision in control
of that department; and completes any other requests made by the Board of
Directors.
COMPENSATION AND NOMINATING COMMITTEE
The Board of Directors of the Company has a Compensation and Nominating
Committee composed of Messrs. Codina, Buoniconti, MacNeill and Williamson.
During the year ended December 31, 1995, the Compensation and Nominating
Committee held five meetings.
The Compensation and Nominating Committee establishes the compensation
package of the Chairman of the Board of Directors, the Chief Executive Officer
and the President of the Company and its major subsidiaries. This committee
reviews and approves the compensation package suggested by Management for all
other officers. The Compensation and Nominating Committee is responsible for the
administration of all perquisites offered officers of the Company and its major
subsidiaries, including, but not necessarily limited to,
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<PAGE> 13
pension, retirement or profit-sharing plans, management incentive plans,
restricted or qualified stock plans, and insurance benefits. In addition, it
assists the Chairman of the Board and the Chief Executive Officer in the
development of a management succession plan. In connection with the Company's
various stock option plans, the Nominating and Compensation Committee has full
power and authority to select employees to participate in each plan, to
determine the amount and timing of grants, to interpret each plan and establish
rules for their administration.
The Compensation and Nominating Committee, subject to the control of the
Board of Directors or the Executive Committee, recommends and implements
criteria regarding composition of the Board of Directors, including, but not
limited to, seeking out possible candidates to fill directorships; determining
the desirable balance of expertise and composition of the Board of Directors;
aiding in attracting such qualified candidates; reviewing the management slate
of directors to be elected by the shareholders; at the Annual Meeting;
recommending to the Board of Directors the inclusion of the slate in the proxy
statement; reviewing the qualifications of candidates for corporate officership;
and recommending the officers for approval by the Board of Directors.
Nominations for the election of directors may be made by the Board of Directors
or by any shareholder entitled to vote for the election of directors.
Nominations by any shareholder shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid, to the
Secretary of the Company not less than 5 days or more than 60 days prior to any
meeting of the shareholders called for the election of directors. Each notice
shall set forth (i) the name, age, business address and, if known, residence
address of each nominee proposed in such notice, (ii) the principal occupation
or employment of each such nominee and (iii) the number of shares of stock of
the Company which are beneficially owned by each such nominee. The Secretary of
the Company shall determine whether any nomination by any shareholder is made in
conformance with the procedures set forth above. Nominations not made in
conformance with the above stated procedures shall be null and void and
disregarded by the Company.
COMPLIANCE WITH SECTION 16 REPORTING REQUIREMENTS
Under the U.S. federal securities laws, the Company's directors, certain
officers, and any persons holding more than ten percent of the Company's Common
Stock are required to report their ownership of the Company's Common Stock and
any changes in that ownership to the Securities and Exchange Commission and the
National Association of Securities Dealers, Inc. Specific due dates for these
reports have been established and the Company is required to report in this
Proxy Statement any failure to file by these dates during 1995. All of these
filing requirements were satisfied by these persons. In making these statements,
the Company has relied on the written representations of its incumbent
directors, officers, and its ten percent holders and copies of the reports that
they have filed with the Commission.
DIRECTORS COMPENSATION
ANNUAL AND MEETING FEES
Directors who are not officers or employees of the Company are paid a
quarterly fee of $5,000 ($5,500, if chairman of a committee of the ABIG Board or
chairman of ABLAC or ABIC Boards). Mr. Landon and Mr. Gaston, received no
additional fees for their directorships. Directors who are not officers or
employees of the Company are also paid a fee of $750 for each meeting of the
Board of Directors or its committees which they attend and $375 for each meeting
attended telephonically, but only one attendance fee is paid for attendance at
meetings held on a single day. Directors who reside outside Miami are also
reimbursed for transportation and other travel expenses. The Company's By-laws
provide for indemnification of directors to the fullest extent permitted under
Florida Statutes.
DIRECTORS' DEFERRED COMPENSATION PLAN
The Company's Directors' Deferred Compensation Plan (the "Deferred Plan")
was adopted by the Board of Directors of the Company in October 1980 and amended
and restated in February 1994, subject to
11
<PAGE> 14
shareholder approval which was obtained on May 25, 1994. Under the Deferred
Plan, directors may elect to defer the receipt of their compensation in cash or
in stock equivalents. Upon termination from the Board of Directors, the Director
will receive, as elected, either cash or actual shares of the Company's Common
Stock for fees deferred as stock equivalents. Directors who elect to defer fees
must make an election in writing prior to an annual meeting of the shareholders.
