<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 23, 1997
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 23, 1997 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 act upon a proposal to approve the adoption of an amendment to
the Third Amended and Restated Articles of Incorporation of the Company to
increase the authorized capital stock of the Company.
3. To act upon a proposal to approve the adoption of an amendment to
the 1994 Amended and Restated Directors' Deferred Compensation Plan to
increase the number of shares of Common Stock reserved for issuance
thereunder from 100,000 to 200,000.
4. To act upon a proposal to approve the adoption of the American
Bankers Insurance Group, Inc. 1997 Equity Incentive Plan.
5. 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 28, 1997 are
entitled to notice of and to vote at the meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ARTHUR W. HEGGEN
Arthur W. Heggen
Secretary
April 11, 1997
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 23, 1997
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 Friday,
May 23, 1997, 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 11, 1997.
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 for this Meeting 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 28, 1997 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 7, 1997, the Company had 20,627,148 shares of Common Stock outstanding all
of which 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 Third 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 28, 1997 must be present, either by person or by proxy, at the Meeting to
constitute a quorum. In general, abstentions and broker non-votes are counted as
present or represented for the purposes of determining quorum for the Meeting. A
non-vote occurs when a broker or nominee holding shares for a beneficial owner
votes on one proposal, but does not vote on another proposal because, in respect
of such other proposal, the broker or nominee does not have discretionary voting
power and has not received instructions from the beneficial owner. 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. Because
the nominees for director are running without opposition, abstentions and broker
non-votes on the election of directors have no legal effect. With respect to the
approval of the proposed amendment to the Third Amended and Restated Articles of
Incorporation, the Florida Business Corporation Act requires the affirmative
vote of a majority of all of the outstanding shares of Common Stock.
Accordingly, abstentions and broker non-votes would have the effect of votes
cast against the proposed amendment. The other proposals set forth in this proxy
statement and for such other business as may properly come before the Meeting,
or any and all postponements or adjournments thereof, require the affirmative
vote of the holders of a majority of the Common Stock represented in person or
by proxy at the Meeting and entitled to vote on the subject matter. As a result,
abstentions would have the effect of votes cast against and broker non-votes
have no legal effect on the respective proposal.
<PAGE> 4
PRINCIPAL SHAREHOLDERS
The following persons are the only persons who on March 7, 1997, to the
knowledge of the Company, owned beneficially more than 5% of the outstanding
voting stock of the Company 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 Common
Stock............... FMR Corp. 2,581,146(a) 12.51%
82 Devonshire Street
Boston, Massachusetts 02109
Barnett Banks Trust Co., N.A. as Trustee of 1,759,343(b) 8.52%
The American Bankers Insurance Group, Inc.
Leveraged Employee Stock
Ownership Trust
9000 South Side Boulevard
Building 100
Jacksonville, Florida 32256
R. Kirk Landon 1,526,260(c) 7.40%
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 2,581,146 shares of Common Stock and
have sole dispositive power over these shares. FMR has sole voting power
with respect to 277,075 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 1,759,343 shares. The Trustee,
Barnett Banks Trust Co., N.A., has sole voting power with respect to 393,621
shares and shared voting power with respect to 1,365,722 shares.
(c) Includes 401,526 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 owned by the Landon Corporation, of which Mr. Landon is
the controlling shareholder; 110,000 shares owned by Mr. Landon's spouse;
41,000 shares owned by R. Kirk/B. Landon Foundation, of which Mr. Landon is
a director; 64,912 shares owned directly by the R. Kirk Landon Revocable
Trust, for which Mr. Landon is the trustee; 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; 13,651 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. 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. Excludes 230,700
shares held by a trust established pursuant to the Last Will and Testament
of Dorothy P. Landon, of which Mr. Landon (together with Northern Trust Co.,
Chicago, Illinois) is trustee because neither Mr. Landon nor a member of his
immediate family have a pecuniary interest in the shares held by the Trust.
2
<PAGE> 5
SECURITY HOLDINGS OF MANAGEMENT
The following table sets forth the amount of Common Stock beneficially
owned or acquirable within 60 days by each director, director emeritus, named
executive officers, and directors and executive officers of the Company as a
group as of March 7, 1997:
<TABLE>
<CAPTION>
AMOUNT OF
SHARES PERCENTAGE
BENEFICIALLY OF
NAME OWNED OWNERSHIP
- ---- ------------ ----------
<S> <C> <C>
William H. Allen, Jr. ...................................... 5,590(a) *
Nicholas A. Buoniconti...................................... 7,073(b) *
Armando M. Codina........................................... 21,102(c) *
Peter J. Dolara............................................. 5,561(d) *
Gerald N. Gaston............................................ 318,954(e) 1.55%
Daryl L. Jones.............................................. 2,903(f) *
James F. Jorden............................................. 5,850(g) *
Jack F. Kemp................................................ 20,000(h) *
Bernard P. Knoth............................................ --(i) *
R. Kirk Landon.............................................. 1,526,260(j) 7.40%
Malcolm G. MacNeill**....................................... 37,717(k) *
Eugene M. Matalene, Jr. .................................... 5,000(l) *
Albert H. Nahmad............................................ 33,207(m) *
Nicholas J. St. George...................................... 7,583(n) *
Robert C. Strauss........................................... 7,210(o) *
George E. Williamson II..................................... 18,234(p) *
Eugene E. Becker............................................ 105,956(q) *
Jay R. Fuchs................................................ 41,038(r) *
Jason J. Israel............................................. 30,992(s) *
Bernard Janis***............................................ 2,359 *
John P. Laborde***.......................................... 500 *
Directors and Executive Officers as a Group**** (25 persons
including those named above).............................. 2,306,966(t) 11.18%
</TABLE>
- ---------------
(a) Includes 590 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.
(b) Includes 3,073 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 3,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(c) Includes 11,102 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 3,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(d) Includes 1,061 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.
(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; 1,133 shares owned by Mr. Gaston's son; 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; and 70,000 shares acquirable upon conversion of a convertible
debenture due May 24, 1999 under the 1994 ABIG Key Executive Debenture
Plan.
(f) Includes 1,903 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.
(g) Includes 220 shares held indirectly by an Individual Retirement Account
Trust and 3,000 shares acquirable under the 1994 Non-Employee Directors'
Stock Option Plan.
(h) Includes 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.
3
<PAGE> 6
(i) Director Elect.
(j) 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.
(k) Includes 6,000 shares owned by Mr. MacNeill's wife; 485 shares owned by his
daughter; and 18,550 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan.
(l) Includes 3,000 shares acquirable under the 1994 Non-Employee Directors'
Stock Option Plan.
(m) Includes 26,000 shares owned by Watsco, Inc.; 10 shares owned by Mr.
Nahmad's son; 3,197 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan; and 3,000 shares acquirable under
the 1994 Non-Employee Directors' Stock Option Plan.
(n) Includes 3,573 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 3,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(o) Includes 3,210 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 3,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(p) Includes 15,234 shares acquirable under the 1994 Amended and Restated
Directors' Deferred Compensation Plan and 3,000 shares acquirable under the
1994 Non-Employee Directors' Stock Option Plan.
(q) Includes 49,361 shares owned by Mr. Becker directly; 8,600 Restricted
Shares under the 1994 Senior Management Stock Option Plan owned by Mr.
Becker directly; 3,000 Restricted Shares under the 1991 Stock
Option/Restricted Stock Award Plan owned by Mr. Becker directly; 4,899
shares owned by Mr. Becker's wife; 5,431 shares allocated under the
Company's Leveraged Employee Stock Ownership Plan; and 34,665 shares
acquirable under the 1987 Executive Stock Option/Dividend Accrual Plan.
(r) Includes 24,300 shares owned by Mr. Fuchs directly; 6,600 Restricted Shares
under the 1994 Senior Management Stock Option Plan owned by Mr. Fuchs
directly; 6,000 Restricted Shares under the 1991 Stock Option/Restricted
Stock Award Plan owned by Mr. Fuchs directly; and 4,138 shares allocated
under the Company's Leveraged Employee Stock Ownership Plan.
(s) Includes 9,265 shares owned by Mr. Israel directly; 4,800 Restricted Shares
under the 1994 Senior Management Stock Option Plan owned by Mr. Israel
directly; 3,000 Restricted Shares under the 1991 Stock Option/Restricted
Stock Award Plan owned by Mr. Israel directly; 3,562 shares allocated under
the Company's Leveraged Employee Stock Ownership Plan; and 10,365 shares
acquirable under the 1987 Executive Stock Option/Dividend Accrual Plan.
(t) 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 (h) above and footnote (c)
under "Principal Shareholders" of this Proxy Statement.
* Denotes less than 1% ownership.
** Retiring.
*** Director Emeritus.
**** Information regarding the Executive Officers of the Company is contained in
the Company's 1996 Annual Report on Form 10-K.
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 Third Amended and Restated Articles of
Incorporation, directors of the Company are classified and are elected for
staggered terms of three years. Class II directors will be elected to office at
the Meeting. The nominees for Class II directorships are Messrs. Gaston, Jones,
Knoth, Nahmad and Williamson. Class III directors and Class I directors will be
elected in 1998 and 1999, respectively, and every third year thereafter.
4
<PAGE> 7
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.
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 below. 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.
TO BE ELECTED FOR A TERM OF THREE YEARS
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE COMPANY;
PRINCIPAL OCCUPATION FOR THE PAST 5 YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ---- ------------------------------------------ --- --------
<S> <C> <C> <C>
GERALD N. GASTON(e)(f)(g)............ President (since 1980) and Chief Executive 64 1980
Officer of the Company (since 1996), Vice (1977)
Chairman of the Board of the Company
(since 1980), Chief Operating Officer of
the Company (1982-1995); Chief Executive
Officer (since 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); Director,
BALAC (since 1990); Director, Eastman
School of Music, University of Rochester
(education) New York, NY (since 1996);
Director, Loyola University (education)
New Orleans, LA (1989-1996).
</TABLE>
5
<PAGE> 8
<TABLE>
<CAPTION>
POSITION AND OFFICES WITH THE COMPANY;
PRINCIPAL OCCUPATION FOR THE PAST 5 YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
- ---- ------------------------------------------ --- --------
<S> <C> <C> <C>
41 1994
DARYL L. JONES(f).................... State of Florida Senator District 40
(since 1992); Major/F16 Pilot, U.S. Air
Force Reserves (since 1989); Attorney for
Adorno and Zeder (attorneys-at-law),
Miami, FL (since 1996); Senior Vice
President, Douglas James Securities
(municipal bond underwriter), (1994-1996);
Attorney for Fowler White Burnett Hurley
Bonick Strickroot PA (attorneys-at-law),
Miami, FL. (1996-1991); State of Florida
Representative District 118 (1990-1992);
Attorney, Dade County Attorney's Office
(1988-1990).
BERNARD P. KNOTH, S.J. .............. President, Loyola University (education), 48 *
New Orleans, LA (since 1995); Associate
Dean of Georgetown University (education),
Washington, DC (1990-1995).
ALBERT H. NAHMAD(b)(d)(e)(g)......... President, Chairman of the Board and Chief 56 1993
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)(f)........ President, Williamson Cadillac Company, 51 1985
(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>
- ---------------
* New nominee for director.
