<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
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>
PXRE CORPORATION
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(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.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE> 2
(PXRE LOGO)
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 8, 1995
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of PXRE
CORPORATION ("PXRE") will be held on June 8, 1995 commencing at 9:00 a.m. at The
Millenium Hilton Hotel, 55 Church Street, New York, New York for the following
purposes:
(1) To elect three members of the Board of Directors who, with the six
other directors whose terms of office do not expire at this meeting,
will constitute the full Board, as described in the Proxy Statement
dated May 3, 1995 accompanying this Notice of Annual Meeting (the
"Proxy Statement");
(2) To ratify the appointment of Price Waterhouse LLP as PXRE's independent
public accountants for the fiscal year ending December 31, 1995;
(3) To approve the adoption of the PXRE Corporation Director Stock Option
Plan; and
(4) To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
Only holders of record of the Common Stock of PXRE at the close of business
on April 14, 1995, as shown by the transfer books of PXRE, are entitled to
notice of, and to vote at, this Annual Meeting and any adjournments.
By Order of the Board of Directors
PXRE CORPORATION
F. SEDGWICK BROWNE, Secretary
May 3, 1995
- - --------------------------------------------------------------------------------
ALL HOLDERS OF THE COMMON STOCK OF PXRE ARE INVITED TO ATTEND THIS ANNUAL
MEETING IN PERSON. THOSE HOLDERS OF COMMON STOCK WHO ARE UNABLE TO ATTEND IN
PERSON ARE RESPECTFULLY URGED TO EXECUTE AND RETURN THE ENCLOSED PROXY AT THEIR
EARLIEST CONVENIENCE. HOLDERS OF COMMON STOCK WHO EXECUTE A PROXY MAY
NEVERTHELESS ATTEND THE MEETING AND VOTE THEIR SHARES IN PERSON.
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<PAGE> 3
PROXY STATEMENT
- - --------------------------------------------------------------------------------
ANNUAL MEETING OF SHAREHOLDERS
OF PXRE CORPORATION
JUNE 8, 1995
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SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of PXRE
CORPORATION, 399 Thornall Street, Edison, New Jersey 08837 ("PXRE") for use at
the Annual Meeting of Shareholders to be held on June 8, 1995 and at any and all
adjournments thereof. Any Proxy given may be revoked at any time before it is
actually voted on any matter by notifying the Treasurer of PXRE in writing, or
by submitting a duly executed Proxy bearing a later date or by voting at the
Annual Meeting. This Proxy Statement and the accompanying Proxy are being mailed
on or about May 3, 1995.
The cost of preparing, assembling and mailing this Proxy Statement and the
material enclosed herewith is being borne by PXRE. Directors, officers and
employees of PXRE may solicit Proxies orally or in writing, without additional
compensation. PXRE's regularly retained investor relations firm, Corporate
Communications Inc., may also be called upon to solicit Proxies by telephone or
by mail. PXRE will reimburse brokers, fiduciaries and custodians for their costs
in forwarding proxy materials to beneficial owners of Common Stock held in their
names.
OUTSTANDING STOCK AND VOTING RIGHTS
The Board of Directors has fixed the close of business on April 14, 1995 as
the record date for the determination of shareholders entitled to notice of this
Annual Meeting, and only holders of record of the Common Stock (par value $.01
per share) of PXRE at that time will be entitled to vote at the meeting. As of
the record date, 7,055,286 shares of Common Stock were issued and outstanding
and held of record by approximately 125 shareholders. Each share of Common Stock
is entitled to one vote on each matter presented at this Annual Meeting. The
presence at the meeting in person or by proxy of the holders of a majority of
the outstanding shares of Common Stock entitled to vote is necessary to
constitute a quorum.
A broker non-vote occurs when a nominee holding shares for a beneficial
owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that item under consideration and has
not received instructions from the beneficial owner. Under Delaware law,
abstaining votes and broker non-votes are deemed to be present for purposes of
determining whether a quorum is present at a meeting. All matters to be voted on
at the Annual Meeting will be decided by the affirmative vote of a majority of
the shares of Common Stock present or represented at the meeting and entitled to
vote. On any such matter, an abstention will have the same effect as a negative
vote, but a broker non-vote will have no effect on the vote.
<PAGE> 4
The following table indicates those persons known to PXRE (including any
"group" as that term is used in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act")) who own beneficially more than 5% of
PXRE's Common Stock as of the record date:
<TABLE>
<CAPTION>
TITLE OF NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- - ------------ -------------------------------------------- -------------------- --------
<S> <C> <C> <C>
Common Stock Phoenix Home Life Mutual Insurance 636,700 shares(1) 9.0%
Company.....................................
One American Row
Hartford, Connecticut 06115
Common Stock Brandywine Asset Management Inc............. 622,400 shares(2) 8.7%
Three Christina Centre
Suite 1200
201 North Walnut Street
Wilmington, Delaware 19801
Common Stock Mellon Bank Corporation..................... 516,000 shares(3) 7.3%
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Common Stock The Equitable Companies Incorporated and
Subsidiaries................................ 493,228 shares(4) 6.9%
787 Seventh Avenue
New York, New York 10019
Common Stock Weiss, Peck & Greer......................... 472,900 shares(5) 6.7%
One New York Plaza
New York, New York 10004
Common Stock Dawson-Samberg Capital Management, Inc...... 426,005 shares(6) 6.0%
354 Pequot Avenue
Southport, Connecticut 06490
Common Stock The TCW Group............................... 388,200 shares(7) 5.5%
865 South Figueroa Street
Los Angeles, California 90017
</TABLE>
- - ------------
(1) The person specified above holds sole voting power and sole investment power
in respect of the number of shares of Common Stock indicated opposite its
name in the above table.
(2) Brandywine Asset Management, Inc. ("BAM") has informed PXRE that, as of
March 31, 1995, BAM beneficially owns the 622,400 shares of Common Stock
indicated opposite BAM's name in the above table (which number of shares
includes 96,200 shares of Common Stock obtainable upon conversion of Series
A Preferred Stock Depositary Shares). BAM holds sole voting power in
respect of 590,600 shares of Common Stock and sole investment power in
respect of 622,400 shares of Common Stock. In accordance with Rule
13d-3(d)(1) under the Exchange Act, the 96,200 shares of Common Stock
obtainable upon conversion of Series A Preferred Stock Depositary Shares
have been added to the total number of issued and outstanding shares of
Common Stock solely for the purpose of calculating the percentage of such
total number of issued and outstanding shares of Common Stock beneficially
owned by BAM.
(3) According to the Schedule 13G filed by Mellon Bank Corporation ("Mellon")
with the Securities and Exchange Commission (the "Commission"), Mellon,
through its direct or indirect subsidiaries, including Mellon Bank N.A.
("Mellon Bank"), may be deemed to be the beneficial owner of the 516,000
shares of Common Stock indicated opposite Mellon's name in the above table,
which shares are beneficially owned by Mellon or such subsidiaries in their
various fiduciary capacities. The Schedule 13G filed by Mellon states that
Mellon holds sole voting power in respect of 211,000 shares and shared
voting power in respect of 117,000 shares of Common Stock and sole
investment power in respect of 212,000 shares and shared
2
<PAGE> 5
investment power in respect of 304,000 shares of Common Stock. The Schedule
13G filed by Mellon also reports that Mellon Bank holds sole voting power
and sole investment power in respect of 90,000 shares, shared voting power
in respect of 117,000 shares and shared investment power in respect of
301,000 shares and therefore may be deemed to beneficially own 391,000
shares (5.6%) of Common Stock. In the Schedule 13G, Mellon and its
subsidiaries, including Mellon Bank, disclaim beneficial ownership of the
shares of Common Stock covered by the Schedule 13G.
(4) The Equitable Companies Incorporated ("Equitable") informed PXRE that, as of
February 28, 1995, it beneficially owns through subsidiaries the 493,228
shares of Common Stock indicated opposite Equitable's name in the above
table (which number of shares includes 144,428 shares of Common Stock
obtainable upon conversion of Series A Preferred Stock Depositary Shares).
The voting and investment power respecting such shares are divided among
three Equitable subsidiaries as follows: The Equitable Life Assurance
Society of the United States is deemed to hold shared voting power and sole
investment power in respect of 24,410 shares; Alliance Capital Management,
L.P., which holds the shares attributed to it on behalf of client
discretionary investment advisory accounts, is deemed to hold sole voting
power and sole investment power in respect of 450,510 shares (6.3%); and
Donaldson, Lufkin & Jenrette Securities Corporation is deemed to hold sole
voting power and sole investment power in respect of 18,308 shares. In
accordance with Rule 13d-3(d)(1) under the Exchange Act, the shares of
Common Stock obtainable upon conversion of Series A Preferred Stock
Depositary Shares have been added to the total number of issued and
outstanding shares of Common Stock solely for the purpose of calculating
the percentage of such total number of issued and outstanding shares of
Common Stock beneficially owned by Equitable and its subsidiaries.
(5) Weiss, Peck & Greer ("WPG") informed PXRE that, in its capacity as a
broker-dealer and an investment adviser, WPG may be deemed to be the
beneficial owner of the 472,900 shares of Common Stock indicated opposite
WPG's name in the above table (which number of shares includes 12,000
shares of Common Stock obtainable upon conversion of Series A Preferred
Stock Depositary Shares). Such shares are held by WPG for the discretionary
accounts of certain clients of WPG. WPG holds shared voting power and
shared investment power in respect of the 472,900 shares of Common Stock.
WPG disclaims beneficial ownership of the 472,900 shares of Common Stock.
In accordance with Rule 13d-3(d)(1) under the Exchange Act, the 12,000
shares of Common Stock obtainable upon conversion of Series A Preferred
Stock Depositary Shares have been added to the total number of issued and
outstanding shares of Common Stock solely for the purpose of calculating
the percentage of such total number of issued and outstanding shares of
Common Stock beneficially owned by WPG.
(6) According to the Schedule 13D filed by Dawson-Samberg Capital Management,
Inc. ("Dawson-Samberg") with the Commission, voting and investment power
respecting the 426,005 shares of Common Stock indicated opposite
Dawson-Samberg's name in the above table are divided among Dawson-Samberg
and two of its affiliates as follows: Dawson-Samberg, an investment
adviser, is deemed to hold sole voting power and sole investment power in
respect of 191,405 shares held in its managed accounts; Pequot General
Partners ("Pequot") is deemed to hold sole voting power and sole investment
power in respect of 166,600 shares held by a limited partnership for which
it serves as general partner; and DS International Partners, L.P. ("DSI")
is deemed to hold sole voting power and sole investment power in respect of
68,000 shares held by a fund for which it serves as investment manager. The
aforementioned Schedule 13D was filed jointly by Dawson-Samberg, Pequot and
DSI.
(7) According to the Schedule 13G filed by The TCW Group, Inc. (formerly known
as TCW Management Company; "TCW") with the Commission, TCW may be deemed to
beneficially own, through its subsidiaries, the 388,200 shares of Common
Stock indicated opposite its name in the above table. The Schedule 13G
filed by TCW states that TCW holds sole voting power and sole investment
power in respect of 388,200 shares of Common Stock. Although TCW is deemed
to be the beneficial owner of the shares covered by the Schedule 13G, in
the Schedule 13G TCW disclaims the beneficial ownership thereof.