All fees earned during each director's term shall be deferred until retirement,
resignation or death. The deferral may be revoked with respect to future
payments or the form of future payments to be deferred may be changed upon
written notice delivered to the Company prior to an annual meeting of the
shareholders. The revocation or change will be effective six months following
receipt of the notice. For the year ended December 31, 1995, nine members of the
Company's Board elected to defer their compensation under the plan. Under the
Deferred Plan 100,000 shares of the Company's authorized but previously unissued
Common Stock has been reserved.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
On May 25, 1994, stockholders approved the adoption of the 1994
Non-Employee Directors' Stock Option Plan. Under the terms of the plan, each
non-employee director will receive 1,000 options at the annual Board of
Directors meeting exercisable at prices equivalent to the fair market value of
the Company's common stock on the such date. Options granted are not exercisable
before the six-month anniversary nor after the fifth anniversary from the date
of the grant. In 1994, there were 50,000 shares authorized, options for 26,000
shares were issued, 2,000 of which were exercised. Grants may be made under this
plan until March 24, 2004.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION AND NOMINATING COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
The Compensation and Nominating Committee of the Board of Directors (the
"Committee") is responsible for establishing the various compensation programs
for the executive officers. In addition, the Committee assists the Chairman of
the Board and the Chief Executive Officer in the development of a management
succession plan and reviews the qualifications of candidates for corporate
officership and recommends the officers for approval by the Board of Directors.
COMPENSATION POLICIES
In developing compensation plans and setting compensation levels, the
Committee reviewed a diverse group of insurance company salaries. The Committee
also reviewed the same diverse group with respect to stock options and long term
incentive plans.
EXECUTIVE OFFICER COMPENSATION
The Company's compensation program for executive officers consists of three
key elements: a base salary, an annual bonus, and long-term incentives. The
Committee believes that this approach best serves the interests of stockholders
by ensuring that executive officers are compensated in a manner that advances
both short- and long-term interests of stockholders.
Base Salary. Base salaries of individual executive officers are reviewed
by the Committee annually. In determining adjustments to base salary for a
particular year, the Committee relies on reports from consultants and reports
from the Company's Human Resources Department. Salaries for all officers, with
the exception of the Chief Executive Officer, are based upon recommendations
made by the officers' superiors taking into account the superiors' subjective
assessment of the nature of the position, and the contribution, experience and
Company tenure of the executive officer. The Chief Executive Officer reviews all
salary recommendations with the Committee, which is responsible for approving or
disapproving those recommendations.
12
<PAGE> 15
Annual Bonus. Executive officers and other senior officers participate in
the Management Incentive Plan ("MIP"). The Committee chooses those officers who
will participate in the MIP, acting upon the advice of the Chief Executive
Officer. Each participant's MIP is based on individual performance objectives,
which may include profits, premiums, and other individual performance measures.
The performance objectives have different weights, but in general, at least 40%
of each participant's bonus must be based on the Company's profit objective. A
target bonus percentage is established for each participant. For executive
officers this percentage ranges from 30% to 60% of base salary. A participant
can earn up to 200% of this target bonus percentage based on their actual
performance on each category in their MIP. For each category three performance
levels are determined in advance. The minimum is the minimum level of acceptable
performance, where 0% of the target bonus percentage would be earned. The target
is the planned performance level, where 100% of the target bonus percentage
would be earned. The maximum is the most optimistic level of performance that
has only a slight probability of being achieved, where 200% of the target bonus
percentage would be earned. The actual performance is compared to the
established objectives and the award for each item measured.
Long-term Incentives. Long-term incentives include stock option grants and
convertible debentures. A stock option permits the holder to buy Company stock
at a specific price during a specific time period. As the price of Company stock
rises, the option increases in value. The number of options granted to any one
employee is based on a formula which is tied to the executive officer's base
salary. However, other subjective factors are taken into consideration such as:
the executive's level of responsibility, experience and long-term expected
contribution to the Company. During 1995, the Company granted stock options to
executive officers under the 1994 Senior Management Stock Option Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
Effective May 24, 1995, Mr. Landon's base salary was increased 8.7% to
$500,000. Mr. Landon received a 4.5% salary increase in 1994. This increase was
based on factors including the increased profitability of the Company, increased
premium production, and the development and execution of plans for future
growth.
Mr. Landon's MIP award for 1995 is expected to be $437,000, to be paid on
the date of the annual meeting. Fifty two percent of his award was directly
related to 1995 actual profits which exceeded the plan objective. Other
categories used to determine Mr. Landon's award included the gross collected
premium for the Company, completion of corporate projects, stock price
performance, the return on equity for certain subsidiaries of the Company, and
quality-performance having relative weights of 17%, 17%, 8%, 3% and 3%,
respectively. Corporate projects involve criteria that are confidential and
disclosure of such criteria would have an adverse effect on the Company.