6
<PAGE> 9
<TABLE>
<CAPTION>
TO CONTINUE IN OFFICE FOR TWO YEARS
POSITION AND OFFICES WITH THE COMPANY;
PRINCIPAL OCCUPATION FOR THE 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 Officer and 56 1993
Director, Columbia Laboratories, Inc.
(pharmaceutical research and development),
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 (1995-1996);
Director, the Sports Authority (sporting
goods), Ft. Lauderdale, FL (since 1996).
ARMANDO M. CODINA(c)(d)(e)(g)........ Chairman of the Board of Codina Group Inc. 50 1987
(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(c)(d)................ Officer/Senior Vice President American 59 1995
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, Furman Selz LLC 49 1990
(investment banking), New York, NY (since
1996); Managing Director, PaineWebber
Incorporated (investment banking), New
York, NY (1987-1996); Director, BALAC,
(since 1991); Director, Empire of
Carolina, Inc. (toy industry), Delray
Beach, FL (since 1995).
NICHOLAS J. ST. GEORGE(d)............ President, Chief Executive Officer (since 58 1983
1979) and Director (since 1972) of Oakwood
Homes Corporation (manufacturer, retailer,
and financier of manufactured homes),
Greensboro, NC; Director, Legg Mason, Inc.
(investment banking), Baltimore, MD (since
1983).
</TABLE>
7
<PAGE> 10
<TABLE>
<CAPTION>
TO CONTINUE IN OFFICE FOR ONE YEAR
POSITION AND OFFICES WITH THE COMPANY;
PRINCIPAL OCCUPATION FOR THE 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. (South) 61 1992
(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......................... Co-Director, Empower America (public 61 1995*
policy/think tank), Washington, DC (since
1993); Secretary, U.S. Department of
H.U.D., Washington, DC (1990-1993);
Director, Carson Products Company
(marketer of ethnic health and beauty
aids), Savannah, GA (since 1996);
Director, Proxicom, (provider of
integrated Internet solutions), McLean, VA
(since 1997); Director, Everen Securities,
Inc. (securities corporation), Chicago, IL
(since 1997); Director, Landair Services
(air transport service), Greenville, TN
(1993-1996); 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
(1993-1996); Director, Cyrix (designer,
developer and manufacturer of high
performance processors for personal
computers), Richardson, TX (1993-1996);
Director, World Corp. (air transportation
services and transaction processing),
Herndon, VA (1995-1996).
JAMES F. JORDEN(d)(e)(f)(g).......... Senior Managing Partner, Jorden Burt 55 1982
Berenson & Johnson LLP (attorneys-at-law),
Miami, FL (since 1988).
- ---------------
* Resigned September 5, 1996 and was reinstated November 20, 1996.
</TABLE>
8
<PAGE> 11
<TABLE>
<CAPTION>
TO CONTINUE IN OFFICE FOR ONE YEAR
POSITION AND OFFICES WITH THE COMPANY;
PRINCIPAL OCCUPATION FOR THE PAST 5 YEARS; DIRECTOR
NAME OTHER DIRECTORSHIPS, IF ANY AGE SINCE(A)
---- ------------------------------------------ --- --------
<S> <C> <C> <C>
67 1980)
R. KIRK LANDON(d)(e)(f)(g)........... Chairman of the Board (since 1980), Chief (1957
International Officer of the Company, ABIC
and ABLAC (since 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); Vice 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 Operating Officer, 55 1992
Ivax Corporation, (generic drug
manufacturer) (since 1997); President and
Chief Executive Officer, Cordis, a Johnson
& Johnson company (1996-1997), 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>
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 1996, the firm received approximately $3,785,400 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 an affiliate of
Oakwood Homes Corporation. In 1996, ABLAC ceded premium of $4,541,367 to Oakwood
Life Insurance Company, LTD. under these reinsurance contracts.
Mr. Williamson is President of Williamson Cadillac Company, Williamson
Saturn Inc. and WWW Enterprises (automobile dealerships). In 1996, Mr.
Williamson's automobile dealerships sold ABLAC Credit Life, Health and
Disability policies. Total net written premium by these dealerships was $192,784
in 1996.
The Company believes these transactions were made on terms no less
favorable than that which could have been received by unaffiliated third
parties.
9
<PAGE> 12
THE BOARD OF DIRECTORS AND ITS STANDING COMMITTEES
BOARD OF DIRECTORS
The Board of Directors held five meetings during the year ended December
31, 1996. 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 and Dolara.
AUDIT COMMITTEE
The Board of Directors of the Company has an Audit Committee currently
composed of Messrs. Strauss, Allen, Nahmad and Williamson. During the year ended
December 31, 1996, 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 of those
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 currently composed of Messrs. Codina, Buoniconti, Dolara and MacNeill.
During the year ended December 31, 1996, 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, 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,
10
<PAGE> 13
(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.
SECTION 16 (A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 1996. 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 the Boards of any subsidiary of the Company). 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 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, 1996, ten 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 have been
reserved. At this year's Meeting, a proposal to amend the Deferred Plan to
increase the number of shares of Common Stock reserved for issuance from 100,000
to 200,000 will be presented to the shareholders. If approved, the amendment
will immediately go into effect.
NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
On May 25, 1994, shareholders approved the adoption of the 1994
Non-Employee Directors' Stock Option Plan ("Non-Employee Directors' 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 date of
grant. Options granted are not exercisable
11
<PAGE> 14
before the six-month anniversary nor after the fifth anniversary from the date
of the grant. When adopted, there were 50,000 shares authorized and currently
options for 39,000 shares have been issued. At this year's Meeting, a proposal
to adopt the American Bankers Insurance Group, Inc. 1997 Equity Incentive Plan
will be presented to shareholders. This plan includes provisions under which
each non-employee director will receive options on substantially the same terms
as the Non-Employees Directors' Plan, except that the options will not be
exercisable before the one year anniversary from the date of grant. If the
proposed plan is approved, the Company shall cease making grants under the
Non-Employee Directors' Plan.
ITEM 2
AMENDMENT TO THE THIRD AMENDED AND
RESTATED ARTICLES OF INCORPORATION
On February 19, 1997, the Company's Board of Directors (i) approved an
amendment to Article IV of the Third Amended and Restated Articles of
Incorporation to increase the authorized number of shares of Capital Stock of
the Company from 35,000,000 shares to 110,000,000 shares of which 100,000,000
shall be Common Stock, with a par value of $1.00 and 10,000,000 shall be
Preferred Stock, without par value, and (ii) directed that the amendment in the
form set forth in Exhibit A (the "Amendment") be submitted to a vote of the
shareholders of the Company at the Meeting.
The Third Amended and Restated Articles of Incorporation of the Company
(the "Articles") currently provide that the authorized capital stock of the
Company shall consist of 35,000,000 shares of Common Stock, par value $1.00 per
share (the "Common Stock"), and 3,500,000 shares of Preferred Stock, without par
value (the "Preferred Stock"). The shares of Preferred Stock may be issued from
time to time in one or more series with the designations and the powers,
preferences and relative, participating, optional or other special rights, and
qualifications, limitations and restrictions thereof, including, without
limitation the voting powers, if any, the dividend rate, conversion rights,
redemption price, or liquidation preference, and in such number as established
by the Board of Directors. The Board of Directors has designated two series of
Preferred Stock -- Series A Participating Preferred Stock ("Series A Preferred
Stock") and $3.125 Series B Cumulative Convertible Preferred Stock ("Series B
Preferred Stock"). As of March 7, 1997, there were 20,627,148 shares of Common
Stock outstanding and there were 2,300,000 shares of Series B Preferred Stock
outstanding. As of that December 31, 1996 there were, 1,310,043 shares of Common
Stock reserved for issuance under the Company's various compensation plans (the
"Plans"), including 637,864 applicable to outstanding grants under the Plan.
There has been no significant activity regarding grants and exercises in 1997.
There are 2,297,010 shares of Common Stock were reserved for issuance upon
conversion of the Series B Preferred Stock into Common Stock. In addition,
350,000 shares of Series A Preferred Stock were reserved for issuance under the
Company's Rights Agreement dated February 24, 1988, as amended, (the "Rights
Plan"). Accordingly, there were as of March 7, 1997, approximately 10,765,000
shares of unissued and unreserved Common Stock and 850,000 shares of
undesignated, unreserved and unissued Preferred Stock.
The proposed increase in authorized shares of capital stock will enhance
the Company's flexibility in connection with possible future actions, such as
stock splits, stock dividends, acquisitions, financing transactions, employee
benefit plan issuances, a new shareholder rights plan to replace the Rights Plan
which currently expires on March 10, 1998, and such other corporate purposes as
may arise. Having such authorized capital stock available for issuance in the
future would give the Company greater flexibility and would allow additional
shares of capital stock to be issued without the expense and delay of a special
shareholders' meeting. Such a delay might deny the Company the flexibility the
Board views as important in facilitating the effective use of the Company's
capital stock. Except for the issuance of shares under the Company's stock
option plans (and, if approved by the shareholders at the Meeting, the American
Bankers Insurance Group, Inc. 1997 Equity Incentive Plan and the 1994 Amended
and Restated Directors' Deferred Compensation Plan), the Company is not
presently engaged in any negotiations with respect to the use of any shares of
the additional authorized capital stock, nor are there currently any
commitments, arrangements or understandings with respect to the issuance of such
shares.
12
<PAGE> 15
The future issuance of additional shares of capital stock on other than a
pro rata basis may dilute the ownership of current shareholders. The rules of
the National Association of Securities Dealers, Inc. ("NASD") currently require
shareholder approval of certain issuances of shares of Common Stock or
securities convertible into Common Stock by issuers of securities traded on the
Nasdaq Stock Market's National Market, on which the Company's Common Stock and
Series B Preferred Stock are currently traded. These issuances include: (i)
stock option or purchase plans for directors or officers where the securities
that may be issued exceed the lesser of 1% of the number of outstanding shares
of Common Stock, 1% of the voting power outstanding or 25,000 shares; (ii)
actions resulting in a change of control of the company; (iii) acquisition
transactions involving directors, officers or substantial security holders where
the present or potential issuance of such securities could result in an increase
in outstanding common shares of 5% or more; (iv) acquisition transactions
generally where the present or potential issuance of such securities could
result in an increase in outstanding common shares of 20% or more; and (v)
certain other sales or issuances of Common Stock (or securities convertible into
or exercisable for Common Stock) in a non-public offering equal to 20% or more
of the voting power outstanding before the issuance for less than the greater of
book or market value of the stock. Exceptions to these rules may be made upon
application to the NASD when (i) the delay in securing shareholder approval
would seriously jeopardize the financial viability of the enterprise and (ii)
reliance by the company on this exception is expressly approved by a company's
audit committee or a comparable body. In other instances, the issuance of
additional shares of capital stock would be within the discretion of the Board
of Directors, without the requirement of further action by shareholders except
as otherwise required by applicable law or any stock exchange on which the
Company's securities may then be listed.