3
<PAGE> 6
To PXRE's knowledge, no other person owns of record or beneficially more
than 5% of the outstanding shares of its Common Stock as of the record date.
NOMINEES FOR ELECTION AS DIRECTORS
PXRE's Certificate of Incorporation and Bylaws provide for the election of
directors by the shareholders. For this purpose, the Board of Directors is
divided into three classes (Classes I, II and III) as nearly equal in number as
possible. The terms of office of the members of one class expire and a successor
class is elected at each annual meeting of the shareholders. Under the
Certificate of Incorporation, the Board of Directors has the power to create up
to two additional directorships within any twelve-month period. Vacancies in
directorships (including vacancies resulting from resignations and newly created
directorships) may be filled, until the expiration of the term of the vacated
directorship and until a successor is elected and qualified, by the vote of
66 2/3% of the directors then in office.
At this Annual Meeting, the terms of office of the Class III directors will
terminate; therefore, the Board of Directors has nominated Bernard Kelly, Edward
P. Lyons and David W. Searfoss (all of whom are also presently serving on the
Board) for re-election as Class III directors to serve three-year terms until
the Annual Meeting of Shareholders is held in 1998 and until their successors
have been elected and qualified. It is intended that Proxies will be voted in
favor of these persons. If, for any reason, any of the nominees is not able or
willing to serve as a director when the election occurs (a situation which is
not presently contemplated), it is intended that the Proxies will be voted for
the election of a substitute nominee in accordance with the judgment of the
Proxy holder.
INFORMATION CONCERNING DIRECTORS AND NOMINEES
Mr. Radke (50) has been the President, Chief Executive Officer and a
director of PXRE since 1986, and of PXRE's predecessor since its formation in
April 1982. Since August 1993, Mr. Radke has also served as President, Chief
Executive Officer and Chairman of the Board of Directors of Transnational Re
Corporation ("TREX"). (See "CERTAIN BUSINESS RELATIONSHIPS -- The Transnational
Companies".)
Mr. Fiondella (52) has been Chairman of the Board of Directors, President
and Chief Executive Officer of Phoenix Home Life Mutual Insurance Company
("Phoenix Home Life") since February 1994. From July 1992 to February 1994, he
was President and Principal Operating Officer of Phoenix Home Life, and from
February 1989 to June 1992, he was President and Chief Operating Officer of
Phoenix Mutual Life Insurance Company, a predecessor of Phoenix Home Life
("Phoenix Mutual"). Mr. Fiondella is also an officer and director of various
Phoenix Home Life subsidiaries.
Mr. Kelly (64), who was elected a director of PXRE in December 1988, is a
U.K. attorney and formerly Vice Chairman and Managing Director of Lazard
Brothers & Co. Ltd., London. Mr. Kelly also is a director of a number of
companies, including American Phoenix Investments Ltd., London (a U.K.
subsidiary of Phoenix Home Life) and Societe Generale d'Investissements SA, a
quoted Luxembourg industrial holding company, and is Chairman of First Equity
Holdings Ltd., an inter-broker dealer and member of the London Stock Exchange,
International Select Fund Ltd., a Guernsey mutual fund, Lazard Income Growth &
Property Unit Trust and Nexus Structured Finance Ltd., an agency for private
sector finance to state (U.K.) institutions.
4
<PAGE> 7
Ms. Luscombe (43), who was elected a director of PXRE in November 1993, has
been a principal of WKL Associates, a company which provides U.S. real estate
investment advisory services to U.K. companies, since May 1994. Ms. Luscombe is
also principal real estate advisor to Prudential Portfolio Managers America
Limited. From November 1992 to May 1994, she was Senior Vice President of
Aldrich Eastman Waltch, a Boston-based company specializing in real estate
investment and pension fund advisory services. Ms. Luscombe is also a director
of Berkeley Commercial Investments, the commercial real estate investment arm of
Berkeley Group plc, a U.K. public company. From 1991 to 1992, she was Chief
Executive Officer of St. Katharine by the Tower Limited, a subsidiary of Taylor
Woodrow Group plc. Ms. Luscombe served as a director of INSILCO Corporation from
1985 to 1988 and of The Carroll Group of Companies from 1989 to 1990. From 1978
to 1989, she was President and Chief Executive Officer of Pan American
Properties Inc./Buckingham Holdings Inc., the U.S. real estate investment
companies of the British Coal Pension Funds.
Mr. Lyons (68) was Vice Chairman of the Board of Directors of Olin Corp., a
diversified chemical manufacturing corporation, prior to his retirement in 1986.
Mr. Lyons is currently a director of Phoenix Home Life.
Mr. McLoughlin (48) has been Executive Vice President and Chief Investment
Officer of Phoenix Home Life since July 1992. From December 1988 to June 1992,
he was Executive Vice President, Investments of Phoenix Mutual. Mr. McLoughlin
is currently president and a director or trustee of several registered
investment companies which are affiliated with Phoenix Home Life, as well as a
director of World Trust, a Luxembourg organized investment trust and a director
and officer of various Phoenix Home Life subsidiaries.
Mr. Searfoss (44) has been Executive Vice President and Chief Financial
Officer of Phoenix Home Life since October 1994. From July 1992 to October 1994,
he was Senior Vice President and Chief Financial Officer of Phoenix Home Life,
and from November 1987 to June 1992, he was Senior Vice President and Chief
Financial Officer of Phoenix Mutual. Mr. Searfoss has served as a director of
PXRE since December 1987.
Mr. Trautlein (68) was Chairman and Chief Executive Officer of Bethlehem
Steel Corporation from 1980 until his retirement in 1986. Mr. Trautlein is
currently a director of The Chase Manhattan Corporation and Data General
Corporation. He was elected a director of PXRE in March 1988.
Mr. Wilde (67) was, from September 1993 to May 1994, Chairman and Chief
Executive Officer and, from November 1971 to September 1993, President and Chief
Executive Officer of The Hartford Steam Boiler Inspection and Insurance Company.
Since May 1994, Mr. Wilde has been Chairman of the Executive Committee of The
Hartford Steam Boiler Inspection and Insurance Company. Mr. Wilde is currently a
director of Phoenix Home Life and Shawmut National Corporation, a banking
corporation.
Unless otherwise indicated, all directors have served in such capacity
since 1986.
In addition to the executive officers who are listed as being directors of
PXRE, PXRE has the following executive officers:
Michael J. Bleisnick (43) has been an Executive Vice President of PXRE
since March 1993. Prior thereto, he was a Senior Vice President of PXRE since
February 1990 and a Vice President of PXRE since July 1986. Since August 1993,
Mr. Bleisnick has also served as an Executive Vice President of TREX.
Gordon Forsyth, III (47) has been an Executive Vice President of PXRE since
March 1993. Prior thereto, he was a Senior Vice President of PXRE since February
1990 and a Vice President of PXRE since October 1986. Since August 1993, Mr.
Forsyth has also served as an Executive Vice President of TREX.
5
<PAGE> 8
Sanford M. Kimmel (42) has been Senior Vice President, Treasurer and Chief
Financial Officer of PXRE since February 1994. Since March 1994, Mr. Kimmel has
also served as Senior Vice President, Treasurer and Chief Financial Officer and
as a director of TREX. Prior to joining PXRE, he was Vice President, Finance of
Page America Group, Inc. since 1992. From 1991 to 1992, he was Vice President,
Expense Management and Special Projects of Home Life Insurance Company, a
predecessor of Phoenix Home Life ("Home Life Insurance"). From 1987 to 1991, he
was Vice President and Treasurer, and from 1982 to 1987 he was Treasurer, of
Home Life Insurance. From August 1982 to July 1991, Mr. Kimmel was also an
officer of four registered investment companies which were affiliated with Home
Life Insurance.
Eugene J. Sverchek (45) has been a Senior Vice President of PXRE since May
1991. Since August 1993, Mr. Sverchek has also served as a Senior Vice President
of TREX. Prior to joining PXRE, he held various positions (including Senior Vice
President) during his sixteen years at MONY Reinsurance Company where he
specialized in property treaty reinsurance underwriting.
Alain Tounquet (42) has been a Senior Vice President of PXRE since March
1994, prior to which he served as a Vice President of PXRE since October 1989.
Mr. Tounquet has also been the General Manager of the Brussels Office of PXRE
since October 1989. Since October 1993, Mr. Tounquet has also served as a Vice
President of TREX. From 1988 to 1989, he was the General Manager of Texcam, a
Belgian import company.
Frank A. LoPiccolo (51) has been a Vice President of PXRE since 1986. Since
August 1993, Mr. LoPiccolo has also served as a Vice President of TREX.
Edward C. McBride (41) has been a Vice President of PXRE since March 1993.
Since August 1993, Mr. McBride has also served as a Vice President of TREX. From
1992 to 1993, he was a Principal and Director of Marketing of BarSafe,
Incorporated, a manufacturing company. From 1985 to 1992, he was Vice President
of Underwriting and Marketing for Hartford Re Management Company, a reinsurance
underwriting management company.
All executive officers of PXRE hold office at the pleasure of the Board of
Directors.
The following table sets forth certain information concerning beneficial
ownership of PXRE's Common Stock by the directors, the five executive officers
named below under the heading "EXECUTIVE COMPENSATION" and all directors and
executive officers as a group, as of the record date:
<TABLE>
<CAPTION>
SHARES (AND
PERCENT) DIRECTOR
DIRECTORS AND FIVE CURRENT NAMED EXECUTIVE BENEFICIALLY TERM
OFFICERS OWNED(1) ENDS
------------------------------------------------- ----------------- --------
<S> <C> <C>
Gerald L. Radke.................................. 111,075(1.6%)(2) 1996
Robert W. Fiondella.............................. 500* 1997
Bernard Kelly.................................... 2,500* (3)
Wendy Luscombe................................... 0* 1996
Edward P. Lyons.................................. 0* (3)
Philip R. McLoughlin............................. 100* 1997
David W. Searfoss................................ 100* (3)
Donald H. Trautlein.............................. 1,500* 1997
Wilson Wilde..................................... 1,000* 1996
Michael J. Bleisnick............................. 36,521(4)* --
Gordon Forsyth, III.............................. 44,883(5)* --
Eugene J. Sverchek............................... 4,812(6)* --
Alain Tounquet................................... 1,529(7)* --
All directors and executive officers as a group
(17 persons)................................ 254,582(3.5%)(8)
</TABLE>
- - ------------
* Beneficially owns less than 1% of PXRE's issued and outstanding Common
Stock.
6
<PAGE> 9
(1) The number of shares of Common Stock set forth opposite the names of Mr.
Kelly, Ms. Luscombe, Mr. Lyons, Mr. Trautlein and Mr. Wilde does not
include the 2,000 shares granted to each such director under the PXRE
Director Deferred Stock Plan (described below under the heading "THE BOARD
OF DIRECTORS AND ITS COMMITTEES AND DIRECTOR COMPENSATION"), as to which
shares such directors currently hold neither voting nor investment power.
Pursuant to the terms of the Director Deferred Stock Plan, on each date
that dividends are paid to shareholders in respect of the Common Stock,
PXRE makes dividend equivalent payments, in cash, in respect of each share
of Common Stock granted, but not yet delivered, under such Plan.