Mr. Landon did not receive any option grants under the 1994 Senior
Management Stock Option Plan. He currently owns 40,500 of restricted shares
issued under the 1991 Stock Option/Restricted Stock Award Plan which were
scheduled to begin vesting in 1996. During 1995, this plan was amended to allow
the Company to grant recipients the option to extend the original vesting period
for one, two, or three years. Mr. Landon elected to defer vesting for an
additional three year period.
COMPLIANCE WITH INTERNAL REVENUE CODE SECTION 162(M)
Section 162(m) of the Internal Revenue Code, generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
corporation's Chief Executive Officer and four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. The Compensation
and Nominating Committee reviews the compensation of its executive officers
(which currently consists of the Management Incentive Plan and the stock option
plans described above) to ensure that it complies with the statute.
CONCLUSION
The Compensation and Nominating Committee has the responsibility for
ensuring that the Company's compensation program continues to be in the best
interests of its stockholders. The Committee consists
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<PAGE> 16
entirely of non-employee directors. The Committee's objective is to assist the
Company, through a sound and reasonable structured compensation program, in the
recruitment, retention and motivation of talented managers capable of
contributing significantly to the Company's increased profitability and to the
creation, over time, of enhanced stockholder value. The Committee administers
the program, which encompasses base pay and long and short-term incentive plans
and reviews the general compensation philosophy of the Company, as well as, the
specific elements of the compensation program. The advice of qualified outside
advisors and independent compensation experts is obtained to assist the
Compensation and Nominating Committee in establishing and evaluating
compensation policies, especially in relation to other comparable companies.
Finally, the Compensation and Nominating Committee also reviews the results of
the Company's compensation programs to determine if such programs are performing
appropriately and achieving the desired results.
Armando M. Codina, Chairman
Nicholas A. Buoniconti
Malcolm G. MacNeill
George E. Williamson II
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Present members of the Compensation and Nominating Committee are Messrs.
Armando M. Codina (Chairman), Nicholas A. Buoniconti, Malcolm G. MacNeill, and
George E. Williamson II.
Mr. MacNeill is a major investor in the Cypress Insurance Company. American
Reliable Insurance Company, a subsidiary of the Company, has a reinsurance
agreement with Cypress Insurance Company. In 1995, $74,000 of premium was ceded
to the Cypress Insurance Company under this agreement.
Mr. Williamson is President of Williamson Cadillac Company, Williamson
Saturn Inc. and WWW Enterprises (automobile dealerships). In 1995 Mr.
Williamson's automobile dealerships sold ABLAC Credit Life, Health and
Disability Policies. Total written premium by these dealerships was $63,355 in
1995.
The Company believes that these transactions were made on terms no less
favorable than that which could have been received by unaffiliated third
parties.
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<PAGE> 17
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The Summary Compensation Table below indicates the cash compensation paid
by the Company and its subsidiaries as well as certain other compensation paid
or accrued to the Chief Executive Officer and the four other highest paid
executive officers, for services rendered in all capacities during the fiscal
years ended December 31, 1995, 1994 and 1993, respectively.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS
--------------------------------------------- ---------------------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ ALL OTHER
COMPENSATION AWARDS SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) ($)(3)(4) (#)(3) ($)(5)
- ------------------------------- ---- --------- ----------- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Kirk Landon................. 1995 482,992 437,000 -- -- -- 18,954
Chairman and Chief Executive 1994 451,652 241,000 -- -- -- 13,126
Officer ABIG 1993 423,539 360,600 -- -- -- 24,833
Gerald N. Gaston............... 1995 428,230 405,600 -- -- -- 18,954
President, Vice Chairman and 1994 390,063 233,200 -- -- -- 13,126
Chief Operating Officer ABIG 1993 367,654 369,700 -- -- -- 24,833
Eugene E. Becker............... 1995 230,973 171,600 -- 84,700 4,200 18,954
Executive Vice President and 1994 217,296 122,500 -- 61,950 4,200 13,126
Chief Marketing Officer of 1993 196,657 191,600 -- -- -- 20,711
ABIG
Jay R. Fuchs................... 1995 178,310 125,800 -- 66,550 3,300 18,954
President of ABLAC and 1994 169,369 84,300 -- 48,675 3,300 13,126
Director, Personal Markets 1993 158,827 136,100 -- -- -- 16,721
and Financial Sales, ABIC and
ABLAC
Floyd G. Denison............... 1995 159,198 72,200 -- 48,400 2,400 18,954
Executive Vice President and 1994 152,535 55,000 -- 35,400 2,400 13,126
Director, Corporate Asset 1993 145,156 50,600 -- -- -- 15,529
Management
</TABLE>
- ---------------
(1) Bonuses earned during a fiscal year are not paid until May of the following
fiscal year.