The proposed shares of capital stock for which authorization is sought
would increase the number of shares of capital stock available for issuance by
the Company, but would have no effect upon the terms of the Common Stock or the
rights of the holders of such stock. If and when issued, the proposed additional
authorized shares of Common Stock would have the same rights and privileges as
the shares of Common Stock presently outstanding and the proposed additional
Preferred Stock would have their designations, rights and privileges as
established by the Board of Directors from time to time. Holders of capital
stock will not have pre-emptive rights to purchase additional shares of capital
stock.
The issuance of additional shares could also be used to block an
unsolicited acquisition through the issuance of large blocks of stock to persons
or entities considered by the Company's officers and directors to be opposed to
such acquisition, which might be deemed to have an anti-takeover effect (i.e.,
might impede the completion of a merger, tender offer or other takeover
attempt). In fact, the mere existence of such a block of authorized but unissued
shares, and the Board's ability to issue such shares without shareholder
approval, might deter a bidder from seeking to acquire shares of the Company on
an unfriendly basis. While the authorization of additional shares of capital
stock might have such effects, the Board of Directors of the Company does not
intend or view the increase in capital stock as an anti-takeover measure, nor is
the Company aware of any proposed transactions of this type.
RECOMMENDATION
The Board of Directors recommends a vote FOR the adoption of the Amendment
to the Third Amended and Restated Articles of Incorporation to increase the
authorized capital stock of the Company from 35,000,000 shares to 110,000,000
shares of which 100,000,000 shares shall be designated Common Stock, with a par
value of $1.00, and 10,000,000 shares shall be designated Preferred Stock,
without par value, substantially in the form of Exhibit A hereto. The
affirmative vote of a majority of all the outstanding shares of the Company's
Common Stock will be required to approve the adoption of the Amendment. If the
Amendment is approved by the shareholders of the Company, such amendment will
become effective when articles of amendment to the Company's Articles are filed
with the Florida Department of State.
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<PAGE> 16
ITEM 3
AMENDMENT TO DIRECTORS' 1994 AMENDED
AND RESTATED DEFERRED COMPENSATION PLAN
On February 19, 1997, the Company's Board of Directors amended the Amended
and Restated Directors' Deferred Compensation Plan (the "Deferred Plan"),
subject to shareholder approval, to increase the total number of shares reserved
for issuance upon exercise of options to be granted under the Plan. The
amendment increases the total number of shares available for amounts deferred
under the Deferred Plan from 100,000 to 200,000 shares.
The purpose of the Deferred Plan is to assist the Company in attracting and
retaining directors. There are currently twenty-nine (29) individuals who are
Directors of the Company and its subsidiaries who will be eligible under the
Deferred Plan.
The Compensation and Nominating Committee of the Board of Directors (the
"Committee") administers the Deferred Plan. The Committee must consist of at
least three members who qualify under Rule 16b-3, promulgated under the
Securities Exchange Act of 1934 ("Exchange Act"). The Committee has full power
and authority to interpret the Deferred Plan and establish rules for its
administration.
Directors who elect to defer their director's compensation must make such
election in writing prior to an annual meeting of the shareholders. Upon making
such election, all fees earned during his term as a Director 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.
Fees that are deferred in cash will be deposited in the participant's
account on the date they are earned. The balance in the account will earn
interest at the Company's net investment income rate for the previous year. The
account will be credited with interest quarterly on the last day of each
calendar quarter.
Fees that are deferred in stock equivalents will be deposited in the
participant's account in cash on the date they are earned. The balance in the
account will earn interest at the Company's net investment income rate for the
previous year. The account will be credited with interest quarterly on the last
day of each calendar quarter. The cash balance in the account will then be
converted to stock equivalents based on the price of the Company's Common Stock
on the last day of each calendar quarter. Dividend income will be credited to
the participants account as cash on each dividend payment date.
In the event of retirement, resignation or death the cash balance in the
participant's account and stock certificates representing the number of stock
equivalents in the participants account shall be distributed to the participant
or his designated beneficiary within thirty (30) days.
The Board of Directors, subject to shareholder approval, if required, may
amend, alter or discontinue the Deferred Plan, except that no amendment shall be
made which would impair the rights of a participant or his beneficiary under the
Deferred Plan.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Under the Internal Revenue Code of 1986, as amended, a Director who elects
in advance to defer future fees does not recognize taxable income when such fees
are earned. Taxable income will be recognized on the earlier of: (i)
resignation, (ii) death or (iii) retirement.
The amount of taxable income recognized by a director will include the
total cash value of deferred benefits paid (including dividends and interest).
The Company will be entitled to a tax deduction for all deferred benefits paid
at the same time the taxable income is recognized by such Directors. The Company
will comply with any information reporting requirements in effect when deferred
benefits are paid.
14
<PAGE> 17
PLAN BENEFITS
DIRECTORS' DEFERRED COMPENSATION PLAN
<TABLE>
<CAPTION>
NAME AND POSITION DOLLAR VALUE ($)(1) NUMBER OF SHARES
- ----------------- ------------------- ----------------
<S> <C> <C>
R. Kirk Landon, Chairman................................... $ 798,584 13,651
All Current Non-Employee Directors Electing to Defer(2).... $3,621,852 61,912
</TABLE>
- ---------------
(1) This represents the number of stock equivalent currently outstanding
multiplied by the last trade price as of March 7, 1997.
(2) Currently, there are 12 Non-Employee Directors electing to defer.
On March 7, 1997, the last trade price of the Common Stock on the Nasdaq
Stock Market's National Market was $58.50 per share.
RECOMMENDATION
The Board of Directors of the Company is of the opinion that approval of
the adoption of the amendment to the Amended and Restated Directors' Deferred
Compensation Plan is in the best interests of the Company and its shareholders,
and accordingly, the Board of Directors recommends that the shareholders vote
FOR the proposed amendment to the Deferred Plan. The affirmative vote of a
majority of the shares of the Company's Common Stock represented in person or by
proxy and entitled to vote at the Meeting will be required to approve the
adoption of the amendment to the Deferred Plan.
ITEM 4
APPROVAL OF
AMERICAN BANKERS INSURANCE GROUP, INC.
1997 EQUITY INCENTIVE PLAN
The American Bankers Insurance Group, Inc. 1997 Equity Incentive Plan (the
"Plan") was approved by the Board of Directors of the Company on February 19,
1997. The Board of Directors has determined that a new stock incentive plan is
needed to promote the interests of the Company and its shareholders by providing
the Company's directors, officers and employees with an incentive to undertake
and continue service with the Company and its subsidiaries. Pursuant to the
Plan, the Company proposes to grant to selected officers and employees of the
Company and its subsidiaries stock options, stock appreciation rights,
restricted stock awards, merit awards, performance share awards and cash awards
("Awards"). In addition, under the Plan, the Company will grant to each current
member of its Board of Directors who is not an officer or employee of the
Company ("Outside Director") an option to purchase 1000 shares of Common Stock
on the date of each annual meeting of the Board. Except for performance share
awards, there are approximately 260 full-time employees and Outside Directors
who the Compensation and Nominating Committee intends to consider as eligible to
receive Awards. For performance share awards, the Compensation and Nominating
Committee intends that all current full-time employees are eligible. At this
time, there are approximately 2,860 full-time employees. The Plan will be
effective and implemented only after approval of the Company's shareholders at
the Meeting. If approved by the shareholders, no further grants will be made
under the 1991 Stock Incentive Compensation Plan, 1994 Senior Management Stock
Option Plan and 1994 Non-Employee Directors' Stock Option Plan.
The principal provisions of the Plan are summarized below. This summary,
however, does not purport to be complete and is qualified in its entirety by
reference to the provisions of the Plan. A copy of the Plan is set forth as
Exhibit B. Capitalized terms used without definition in this summary have the
meanings specified under the Plan.
15
<PAGE> 18
SHARES AVAILABLE FOR ISSUANCE
Under the Plan, 2,000,000 shares of the Company Common Stock will be
available for grants of Awards. Of this amount, only 700,000 shares in the
aggregate are authorized for the issuance of restricted stock and merit awards
and only 200,000 shares in the aggregate are authorized for the issuance of
performance share awards under the Plan. In general, if any Award under the Plan
expires or terminates without having been fully exercised, or if any Award shall
be forfeited, the shares subject to the unexercised or forfeited portion of such
Award will become available for grants of new Awards under the Plan. In
addition, if there is a change in capitalization of the Company the number of
shares available for grants and the shares subject to outstanding Awards will be
adjusted accordingly.
PLAN ADMINISTRATION
The Plan will be administered by the Compensation and Nominating Committee
of the Board of Directors (the "Committee"). The Board and the Committee will
have the authority to amend the Plan as it deems advisable; subject to any
regulatory or shareholder approval required by law. The Committee may, subject
to any regulatory or shareholder approval required by law, at any time modify or
amend the terms of an outstanding Award so long as the rights of any holder of
an outstanding Award are not adversely affected or no law is violated.
Except with respect to Awards made to Outside Directors and subject to the
terms of the Plan, the Committee will select the individuals to whom Awards will
be granted, determine the number of shares subject to each Award, prescribe the
terms and conditions of each Award granted under the Plan, and make any other
determination necessary or advisable for administration of the Plan.
STOCK OPTIONS
Employee Stock Options
Options may be granted by the Committee as incentive stock options ("ISOs")
intended to qualify for favorable tax treatment under the Federal tax law or as
nonqualified stock options ("NQSOs"). The options may, in the Committee's
discretion, be made transferable.
The Plan requires that the exercise price of all options be equal to or
greater than the fair market value of Common Stock on the date of grant of that
option. The term of any ISO cannot exceed ten years from the date of grant, and
the term of any NQSO cannot exceed ten years and one month from the date of
grant. Subject to the terms of the Plan and any additional restrictions imposed
at the time of grant, options ordinarily will become exercisable, at least in
part, commencing one year after the date of grant.
Outside Directors Stock Options
Under the Plan, each Outside Director will receive options to purchase
1,000 shares of Common Stock on the date of each annual meeting of the Board.
The exercise price of the Outside Directors' options will be equal to the last
trade price of the Common Stock on the date of grant. The options will expire on
the fifth anniversary of their grant.
General Terms
Options will become exercisable in whole or in part on such date as the
Committee determines, but in no event prior to the first anniversary of their
grant. No exercise of options may be for fewer than 50 shares (or the total
remaining shares covered by the option if fewer than 50 shares).
Subject to such rules as the Committee may impose, the exercise price of an
option may be paid in cash, in shares of Common Stock owned by the optionee for
at least six months and not used in a stock option exercise during the preceding
six months, with a combination of cash and shares, or by effecting a "cashless
exercise" with a broker, or with such other consideration as shall be approved
by the Committee (including with respect to an employee stock option, if
permitted by the Committee, the equivalent cash dividend paid
16
<PAGE> 19
upon each share of Common Stock by the Company during the period between the
grant of the option and its exercise to the extent of the number of shares for
which the option was exercised).
The options of an employee or Outside Director who dies or becomes disabled
during the term of the options will continue to be exercisable up to six months
after the death or disability or up to the expiration of the options, whichever
occurs earlier. The options of an employee or Outside Director who leaves the
Company other than as a result of death or disability will terminate
automatically upon termination of employment.