(2) Includes currently exercisable options to purchase 43,575 shares of Common
Stock and 200 shares of Common Stock owned by Mr. Radke's children, the
beneficial ownership of which 200 shares is disclaimed by Mr. Radke. In
accordance with Rule 13d-3(d)(1) under the Exchange Act, the 43,575 shares
of Common Stock for which Mr. Radke holds currently exercisable options
have been added to the total number of issued and outstanding shares of
Common Stock solely for the purpose of calculating the percentage of such
total number of issued and outstanding shares of Common Stock beneficially
owned by Mr. Radke.
(3) Term of office of Class III directors terminates at the forthcoming 1995
Annual Meeting.
(4) Consists of currently exercisable options to purchase 34,813 shares of
Common Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act,
the 34,813 shares of Common Stock for which Mr. Bleisnick holds currently
exercisable options have been added to the total number of issued and
outstanding shares of Common Stock solely for the purpose of calculating
the percentage of such total number of issued and outstanding shares of
Common Stock beneficially owned by Mr. Bleisnick.
(5) Includes currently exercisable options to purchase 36,041 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
36,041 shares of Common Stock for which Mr. Forsyth holds currently
exercisable options have been added to the total number of issued and
outstanding shares of Common Stock solely for the purpose of calculating
the percentage of such total number of issued and outstanding shares of
Common Stock beneficially owned by Mr. Forsyth.
(6) Includes currently exercisable options to purchase 3,360 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
3,360 shares of Common Stock for which Mr. Sverchek holds currently
exercisable options have been added to the total number of issued and
outstanding shares of Common Stock solely for the purpose of calculating
the percentage of such total number of issued and outstanding shares of
Common Stock beneficially owned by Mr. Sverchek.
(7) Consists of currently exercisable options to purchase 545 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the 545
shares of Common Stock for which Mr. Tounquet holds currently exercisable
options have been added to the total number of issued and outstanding
shares of Common Stock solely for the purpose of calculating the percentage
of such total number of issued and outstanding shares of Common Stock
beneficially owned by Mr. Tounquet.
(8) Includes currently exercisable options to purchase 157,055 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
157,055 shares of Common Stock for which PXRE's directors and executive
officers as a group hold currently exercisable options have been added to
the total number of issued and outstanding shares of Common Stock solely
for the purpose of calculating the percentage of such total number of
issued and outstanding shares of Common Stock beneficially owned by such
directors and executive officers as a group.
7
<PAGE> 10
THE BOARD OF DIRECTORS AND ITS COMMITTEES
AND DIRECTOR COMPENSATION
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In 1994, the Board of Directors met six (6) times. No director attended
fewer than 75% of the aggregate of (i) the total number of Board meetings (held
when such person was a director) and (ii) the total number of meetings held by
committees on which he or she served (during the periods that he or she served).
The Board of Directors has an Audit Committee which is comprised of Messrs.
Kelly (Chairman), McLoughlin, Searfoss and Trautlein and Ms. Luscombe. The
members of the committee are responsible for assisting the Board of Directors in
fulfilling its responsibilities in connection with PXRE's accounting and
financial reporting practices. In 1994, the Audit Committee met three (3) times.
The Human Resources Committee of the Board of Directors is comprised of
Messrs. Trautlein (Chairman), Fiondella, Lyons and Wilde. The Human Resources
Committee performs the functions of a compensation committee, including the
administration of PXRE's various stock option and other compensation plans. In
1993, the Human Resources Committee met two (2) times.
The Investment Committee of the Board of Directors is comprised of Messrs.
Lyons (Chairman), Kelly and Wilde and Ms. Luscombe. The members of the
Investment Committee are responsible for monitoring and approving the investment
policies and the investments of PXRE and its reinsurance subsidiary, PXRE
Reinsurance Company ("PXRE Reinsurance"), and for overseeing investment
management carried out by Phoenix Investment Counsel, Inc. ("Phoenix
Investment"), an indirect subsidiary of Phoenix Home Life. In 1994, the
Investment Committee met two (2) times.
The Board of Directors also has an Executive Committee, which is currently
comprised of Messrs. Radke, Fiondella and Trautlein. The Executive Committee is
vested with the authority to exercise the powers of the full Board of Directors
during the intervals between its meetings. In 1994, the Executive Committee met
one (1) time.
PXRE does not have a standing nominating committee. However, upon the
request of the Board of Directors, the Executive Committee has occasionally
functioned in this role.
COMPENSATION OF DIRECTORS
CASH COMPENSATION. During the 1994 fiscal year PXRE paid annual retainers
of $12,000 (plus $1,500 each for members ($3,000 for the Chairman) of the Audit
Committee, the Investment Committee and the Human Resources Committee) and fees
per meeting ranging from $1,000-$3,000 to each director of PXRE, except for
directors who were also officers of PXRE or Phoenix Home Life who individually
received no compensation for attendance at meetings. For fiscal 1994 PXRE paid a
total of $236,500 in directors' fees. The amount of the annual retainer paid to
nonemployee directors has been increased to $16,000 effective for fiscal 1995.
Also effective for 1995, directors who are officers of Phoenix Home Life are
entitled to directly receive compensation for service as directors of PXRE.
Directors have the ability to defer receipt of their cash compensation by making
an irrevocable written election prior to the beginning of the calendar year to
defer receipt of such compensation until the earlier of their retirement or
resignation as a director of PXRE, death or disability. An unfunded account is
established by PXRE in the director's name and interest is credited to the
account balance at an annual rate equal to the annualized average rate of return
earned on accounts
8
<PAGE> 11
invested during such period in the Intermediate Term U.S. Treasury Portfolio
fund of PXRE's 401(k) Savings and Investment Plan.
OTHER COMPENSATION. On April 20, 1995, PXRE adopted a Director Stock
Option Plan (the "Director Option Plan") pursuant to which each director of PXRE
who is not an employee of PXRE will automatically receive annual grants (on the
date of PXRE's Annual Meeting for such year) of options to purchase 1,000 shares
of PXRE Common Stock. The Director Option Plan was adopted contingent upon the
approval of PXRE's shareholders at the 1995 Annual Meeting. For a detailed
description of the Director Option Plan, see "APPROVAL OF DIRECTOR STOCK OPTION
PLAN" below.
On August 23, 1990, PXRE adopted a Director Deferred Stock Plan (the
"Director Plan") pursuant to which directors of PXRE who are not employees of
PXRE or of Phoenix Home Life were each granted the right to receive 2,000 shares
of Common Stock (subject to anti-dilution adjustments) at certain specified
times following their respective terminations as PXRE directors. On August 23,
1990, Messrs. Kelly, Lyons, Trautlein and Wilde were each granted the right to
receive 2,000 shares of Common Stock pursuant to the terms of the Director Plan.
The Director Plan was subsequently amended effective August 23, 1990 to allow
participation by directors who were employees of Phoenix Home Life and who were
PXRE directors on August 23, 1990, provided that shares allocable under the
Director Plan to such directors were delivered at the time specified in the
Director Plan. Effective August 23, 1990, Messrs. Fiondella, Gummere (who
resigned as a PXRE director on February 21, 1994), McLoughlin and Searfoss, all
full-time employees of Phoenix Home Life who were PXRE directors on such date,
were each granted the right to receive 2,000 shares of Common Stock, which
shares were delivered on August 24, 1993 pursuant to the terms of the Director
Plan, as amended. Upon becoming a director of PXRE on November 12, 1993, Ms.
Luscombe was granted the right to receive 2,000 shares of Common Stock pursuant
to the terms of the Director Plan. Such grants resulted in all eligible
non-employee PXRE directors as a group being granted the right to receive a
total of 18,000 shares of Common Stock pursuant to the terms of the Director
Plan.
On each date on which dividends are paid to shareholders with respect to
shares of Common Stock of PXRE, each director who has been granted shares of
Common Stock under the Director Plan is, subject to the practice described below
respecting directors who are employees of Phoenix Home Life, paid an amount in
cash equal to the product of (i) the dividend per share for the applicable
dividend payment date and (ii) the number of shares which have been granted to
the director but which have not yet been delivered.
The Director Plan is administered by the Board of Directors, which may
amend or terminate the Director Plan at any time. However, no such amendment or
termination may reduce the number of shares that had been granted to the
directors prior to such amendment or termination.
Phoenix Home Life maintained a practice that no employee could accept any
individual remuneration for serving on the board of directors of PXRE, and that
any such remuneration that would otherwise be payable by PXRE to a Phoenix Home
Life employee would instead be paid directly to Phoenix Home Life. In accordance
with Phoenix Home Life's practice, the above-described dividend equivalents
were, since the inception of the Director Plan, paid by PXRE directly to Phoenix
Home Life and, on August 24, 1993, the aggregate of 8,000 shares of Common Stock
that would otherwise have been delivered by PXRE to Messrs. Fiondella, Gummere,
McLoughlin and Searfoss on such date were instead delivered by PXRE directly to
Phoenix Home Life. In light of its current ownership of PXRE shares, Phoenix
Home Life notified PXRE that, effective January 1, 1995, it has changed such
practice and employees of Phoenix Home Life serving as directors of PXRE are
entitled to receive directly any compensation therefor.
9
<PAGE> 12
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK PRESENT IN
PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING IS REQUIRED TO ELECT THE
NOMINEES FOR DIRECTOR. THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE
"FOR" THE ELECTION OF THE NOMINEES FOR DIRECTOR AND, UNLESS A STOCKHOLDER
SIGNIFIES OTHERWISE, THE PERSONS NAMED IN THE PROXY WILL SO VOTE.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the firm of Price Waterhouse LLP as
PXRE's independent public accountants for the fiscal year ending December 31,
1995. This selection is being presented to the shareholders for their
ratification at the Annual Meeting. Price Waterhouse LLP has audited PXRE's
financial statements since July 1, 1986. A representative of Price Waterhouse
LLP is expected to attend the Annual Meeting, with the opportunity to make a
statement if he or she so desires and to respond to questions.
RATIFICATION OF THE SELECTION OF PRICE WATERHOUSE LLP AS INDEPENDENT PUBLIC
ACCOUNTANTS WILL REQUIRE THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF
COMMON STOCK PRESENT IN PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING.
THE BOARD OF DIRECTORS AND MANAGEMENT RECOMMEND A VOTE "FOR" RATIFICATION AND,
UNLESS A STOCKHOLDER SIGNIFIES OTHERWISE, THE PERSONS NAMED IN THE PROXY WILL SO
VOTE.