(2) Officers also receive certain perquisites and personal benefits; however,
such items do not exceed the lesser of $50,000 or 10% of such Officer's
salary and bonus and, therefore, are not required to be reported.
(3) Officers received Restricted Stock under the 1994 Senior Management Stock
Option Plan ("Senior Plan"). The 1994 Senior Plan provides that upon the
exercise of an option for a "Primary Share," the grantee will receive two
additional shares of "Restricted Shares," and the Restricted Shares vest
three years from the date of exercise. Holders of Restricted Shares are
entitled to receive dividends equal to those granted to the holders of the
Company's Common Stock generally, and are entitled to vote such shares. For
specific terms of this plan, see the plan description on page 19.
(4) At December 31, 1995, Restricted Shares of Common Stock held by the
executive officers named in the table and the market value thereof was as
follows: Mr. Landon, 40,500 shares acquired under the 1991 Stock
Option/Restricted Stock Award Plan ("1991 Plan"), $1,579,500; Mr. Gaston,
33,000 shares acquired under the 1991 Plan, $1,287,000; Mr. Becker 21,300
shares acquired under the 1991 Plan and 5,600 acquired under the Senior
Plan, $1,049,100; Mr. Fuchs, 18,000 shares acquired under the 1991 Plan and
4,400 under the Senior Plan (includes 2,200 shares acquirable upon exercise
of option under the 1994 Senior Plan), $873,600; and Mr. Denison, 9,000
shares acquired under the 1991 Plan and 3,200 shares acquired under the
Senior Plan, $475,800.
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<PAGE> 18
(5) For 1995 this amount represents the estimated allocation of shares of the
Company's Common Stock under the Leveraged Employee Stock Ownership Plan
(LESOP). Mr. Landon, Mr. Gaston, Mr. Becker, Mr. Fuchs and Mr. Denison each
are estimated to receive 486 shares. The value is based on the market value
at year-end of $39.00; multiplied by the number of shares allocated to each
named executive officer.
STOCK OPTIONS AND SARS
The following table sets forth information with regard to grants of stock
options to each of the named executive officers during the year ended December
31, 1995. Grants were made under the 1994 Senior Management Stock Option Plan.
No SARs have been granted.
OPTION GRANTS IN 1995
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
% OF TOTAL STOCK
OPTIONS PRICE APPRECIATION
GRANTED TO EXERCISE FOR
OPTIONS EMPLOYEES OR BASE OPTION TERM
GRANTED IN FISCAL PRICE EXPIRATION --------------------
NAME (#)(1) YEAR(2) ($/SH) DATE 5%($)(3) 10%($)(3)
- ----------------------------- ------- ---------- -------- ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
R. Kirk Landon............... -- -- -- -- -- --
Gerald N. Gaston............. -- -- -- -- -- --
Eugene E. Becker............. 4,200 6% 30.25 5/24/98 104,726 126,754
Jay R. Fuchs................. 3,300 4% 30.25 5/24/98 82,285 99,592
Floyd G. Denison............. 2,400 3% 30.25 5/24/98 59,844 72,431
</TABLE>
- ---------------
(1) Options were granted under the 1994 Senior Management Stock Option Plan to
Mr. Becker, Mr. Fuchs and Mr. Denison. Mr. Becker and Mr. Denison exercised
their options during November 1995. Upon exercise of the option, Mr. Becker
received 2,800 Restricted Shares and Mr. Denison received 1,600 Restricted
Shares. Mr. Fuchs has not exercised his option, however upon exercise of
the option he will receive 2,200 Restricted Shares. See footnote (3) under
Summary Compensation Table of this Proxy Statement for material terms of
the options granted.
(2) As a percentage of options granted under the 1994 Senior Management Stock
Option Plan. During 1995, 24,500 stock options for Primary Shares were
granted under the 1994 Senior Management Stock Option Plan which includes
3,300 Stock Options for Primary Shares granted to the named executive
officers. An additional 65,500 stock options were granted under the 1991
Stock Incentive Compensation Plan to key employees other than those named
above.
(3) Assumed annual rates of appreciation of 5% and 10% would result in the price
of the Company's Common Stock increasing to $35.02 and $40.26,
respectively.
16
<PAGE> 19
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with regard to stock option
exercises during 1995 by each of the named executive officers and December 31,
1995 values of all unexercised options held by such individuals.
AGGREGATED OPTION EXERCISES IN 1995
AND 1995 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
12/31/95(#)(2) 12/31/95($)(3)
SHARES VALUE REALIZED -------------- --------------
ACQUIRED -------------- EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---------------------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
R. Kirk Landon.............. -- -- 162,843/0 3,858,872/0
Gerald N. Gaston............ -- -- 141,636/0 3,348,478/0
Eugene E. Becker............ 4,200 113,050 34,665/0 1,139,982/0
Jay R. Fuchs................ 3,300 73,425 20,401/0 657,455/0
Floyd G. Denison............ 2,400 64,900 17,678/0 581,600/0
</TABLE>
- ---------------
(1) Market value at date of exercise minus exercise price.