STOCK APPRECIATION RIGHTS
The Committee may grant stock appreciation rights ("SARs"), in tandem with
any options granted under the Plan or may solely grant SARs. An SAR granted in
tandem with an option may be exercised only when the underlying option is
exercisable. An SAR permits the holder to receive (in shares of Common Stock,
cash, or a combination thereof) an aggregate value equal to the excess of the
fair market value of one share of Common Stock over the exercise price specified
in the SAR multiplied by the number of shares covered by such option or portion
thereof which is to be exercised.
The Plan requires that the exercise price of all SARs be equal or greater
than the fair market value of the Common Stock on the date of grant of the SARs.
For SARs granted in tandem with options, the exercise price shall be that of the
related option. SARs will become exercisable on such date as the Committee
determines, but in no case earlier than the first anniversary of their grant.
RESTRICTED STOCK AND MERIT AWARDS TO EMPLOYEES
The Committee may grant shares of Common Stock to participants in such
amounts, and subject to such restrictions and additional terms and conditions,
if any, as the Committee in its sole discretion shall determine consistent with
the provisions of the Plan ("Restricted Stock"). The Committee may also grant
from time to time shares of Common Stock to selected Plan participants free of
restrictions ("Merit Awards") in such amounts as the Committee in its sole
discretion shall determine consistent with the provisions of the Plan. As a
condition to any award of Restricted Stock or Merit Award, the Committee may
require a participant to pay an amount equal to, or in excess of, the par value
of the shares of Restricted Stock or Common Stock awarded to him or her.
Unless otherwise directed by the Committee, Restricted Stock may not be
sold, assigned, transferred, pledged or otherwise encumbered during a
"Restricted Period", which in the case of grants to employees shall not be less
than one year from the date of grant. The Restricted Period with respect to any
outstanding shares of Restricted Stock awarded to employees may be reduced by
the Committee at any time. Except for such restrictions, the employee as the
owner of such stock shall have all the rights of a shareholder including, but
not limited to, the right to vote such stock and to receive dividends thereon as
and when paid.
In the event that an employee's employment is terminated for any reason, an
employee's Restricted Stock will be forfeited; provided, however, that the
Committee may limit such forfeiture in its sole discretion. At the end of the
Restricted Period all shares of Restricted Stock shall be transferred free and
clear of all restrictions to the employee. Employees may be offered the
opportunity to defer receipt of their shares of Restricted Stock and may be
granted a bonus for such deferral.
PERFORMANCE SHARE AWARDS
The Committee may make, in its sole discretion and subject to the terms and
conditions it may determine in accordance with the Plan, awards of Common Stock
or Restricted Stock which shall be earned on the basis of the Company's
performance in relation to established performance measures for a specific
performance period ("Performance Shares"). Such measures may include, but shall
not be limited to, return on investment, earnings per share, return on
shareholders' equity, or return to shareholders. Unless otherwise determined by
the Committee, Performance Shares may not be sold, assigned, transferred,
pledged, or otherwise encumbered during the relevant performance period. The
amount of any Performance Share award
17
<PAGE> 20
in the aggregate during the term of the Plan to an individual shall not exceed
100,000 shares of Common Stock.
Performance Shares may be paid in cash, shares of Common Stock or shares of
Restricted Stock in such proportion as the Committee may determine. An employee
must be employed at the end of the performance period to receive payment of
Performance Shares; provided, however, that in the event an employee's
employment is terminated by reason of death, disability, retirement or other
reason approved by the Committee, the Committee may limit such forfeiture in its
sole discretion. Employees may be offered the opportunity to defer receipt of
payment of earned Performance Shares and may be granted a bonus for such
deferral.
CASH AWARDS
The Committee may, on such terms as it determines in its sole discretion,
make grants of cash or loans in order to help defray in whole or in part the
economic cost (including tax cost) of an Award ("Cash Awards"). The Cash Award
may be granted at the time of grant of any award or upon exercise of any Award.
CHANGE OF CONTROL
In the case of the sale or other disposition of assets by the Company which
results in the termination of an employee's employment or for a "change in
control" of the Company (as defined in the Plan), Awards granted pursuant to the
Plan, may become fully exercisable in the discretion of the Committee or as may
otherwise be provided in the recipient's Award agreement.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following brief description of the tax consequences of awards under the
Plan is based on Federal tax laws currently in effect and does not purport to be
a complete description of such Federal tax consequences.
Options
There are no Federal tax consequences either to the optionee or to the
Company upon the grant of an ISO or a NQSO. On the exercise of an ISO, the
optionee will not recognize any income and the Company will not be entitled to a
deduction, although such exercise may give rise to alternative minimum tax
liability for the optionee. Generally, if the optionee disposes of shares
acquired upon exercise of an ISO within two years of the date of grant or one
year of the date of exercise, the optionee will recognize ordinary income, and
the Company will be entitled to a deduction, equal to the excess of the fair
market value of the shares on the date of exercise over the option price
(limited generally to the gain on the sale). Upon the ultimate sale of the
shares, the balance of any gain or loss will be treated as a capital gain or
loss to the optionee. If the shares are disposed of after the foregoing holding
requirements are met, the Company will not be entitled to any deduction, and the
entire gain or loss for the optionee will be treated as a capital gain or loss.
On exercise of a NQSO, the excess of the date-of-exercise fair market value
of the shares acquired over the option price will generally be taxable to the
optionee as ordinary income and deductible by the Company. The disposition of
shares acquired upon exercise of a NQSO will generally result in a capital gain
or loss for the optionee depending on the cost and holding period of such
shares, but will have no tax consequences for the Company.
Stock Appreciation Rights
The amount of any cash (or the fair market value of any Common Stock)
received by the holder of an option upon the exercise of SARs under the Plan
will be subject to ordinary income tax in the year of receipt and generally the
Company will be entitled to a deduction for such amount.
18
<PAGE> 21
Restricted Stock Awards
An employee who has been awarded Restricted Stock will not recognize
taxable income at the time of the award unless he or she elects otherwise. At
the time any restrictions applicable to the Restricted Stock award lapse, the
recipient will recognize ordinary income and generally the Company will be
entitled to a corresponding deduction equal to the excess of the fair market
value of such stock at such time over the amount paid therefore. Dividends paid
to the recipient on the Restricted Stock during the Restricted Period will be
ordinary compensation income to the recipient and deductible as such by the
Company.
Merit Awards
A grant of Common Stock pursuant to a Merit Award will result in income for
the employee, and a generally a tax deduction for the Company, equal generally
to the fair market value of such shares less any amount paid for them.
Performance Share Awards
An employee who has been awarded Performance Shares will not recognize
taxable income, and the Company will not be entitled to a deduction, at the time
of the award. At the time the employee is entitled to the Performance Shares,
the employee will recognize ordinary income equal to the sum of the cash and the
fair market value of the shares of Common Stock at such time, and generally the
Company will be entitled to a corresponding deduction. To the extent Performance
Shares are paid in shares of Restricted Stock, the Federal income tax
consequences described above applicable to Restricted Stock will apply.
Cash Awards
An employee who has been awarded cash under Cash Awards will recognize
taxable income, and the Company will generally be entitled to a deduction, at
the time of payment of the award. An employee who receives a bona fide loan
under Cash Awards will not recognize taxable income on the amounts distributed
under the loan. The Company will not be entitled to a deduction and will be
taxed on the interest payments.
PLAN BENEFITS
AMERICAN BANKERS INSURANCE GROUP, INC.
1997 EQUITY INCENTIVE PLAN
The Committee has made no determinations with respect to grants of stock
options, SARs, Restricted Stock, Merit Awards or Performance Shares to officers
and employees under the Plan. If the Plan is approved by the shareholders, the
Outside Directors will be granted options at the annual meeting of the Directors
which follows the Meeting. Accordingly, the benefits to the Outside Directors
are as follows:
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS
NAME AND POSITION GRANTS(1)
----------------- ---------
<S> <C>
All Current Outside Directors............................... 13,000
</TABLE>
- ---------------
(1) The value of option grants cannot be determined at this time
On March 7, 1997, the last trade price of Common Stock on Nasdaq Stock
Market's National Market was $58.50 per share.
RECOMMENDATION
The Board of Directors of the Company is of the opinion that approval of
the adoption of the American Bankers Insurance Group, Inc. 1997 Equity Incentive
Plan is in the best interests of the Company and its shareholders, and
accordingly, the Board of Directors recommends that the shareholders vote FOR
the
19
<PAGE> 22
American Bankers Insurance Group, Inc. 1997 Equity Incentive Plan. The
affirmative vote of a majority of the shares of the Company's Common Stock
represented in person or by proxy and entitled to vote at the Meeting will be
required to approve the adoption of the American Bankers Insurance Group, Inc.
1997 Equity Incentive Plan.
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 shareholders
by ensuring that executive officers are compensated in a manner that advances
both short- and long-term interests of shareholders.
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.
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 100% 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
20
<PAGE> 23
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 1996, the Company granted stock options to
executive officers under the 1994 Senior Management Stock Option Plan.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Gaston was promoted to CEO, effective January 1, 1996. On February 5,
1996, commensurate with his increase in responsibilities, his salary was
increased to $525,000. The Committee, in determining CEO base pay, reviewed a
number of Executive Compensation analyses for insurance companies with
comparable premium income. Median income for CEO's of insurance companies with
comparable premium income, ranged between $600,000 to $745,000. Effective May
22, 1996, Mr. Gaston received a raise of 14.29% increasing his base pay to
$600,000. His May 1996 increase was based on factors including the compensation
analyses discussed above, increased earnings per share and stock price
performance.
Mr. Gaston's MIP award for 1996 is expected to be $919,100, to be paid on
the date of the Meeting. Fifty percent of his award was directly related to 1996
actual profits which exceeded the plan objective by 19.5%. Other categories used
to determine Mr. Gaston's award included the gross written premium for the
Company, stock price performance, completion of corporate projects, completion
of building expansion and quality improvements having relative weights of 17%,
11%, 10%, 8% and 4%, respectively. Corporate projects involve criteria that are
confidential and disclosure of such criteria would have an adverse effect on the
Company.
Mr. Gaston did not receive any option grants under the 1994 Senior
Management Stock Option Plan. With respect to the Company's long-term incentive
plans, he currently owns 33,000 of restricted shares issued under the 1991 Stock
Option/Restricted Stock Award Plan and a debenture due May 24, 1999 convertible
into 70,000 shares of stock issued under the 1994 Key Executive Debenture Plan.
The restricted shares 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. Gaston elected to
defer vesting for an additional one year period that will expire during 1997.
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). At this time, this is a limited issue for the Company
and the Compensation and Nominating Committee believes that the financial impact
of any loss of deduction to the Company is immaterial. The Compensation and
Nominating Committee monitors the executives' compensation and the related
deduction under Section 162(m).
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<PAGE> 24
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 shareholders. The Committee consists 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
shareholder 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
Peter J. Dolara
Malcolm G. MacNeill
George E. Williamson II
COMPENSATION AND NOMINATING COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Present members of the Compensation and Nominating Committee are Messrs.