10
<PAGE> 13
EXECUTIVE COMPENSATION
The following tables and narrative text describe the compensation paid in
1994 and the two prior fiscal years to PXRE's Chief Executive Officer and PXRE's
four other most highly compensated executive officers. Also described below is
certain future compensation such individuals may be eligible to receive upon
retirement or following certain terminations of employment or certain changes of
control.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-----------------------------
ANNUAL COMPENSATION SECURITIES
----------------------------------------------- RESTRICTED UNDERLYING
NAME AND OTHER ANNUAL STOCK STOCK ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS($)(1) COMPENSATION(2) AWARDS($)(3) OPTIONS(#)(4) COMPENSATION(5)
- - ------------------------ ----- -------- ----------- --------------- ------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Gerald L. Radke......... 1994 $368,846 $ 275,625 $4,934 $ 118,125 17,592 $20,284
President and Chief 1993 $345,705 $ 301,175 $3,571 $ 100,011 14,352 $17,991
Executive Officer 1992 $305,734 -- $7,984 -- 32,759 $40,984
Michael J. Bleisnick.... 1994 $211,307 $ 124,103 -- $ 53,213 7,120 $ 5,777
Executive Vice 1993 $192,583 $ 136,500 -- $ 40,803 4,586 $ 5,069
President -- Domestic 1992 $166,217 -- -- -- 12,193 $14,120
Operations
Gordon Forsyth, III..... 1994 $211,307 $ 124,103 -- $ 53,213 7,120 $ 6,930
Executive Vice 1993 $190,348 $ 136,500 -- $ 40,803 4,452 $ 5,705
President -- 1992 $162,900 -- -- -- 11,802 $17,146
International
Operations
Eugene J. Sverchek...... 1994 $151,305 $ 81,375 -- $ 34,875 4,398 $ 4,546
Senior Vice 1993 $137,819 $ 87,550 -- $ 28,571 3,668 $ 4,382
President -- Domestic 1992 $134,377 -- -- -- 9,770 $14,540
Treaty
Alain Tounquet.......... 1994 $150,638 $ 79,085 -- $ 33,894 3,995 --
Senior Vice 1993 $117,688 $ 71,585 -- $ 23,370 2,181 --
President -- 1992 $109,570 -- -- -- 6,048 --
International
Operations
</TABLE>
- - ------------
(1) For 1994, consists of cash bonuses awarded in 1995 in respect of fiscal year
1994 pursuant to PXRE's Restated Employee Annual Incentive Bonus Plan. For
1993, consists of (i) special cash bonuses awarded in March 1993 in
recognition of the executives' role in the successful completion, on March
3, 1993, of a public offering and (ii) cash bonuses awarded in 1994 in
respect of fiscal year 1993 pursuant to PXRE's Restated Employee Annual
Incentive Bonus Plan and, in the case of Messrs. Bleisnick and Forsyth, on
an ad-hoc basis outside of the Plan.
(2) For 1994 and 1993, consists of $4,934 and $3,571, respectively, paid to
reimburse Mr. Radke for taxes paid by him in respect of income arising from
PXRE's forgiveness of certain accrued interest on an outstanding loan. (See
column entitled "All Other Compensation".) For 1992, consists of $5,016
paid to reimburse Mr. Radke for taxes paid by him in respect of involuntary
refunds of excess contributions to PXRE's 401(k) Savings and Investment
Plan (the "401(k) Plan") and $2,968 paid to reimburse Mr. Radke for taxes
paid by him in respect of income arising from PXRE's forgiveness of certain
accrued interest on the outstanding loan referred to above.
(3) Consists of awards to Messrs. Radke, Bleisnick, Forsyth, Sverchek and
Tounquet, respectively, in respect of fiscal year 1994, of 4,643, 2,092,
2,092, 1,371 and 1,332 restricted shares of PXRE's Common Stock and in
respect of fiscal year 1993, of 4,211, 1,718, 1,718, 1,203 and 984
restricted shares of PXRE's Common Stock pursuant to PXRE's Restated
Employee Annual Incentive Bonus Plan. In accordance
11
<PAGE> 14
with the Commission's rules, the above dollar values were calculated by
multiplying the closing prices of PXRE's Common Stock on February 16, 1995
and February 10, 1994, the dates of such grants (i.e., $24.875 and $23.75,
respectively), as reported on the Nasdaq Stock Market National Market
System, by the number of restricted shares awarded. Pursuant to the terms
of this Plan, such restricted shares will vest and become 100%
nonforfeitable, with respect to the 1993 grants, in one installment on
January 1, 1997 and, with respect to the 1994 grants, in one installment on
January 1, 1998. During the holding periods such shares are entitled to
receive dividends, if any, declared with respect to PXRE's Common Stock.
(4) For 1994 and 1993, consists of non-qualified options granted in respect of
PXRE's Common Stock pursuant to PXRE's 1992 Officer Incentive Plan. For
1992, consists of non-qualified options granted in respect of PXRE's Common
Stock pursuant to PXRE's 1988 Stock Option Plan.
(5) For Mr. Radke, consists of: $11,178, $10,232 and $8,967 contributed by PXRE
in 1994, 1993 and 1992, respectively, to the 401(k) Plan (which is a
contributory defined contribution plan), $23,655 contributed by PXRE in
1992 to PXRE's Pension Plan (which is a non-contributory defined
contribution actuarial plan) (the "Pension Plan"), $1,712 paid by PXRE
during each of 1994, 1993 and 1992 with respect to a supplemental term life
insurance policy for Mr. Radke's benefit, $1,602 paid by PXRE during each
of 1994, 1993 and 1992 with respect to a supplemental disability insurance
policy for Mr. Radke's benefit and $5,792, $4,445 and $5,048 representing
the amount of interest accrued in 1994, 1993 and 1992, respectively, and
forgiven by PXRE in respect of a loan of $70,125 made by PXRE to Mr. Radke
in 1988, the full principal amount of which remained outstanding during
1994, 1993 and 1992 (see "CERTAIN BUSINESS RELATIONSHIPS" below); for Mr.
Bleisnick, consists of: $5,336, $4,628 and $4,493 contributed by PXRE in
1994, 1993 and 1992, respectively, to the 401(k) Plan, $9,344 contributed
by PXRE in 1992 to the Pension Plan and $441, $441 and $283 paid by PXRE
during 1994, 1993 and 1992, respectively, with respect to a supplemental
term life insurance policy for Mr. Bleisnick's benefit; for Mr. Forsyth,
consists of: $6,459, $5,234 and $2,902 contributed by PXRE in 1994, 1993
and 1992, respectively, to the 401(k) Plan, $13,877 contributed by PXRE in
1992 to the Pension Plan and $471, $471 and $367 paid by PXRE during 1994,
1993 and 1992, respectively, with respect to a supplemental term life
insurance policy for Mr. Forsyth's benefit; and for Mr. Sverchek, consists
of: $4,546, $4,382 and $1,814 contributed by PXRE in 1994, 1993 and 1992,
respectively, to the 401(k) Plan and $12,726 contributed by PXRE in 1992 to
the Pension Plan. No amounts were contributed by PXRE to the Pension Plan
for 1994 and 1993 because the Pension Plan was frozen effective December
31, 1992. The PXRE Retirement Plan (which is a defined benefit plan) was
adopted in its place effective January 1, 1993; estimated benefits under
such defined benefit plan are outlined in the Pension Plan Table below. The
assets in a participant's account under the Pension Plan will be used to
satisfy accrued benefits under the new defined benefit plan. Thus, the
amounts contributed on behalf of the named executives to the Pension Plan
for 1992 included above will be used to satisfy the estimated benefits
outlined in the Pension Plan Table.
12
<PAGE> 15
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE VALUE($)(2)
- - -------------------------------------------------- ------------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Gerald L. Radke................................... 17,592 31.5% $23.875 3/24/04 $ 193,688
Michael J. Bleisnick.............................. 7,120 12.7% $23.875 3/24/04 $ 78,391
Gordon Forsyth, III............................... 7,120 12.7% $23.875 3/24/04 $ 78,391
Eugene J. Sverchek................................ 4,398 7.8% $23.875 3/24/04 $ 48,422
Alain Tounquet.................................... 3,995 7.2% $23.875 3/24/04 $ 43,985
</TABLE>
- - ------------
(1) Consists of non-qualified options granted pursuant to PXRE's 1992 Officer
Incentive Plan. Under such Plan, the option exercise price may be less
than, equal to or greater than the fair market value of the Common Stock of
PXRE on the date the option is granted, but may not be less than 50% of
such fair market value. For this purpose, the fair market value of a share
of PXRE's Common Stock is the average of the high and low bid and asked
prices of the Common Stock as reported on the Nasdaq Stock Market National
Market System on the date of grant. The exercise price of the options
listed in the above table is 100% of the fair market value of PXRE's Common
Stock on the date of grant (March 24, 1994). The options listed above
become exercisable in four equal annual installments, subject to the
grantee remaining in the continuous employ of PXRE or its affiliates for at
least one year from the date of grant, except where such employment
terminates by reason of death, permanent disability or retirement at or
after age 65 with PXRE's consent; provided, however, that upon the earlier
of (i) a change of control of PXRE or (ii) the Common Stock of PXRE ceasing
to be publicly traded, any unexercised portion of an option will become
exercisable. Options may also be surrendered in exchange for a cash payment
in the event of a change of control of PXRE or the cessation of public
trading of the Common Stock of PXRE, in each case under certain
circumstances. Options are not transferable by a grantee other than by will
or the laws of descent and distribution, and during the lifetime of a
grantee an option will be exercisable only by the grantee or, if the
grantee is legally incapacitated, by the grantee's duly appointed guardian
or legal representative. The Plan authorizes the administering committee to
include in individual stock option agreements with grantees a provision
allowing grantees to satisfy any federal, state or local income tax
liabilities resulting from option exercises by having PXRE withhold the
appropriate number of shares of Common Stock at the time of exercise
(subject in each instance to committee approval), but the Plan does not
provide for cash payments by PXRE to cover any such income taxes.
(2) In accordance with the Commission's rules, in order to determine grant date
present values in the above table PXRE used the Black-Scholes model of
option valuation, adjusted to reflect an option term of 5 years, which
represents the weighted average (by number of options) over the past ten
years of the length of time between the grant dates of options under PXRE's
plans and their exercise dates for the named executive officers. The model
also assumes: (i) an interest rate that represents the interest rate on a
U.S. government zero coupon bond with a maturity equal to the term of the
grant; (ii) volatility calculated using a weekly stock price for five years
(260 weeks) prior to the grant date; and (iii) dividends estimated at the
annual rate of $0.60 per share (the quarterly dividend on PXRE's Common
Stock having been increased in November 1994 from $0.075 per share to $0.15
per share). Based on this model, the present value of the options on the
March 24, 1994 grant date was determined to be $11.01 per option. PXRE does
not advocate or necessarily agree that the Black-Scholes model can properly
determine the value of an option.
13
<PAGE> 16
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT DECEMBER 31, 1994
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED IN-
STOCK OPTIONS AT 12/31/94 THE-MONEY STOCK OPTIONS
SHARES ACQUIRED VALUE (#)(2) AT 12/31/94 ($)(3)
NAME ON EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- - ------------------------ ---------------- ---------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald L. Radke......... 100,000 $1,243,237 43,575/44,736 $1,230,993/$1,263,792
Michael J. Bleisnick.... 15,063 $ 204,297 34,813/16,657 $ 983,467/$ 470,560
Gordon Forsyth, III..... 5,000 $ 65,000 36,041/16,360 $1,018,158/$ 462,170
Eugene J. Sverchek...... 0 $ 0 3,360/12,034 $ 94,920/$ 339,960
Alain Tounquet.......... 4,682 $ 69,685 545/10,455 $ 15,396/$ 295,353
</TABLE>
- - ------------
(1) Represents the difference between the closing prices of PXRE's Common Stock
as reported on the Nasdaq Stock Market National Market System on the dates
of exercise and the exercise prices of the options.