(2) All unexercised options include options that were granted under the 1987
Executive Stock Option/Dividend Accrual Plan. Also included are: 80,000
shares for Mr. Landon and 70,000 shares for Mr. Gaston which are issuable
upon conversion of the debentures granted under the 1994 ABIG Key Executive
Debenture Plan and 3,300 shares for Mr. Fuchs under the 1994 Senior
Management Stock Option Plan.
(3) Market value at year-end minus exercise price.
1994 ABIG KEY EXECUTIVE DEBENTURE PLAN
On May 25, 1994, stockholders of the Company approved the adoption of the
1994 ABIG Key Executive Debenture Plan (the "Debenture Plan"). The Debenture
Plan provides for the offering for sale of subordinated debentures
("Debentures") to key executive officers of the Company and its subsidiaries.
Such persons include individuals who hold the title of executive vice presidents
and above. The Debentures are convertible to shares of the Company's common
stock in accordance with the provisions of the plan. Under the Debenture Plan
150,000 shares of the Company's authorized but previously unissued Common Stock
are reserved for issuance on conversion.
1994 SENIOR MANAGEMENT STOCK OPTION PLAN AND THE 1991 STOCK OPTION/RESTRICTED
STOCK AWARD PLAN
On May 25, 1994, stockholders approved the adoption of the 1994 Senior Plan
(the "Senior Plan"). The Senior Plan is a non-qualified plan under the Internal
Revenue Code of 1986, as amended. The Senior Plan provides for the issuance of
up to 700,000 shares of the Company's authorized but previously unissued Common
Stock to persons who are full-time, key management employees of the Company and
its subsidiaries. Such persons include individuals who hold the titles of
Business Board Chairman and senior vice presidents and above. There were
approximately thirty-nine (39) individuals who are considered key management
employees at this time.
The Compensation and Nominating Committee (the "Committee") may at any
regular quarterly or annual meeting, subject to the provisions of the Senior
Plan, grant employees options to purchase shares of the Company's Common Stock
("Primary Shares") at the fair market value of such shares on the date of grant.
The grantee will also receive, for no additional consideration, two shares of
the Company's Common Stock subject to certain transfer restrictions ("Restricted
Shares") for every one Primary Share purchased upon the exercise of the option.
The restrictions will lapse on the Restricted Shares three years from the date
the option
17
<PAGE> 20
is exercised, provided that the employee still holds the Primary shares
purchased on the date the option was exercised.
Payment of the purchase price for Primary Shares shall be made in cash or
in such other form as the Company may approve including shares of Common Stock
of the Company, held for at least six months, valued at their fair market value
on the date of the exercise of the option. Options granted under the Senior Plan
may not be exercised on or after the third anniversary of the grant date or such
shorter time as determined by the Committee on the date of grant. No options
will be granted pursuant to the Senior Plan after ten years from its adoption by
the Board of Directors.
During a three-year vesting period, Restricted Shares are subject to a
forfeiture in the event the related Primary Shares are disposed of or if
employment with the Company is terminated except by death, disability or
retirement. Dividends and voting rights on the Restricted Shares remain with the
employee during the vesting period. Full vesting occurs on the third annual
anniversary after the date the options are exercised or upon death, disability
or retirement of the employee or a change in control of the Company.
The 1991 Stock Option/Restricted Stock Award Plan was adopted by the Board
of Directors in November 1990 subject to shareholder approval, which was
obtained on May 22, 1991. Upon stockholder approval of the Senior Plan, the
Company ceased granting options under this plan. Nevertheless, the options
granted under this plan are outstanding.
The terms of the plan are substantially similar to those of the Senior Plan
except that (i) the employee is awarded three Restricted Shares for every
Primary Share and (ii) originally, full vesting occurs on the fifth annual
anniversary after the exercise date of the options. During 1995, the plan was
amended to allow the Company to grant recipients the option to extend the
original vesting period for either one, two or three years. A one time election
was granted to all plan recipients by the Company. As of December 31, 1995, two
individuals had elected to defer. Mr. Landon elected to defer vesting for an
additional three year period and Mr. Gaston elected to defer for an additional
one year period.
1991 STOCK INCENTIVE COMPENSATION PLAN
The 1991 Stock Incentive Compensation Plan provides for the issuance of
options for up to 289,586 shares of the Company's Common Stock to persons who
are key management employees of the Company and its subsidiaries. The plan was
adopted by the Board of Directors in November 1990 subject to shareholder
approval which was obtained on May 22, 1991. The plan, which is a non-qualified
plan under the Internal Revenue Code, is effective for a period of ten years.