Armando M. Codina (Chairman), Nicholas A. Buoniconti, Peter J. Dolara and
Malcolm G. MacNeill. Mr. Dolara succeeded Mr. Williamson in October 1996.
Mr. Williamson is President of Williamson Cadillac Company, Williamson
Saturn Inc. and WWW Enterprises (automobile dealerships). In 1996, Mr.
Williamson's automotive sold ABLAC Credit Life, Health and Disability Policies.
Total net written premium by these dealerships was $192,784 in 1996.
22
<PAGE> 25
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The Summary Compensation Table below indicates the cash compensation paid
by the Company and its subsidiaries as well as certain other compensation paid
or accrued to the Chief Executive Officer and the four other highest paid
executive officers, for services rendered in all capacities during the fiscal
years ended December 31, 1996, 1995 and 1994, respectively.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------------- ---------------------
OTHER RESTRICTED
ANNUAL STOCK OPTIONS/ ALL OTHER
COMPENSATION AWARDS SARS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) ($)(3)(4) (#)(3) ($)(5)
- --------------------------- ---- --------- ----------- ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
R. Kirk Landon...................... 1996 544,135 454,600 -- -- -- 21,728
Chairman and Chief International 1995 482,992 437,000 -- -- -- 18,954
Marketing Officer ABIG 1994 451,652 241,000 -- -- -- 13,126
Gerald N. Gaston.................... 1996 560,481 919,100 -- -- -- 21,728
President, Vice Chairman and 1995 428,230 405,600 -- -- -- 18,954
Chief Executive Officer ABIG 1994 390,063 233,200 -- -- -- 13,126
Eugene E. Becker.................... 1996 253,423 229,900 -- 123,000 4,500 21,728
Executive Vice President and 1995 230,973 171,600 -- 84,700 4,200 18,954
Chief Marketing Officer of 1994 217,296 122,500 -- 61,950 4,200 13,126
ABIG
Jay R. Fuchs........................ 1996 194,329 159,200 -- 90,200 3,300 21,728
President of ABLAC and 1995 178,310 125,800 -- 66,550 3,300 18,954
ABIC 1994 169,369 84,300 -- 48,675 3,300 13,126
Jason J. Israel..................... 1996 175,138 129,300 -- 82,000 3,000 21,319
Executive Vice President of 1995 136,436 76,600 -- 42,350 2,100 17,238
Administration 1994 128,310 65,400 -- 30,975 2,100 10,608
</TABLE>
- ---------------
(1) Estimated. 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. The
exercise price for the Primary Shares was $41.00. For specific terms of
this plan, see the plan description on pages 25 and 26.
(4) At December 31, 1996, 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"), $2,070,562; Mr. Gaston,
33,000 shares acquired under the 1991 Plan, $1,687,125; Mr. Becker 3,000
shares acquired under the 1991 Plan and 8,600 acquired under the Senior
Plan, $593,050; Mr. Fuchs, 6,000 shares acquired under the 1991 Plan and
6,600 under the Senior Plan, $644,175; and Mr. Israel, 3,000 shares
acquired under the 1991 Plan and 2,800 shares acquired under the Senior
Plan, $296,525.
(5) For 1996 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 are estimated to
receive 425 shares each and Mr. Israel is estimated to receive 417 shares.
The value is based on the market value at year-end of $51.125 multiplied by
the number of estimated shares allocated to each named executive officer.
23
<PAGE> 26
STOCK OPTIONS AND SARS
The following table sets forth information with regard to grants of stock
options to each of the named executive officers during the year ended December
31, 1996. Grants were made under the 1994 Senior Management Stock Option Plan.
No SARs have been granted.
OPTION GRANTS IN 1996
INDIVIDUAL GRANTS
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
% OF TOTAL VALUE AT ASSUMED
OPTIONS ANNUAL RATES OF STOCK
GRANTED TO PRICE APPRECIATION FOR
OPTIONS EMPLOYEES EXERCISE OPTION TERM
GRANTED IN FISCAL OF BASE EXPIRATION ----------------------
NAME (#)(1) YEAR(2) PRICE($/SH) DATE 5%($)(3) 10%($)(3)
- ---- ------- ---------- ----------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
R. Kirk Landon....................... -- -- -- -- -- --
Gerald N. Gaston..................... -- -- -- -- -- --
Eugene E. Becker..................... 4,500 5% 41.00 5/21/99 152,070 184,065
Jay R. Fuchs......................... 3,300 4% 41.00 5/21/99 111,518 134,581
Jason J. Israel...................... 3,000 3% 41.00 5/21/99 101,380 122,710
</TABLE>
- ---------------
(1) Options were granted under the 1994 Senior Management Stock Option Plan to
Mr. Becker, Mr. Fuchs and Mr. Israel. Mr. Becker and Mr. Fuchs exercised
their options during November 1996. Upon exercise of the option, Mr. Becker
received 3,000 Restricted Shares and Mr. Fuchs received 2,200 Restricted
Shares. Mr. Israel has not exercised his option, however upon exercise of
the option he will receive 2,000 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 1996, 29,400 stock options for Primary Shares were
granted under the 1994 Senior Management Stock Option Plan which includes
3,600 Stock Options for Primary Shares granted to the named executive
officers. An additional 74,300 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 $47.46 and $54.57,
respectively.
24
<PAGE> 27
OPTION EXERCISES AND HOLDINGS
The following table sets forth information with regard to stock option
exercises during 1996 by each of the named executive officers and December 31,
1996 values of all unexercised options held by such individuals.
AGGREGATED OPTION EXERCISES IN 1996
AND 1996 YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES 12/31/96(#)(2) 12/31/96($)(3)
ACQUIRED -------------- --------------
ON VALUE REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($)(1) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
R. Kirk Landon............................ -- -- 162,843/0 5,897,975/0
Gerald N. Gaston.......................... -- -- 141,636/0 5,121,698/0
Eugene E. Becker.......................... 4,500 170,250 34,665/0 1,587,507/0
Jay R. Fuchs.............................. 23,701 773,642 0/0 0/0
Jason J. Israel........................... -- -- 16,396/0 725,801/0
</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 3,000 shares for Mr. Israel 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, shareholders 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 and all shares are subject to
outstanding Debentures.
1994 SENIOR MANAGEMENT STOCK OPTION PLAN AND THE 1991 STOCK OPTION/RESTRICTED
STOCK AWARD PLAN
On May 25, 1994, shareholders 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 are
approximately forty-five (45) 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 is exercised, provided that the employee still holds the Primary
shares purchased on the date the option was exercised.
25
<PAGE> 28
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 shareholder 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.
Upon shareholder approval of the American Bankers Insurance Group, Inc.
1997 Equity Incentive Plan, the Company will discontinue making grants under the
Senior Plan.
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 a 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.
Upon shareholder approval of the American Bankers Insurance Group, Inc.
1997 Equity Incentive Plan, the Company will discontinue making grants under
this plan.
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.
26
<PAGE> 29
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, 1996, 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. Israel in the amounts of $1,387,390,
$1,251,606, $506,846, $388,658 and $403,969, respectively.
27
<PAGE> 30
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. 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 designated 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 1996. 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............. 1,804 11,804 21,804 31,804 41,804 51,804 61,804 71,804 81,804
$150,000............. 6,804 21,804 36,804 51,804 66,804 81,804 96,804 111,804 126,804
$200,000............. 11,804 31,804 51,804 71,804 91,804 111,804 131,804 151,804 171,804
$250,000............. 16,804 41,804 66,804 91,804 116,804 141,804 166,804 191,804 216,804
$300,000............. 21,804 51,804 81,804 111,804 141,804 171,804 201,804 231,804 261,804
$350,000............. 26,804 61,804 96,804 131,804 166,804 201,804 236,804 271,804 306,804
$400,000............. 31,804 71,804 111,804 151,804 191,804 231,804 271,804 311,804 351,804
$450,000............. 36,804 81,804 126,804 171,804 216,804 261,804 306,804 351,804 396,804
$500,000............. 41,804 91,804 141,804 191,804 241,804 291,804 341,804 391,804 441,804
$550,000............. 46,804 101,804 156,804 211,804 266,804 321,804 376,804 431,804 486,804
$600,000............. 51,804 111,804 171,804 231,804 291,804 351,804 411,804 471,804 531,804
$650,000............. 56,804 121,804 186,804 251,804 316,804 381,804 446,804 511,804 576,804
$700,000............. 61,804 131,804 201,804 271,804 341,804 411,804 481,804 551,804 621,804
$750,000............. 66,804 141,804 216,804 291,804 366,804 441,804 516,804 591,804 666,804
</TABLE>
The years of service, as of December 31, 1996, for Mr. Landon, Mr. Gaston,
Mr. Becker, Mr. Fuchs and Mr. Israel are 44, 19, 23, 19 and 11 years,
respectively.
28
<PAGE> 31
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
<TABLE>
<CAPTION>
AMERICAN
MEASUREMENT PERIOD BANKERS NASDAQ NASDAQ
(FISCAL YEAR COVERED) INSURANCE INDEX MARKET INDEX INSURANCE INDEX
<S> <C> <C> <C>
1991 100 100 100
1992 120 116 135
1993 136 134 145
1994 128 131 136
1995 212 185 194
1996 283 227 221
</TABLE>
The graph assumes that the value of the investment in the Company's Common
Stock and each index was $100 at December 31, 1991, 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, 1996. 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 19, 1997.
29
<PAGE> 32
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.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ ARTHUR W. HEGGEN
--------------------------------------
Arthur W. Heggen
Secretary
April 11, 1997
THE COMPANY HEREBY INCORPORATES BY REFERENCE ITEMS 7 AND 8 OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR FISCAL YEAR ENDED DECEMBER 31, 1996. THE COMPANY
WILL FURNISH WITHOUT CHARGE TO ANY SHAREHOLDER SUBMITTING A WRITTEN REQUEST, A
COPY OF THE COMPANY'S 1996 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.
30
<PAGE> 33
EXHIBIT A
TEXT OF PROPOSED AMENDMENT TO
THIRD AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
AMERICAN BANKERS INSURANCE GROUP, INC.
The first paragraph of Article IV of the Third Amended and Restated
Articles of Incorporation of the Company, is proposed to be amended to read in
full as follows:
The Corporation shall be authorized to issue two classes of shares of
stock to be designated, respectively, "Common Stock" and "Preferred
Stock"; the total number of shares which the Corporation shall have
authority to issue is 110,000,000 the total number of shares of Common
Stock shall be 100,000,000 and each such share shall have a par value of
One Dollar ($1.00); and the total number of shares of Preferred Stock
shall be 10,000,000 and each share shall be without par value.
A-1
<PAGE> 34
EXHIBIT B
AMERICAN BANKERS INSURANCE GROUP, INC.