(2) For Mr. Radke, consists of options for 7,275 shares of PXRE Common Stock
granted in 1987 pursuant to PXRE's 1987 Stock Option Plan at an exercise
price of $13.00 per share, all of which options were exercisable at
December 31, 1994, options for 49,092 shares of PXRE Common Stock granted
in 1990-1992 pursuant to PXRE's 1988 Stock Option Plan at exercise prices
ranging from $8.75 to $11.50 per share, 32,712 of which options were
exercisable at December 31, 1994, and options for 31,944 shares of PXRE
Common Stock granted in 1993 and 1994 pursuant to PXRE's 1992 Officer
Incentive Plan at exercise prices of $25.00 and $23.875 per share,
respectively, 3,588 of which options were exercisable at December 31, 1994;
for Mr. Bleisnick, consists of options for 13,000 shares of PXRE Common
Stock granted in 1987 pursuant to PXRE's 1987 Stock Option Plan at an
exercise price of $13.00 per share, all of which options were exercisable
at December 31, 1994, options for 26,764 shares of PXRE Common Stock
granted in 1989-1992 pursuant to PXRE's 1988 Stock Option Plan at exercise
prices ranging from $8.75 to $11.50 per share, 20,667 of which options were
exercisable at December 31, 1994, and options for 11,706 shares of PXRE
Common Stock granted in 1993 and 1994 pursuant to PXRE's 1992 Officer
Incentive Plan at exercise prices of $25.00 and $23.875 per share,
respectively, 1,146 of which options were exercisable at December 31, 1994;
for Mr. Forsyth, consists of options for 40,829 shares of PXRE Common Stock
granted in 1989-1992 pursuant to PXRE's 1988 Stock Option Plan at exercise
prices ranging from $8.75 to $11.50 per share, 34,928 of which options were
exercisable at December 31, 1994, and options for 11,572 shares of PXRE
Common Stock granted in 1993 and 1994 pursuant to PXRE's 1992 Officer
Incentive Plan at exercise prices of $25.00 and $23.875 per share,
respectively, 1,113 of which options were exercisable at December 31, 1994;
for Mr. Sverchek, consists of options for 7,328 shares of PXRE Common Stock
granted in 1992 pursuant to PXRE's 1988 Stock Option Plan at an exercise
price of $10.875 per share, 2,443 of which options were exercisable at
December 31, 1994, and options for 8,066 shares of PXRE Common Stock
granted in 1993 and 1994 pursuant to PXRE's 1992 Officer Incentive Plan at
exercise prices of $25.00 and $23.875 per share, respectively, 917 of which
options were exercisable at December 31, 1994; and for Mr. Tounquet,
consists of options for 4,824 shares of PXRE Common Stock granted in 1991
and 1992 pursuant to PXRE's 1988 Stock Option Plan at exercise prices of
$8.75 and $10.875 per share, none of which options were exercisable at
December 31, 1994, and options for 6,176 shares of PXRE Common Stock
granted in 1993 and 1994 pursuant to PXRE's 1992 Officer Incentive Plan at
exercise prices of $25.00 and $23.875 per share, respectively, 545 of which
options were exercisable at December 31, 1994.
(3) Represents the difference between the closing price of PXRE's Common Stock
as reported on the Nasdaq Stock Market National Market System on December
31, 1994 ($28.25) and the exercise prices of the options.
14
<PAGE> 17
PENSION PLAN
The following table illustrates the maximum annual estimated benefits
payable under PXRE's defined benefit plan (in conjunction with the predecessor
actuarial retirement plan) and its non-qualified supplemental plan, to employees
for specified covered compensation and specified years of service, assuming
retirement at age 65.
<TABLE>
<CAPTION>
YEARS OF SERVICE
------------------------------------------------------------
REMUNERATION 5 10 15 20 25
- - ------------------------------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$100,000............................ $ 13,333 $ 26,667 $ 40,000 $ 40,000 $ 42,559
$125,000............................ 16,667 33,333 50,000 50,000 54,121
$150,000............................ 20,000 40,000 60,000 60,000 65,684
$175,000............................ 23,333 46,667 70,000 70,000 77,246
$200,000............................ 26,667 53,333 80,000 80,000 88,809
$225,000............................ 30,000 60,000 90,000 90,000 100,371
$250,000............................ 33,333 66,667 100,000 100,000 111,934
$275,000............................ 36,667 73,333 110,000 110,000 123,496
$300,000............................ 40,000 80,000 120,000 120,000 135,059
$400,000............................ 53,333 106,667 160,000 160,000 181,309
$500,000............................ 66,667 133,333 200,000 200,000 227,559
</TABLE>
Benefits are calculated on a straight-life annuity basis. Benefits shown in
the Pension Plan Table are not subject to any reduction for Social Security or
other offset amounts.
Covered compensation includes base salary only. For each of the named
current executive officers, annual covered compensation for 1994 is the amount
shown for 1994 in the Salary column of the Summary Compensation Table, above.
The full years of credited service under the plans as of December 31, 1994 for
each of the named current executive officers is: Mr. Radke: 22; Mr. Bleisnick:
10; Mr. Forsyth: 6; and Mr. Sverchek: 3. Mr. Tounquet is not a participant in
the plans.
15
<PAGE> 18
Notwithstanding anything to the contrary set forth in any of PXRE's
previous filings under the Securities Act of 1933, as amended, or under the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
Stock Performance Graph and Report of the Human Resources Committee of the Board
of Directors of PXRE shall not be incorporated by reference into any such
filings.
STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG PXRE CORPORATION, S&P 500 AND DOW JONES PROPERTY AND CASUALTY INDEX
(GRAPH)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) PXRE CORP S&P 500 DOW JONES P&C
<S> <C> <C> <C>
1989 100 100 100
1990 57.55 96.90 95.75
1991 79.66 126.42 119.13
1992 121.71 136.05 145.06
1993 212.18 149.76 146.26
1994 223.16 151.74 153.81
</TABLE>
The total return assumes that dividends were reinvested quarterly and is
based on a $100 investment on December 31, 1989. For each subsequent year, the
total return for PXRE and for each index is stated as of December 31 of such
year.
16
<PAGE> 19
REPORT OF THE HUMAN RESOURCES COMMITTEE OF THE BOARD OF DIRECTORS OF PXRE
CORPORATION
The Human Resources Committee of the Board of Directors has furnished the
following report on executive compensation:
PXRE Corporation (the "Company") has implemented compensation policies,
plans and programs which seek to increase the profitability of the Company, and
thus shareholder value, by aligning closely the financial interests of the
Company's executives with those of its shareholders. Emphasis is placed on the
achievements of the Company as an integrated unit.
The Human Resources Committee of the Company has established an executive
compensation program to achieve the following goals:
1. To attract and retain key executives critical to the long-term
success of the Company.
2. To promote the enhancement of shareholder value.
3. To reward executives for long-term strategic management.
4. To support a performance-oriented environment resulting in above
average total compensation for above average company results.
COMPENSATION MIX
The Company's executive compensation program consists of three components
(base salary, annual incentives and long-term incentives) designed to promote
the above-stated goals.
BASE SALARY. Base salary is targeted at the competitive median for
competitors in the reinsurance industry. For the purpose of establishing base
salary levels, the Company from time to time compares the levels of executive
base salary paid by it to those levels paid to the executives of other public
and private reinsurance companies in the United States.
Executive salaries are reviewed by the Committee in the first quarter of
each year. The Chief Executive Officer submits an annual salary plan to the
Committee and the Committee reviews the plan and determines any appropriate
modifications. Any increases in an individual executive's salary from year to
year are based on (1) increased contribution to the Company by the individual
and (2) increases in median competitive pay levels. Based upon these factors, in
1994 the Committee determined that it was appropriate to increase executive base
salaries by an average of 8.0%.
ANNUAL INCENTIVES. The Restated Employee Annual Incentive Bonus Plan,
adopted by the Company in 1992, is intended to reflect the Company's belief that
management's contribution to shareholder returns comes from maximizing earnings
at an appropriate level of risk across the reinsurance cycle. Annual target
bonuses are determined for each eligible employee, and following the end of each
year the Committee determines to what extent each employee's target bonus for
the year has been earned. The full target bonus will be paid to the employee if
the Company achieved a 13% after tax return on equity for the year. The bonus
award will be adjusted up to 150% or down to 0% of the target bonus based on the
actual return on equity achieved by the Company for the year.
Pursuant to the Annual Bonus Plan, the bonus award for all officers is
payable 70% in cash and 30% in restricted stock, at the current market value.
The partial payment in restricted stock ties a portion of each executive's
annual incentive award to the Company's stock price over time. Employees who are
not officers of
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the Company receive the entire bonus award in cash. The Committee may adjust the
cash portion of any bonus award (plus or minus 20% for officers, 40% for
non-officers) to reflect individual performance.
In February 1995, the Committee determined that total bonus amounts equal
to $977,729 were payable to the Company's executives under the Restated Employee
Annual Incentive Bonus Plan based on the 1994 performance of the Company. These
awards, which were based on a more than 20.0% return on equity calculated under
the Plan and a corresponding upward adjustment in individual performance
percentages to 150%, consisted of cash payments of $684,409 and restricted stock
grants valued at $293,320 containing a three year vesting provision.
LONG-TERM INCENTIVES. In March 1992, the Committee made its final awards
under the Company's 1988 Stock Option Plan, which was effectively "frozen" by
the Board of Directors as of December 31, 1992 so that no further options could
thereafter be granted under such Plan. In May 1992, the shareholders of the
Company approved the 1992 Officer Incentive Plan, which provides for grants of
long-term incentive awards to officers of the Company. The 1992 Incentive Plan
provides the Committee with the flexibility to grant long-term incentives in two
forms: stock options and restricted stock.
Each year, the Committee determines whether it is appropriate to grant
stock option and/or restricted stock awards to eligible officers. Grants for
each officer are determined based on industry norms, with the Committee having
the flexibility to adjust individual awards. Awards are considered in
conjunction with the annual salary plan and the overall goals of the Company's
executive compensation program. The Committee believes that its past option
grants under the 1988 Stock Option Plan have focused, and its option and
restricted stock grants under the 1992 Incentive Plan will continue to focus,
senior management's attention on building shareholder value.
The Committee granted non-qualified options to purchase a total of 56,330
shares of the Company's Common Stock at an exercise price of $23.875 per share
(market value on grant date) in March 1994 to the Company's executive officers
pursuant to the 1992 Incentive Plan. Such grants were made pursuant to the
Committee's evaluation of each grantee's base salary and position with the
Company, the fair market value of the Common Stock on the date of grant and
competitive compensation levels within the industry. No grants of restricted
stock were made during or with respect to 1994 under this Plan.
The Internal Revenue Code has set limitations on the deductibility of
compensation paid to executive officers effective in 1994. Depending on the
final form of applicable Treasury Regulations and the Company's future
compensation structure, the Committee will consider recommending appropriate
steps that may be necessary to preserve all available tax deductions for the
Company.
CHIEF EXECUTIVE COMPENSATION
The Committee determined the Chief Executive Officer's compensation for
1994 based upon a number of factors and criteria. The Chief Executive Officer's
base salary was increased by 7.1% during 1994 and was based upon a review of
similar companies adjusted for size and capitalization and upon review of the
Chief Executive Officer's performance as regards the achievement of long-term
strategic goals and the management of the Company during a particularly
unfavorable business climate.
In February 1995, the Committee granted an award to the Chief Executive
Officer under the Restated Employee Annual Incentive Bonus Plan consisting of a
cash payment of $275,625 and a restricted stock grant valued at $118,125 and
containing a three year vesting provision.