Options issued pursuant to the plan are exercisable at fifty percent of the
fair market value (as defined in the plan) on the grant date. Options must be
exercised within sixty days of the grant date. Shares obtained upon exercise are
subject to restrictions. Vesting occurs ratably over a five-year period or upon
death, disability or retirement of the employee or the change in control of the
Company. Non-vested shares are subject to forfeiture if employment is terminated
except by death, disability or retirement. During the restricted period,
employees receive all cash dividends paid and exercise the voting rights
assigned to each share.
EXECUTIVE STOCK OPTION/DIVIDEND ACCRUAL PLAN
The 1987 Executive Stock Option/Dividend Accrual Plan provided for the
issuance of up to 1,000,000 shares of the Company's Common Stock to persons who
are officers and key management employees of the Company. The plan became
effective upon shareholder approval on May 27, 1987 and has a term of ten years.
The Company has discontinued making grants under this plan.
Options which were issued pursuant to the plan are exercisable at fair
market value (as defined in the plan) on the date of grant. From the date of
grant until the exercise date of options, and to the extent cash dividends are
declared by the Company in respect of its Common Stock, cash is accrued for the
benefit of the optionee as if the options had already been exercised and
dividends were payable thereon, provided that all such accrued cash will be
applied toward the exercise price of the options on the date of exercise.
18
<PAGE> 21
1988 LEVERAGED EMPLOYEE STOCK OWNERSHIP PLAN ("LESOP")
The 1988 LESOP is a defined contribution stock bonus plan and trust in
which employees of ABIC and ABLAC and certain other subsidiaries of the Company
are eligible to participate. Generally, an employee becomes eligible to
participate in the plan following a 12-month period of employment.
The LESOP trust fund acquired 1,752,537 shares of the Company's Common
Stock, which will be allocated to participants annually over the 10-year period
commencing December 31, 1989. The LESOP trust fund borrowed money (the "Loan")
to purchase the stock. Each year the Company makes a contribution to the LESOP
which is used to pay the Loan and certain LESOP expenses. As principal payments
are made, stock held in the trust fund is allocated to participants' accounts.
Participants have the right to instruct the LESOP trustee as to the voting of
allocated shares.
The vested value of a participant's account becomes payable upon
termination of employment for any reason including death. However, the vested
value of a participant's account becomes distributable upon final payment of the
Loan. There is no partial vesting, but full vesting occurs after the completion
of five years of service (including certain service prior to January 1, 1989),
or upon the participant's earlier death, disability or retirement. If a
participant terminates employment prior to vesting, his account is forfeited.
The participant's interest in the vested value of their account is represented
by their allocated shares of the Company's stock and by cash for fractional
shares.
CERTAIN CONTRACTS
To help ensure that Senior Management will be prepared to function in the
Company's best interests in the event of any possible change in control of the
Company, whether by merger, sale or other comparable action, and to help ensure
the continuing services of such officers, the Board of Directors (with only non-
employee directors participating) authorized the Company originally to enter
into certain contracts with selected executive officers. While there was no
reason to believe that a merger or sale was imminent, the Board of Directors
believed it in the best interest of the Company and its shareholders that it act
at that time to avoid the need for hasty action in the future and to ensure
continuity of highly qualified management.
The contracts generally provide the executive officers will receive the
following compensation in the amounts and for the reasons indicated:
(a) In the event the company becomes a party to a merger or sale, an
amount up to two times his then current base salary or an amount equal to
the maximum amount that will not constitute a "parachute amount" as defined
in Section 280G of the Internal Revenue Service Code. As of March 15, 1996,
the maximum allowable is up to, but not including three times the average
of the individual's previous compensation for the past five years. Under
the contract, a merger or sale is deemed to have taken place when any
person (or group) obtains sufficient ownership of stock to exercise control
over the operations of the Company.
(b) Upon retirement at or after attainment of age 65, from 100% up to
150% of current base salary. Upon termination for the convenience of the
Company, an amount equal to his then current annual base salary.
Termination for convenience means termination at the behest of the Company,
whether by dismissal, by requested resignation or by resignation which
follows a greater than 20% decrease in the employee's salary.
(c) In the event of termination of employment for certain illnesses or
disabilities which preclude an employee from rendering satisfactory
services for a period of three months or more, an amount from 50% up to
100% of his then current annual base salary.
(d) In the event of death, an amount payable to his beneficiary or
estate equal to 150% his annual base salary at the time of death.
If, at December 31, 1995, a merger or sale had occurred as set forth above,
the Company would have been obligated to make payments to Mr. Landon, Mr.
Gaston, Mr. Becker, Mr. Fuchs and Mr. Denison in the amounts of $1,286,158,
$1,103,566, $461,945, $356,619 and $429,162, respectively.