1997 EQUITY INCENTIVE PLAN
I. PURPOSE
The purpose of the American Bankers Insurance Group, Inc. 1997 Equity
Incentive Plan is to promote the interests of American Bankers Insurance Group,
Inc. and its shareholders by providing incentives to its directors, officers and
employees. Accordingly, the Company may grant to selected officers and employees
Options, Stock Appreciation Rights, Restricted Stock, Merit Awards, Performance
Share Awards and Cash Awards in an effort to attract and retain in its employ
qualified individuals and to provide such individuals with incentives to
continue service with American Bankers, devote their best efforts to the Company
and improve American Bankers' economic performance, thus enhancing the value of
the Company for the benefit of shareholders. The Plan also provides an incentive
for qualified persons, who are not officers or employees of the Company, to
serve on the Board of Directors of the Company and to continue to work for the
best interests of the Company by rewarding such persons with automatic grants of
Options. Stock Appreciation Rights, Merit Awards, Performance Shares Awards and
Cash Awards may not be granted to such Outside Directors under the Plan.
II. DEFINITIONS
A. "Agreement" shall mean a written agreement setting forth the terms of an
Award, to be entered into at the Company's discretion.
B. "American Bankers" shall mean, collectively, American Bankers Insurance
Group, Inc. and its Subsidiaries.
C. "Award" shall mean an Option, a Stock Appreciation Right, a Restricted
Stock Award, a Merit Award, a Performance Share Award, or a Cash Award in each
case granted under this Plan.
D. "Beneficiary" shall mean the person, persons, trust or trusts designated
by an Employee or Outside Director or if no designation has been made, the
person, persons, trust, or trusts entitled by will or the laws of descent and
distribution to receive the benefits specified under this Plan in the event of
an Employee's or Outside Director's death.
E. "Board" shall mean the Board of Directors of the Company.
F. "Cash Award" shall mean grants of cash or loans, in order to help defray
in whole or in part the economic cost (including tax cost) of the Award to the
Award recipient.
G. "Change in Control" shall mean the consummation of any transaction or
series of transactions in which a person or a group of related or affiliated
persons obtains ownership of the Common Stock of the Company sufficient to
exercise control over the operations of the Company, and such person or group
does not presently have the ability to exercise such control. Such a Change in
Control shall be deemed to have taken place if:
1. a tender offer or series of offers has been made to and accepted by
50 percent or more of the Company's shareholders; or
2. a transfer of stock has occurred which is sufficient to allow the
new purchaser (or group of related or affiliated purchasers) to elect a
majority of the Board other than those proposed by the management of the
Company; or
3. a majority of the Board is replaced in any one year; or
4. a merger or reorganization is consummated which results in existing
shareholders of American Bankers owning less than 50 percent of the voting
stock of the corporation acquiring the Company (or, if
B-1
<PAGE> 35
the Company is the acquiring corporation, results in existing shareholders
of the Company owning less than 50 percent of the voting stock of the
Company); or
5. more than 50 percent of the assets of American Bankers are sold.
H. "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
I. "Committee" shall mean the Compensation and Nominating Committee of the
Board, as from time to time constituted, or any successor committee of the Board
with similar functions, which shall consist of two or more members, each of whom
shall be a "Non-Employee Director" as defined in Rule 16b-3 promulgated under
the Exchange Act and an "outside director" as defined in the regulations issued
under Section 162(m) of the Code, as each may be amended from time to time.
J. "Common Stock" shall mean the Common Stock of the Company ($1.00 par
value), subject to adjustment pursuant to Section 14.
K. "Company" shall mean, collectively, American Bankers Insurance Group,
Inc. and its Subsidiaries.
L. "Employee" shall mean a regular, full-time employee of American Bankers
as selected by the Committee to receive an Award under the Plan.
M. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
N. "Exercise Price" shall mean, with respect to Option or SAR, the price
fixed by the Committee at which each share of Common Stock may be purchased from
the Company pursuant to the exercise of such Option or the price fixed by the
Committee at which the appreciation of the SAR shall be determined.
O. "Fair Market Value" shall mean the last trade price of the Common Stock
as reported on the Nasdaq Stock Market's National Market or other national
market exchange on which the Common Stock is traded on the relevant date, or if
no quotation shall have been made on that date, on the next preceding day on
which there was a quotation if within seven days thereof, or, otherwise, as
determined in good faith by the Committee.
P. "Incentive Stock Option" or "ISO" shall mean an Option that is intended
by the Committee to meet the requirements of Section 422 of the Code or any
successor provision.
Q. "Merit Award" shall mean an award of Common Stock issued pursuant to
Section 9 of the Plan.
R. "Nonqualified Stock Option" or "NQSO" shall mean an Option granted
pursuant to this Plan which does not qualify as an Incentive Stock Option.
S. "Option" shall mean the right to purchase Common Stock at a price to be
specified and upon terms to be designated by the Committee or otherwise
determined pursuant to this Plan. An Option shall be designated by the Committee
as a Nonqualified Stock Option or an Incentive Stock Option.
T. "Outside Director" shall mean a director of the Company who is not also
an Employee of the Company.
U. "Performance Goals" means performance goals as may be established in
writing by the Committee which may be based on earnings, stock price, return on
equity, return on investment, total return to shareholders, economic value
added, debt rating or achievement of business or operational goals. Such goals
may be absolute in their terms or measured against or in relation to other
companies comparably or otherwise situated. Such performance goals may be
particular to an Employee or the division, department, branch, line of business,
subsidiary or other unit in which the Employee works and/or may be based on the
performance of American Bankers generally.
V. "Performance Period" shall mean the period designated by the Committee
during which the performance objectives shall be measured.
W. "Performance Share Award" shall mean an award of shares of Common Stock,
the issuance of which is contingent upon attainment of performance objectives
specified by the Committee.
B-2
<PAGE> 36
X. "Performance Shares" shall mean those shares of Common Stock issuable
pursuant to a Performance Share Award.
Y. "Personal Representative" shall mean the person or persons who, upon the
disability or incompetence of an Employee or Outside Director, shall have
acquired on behalf of the Employee or Outside Director by legal proceeding or
otherwise the right to receive the benefits specified in this Plan.
Z. "Plan" shall mean this American Bankers Insurance Group, Inc. 1997
Equity Incentive Plan.
AA. "Restricted Period" shall mean the period designated by the Committee
during which Restricted Stock may not be sold, assigned, transferred, pledged,
or otherwise encumbered, which period in the case of Employees shall not be less
than one year from the date of grant (unless otherwise directed by the
Committee).
AB. "Restricted Stock" shall mean those shares of Common Stock issued
pursuant to a Restricted Stock Award which are subject to the restrictions,
terms, and conditions set forth in the related Agreement, if any.
AC. "Restricted Stock Award" shall mean an award of Restricted Stock.
AD. "Retained Distributions" shall mean any securities or other property
(other than regular cash dividends) distributed by the Company in respect of
Restricted Stock during any Restricted Period.
AE. "Retirement" shall mean retirement of an Employee from the employ of
the Company at any time as described in the American Bankers Insurance Group,
Inc. Retirement Plan or in any successor pension plan, as from time to time in
effect.
AF. "Stock Appreciation Right" or "SAR" shall mean the right of the holder
to elect to receive in exchange therefor shares of Common Stock, cash, or a
combination thereof, as the case may be, with an aggregate value equal to the
excess of the Fair Market Value of one share of Common Stock over the Exercise
Price specified in such right multiplied by the number of shares of Common Stock
covered by such right or portion thereof which is so surrendered.
AG. "Subsidiary" shall mean any present or future subsidiary corporations,
as defined in Section 424 of the Code, of American Bankers.
AH. "Tax Date" shall mean the date the withholding tax obligation arises
with respect to the exercise of an Award.
III. STOCK SUBJECT TO THE PLAN
There will be reserved for issuance under the Plan (upon the exercise of
Options and Stock Appreciation Rights, upon awards of Restricted Stock,
Performance Shares and Merit Awards and for stock bonuses on deferred awards of
Restricted Stock and Performance Shares), an aggregate of 2,000,000 shares of
Common Stock; provided, however, that of such shares, only 700,000 shares in the
aggregate shall be available for issuance for Restricted Stock Awards and Merit
Awards and only 200,000 shares in the aggregate shall be available for issuance
for Performance Share Awards. Such shares shall be authorized but unissued
shares of Common Stock. Except as provided in Sections 7 and 8, if any Award
under the Plan shall expire or terminate for any reason without having been
exercised in full, or if any Award shall be forfeited, the shares subject to the
unexercised or forfeited portion of such Award shall again be available for the
purposes of the Plan.
IV. ADMINISTRATION
The Plan shall be administered by the Committee. The Committee shall have
no authority regarding the granting of Options to Outside Directors, as such
grants are fixed pursuant to Section 6, subsection B of the Plan.
In addition to any implied powers and duties that may be needed to carry
out the provisions of the Plan, the Committee shall have all the powers vested
in it by the terms of the Plan, including exclusive authority (except as to
Awards of Options granted to Outside Directors) to select the Employees to be
granted Awards
B-3
<PAGE> 37
under the Plan, to determine the type, size and terms of the Awards to be made
to each Employee selected, to determine the time when Awards will be granted,
and to prescribe the form of the Agreements embodying Awards made under the
Plan. Subject to the provisions of the Plan specifically governing Awards of
Restricted Stock granted, the Committee shall be authorized to interpret the
Plan and the Awards granted under the Plan, to establish, amend and rescind any
rules and regulations relating to the Plan, to make any other determinations
which it believes necessary or advisable for the administration of the Plan, and
to correct any defect or supply any omission or reconcile any inconsistency in
the Plan or in any Award in the manner and to the extent the Committee deems
desirable to carry it into effect. Any decision of the Committee in the
administration of the Plan, as described herein, shall be final and conclusive.
The Committee may act only by a majority of its members. Any determination
of the Committee may be made, without notice, by the written consent of the
majority of the members of the Committee. In addition, the Committee may
authorize any one or more of their number or any officer of the Company to
execute and deliver documents on behalf of the Committee. No member of the
Committee shall be liable for any action taken or omitted to be taken by him or
her or by any other member of the Committee in connection with the Plan, except
for his or her own willful misconduct or as expressly provided by statute.
V. ELIGIBILITY
Awards may only be granted (i) to individuals who are Employees of American
Bankers, and (ii) as expressly provided in Section 6, subsection B of the Plan,
to individuals who are duly elected Outside Directors of American Bankers.
VI. OPTIONS
A. EMPLOYEE AWARDS
1. Any Option granted under the Plan may be granted as an Incentive Stock
Option or as a Nonqualified Stock Option as shall be designated by the Committee
at the time of the grant of such Option. Each Option shall, at the discretion of
the Company and as directed by the Committee, be evidenced by an Agreement
between the recipient and the Company, which Agreement shall specify the
designation of the Option as an ISO or a NQSO, as the case may be, and shall
contain such terms and conditions as the Committee, in its sole discretion, may
determine in accordance with the Plan.
2. Every Incentive Stock Option shall provide for a fixed expiration date
of not later than ten years from the date such Incentive Stock Option is
granted. Every Nonqualified Stock Option shall provide for a fixed expiration
date of not later than ten years and one month from the date such Nonqualified
Stock Option is granted.
3. The Exercise Price of Common Stock issued pursuant to each Option shall
be fixed by the Committee at the time of the granting of the Option; provided,
however, that such Exercise Price shall in no event be less than 100% of the
Fair Market Value of the Common Stock on the date such Option is granted.