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In March 1994, the Chief Executive Officer received options to purchase a
total of 17,592 shares of Common Stock at an exercise price of $23.875 per share
(market value on grant date) under the 1992 Officer Incentive Plan. As discussed
above, such grant was determined pursuant to the Committee's evaluation of the
Chief Executive Officer's base salary and position with the Company, the fair
market value of the Common Stock on the date of grant and competitive CEO
compensation levels within the industry.
HUMAN RESOURCES COMMITTEE
Donald H. Trautlein, Chairman
Robert W. Fiondella
Edward P. Lyons
Wilson Wilde
February 16, 1995
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Of the four members of the Human Resources Committee, one member, namely
Mr. Fiondella, is an executive officer of Phoenix Home Life and three members,
namely Messrs. Fiondella, Lyons and Wilde serve as directors of Phoenix Home
Life or one of its affiliates. Additionally, one former director and member of
the Human Resources Committee (namely John Gummere who resigned as a director of
PXRE in February 1994) was also an executive officer and director of Phoenix
Home Life and two directors who served as members of the Human Resources
Committee until May 1994, namely Messrs. McLoughlin and Kelly, were also an
executive officer and director and a director, respectively, of Phoenix Home
Life or one of its affiliates. During 1994 and as of the record date, Phoenix
Home Life owned approximately 9% of the issued and outstanding Common Stock of
PXRE. PXRE Reinsurance Company ("PXRE Reinsurance"), a wholly-owned subsidiary
of PXRE, and Phoenix Investment Counsel, Inc., an indirect subsidiary of Phoenix
Home Life ("Phoenix Investment"), are parties to an investment advisory
agreement. Pursuant to this agreement, which is terminable by either party on 60
days' notice, Phoenix Investment provides, or arranges for another party to
provide, investment research and advice, implementation of investment
transactions, clearing agent and custodian services, monthly reports on
portfolio transactions and other related services in connection with PXRE
Reinsurance's investment portfolio. PXRE Reinsurance incurred fees of $112,500
to Phoenix Investment for services performed pursuant to such agreement in
fiscal year 1994. As of the date hereof, such investment advisory agreement is
being renegotiated. Management of PXRE expects that the fees for 1995 will be
approximately $200,000. Based upon management's experience related to similar
agreements with unaffiliated persons, PXRE believes that the terms and
conditions of the investment advisory agreement described above are no less
favorable to PXRE Reinsurance than terms and conditions available for comparable
services from unaffiliated persons.
In addition, from September 1986 until August 1989, Mr. McLoughlin served
as Secretary (a non-employee position) of PXRE and its subsidiaries.
TERMINATION AND CHANGE OF CONTROL ARRANGEMENTS
EXECUTIVE SEVERANCE PLAN. In 1989, the Board of Directors approved an
Executive Severance Plan for designated officers of PXRE, which was renewed for
an additional five year term in August 1994.
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The Executive Severance Plan provides to designated officers certain
benefits in the event of termination without cause or constructive discharge
within 6 months before a "Change of Control" (as defined in the Executive
Severance Plan) or within one year thereafter (two years for Mr. Radke). The
Executive Severance Plan provides that a "Change of Control" will be deemed to
have occurred if (i) any person (as defined in the Executive Severance Plan)
other than PXRE becomes the beneficial owner, directly or indirectly, of
securities representing 30% or more of the combined voting power of PXRE's
outstanding securities; (ii) the shareholders of PXRE approve a merger or
consolidation of PXRE with another corporation (other than certain situations
where the shareholders of PXRE before such transaction continue in control after
such transaction) or a sale or other disposition of all or substantially all of
the assets of PXRE; (iii) the shareholders of PXRE approve a plan of liquidation
or dissolution of PXRE; or (iv) during any period of two consecutive years
following August 17, 1989, individuals who at the beginning of such period
constitute the Board of Directors of PXRE and any new director whose election
was approved by at least two-thirds of the directors who were directors at the
beginning of the period or whose election had previously been so approved, cease
to constitute a majority of the board.
The benefits consist of a lump sum cash payment equal to (i) one year's
salary (for Mr. Radke two years if terminated within 12 months of a change of
control), (ii) accrued but unpaid bonuses, (iii) present value of employer
contributions to PXRE's Pension Plan and its 401(k) Plan (the "Qualified Plans")
for one year (two years for Mr. Radke if terminated within 12 months of a change
of control), and (iv) amounts forfeited under the Qualified Plans on termination
of employment, reduced by the present value of payments under any employment
agreement, Company policy or statute. In addition, one year's coverage (two
years' for Mr. Radke) is provided to the officer under PXRE's medical, life and
other welfare benefit plans in which the officer participated. In determining
these benefits, the one and two year periods do not extend past age 65.
PXRE also indemnifies the officer for any excess parachute payment excise
tax (and the excise and income tax on such indemnity) for which the officer may
become responsible, as well as attorney's fees required to enforce such
officer's rights under the Plan.
The Executive Severance Plan has a five year term subject to renewal only
if the Board of Directors determines prior to the end of such term (or the end
of any subsequent renewal term) that the Plan shall be renewed; the Plan
continues in the event of a change of control until all obligations are
satisfied.
Messrs. Radke, Bleisnick, Forsyth, Sverchek and Tounquet participate in the
Plan, with 12 others. Were a change of control of PXRE to have occurred on
December 31, 1994 and if their employment with PXRE had then been terminated as
provided in the Plan, it is estimated that the compensation payable to Messrs.
Radke, Bleisnick, Forsyth, Sverchek and Tounquet would have been $750,000,
$215,000, $215,000, $155,000 and $139,000, respectively.
1988 STOCK OPTION PLAN. Adopted in 1988 and subsequently amended, the 1988
Stock Option Plan (the "1988 Option Plan") provides for the grant of incentive
stock options which are intended to qualify as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as
well as non-qualified stock options which are not intended to qualify as
incentive stock options under the Code. Subject to certain adjustments as
provided in the 1988 Option Plan, the maximum number of shares of Common Stock
reserved for issuance upon the exercise of options granted under the 1988 Option
Plan is 450,000. As of March 19, 1992, options to purchase a total of 449,965
shares of Common Stock were outstanding under the 1988 Option Plan, all of which
options were non-qualified stock options. At a meeting held on such date, the
Board of Directors of PXRE resolved to "freeze" the 1988 Option Plan as of
December 31, 1992 so that no further options could thereafter be granted under
the 1988 Option Plan.
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Each non-qualified option granted under the 1988 Option Plan has a term not
exceeding ten years and one day. In each case, the exercise price is equal to or
in excess of the fair market value of the Common Stock on the date the option
was granted.
No part of any option may be exercised unless the optionee remains in the
continuous employ of PXRE or its affiliates for at least one year from the date
of grant of the option, except where such employment terminates by reason of
death or permanent disability, or retirement on or after age 65 with PXRE's
consent. Subject to the foregoing, options become exercisable in four equal
annual installments, unless otherwise provided by the 1988 Option Plan Committee
(which administers the 1988 Option Plan), provided, however, that upon the
earlier of (i) a Change of Control (as defined in the 1988 Option Plan) or (ii)
the Common Stock of PXRE ceasing to be publicly traded, any unexercised portion
of an option will become exercisable.
No options are transferable by an optionee other than by will or the laws
of descent and distribution, and during the lifetime of an optionee an option
will be exercisable only by the optionee or, if the optionee is legally
incapacitated, by the optionee's duly appointed guardian or legal
representative.
Under the 1988 Option Plan an optionee may elect up to 60 days following a
Change of Control to surrender all or part of his or her non-qualified option
and to receive a cash payment equal to the greater of (a) the excess of the fair
market value of the option shares surrendered over the exercise price for such
shares, or (b) the excess of the per share net worth (as determined under the
1988 Option Plan) of the shares to which the surrendered option pertains on the
date of surrender over the per share net worth of such shares on the date the
option was granted.
For this purpose, the 1988 Option Plan provides that "fair market value"
for non-qualified options is the higher of (a) the highest trading price of
PXRE's shares (as determined under the 1988 Option Plan) during the 90-day
period ending on the date of such election, or (b) if the transaction occurs as
the result of a person acquiring a 30% interest in PXRE, the highest price per
share shown on Schedule 13D or any amendment thereto filed by any person holding
30% or more of such shares, or (c) if the Change of Control occurs as the result
of shareholder approval of a merger or consolidation (as described in the 1988
Option Plan) or any sale or other disposition of all or substantially all of the
assets of PXRE, the highest price paid pursuant to such transaction.
In addition, under the 1988 Option Plan the optionee may elect up to 60
days following the cessation of the public trading of the shares of PXRE (other
than where due to the fraud or other misconduct of the management of PXRE) to
surrender all or part of his or her non-qualified option and receive a cash
payment equal to the greater of (a) the excess of the fair market value of the
shares subject to the surrendered option over the exercise price, or (b) the
amount determined under the per share net worth valuation method described
above. For this purpose, "fair market value" means the highest public trading
value (as determined under the 1988 Option Plan) during the 90-day period ending
on the date of such cessation of public trading.
The 1988 Option Plan also provides that if an optionee does not make an
election under either of the above provisions on or before the 60th day
following a Change of Control resulting from certain mergers and consolidations,
sale of all or substantially all of the assets of PXRE, the liquidation or
dissolution of PXRE, or such cessation of public trading, the optionee will be
deemed to have made such election as of such 60th day, the optionee will receive
the cash payment that would be due upon such an election and the optionee's
option and surrender rights will be deemed to have been cancelled.
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Under the 1988 Option Plan, an election is not transferable other than by
will or the laws of intestacy. An optionee who is subject to Section 16(b) of
the Exchange Act may only exercise an election in compliance with Rule 16b-3(e)
thereunder.
The 1988 Option Plan provides that a "Change of Control" will be deemed to
have occurred if (i) any person (as defined in the Plan) other than PXRE or
Phoenix Home Life or an affiliate thereof, becomes the beneficial owner,
directly or indirectly, of securities representing 30% or more of the combined
voting power of PXRE's outstanding securities; (ii) the shareholders of PXRE
approve a merger or consolidation of PXRE with another corporation (other than
certain situations where the shareholders of PXRE before such transaction
continue in control after the transaction) or a sale or other disposition of all
or substantially all of the assets of PXRE; (iii) the shareholders approve a
plan of liquidation or dissolution of PXRE; or (iv) during a period of two
consecutive years following August 17, 1989 individuals who at the beginning of
such period constitute the Board of Directors of PXRE and any new director whose
election was approved by at least two-thirds of the directors who were directors
at the beginning of the period or whose election had been previously so
approved, cease to constitute a majority of the Board.
As of the record date, Messrs. Radke, Bleisnick, Forsyth, Sverchek and
Tounquet held outstanding non-qualified options to purchase 49,092, 26,764,
40,829, 7,328 and 4,824 shares of Common Stock, respectively, pursuant to the
1988 Option Plan; and of such options, 32,712, 20,667, 34,928, 2,443 and 0,
respectively, had vested in accordance with the provisions of the 1988 Option
Plan, and were exercisable, as of the record date.