19
<PAGE> 22
RETIREMENT PLANS
The Company has a non-contributory pension plan covering substantially all
of its employees. The Company contributes such amounts as are necessary, on an
actuarial basis, to provide the plan with assets sufficient to meet the benefits
to be paid to plan members. Contributions under the plan are based on length of
service and average annual compensation. Compensation includes normal salary and
wages and does not include bonuses, overtime pay, reimbursements or special pay.
Upon normal retirement, age 65, the participant's monthly benefit will be equal
to 2% of the "average monthly earnings" multiplied by the number of years of
service to the Company less 50% of the monthly primary social security benefits
to which the individual is entitled. The participant's "average monthly
earnings" equals the average monthly compensation for the highest 60 consecutive
months of compensation within the last 120 months immediately preceding
retirement. In 1993, there was no actuarially-determined pension expense as a
result of the plan reaching the full funding limitation.
On August 24, 1991, the Board of Directors approved the Non-qualified
Supplemental Benefit Plan. The plan is a non-qualified, unfunded, deferred
compensation arrangement designed solely to equalize the total benefits certain
key executives would have received under the Company's Retirement Plan, but for
the limitations on benefits imposed by Section 415 of the Internal Revenue Code
(as reflected in Section 7.01 of the Retirement Plan). The plan is intended to
benefit the Company and its affiliates by recognizing the value of the past and
present services of the key executives covered by the plan and to encourage them
to continue careers with the Company and its affiliates. The Compensation and
Nominating Committee administers and interprets the provisions of the plan.
Participants are those key executives designed from time to time by the Board of
Directors.
Following are the estimated annual benefits under both Retirement Plans for
various lengths of service and compensation levels based on the assumption that
the retiree will choose a life-only benefit and is retiring at age 65 during the
year 1995. Election of the other available payment options could change the
benefit; however, all benefits are actuarially equivalent. For annual benefits
in excess of $120,000 or salaries in excess of $150,000, assume the employee is
a member of both retirement plans.
PENSION ACCRUAL BASED ON YEARS OF SERVICE
<TABLE>
<CAPTION>
5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS 45 YEARS
AVERAGE ANNUAL SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE
- ------------------ ------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$100,000.......... 2,806 12,806 22,806 32,806 42,806 52,806 62,806 72,806 82,806
$150,000.......... 7,806 22,806 37,806 52,806 67,806 82,806 97,806 112,806 127,806
$200,000.......... 12,806 32,806 52,806 72,806 92,806 112,806 132,806 152,806 172,806
$250,000.......... 17,806 42,806 67,806 92,806 117,806 142,806 167,806 192,806 217,806
$300,000.......... 22,806 52,806 82,806 112,806 142,806 172,806 202,806 232,806 262,806
$350,000.......... 27,806 62,806 97,806 132,806 167,806 202,806 237,806 272,806 307,806
$400,000.......... 32,806 72,806 112,806 152,806 192,806 232,806 272,806 312,806 352,806
$450,000.......... 37,806 82,806 127,806 172,806 217,806 262,806 307,806 352,806 397,806
$500,000.......... 42,806 92,806 142,806 192,806 242,806 292,806 342,806 392,806 442,806
$550,000.......... 47,806 102,806 157,806 212,806 267,806 322,806 377,806 432,806 487,806
$600,000.......... 52,806 112,806 172,806 232,806 292,806 352,806 412,806 472,806 532,806
</TABLE>
The years of service, as of December 31, 1995, for Mr. Landon, Mr. Gaston,
Mr. Becker, Mr. Fuchs and Mr. Denison are 43, 18, 22, 18 and 18 years,
respectively.
20
<PAGE> 23
PERFORMANCE GRAPHS
The following graph compares the Company's cumulative total shareholder
return (Common Stock appreciation plus dividends on a reinvested basis) over the
last five fiscal years compared to the NASDAQ Market Index and the NASDAQ
Insurance Index.
FIVE-YEAR CUMULATIVE TOTAL RETURN
AMERICAN BANKERS INSURANCE GROUP, INC., NASDAQ MARKET INDEX
AND NASDAQ INSURANCE INDEX
[GRAPH]
<TABLE>
<CAPTION>
AMERICAN
MEASUREMENT PERIOD BANKERS IN- NASDAQ MARKET NASDAQ IN-
(FISCAL YEAR COVERED) SURANCE INDEX SURANCE INDEX
<S> <C> <C> <C>
1990 100 100 100
1991 243 161 141
1992 293 187 191
1993 330 215 204
1994 311 210 192
1995 516 296 273
</TABLE>
The graph assumes that the value of the investment in the Company's Common
Stock and each index was $100 at December 31, 1990, and that all dividends were
reinvested.