B. NON-EMPLOYEE DIRECTORS' AWARD
Each Outside Director shall be granted Options to purchase 1,000 shares of
Common Stock on the date of the Annual Meeting of the Board. The expiration date
for the Options granted under this Section 6, subsection B shall be on the fifth
anniversary of the date of grant. The Exercise Price of Options granted under
this Section 6, subsection B shall be equal to 100% of the Fair Market Value on
the date of grant.
C. EXERCISE
The Committee may, in its discretion, provide for Options granted under the
Plan to be exercisable in whole or in part; provided, however, that no Option
shall be exercisable prior to the first anniversary of the date of its grant,
except as provided in Section 12 or as the Committee otherwise determines in
accordance with the Plan, and in no case may an Option be exercised at any time
for fewer than 50 shares (or the total remaining shares covered by the Option if
fewer than 50 shares) during the term of the Option. The specified number of
B-4
<PAGE> 38
shares will be issued upon receipt by American Bankers of (i) notice from the
holder thereof of the exercise of an Option, and (ii) payment to American
Bankers (as provided in this Section 6, subsection D below), of the Exercise
Price for the number of shares with respect to which the Option is exercised.
Each such notice and payment shall be delivered or mailed by postpaid mail.
D. PAYMENT FOR SHARES.
Except as otherwise provided in this Section 6, the Exercise Price for the
Common Stock shall be paid in full when the Option is exercised. Subject to such
rules as the Committee may impose, the Exercise Price may be paid in whole or in
part (i) in cash, (ii) in whole shares of Common Stock owned by the Employee or
Outside Director and evidenced by negotiable certificates, valued at their Fair
Market Value (which shares of Common Stock must have been owned by the Employee
or Outside Director six months or longer, and not used to effect an Option
exercise within the preceding six months, unless the Committee specifically
provides otherwise), (iii) by a combination of such methods of payment, or (iv)
by such other consideration as shall constitute lawful consideration for the
issuance of Common Stock and be approved by the Committee (including with
respect to any Option granted in Section 6 subsection A, if permitted by the
Committee, the equivalent cash dividend paid upon each share of Common Stock by
the Company during the period between the grant of such Option and the exercise
of such Option to the extent of the number of shares of Common Stock with
respect to which the Option was exercised).
VII. STOCK APPRECIATION RIGHTS
The Committee may grant Stock Appreciation Rights granted in tandem with
the grant of Options or may solely grant Stock Appreciation Rights. If Stock
Appreciation Rights are granted without any related Options, they may contain
such terms and conditions as determined by the Committee in its sole discretion
in accordance with the Plan. If the Stock Appreciation Rights are granted in
tandem with any Option granted under the Plan, each SAR shall be exercisable
only at the same time and to the same extent the related Option is exercisable
and in no event after the termination of the related Option.
The Exercise Price of an SAR shall be shall be equal to or greater than the
Fair Market Value of Common Stock on the date of the grant of the SAR. For an
SAR granted in tandem with Options, the Exercise Price shall be the Exercise
Price of the related Option. An SAR shall be exercisable only when the Fair
Market Value (determined as of the date of exercise of the SAR) of each share of
Common Stock with respect to which the SAR is to be exercised shall exceed the
Exercise Price of the SAR. An SAR granted under the Plan shall be exercisable in
whole or in part; provided, however, that no SAR shall be exercisable prior to
the first anniversary of the date of its grant, except as provided in Section 12
or as the Committee otherwise determines in accordance with the Plan. A notice
for the exercise of an SAR shall state that the holder of the SAR elects to
exercise the SAR and the number of shares in respect of which the SAR is being
exercised.
Subject to the terms and provisions of this Section 7, upon the exercise of
an SAR, the holder thereof shall be entitled to receive from American Bankers
consideration (in the form hereinafter provided) equal in value to the excess of
the Fair Market Value (determined as of the date of exercise of the SAR) of each
share of Common Stock with respect to which such SAR has been exercised over the
Exercise Price of the SAR. The Committee may stipulate in the Agreement the form
of consideration which shall be received upon the exercise of a SAR. If no
consideration is specified therein, upon the exercise of an SAR, the holder may
specify the form of consideration to be received by such holder, which shall be
in shares of Common Stock, or in cash, or partly in cash and partly in shares of
Common Stock (valued at Fair Market Value on the date of exercise of the SAR),
as the holder shall request; provided, however, that the Committee, in its sole
discretion, may disapprove the form of consideration requested and instead
authorize the payment of such consideration in shares of Common Stock (valued as
aforesaid), or in cash, or partly in cash and partly in shares of Common Stock.
B-5
<PAGE> 39
Upon the exercise of an SAR, the extent of the number of shares of Common
Stock with respect to which such SAR is exercised and to that extent a
corresponding number of shares of Common Stock shall not again be available for
the grant of Awards under the Plan.
VIII. RESTRICTED STOCK AWARDS
The Committee may make an award of Restricted Stock to selected Employees,
which shall be evidenced by an Agreement which shall contain such terms and
conditions as the Committee, in its sole discretion, may determine. The amount
of each Restricted Stock Award and the respective terms and conditions of each
Award (which terms and conditions need not be the same in each case) shall be
determined by the Committee in its sole discretion. As a condition to any Award
hereunder, the Committee may require an Employee to pay to the Company a
non-refundable amount equal to, or in excess of, the par value of the shares of
Restricted Stock awarded to him or her. Subject to the terms and conditions of
each Restricted Stock Award, the Employee, as the owner of the Common Stock
issued as Restricted Stock, shall have all rights of a shareholder including,
but not limited to, voting rights as to such Common Stock and the right to
receive dividends thereon when, as and if paid.
In the event that a Restricted Stock Award has been made to an Employee
whose employment or service is subsequently terminated for any reason prior to
the lapse of all restrictions thereon, such Restricted Stock will be forfeited
in its entirety by such Employee; provided, however, that the Committee may, in
its sole discretion, limit such forfeiture.
Employees may be offered the opportunity to defer the receipt of payment of
vested shares of Restricted Stock, and Common Stock may be granted as a bonus
for deferral, under terms as may be established by the Committee from time to
time; however, in no event shall the Common Stock granted as a bonus for
deferral exceed 20% of the Restricted Stock so deferred.
A. TRANSFERABILITY
Subject to subsection B of Section 16 hereof, Restricted Stock may not be
sold, assigned, transferred, pledged, or otherwise encumbered during a
Restricted Period, which, in the case of Employees, shall be determined by the
Committee and, unless otherwise determined by the Committee, shall not be less
than one year from the date such Restricted Stock was awarded. The Committee
may, at any time, reduce the Restricted Period with respect to any outstanding
shares of Restricted Stock awarded under the Plan to Employees, but, unless
otherwise determined by the Committee, such Restricted Period shall not be less
than one year.
During the Restricted Period, certificates representing the Restricted
Stock and any Retained Distributions shall be registered in the recipient's name
and bear a restrictive legend to the effect that ownership of such Restricted
Stock (and any such Retained Distributions), and the enjoyment of all rights
appurtenant thereto are subject to the restrictions, terms, and conditions
provided in the Plan and the applicable Agreement, if any. Such certificates
shall be deposited by the recipient with the Company, together with stock powers
or other instruments of assignment, each endorsed in blank, which will permit
transfer to the Company of all or any portion of the Restricted Stock and any
securities constituting Retained Distributions which shall be forfeited in
accordance with the Plan and the applicable Agreement, if any. Restricted Stock
shall constitute issued and outstanding shares of Common Stock for all corporate
purposes. The recipient will have the right to vote such Restricted Stock, to
receive and retain all regular cash dividends, and to exercise all other rights,
powers, and privileges of a holder of Common Stock with respect to such
Restricted Stock, with the exception that (i) the recipient will not be entitled
to delivery of the stock certificate or certificates representing such
Restricted Stock until the restrictions applicable thereto shall have expired;
(ii) the Company will retain custody of all Retained Distributions made or
declared with respect to the Restricted Stock (and such Retained Distributions
will be subject to the same restrictions, terms and conditions as are applicable
to the Restricted Stock) until such time, if ever, as the Restricted Stock with
respect to which such Retained Distributions shall have been made, paid, or
declared shall have become vested, and such Retained Distributions shall not
bear interest or be segregated in separate accounts; (iii) subject to subsection
B of
B-6
<PAGE> 40
Section 16 hereof, the recipient may not sell, assign, transfer, pledge,
exchange, encumber, or dispose of the Restricted Stock or any Retained
Distributions during the Restricted Period; and (iv) a breach of any
restrictions, terms, or conditions provided in the Plan or established by the
Committee with respect to any Restricted Stock or Retained Distributions will
cause a forfeiture of such Restricted Stock and any Retained Distributions with
respect thereto.
IX. MERIT AWARDS
The Committee may from time to time make an award of Common Stock under the
Plan to selected Employees for such reasons and in such amounts as the
Committee, in its sole discretion, may determine. As a condition to any such
Merit Award, the Committee may require an Employee to pay to the Company an
amount equal to, or in excess of, the par value of the shares of Common Stock
awarded to him or her.
X. PERFORMANCE SHARES
The Committee may make awards of Common Stock or Restricted Stock which
may, in the Company's discretion and as directed by the Committee, be evidenced
by an Agreement, to selected Employees on the basis of the Company's financial
performance in any given period. Subject to the provisions of the Plan, the
Committee shall have sole and complete authority to determine the Employees who
shall receive such Performance Shares, to determine the number of such shares to
be granted for each Performance Period, and to determine the duration of each
such Performance Period. There may be more than one Performance Period in
existence at any one time, and the duration of Performance Periods may differ
from each other.
The Performance Goals and Performance Period applicable to an award of
Performance Shares shall be set forth in writing by the Committee no later than
90 days after the commencement of the Performance Period and shall be
communicated to the Employee. The Committee shall have the discretion to later
revise the Performance Goals solely for the purpose of reducing or eliminating
the amount of compensation otherwise payable upon attainment of the Performance
Goals; provided that the Performance Goals and the amounts payable upon
attainment of the Performance Goals may be adjusted during any Performance
Period to reflect promotions, transfers or other changes in an Employee's
employment so long as such changes are consistent with the Performance Goals
established for other Employees in the same or similar positions.
In making a Performance Share Award, the Committee may take into account an
Employee's responsibility level, performance, cash compensation level, incentive
compensation awards and such other considerations as it deems appropriate. Each
Performance Share Award shall be established in shares of Common Stock and/or
shares of Restricted Stock in such proportions as the Committee shall determine.
The amount of any Performance Share award in the aggregate during the term of
the Plan to an individual shall not exceed 10,000 shares of Common Stock.
The Committee shall determine, in its sole discretion, the manner of
payment, which may include (i) cash, (ii) shares of Common Stock, or (iii)
shares of Restricted Stock in such proportions as the Committee shall determine.
Employees may be offered the opportunity to defer the receipt of payment of
earned Performance Shares, and Common Stock may be granted as a bonus for
deferral under terms as may be established by the Committee from time to time;
however, in no event shall the Common Stock granted as a bonus for deferral
exceed 20% of the Performance Shares so deferred.