1987 STOCK OPTION PLAN. The 1987 Stock Option Plan (the "1987 Option
Plan") originally consisted of six non-qualified stock option agreements, as
amended, with certain officers of PXRE (including three of the five current
executive officers named in the Summary Compensation Table) that were entered
into in anticipation of PXRE's initial public offering of its Common Stock which
began on March 25, 1987. The only persons currently participating in the 1987
Option Plan are those four officers of PXRE who have been granted non-qualified
options.
Options to purchase an aggregate of 169,800 shares of Common Stock were
granted (being all of the shares reserved under the 1987 Option Plan) at an
exercise price of $13.00 per share, which price was equivalent to the price per
share in PXRE's initial public offering. Unless the parties otherwise agree,
this price may not be modified. Options granted under the 1987 Option Plan
became exercisable in four cumulative annual installments starting in 1988, and
are currently fully exercisable.
For officers other than Mr. Radke, the option to purchase shares of Common
Stock granted under the 1987 Option Plan, and all installments thereof, expires
upon the first of the following events to occur: (i) the expiration of ten (10)
years from the option date (March 25, 1987), (ii) the officer's termination of
employment with PXRE for any reason other than death or disability, (iii) the
expiration of one (1) year from the date of the officer's death or disability,
if such death or disability occurs while the officer is employed by PXRE, or
(iv) a Change of Control of PXRE. If death or disability is the cause of the
termination of employment, unexercised installments of the option which would
have been exercisable by the officer are exercisable within one (1) year of the
officer's death by his executor, administrator or personal representative or by
those succeeding to the officer's interest by will or the laws of descent and
distribution.
Mr. Radke's option to purchase shares of Common Stock granted under the
1987 Option Plan, and all installments thereunder, expires upon the first of the
following events to occur: (i) the expiration of ten (10) years from the option
date (March 25, 1987), (ii) the termination of employment by PXRE for "cause",
as such term is defined in a former employment agreement between Mr. Radke and
PXRE, (iii) the voluntary termination of employment by Mr. Radke, or (iv) the
expiration of five (5) years from the date of
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Mr. Radke's death or disability, if such death or disability occurs while he is
employed by PXRE. If death or disability is the cause of termination of
employment, unexercised installments of the option may be exercised within the
lesser of (i) five (5) years after such death or disability, or (ii) the time
permitted under the 1987 Option Plan in the case of a Change of Control of PXRE.
The option may be exercised by Mr. Radke's executor, administrator or personal
representative or by those succeeding to his interest by will or the laws of
descent and distribution.
The 1987 Option Plan contains the same definition of "Change of Control" as
the 1988 Option Plan described above and the same provisions as the 1988 Option
Plan respecting (i) the right of optionees to surrender options for a cash
payment for 60 days following a Change of Control of PXRE and for 60 days
following the cessation of public trading of PXRE's shares and (ii) the
cancellation of options and the deemed exercise of such surrender rights in the
event of a Change of Control of PXRE resulting from certain mergers or
consolidations, the sale of all or substantially all of PXRE's assets, the
liquidation or dissolution of PXRE or the cessation of public trading of PXRE's
shares (except where such cessation is due to the fraud or other misconduct of
PXRE's management).
As of the record date, Messrs. Radke, Bleisnick and Forsyth held
outstanding and fully exercisable options to purchase 7,275, 13,000 and 0 shares
of Common Stock, respectively, pursuant to the 1987 Option Plan. (Mr. Sverchek
and Mr. Tounquet are omitted from the foregoing discussion because they are not
participants in the 1987 Option Plan).
RESTATED EMPLOYEE ANNUAL INCENTIVE BONUS PLAN. Adopted in 1992, the
Restated Employee Annual Incentive Bonus Plan, as amended (the "Restated Bonus
Plan"), provides for annual employee incentive awards comprised of cash and, in
the case of senior and junior executives, restricted shares of Common Stock.
More specifically, the Restated Bonus Plan (i) provides for the grant of shares
of Common Stock subject to restrictions, as determined by the administering
committee ("Restricted Shares"), in lieu of 30% of the annual cash bonus payable
to eligible officers under the Restated Plan; (ii) links the funding of the
annual bonus pool for all participating employees to PXRE's "return on equity"
(defined in the Restated Bonus Plan as PXRE's net income for the fiscal year
divided by PXRE's average stockholders' equity for such fiscal year); and (iii)
provides the Board of Directors with the discretion to adjust the final annual
bonus pool amount for allocation to participants by up to plus or minus 25% of
such pool. Subject to certain adjustments as provided in the Restated Bonus
Plan, a maximum of 150,000 shares of PXRE Common Stock has been reserved for
awards of Restricted Shares under the Restated Bonus Plan. Authorized and
unissued shares or treasury shares or both may be used for grants of Restricted
Shares under the Restated Bonus Plan.
Restricted Share awards consist of grants of shares of PXRE's Common Stock,
which are generally subject to forfeiture if the recipient's employment with
PXRE terminates during the restricted period specified in the award. Subject to
the discretion of the Restated Bonus Plan Committee (which administers the
Restated Bonus Plan), the period must be at least three years, measured as
provided in the Restated Bonus Plan (the "Restricted Period"). The recipient of
a Restricted Share award is entitled to all the rights of a shareholder with
regard to the awarded Restricted Shares during the Restricted Period, including
the right to receive dividends on, and to vote, the Restricted Shares, except
that the Restricted Shares may not be sold, pledged or otherwise transferred by
the recipient until the applicable Restricted Period has lapsed. The lapse of
the Restricted Period may be accelerated in the event of a recipient's death,
permanent disability or retirement, as determined by the Restated Bonus Plan
Committee. The Restated Bonus Plan Committee will require a participant
receiving an award of Restricted Shares to enter into a Restricted Share
Agreement with PXRE containing the foregoing restrictions and such other terms
as the Restated Bonus Plan Committee may deem advisable.
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Upon the earlier of a Change of Control of PXRE or the shares of PXRE
ceasing to be publicly traded, any remaining Restricted Period applicable to
Restricted Shares will immediately lapse. For this purpose, a "Change of
Control" of PXRE will be deemed to have occurred if (i) any person (as defined
in the Restated Bonus Plan) other than PXRE or Phoenix Home Life or an affiliate
thereof, becomes the beneficial owner, directly or indirectly, of securities
representing 30% or more of the combined voting power of PXRE's outstanding
securities; (ii) the shareholders of PXRE approve a merger or consolidation of
PXRE with another corporation (other than certain situations where the
shareholders of PXRE before such transaction continue in control after the
transaction) or a sale or other disposition of all or substantially all of the
assets of PXRE; (iii) the shareholders of PXRE approve a plan of liquidation or
dissolution of PXRE; or (iv) during any period of two consecutive years
following March 19, 1992, individuals who at the beginning of such period
constitute the entire Board of Directors of PXRE and any new director whose
election was approved by at least two-thirds of the directors who were directors
at the beginning of the period or whose election had been previously so
approved, cease to constitute a majority of the Board.
Messrs. Radke, Bleisnick, Forsyth, Sverchek and Tounquet are each eligible
to participate in the Restated Bonus Plan. In February 1995, Restricted Share
and cash bonus awards under the Restated Bonus Plan were made to Messrs. Radke,
Bleisnick, Forsyth, Sverchek and Tounquet in respect of fiscal year 1994, as
noted in the Summary Compensation Table above. The Restricted Shares so awarded
will not vest, and may not be sold, transferred, pledged or otherwise disposed
of, until January 1, 1998, subject to the terms of the Restated Bonus Plan and
the related Restricted Share Agreements.
1992 OFFICER INCENTIVE PLAN. Adopted in 1992, the 1992 Officer Incentive
Plan, as amended (the "1992 Incentive Plan") provides for both grants of options
and awards of Common Stock with certain restrictions ("Restricted Shares") to
officers of PXRE or its affiliates. More specifically, the 1992 Incentive Plan
provides for the grant of incentive stock options (the "Incentive Stock
Options") which are intended to qualify as incentive stock options under Section
422 of the Code, non-qualified stock options which are not intended to qualify
as incentive stock options under the Code ("Non-Qualified Options"), and awards
of Restricted Shares, as determined by the 1992 Incentive Plan Committee, which
administers the 1992 Incentive Plan. Subject to certain adjustments as provided
in the 1992 Incentive Plan, a maximum of 500,000 shares of the Common Stock of
PXRE has been reserved for issuance upon the exercise of options and grants of
Restricted Shares under the 1992 Incentive Plan. Authorized but unissued shares
or treasury shares or both may be used for grants of options or Restricted
Shares under the 1992 Incentive Plan.
All options and Restricted Share awards will be evidenced by agreements
("Stock Option Agreements" and "Restricted Share Agreements", respectively) on
the terms and conditions set forth in the 1992 Incentive Plan and such other
terms and conditions as the 1992 Incentive Plan Committee shall determine.
Options must be granted within ten years of the adoption of the 1992
Incentive Plan. Options will have a term not to exceed ten years. The exercise
price for Incentive Stock Options must be equal to or exceed the fair market
value of the Common Stock on the date the option is granted, and the exercise
price for Non-Qualified Options may be less than, equal to, or greater than the
fair market of the Common Stock on the date of grant, but not less than 50% of
such fair market value.
Subject to the 1992 Incentive Plan Committee's discretion, no part of any
option may be exercised unless the optionee remains in the continuous employ of
PXRE or its affiliates for at least one year from the date of grant of the
option, except where such employment terminates by reason of death, permanent
disability or retirement at or after age 65 with PXRE's consent.
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No options will be transferable by an optionee other than by will or the
laws of descent and distribution, and during the lifetime of an optionee an
option will be exercisable only by the optionee or, if the optionee is legally
incapacitated, by the optionee's duly appointed guardian or legal
representative.
Restricted Shares are generally subject to forfeiture if the recipient's
employment with PXRE terminates during the restricted period determined by the
1992 Incentive Plan Committee to be applicable to the award (the "Restricted
Period"). The recipient of a Restricted Share award is entitled to all the
rights of a shareholder with regard to the awarded Restricted Shares during the
Restricted Period, including the right to receive dividends on, and to vote, the
Restricted Shares, except that the Restricted Shares may not be sold, pledged or
otherwise transferred by the recipient until the applicable Restricted Period
has lapsed. The lapse of the Restricted Period may be accelerated in the event
of a recipient's death, permanent disability or retirement, as determined by the
1992 Incentive Plan Committee.
The 1992 Incentive Plan provides that upon the earlier of (i) a Change of
Control of PXRE or (ii) the Common Stock of PXRE ceasing to be publicly traded,
any unexercised portion of an option shall become exercisable and any Restricted
Period applicable to Restricted Shares shall immediately lapse. The 1992
Incentive Plan incorporates the same definition of "Change of Control" as that
contained in the Restated Bonus Plan.
The 1992 Incentive Plan Committee may grant to an optionee for up to 60
days following a Change of Control the right to elect to surrender all or part
of his or her option and to receive a cash payment equal to the greater of (a)
the excess of the fair market value of the option shares surrendered over the
exercise price for such shares, or (b) except for Incentive Stock Options, the
excess of the per share net worth (as determined under the 1992 Incentive Plan)
of the shares to which the surrendered option pertains on the date of surrender
over the per share net worth of such shares on the date the option was granted.