INDEPENDENT PUBLIC ACCOUNTANTS
The firm of Price Waterhouse, Independent Certified Public Accountants,
certified the accounts of the Company for the last fiscal year ended December
31, 1995. No member of such firm or any associate thereof has any financial
interest in the Company or in its subsidiaries. A member of such firm is
expected to be present at the Meeting and will be given the opportunity to make
a statement and to respond to appropriate questions.
SHAREHOLDERS' PROPOSALS
Any shareholder of the Company who wishes to present a proposal to be
considered at the next Annual Meeting of Shareholders of the Company and who
wishes to have such proposal presented in the Company's Proxy Statement for such
meeting, must deliver such proposal in writing to the Company at 11222 Quail
Roost Drive, Miami, Florida 33157-6596, not later than December 20, 1996.
21
<PAGE> 24
OTHER MATTERS
The Board of Directors has no knowledge of any other matters which may come
before the Meeting and does not intend to present any other matters. However, if
other matters shall properly come before the Meeting or any adjournment thereof,
the persons named as proxies will have discretionary authority to vote the
shares represented by the accompanying proxy in accordance with their best
judgment.
/s/ Leonardo F. Garcia
BY ORDER OF THE BOARD OF DIRECTORS
Leonardo F. Garcia
Secretary
April 19, 1996
THE COMPANY WILL FURNISH WITHOUT CHARGE TO ANY SHAREHOLDER SUBMITTING A
WRITTEN REQUEST, A COPY OF THE COMPANY'S 1995 ANNUAL REPORT ON FORM 10-K FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION INCLUDING THE FINANCIAL STATEMENTS
AND SCHEDULES THERETO. SUCH WRITTEN REQUEST SHOULD BE DIRECTED TO P. BRUCE
CAMACHO, FIRST SENIOR VICE PRESIDENT, INVESTOR RELATIONS, AT THE ADDRESS STATED
HEREIN.
22
<PAGE> 25
APPENDIX A
AMERICAN BANKERS INSURANCE GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS - MAY 22, 1996
The undersigned hereby appoints R. KIRK LANDON, GERALD N.
P GASTON and LEONARDO F. GARCIA, and each of them, proxies with
R the power of substitution to each for and in the name of the
O undersigned to vote all shares of Common Stock of American
X Bankers Insurance Group, Inc. (the "Company") which the
Y undersigned would be entitled to vote at the Annual Meeting of
Shareholders of the Company to be held on Wednesday, May 22,
1996 at 10:00 A.M. Eastern time in the Auditorium of the
Company's Headquarters, 11222 Quail Roost Drive, Miami, Florida
33157 and at any and all adjournments or postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1 & 2.
The shares represented by this proxy will be voted as
directed by the shareholder. If no direction is given when the
duly executed proxy is returned, such shares will be voted "FOR"
Items 1 & 2. Please mark your vote, date and sign your name as
it appears on the mailing label, detach and return it in the
enclosed envelope.
-----------
SEE REVERSE
SIDE
-----------
Detach Card
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
/X/ Please mark
votes as in
this example.
This Proxy is being solicited by the Board of Directors of American
Bankers Insurance Group, Inc.
THIS PROXY WILL BE VOTED AS DIRECTED, IF NO DIRECTION IS INDICATED. THIS
PROXY WILL BE VOTED FOR ITEMS 1 & 2.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
THE AMERICAN BANKERS INSURANCE GROUP, INC. BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 & 2.
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ITEM 1 - Election of the following nominees as ITEM 2 - In their discretion, the FOR AGAINST ABSTAIN
Directors for a term expiring in 1999: proxies are authorized to consider / / / / / /
Nicholas A. Buoniconti, Armando M. Codina, and act upon such other matters as
Peter J. Dolara, Eugene M. Matalene, Jr. may properly come before the meeting
and Nicholas J. St.George. or any and all postponements or
adjournments thereof.
FOR ALL WITHHELD FOR
NOMINEES ALL NOMINEES
/ / / /
WITHHELD FOR THE FOLLOWING ONLY:
(Write the name of the nominee(s) in space below)
- -------------------------------------------------
- -------------------------------------------------
If acting as executor, administrator, trustee, guardian, etc., you should so
indicate when signing. If the signer is a corporation, please sign the full corporate
name, by a duly authorized officer. If shares are held jointly, each shareholder named
should sign.
Signature
--------------------------------------------------------------
Signature if held jointly
----------------------------------------------
Dated: , 1996
--------------------------
</TABLE>
<PAGE> 26
Detach Card
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
AMERICAN BANKERS INSURANCE GROUP, INC.
DO YOU HAVE ANY COMMENTS?
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CONTINUED AND TO BE SIGNED ON REVERSE SIDE