An Employee must be employed by the Company at the end of a Performance
Period in order to be entitled to payment of Performance Shares in respect of
such period; provided, however, that in the event of an Employee's cessation of
employment before the end of such period, or upon the occurrence of his or her
death, Retirement, or disability, or other reason approved by the Committee, the
Committee may, in its sole discretion, limit such forfeiture.
B-7
<PAGE> 41
XI. CASH AWARDS
The Committee may make Cash Awards. The Committee may grant a Cash Award at
the time of grant of any other Award or may grant a Cash Award upon the exercise
of any other Award. The terms of any such Cash Award shall be determined by the
Committee, in its sole discretion.
XII. CONTINUED EMPLOYMENT, AGREEMENT TO SERVE AND EXERCISE PERIODS
A. Subject to the provisions of subsection F of this Section 12, every
Option and SAR shall provide that it may not be exercised in whole or in part
for a one-year period beginning on the date of granting such Option (unless
otherwise determined by the Committee).
B. Every Option and SAR shall provide that in the event the Employee or,
with respect to Options granted under Section 6, subsection B, Outside Director
dies (i) while employed by or a member of the Board of American Bankers or, (ii)
during the periods in which Options or SARs may be exercised by an Employee or
Outside Director determined to be disabled as provided in subsection C of this
Section 12 up to 6 months after the death of the Employee or Outside Director
such Option or SAR shall be exercisable, at any time or from time to time, prior
to the fixed termination date set forth in the Option or SAR, by the
Beneficiaries of the decedent to the extent exercisable by the Employee or
Outside Director prior to death.
C. Every Option and SAR shall provide that in the event the employment of
any Employee or, with respect to Options granted under Section 6, subsection B,
Outside Director shall cease by reason of disability, at any time during the
term of the Option or SAR, such Option or SAR shall be exercisable, at any time
or from time to time up to 6 months after the disability of the Employee or
Outside Director prior to the fixed termination date set forth in the Option for
the number of shares which could have been acquired under the Option immediately
prior to disability. As used herein, an Employee or Outside Director will be
deemed "disabled" when he or she becomes unable to perform the functions
required by his or her regular job or of the Outside Director due to physical or
mental illness. In connection with the grant of an Incentive Stock Option an
Employee shall be disabled if he or she falls within the meaning of that term as
provided in Section 22(e)(3) of the Code. The determination by the Committee of
any question involving disability shall be conclusive and binding.
D. Except as provided in subsections A, B, C and E of this Section 12,
every Option and SAR shall provide that it shall terminate on the earlier to
occur of the fixed termination date set forth in the Option or SAR or upon
termination, whether voluntary or for cause, of the Employee's employment or of
the Outside Director's membership on the Board.
E. Notwithstanding any provision of this Section 12 to the contrary, any
Award granted pursuant to the Plan, may, in the discretion of the Committee,
become exercisable, at any time or from time to time, prior to the fixed
termination date set forth in the Award for the full number of awarded shares or
any part thereof, less such numbers as may have been theretofore acquired under
the Award (i) from and after the time the Employee ceases to be an Employee of
American Bankers as a result of the sale or other disposition by American
Bankers of assets or property (including shares of any Subsidiary) in respect of
which such Employee had theretofore been employed or as a result of which such
Employee's continued employment with American Bankers is no longer required, and
(ii) in the case of a Change in Control of American Bankers, from and after the
date of such Change in Control.
F. Subject to the limitations set forth in Section 422 of the Code, the
Committee may adopt, amend, or rescind from time to time such provisions as it
deems appropriate with respect to the effect of leaves of absence approved by
any duly authorized officer of American Bankers with respect to any Employee.
XIII. WITHHOLDING TAXES
Federal, state or local law may require the withholding of taxes applicable
to gains resulting from the exercise of an Award. Unless otherwise prohibited by
the Committee, each Employee may satisfy any such tax withholding obligation by
any of the following means, or by a combination of such means: (i) a cash
payment, (ii) authorizing American Bankers to withhold from the shares of Common
Stock otherwise issuable to the
B-8
<PAGE> 42
Employee pursuant to the exercise or vesting of an Award a number of shares
having a Fair Market Value, as of the Tax Date, which will satisfy the amount of
the withholding tax obligation, or (iii) by delivery to American Bankers of a
number of shares of Common Stock having a Fair Market Value as of the Tax Date
which will satisfy the amount of the withholding tax obligation arising from an
exercise or vesting of an Award. An Employee's election to pay the withholding
tax obligation by (ii) or (iii) above must be made on or before the Tax Date, is
irrevocable, is subject to such rules as the Committee may adopt, and may be
disapproved by the Committee. If the amount requested is not paid, the Committee
may refuse to issue Common Stock under the Plan.
XIV. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event of any change in the outstanding Common Stock of the Company
by reason of any stock split, stock dividend, recapitalization, merger,
consolidation, reorganization, combination, or exchange of shares, split-up,
split-off, spin-off, liquidation or other similar change in capitalization, or
any distribution to Common Stockholders other than cash dividends, the number or
kind of shares that may be issued under the Plan pursuant to Section 3 and the
number or kind of shares subject to, or the price per share under any
outstanding Award shall be automatically adjusted so that the proportionate
interest of the Employee or Outside Director shall be maintained as before the
occurrence of such event. Such adjustment shall be conclusive and binding for
all purposes of the Plan.
XV. AMENDMENTS AND TERMINATIONS
Unless the Plan shall have been earlier terminated as hereinafter provided,
no Awards shall be granted hereunder after May 23, 2007. The Board or the
Committee may at any time terminate, modify or amend the Plan in such respects
as it shall deem advisable; subject to any regulatory or shareholder approval
required by law. The Committee may, subject to any regulatory or shareholder
approval required by law, at any time modify or amend the terms of an
outstanding Award, provided, however, that in no event shall any such
termination, modification or amendment to the Plan adversely affect the rights
of the holder of any outstanding Award or violate applicable law.
XVI. MISCELLANEOUS PROVISIONS
A. Except as to Awards to Outside Directors, no Employee or other person
shall have any claim or right to be granted an Award under the Plan.
B. An Employee's or Outside Director's rights and interest under the Plan
may not be assigned or transferred in whole or in part, either directly or by
operation of law or otherwise (except in the event of an Employee's or Outside
Director's death, by will or the laws of descent and distribution), including,
but not by way of limitation, execution, levy, garnishment, attachment, pledge,
bankruptcy or in any other manner, and no such right or interest of any Employee
or Outside Director in the Plan shall be subject to any obligation or liability
of such individual; provided, however, that an Employee's or Outside Director's
rights and interest under the Plan may, subject to the discretion and direction
of the Committee, be made transferable by such Employee or Outside Director
during his or her lifetime. Except as specified in Section 8, the holder of an
Award shall have none of the rights of a shareholder until the shares subject
thereto shall have been registered in the name of the person receiving or person
or persons exercising the Award on the transfer books of the Company.
C. No Common Stock shall be issued hereunder unless counsel for the Company
shall be satisfied that such issuance will be in compliance with applicable
Federal, state, and other securities laws.
D. The expenses of the Plan shall be borne by the Company.
E. By accepting any Award under the Plan, each Employee and Outside
Director and each Personal Representative or Beneficiary claiming under or
through him or her shall be conclusively deemed to have indicated his or her
acceptance and ratification of, and consent to, any action taken under the Plan
by the Company, the Board or the Committee.
B-9
<PAGE> 43
F. Awards granted under the Plan shall be binding upon American Bankers,
its successors, and assigns.
G. The appropriate officers of the Company shall cause to be filed any
reports, returns, or other information regarding Awards hereunder or any Common
Stock issued pursuant hereto as may be required by Sections 13, 15(d) or 16(a)
of the Exchange Act, or any other applicable statute, rule, or regulation.
H. Nothing contained in this Plan shall prevent the Board of Directors from
adopting other or additional compensation arrangements, subject to shareholder
approval if such approval is required.
I. Each Employee shall be deemed to have been granted any Award on the date
the Committee took action to grant such Award under the Plan or such later date
as the Committee in its sole discretion shall determine at the time such grant
is authorized.
XVII. EFFECTIVENESS OF THE PLAN
The Plan shall be submitted to the shareholders of the Company for their
approval and adoption on May 23, 1997 or such other date fixed for the next
meeting of shareholders or any adjournment or postponement thereof. The Plan
shall not be effective and no Award shall be made hereunder unless and until the
Plan has been so approved and adopted at a meeting of the Company's
shareholders.
XVIII. GOVERNING LAW
The provisions of this Plan shall be interpreted and construed in
accordance with the laws of the State of Florida.
B-10
<PAGE> 44
Exhibit C
AMERICAN BANKERS INSURANCE GROUP, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR
THE ANNUAL MEETING OF SHAREHOLDERS -- MAY 23, 1997
The undersigned hereby appoints R. KIRK LANDON, GERALD N. GASTON and
ARTHUR W. HEGGEN, and each of them, proxies with the power of substitution to
each for and in the name of the undersigned to vote all shares of Common Stock
of American Bankers Insurance Group, Inc. (the "Company") which the undersigned
would be entitled to vote at the Annual Meeting of Shareholders of the Company
to be held on Friday, May 23, 1997 at 10:00 A.M. Eastern Time in the Auditorium
of the Company's Headquarters at 11222 Quail Roost Drive, Miami, Florida 33157
and at any and all adjournments or postponements thereof.
COMMENTS:
------------------------------------------
----------------------------------------------------
----------------------------------------------------
PROXY
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEMS 1, 2, 3, 4 & 5.
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, 3, 4 & 5 listed on the reverse
side. Please mark your vote, date and sign your name as it appears on the
mailing label, detach and return it in the enclosed envelope.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
- -------------------------------------------------------------------------------
FOLD AND DETACH HERE
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, 3, 4 & 5.
Please mark
your votes as
indicated in /X/
this example
The American Bankers Insurance Group, Inc. Board of Directors recommends a vote
FOR Items 1, 2, 3, 4 & 5.
<TABLE>
<S> <C>
Item 1 - Election of the following nominees as Directors Item 2 - Approval of the adoption of an
for a term expiring in 2000: Gerald N. Gaston, Daryl L. Jones, amendment to the Third Amended and Restated
Bernard P. Knoth, Albert H. Nahmad, and George E. Williamson, II. Articles of Incorporation of the Company
to increase the authorized capital stock of
the Company.
FOR ALL WITHHELD FOR ALL WITHHELD FOR THE FOLLOWING ONLY:
NOMINEES NOMINEES (Write the name of the nominee(s) in space below) FOR AGAINST ABSTAIN
/ / / / _____________________________________________ / / / / / /
Item 3 - Approval of the adoption of an amendment Item 4 - Approval of the adoption Item 5 - In their discretion, the
to the 1994 Amended and Restated Directors' Deferred of the American Bankers Insurance proxies are authorized to
Compensation Plan to increase the number of shares Group, Inc. 1997 Equity Incentive consider and act upon such other
of Common Stock reserved for issuance thereunder Plan. matters as may properly come
from 100,000 to 200,000 shares. before the meeting or any and all
postponements or adjournments
thereof.
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
/ / / / / / / / / / / / / / / / / /
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: ______________________________ , 1997
</TABLE>