For this purpose, the 1992 Incentive Plan provides that "fair market value"
for Non-Qualified Options is the higher of (a) the highest trading price of
PXRE's Common Stock (as determined under the 1992 Incentive Plan) during the
90-day period ending on the date of such election, or (b) if the transaction
occurs as the result of a person acquiring a 30% interest in PXRE, the highest
price per share of Common Stock shown on Schedule 13D or any amendment thereto
filed by any person holding 30% or more of such shares, or (c) if the Change of
Control occurs as the result of shareholder approval of a merger or
consolidation (as described in the 1992 Incentive Plan) or any sale or other
disposition of all or substantially all of the assets of PXRE, the highest price
per share paid pursuant to such transaction. With respect to Incentive Stock
Options, "fair market value" means fair market value as determined under Section
1.2(g) of the 1992 Incentive Plan.
In addition, under the 1992 Incentive Plan the optionee may elect up to 60
days following the cessation of the public trading of the Common Stock of PXRE
(other than where due to the fraud or other misconduct of the management of
PXRE) to surrender all or part of his or her option and receive a cash payment
equal to the greater of (a) the excess of the fair market value of the shares
subject to the surrendered option over the exercise price, or (b) except for
Incentive Stock Options, the excess of the per share net worth (as determined
under the 1992 Incentive Plan) of the shares to which the surrendered option
pertains on the date of surrender over the per share net worth of such shares on
the date the option was granted. For this purpose, "fair market value" means the
highest trading price (as determined under the 1992 Incentive Plan) during the
90-day period ending on the date of such cessation of public trading, except
that for Incentive Stock Options it means "fair market value" as determined
under Section 1.2(g) of the 1992 Incentive Plan.
The 1992 Incentive Plan also provides that if an optionee does not make an
election under either of the above provisions on or before the 60th day
following a Change of Control resulting from certain mergers and
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consolidations, the sale of all or substantially all of the assets of PXRE, the
liquidation or dissolution of PXRE, or such cessation of public trading, the
optionee will be deemed to have made such election as of such 60th day, the
optionee will receive the cash payment that would be due upon such an election
and the optionee's option and surrender rights will be deemed to have been
cancelled.
Under the 1992 Incentive Plan, an election is not transferable other than
by will or the laws of intestacy. An optionee who is subject to Section 16(b) of
the Exchange Act may only exercise an election in compliance with Rule 16b-3(e)
thereunder.
Messrs. Radke, Bleisnick, Forsyth, Sverchek and Tounquet are each eligible
to participate in the 1992 Incentive Plan. In March 1994, non-qualified options
were granted under the 1992 Incentive Plan to Messrs. Radke, Bleisnick, Forsyth,
Sverchek and Tounquet in respect of fiscal year 1994, as noted in the Option
Grant Table above.
APPROVAL OF DIRECTOR STOCK OPTION PLAN
On April 20, 1995, the Board of Directors adopted the Director Stock Option
Plan (the "Director Option Plan") for non-employee directors of PXRE, subject to
the approval of the shareholders of PXRE at the 1995 Annual Meeting.
The following is a description of the principal features of the Director
Option Plan for which shareholder approval is being sought hereby. Such
description is qualified in its entirety by reference to the terms of the
Director Option Plan, a complete copy of which is attached as Appendix A.
PURPOSE OF DIRECTOR OPTION PLAN. The purpose of the Director Option Plan
is to maintain PXRE's ability to attract and retain the services of experienced
and highly qualified non-employee directors and to increase their proprietary
interest in PXRE's continued success.
TERMS OF DIRECTOR OPTION PLAN. If approved by the shareholders, the
Director Option Plan will, from 1995 until 2005 inclusive, automatically provide
annual grants of stock options on the date of PXRE's Annual Meeting to each
individual who is elected to the Board of Directors at such meeting, or who
continues to be a member of the Board of Directors following such meeting,
provided such individual is not also an employee of PXRE or any of its
subsidiaries. Presently that includes all the directors except Mr. Radke. If the
Director Option Plan is approved by the shareholders, options will be granted
thereunder as of the date of the 1995 Annual Meeting.
Each annual grant will permit the holder, for a period of ten years from
the date of grant, to purchase from PXRE 1,000 shares of PXRE's Common Stock
(subject to adjustment for stock splits, stock dividends, reclassification and
certain other events as provided in the Director Option Plan) at the fair market
value of such shares on the date the option was granted. Each option shall
become exercisable one term-year after the date of the grant (defined to be the
period from one Annual Meeting to the next) with respect to 333 shares; it shall
become exercisable two term-years after the date of grant with respect to
another 333 shares; and it shall become exercisable three term-years after the
date of the grant for the final 334 shares; provided, that the holder continues
to be a director at the end of such term-year in question.
In the event a director terminates service on the Board by reason of death,
retirement (defined to be retirement as of the Annual Meeting coinciding with or
next following attainment of age 72) or disability, the total number of option
shares will become immediately exercisable and will continue to be exercisable
for
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<PAGE> 29
three years (but not beyond its original expiration date) subject to the
provisions of Rule 16b-3 under the Exchange Act, with respect to resale of such
shares.
In the event a director terminates service on the Board other than by
reason of death, disability or retirement, such person's options (to the extent
exercisable upon such termination) shall be exercisable for three months after
the date of termination of service, but not beyond its original expiration date.
In the event of death of a director after terminating service on the Board,
any outstanding options shall expire on the later of the date applicable to the
director at the time the director terminated service or one year from the date
of death, provided that in no event may an option be exercised beyond its
original expiration date.
Each option and all rights thereunder shall be nonassignable and
nontransferable other than by will or the laws of descent and distribution, or
pursuant to a qualified domestic relations order (as described in Section 414(p)
of the Code).
An aggregate of 100,000 shares of Common Stock (subject to adjustment for
stock splits, stock dividends, reclassification and certain other events as
provided in the Director Option Plan) will be subject to the Director Option
Plan. Shares subject to options which terminate or expire unexercised will be
available for future option grants.
The Director Option Plan will be administered by the Board of Directors,
who will be authorized to interpret the Director Option Plan but have no
authority with respect to the selection of directors to receive options, the
number of shares subject to the Director Option Plan or to each grant
thereunder, or the option price for shares subject to options. The Board may
amend the Director Option Plan as it shall deem advisable but may not, without
further approval of the shareholders, increase the maximum number of shares
under the Director Option Plan or options to be granted thereunder, change the
option price provided in the Director Option Plan, extend the period during
which options may be granted or exercised, or change the class of persons
eligible to receive options. Adjustments will be made in the number and kind of
shares subject to the Director Option Plan and the number and kind of shares
subject to outstanding and subsequent option grants and in the purchase price of
outstanding options, in each case to reflect changes in PXRE's Common Stock
through changes in the corporate structure or capitalization such as through a
merger, stock split or stock dividend.
NEW PLAN BENEFITS TABLE. The following table sets forth the number of
options that, subject to shareholder approval at the 1995 Annual Meeting of
Shareholders, and subject further to the terms of the Director Option Plan, will
be granted to the non-employee directors as a group on the date of such meeting:
NEW PLAN BENEFITS
DIRECTOR STOCK OPTION PLAN
<TABLE>
<CAPTION>
NAME AND POSITION(1) NUMBER OF OPTIONS(2)
------------------------------------------------------------------ --------------------
<S> <C>
All Non-Executive Directors as a group (8 persons)................ 8,000
</TABLE>
- - ------------
(1) The table does not include any information regarding each of the five named
Executive Officers, all current Executive Officers as a group or all
employees who are not Executive Officers as a group, as none of those
individuals or groups is eligible to participate in the Director Option
Plan.
(2) The value of such options is not determinable because, as described above,
the exercise price thereof will not be determined until the date of grant
(i.e., the date of the Annual Meeting).
27
<PAGE> 30
FEDERAL INCOME TAX CONSEQUENCES. The options under the Director Option
Plan will be nonstatutory options not intended to qualify as incentive stock
options under Section 422 of the Code. The grant of options will not result in
taxable income to the director or a tax deduction to PXRE. The exercise of an
option by a director will result in taxable ordinary income to the director and
a corresponding deduction for PXRE, in each case equal to the difference between
the fair market value on the date the option was exercised and the fair market
value on the date the option was granted (the option exercise price) multiplied
by the number of shares acquired upon such exercise. Any gain (or loss) on the
director's subsequent sale of such shares, determined by comparing the amount
realized from such sale with the fair market value of the shares on the date of
exercise, will be long or short-term capital gain (or loss) depending on how
long the shares were held before the sale.
The foregoing tax analysis is intended to summarize certain relevant U.S.
federal income tax consequences of the Director Option Plan in effect as of the
date of this Proxy Statement. Legislation may be enacted and regulations may be
issued in the future which create different tax consequences.
APPROVAL OF THE DIRECTOR STOCK OPTION PLAN WILL REQUIRE THE AFFIRMATIVE
VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK PRESENT IN PERSON OR
REPRESENTED BY PROXY AT THE ANNUAL MEETING. THE BOARD OF DIRECTORS AND
MANAGEMENT RECOMMEND A VOTE "FOR" THE PROPOSAL TO ADOPT THE DIRECTOR STOCK
OPTION PLAN AND, UNLESS A SHAREHOLDER SIGNIFIES OTHERWISE, THE PERSONS NAMED IN
THE PROXY WILL SO VOTE.
CERTAIN BUSINESS RELATIONSHIPS
THE TRANSNATIONAL COMPANIES
In November 1993, TREX, a newly-organized subsidiary of PXRE, effected an
initial public offering (the "TREX Offering"), and in a related transaction PXRE
caused PXRE Reinsurance to contribute all of the outstanding capital stock of
Transnational Reinsurance Company ("Transnational"; formerly Transnational
Insurance Company) to TREX. This contribution was made in exchange for TREX's
issuance to PXRE Reinsurance of shares of an unregistered class of TREX's common
stock, convertible on a one-for-one basis into TREX's registered shares, which
resulted in PXRE Reinsurance owning approximately 21% of TREX's total issued and
outstanding common stock after completion of the TREX Offering and being
entitled to designate two of the five directors of TREX. Pursuant to a
management agreement discussed below, PXRE Reinsurance undertook, for a fee, to
manage the businesses of TREX and Transnational, including the reinsurance
operations of Transnational. To this end, the executive officers of PXRE and
PXRE Reinsurance (including the five current executive officers named in the
Summary Compensation Table) serve as the executive officers of TREX and
Transnational. These executive officers, while not salaried employees of TREX or
Transnational, are eligible to receive directly from TREX pursuant to a TREX
incentive plan, cash incentive awards based on the net income of TREX. In
addition, Messrs. Radke and Kimmel serve as the two PXRE Reinsurance-designated
directors of TREX and as two of the five directors of Transnational.
Described below are certain transactions and arrangements to which PXRE
Reinsurance and TREX and/or Transnational are parties.
MANAGEMENT AGREEMENT. Since November 8, 1993, PXRE Reinsurance has been
party to a management agreement (the "Management Agreement") with TREX and
Transnational. Under the Management Agreement, PXRE Reinsurance has
responsibility for the day-to-day operations of TREX and Transnational,
28
<PAGE> 31
including all the reinsurance operations of Transnational. TREX and
Transnational do not have any operating properties, systems or paid employees.
Pursuant to the Management Agreement, PXRE Reinsurance provides all the
operating facilities, systems, equipment and management and clerical personnel
required to conduct the businesses of TREX and Transnational.
Under the terms of the Management Agreement, Transnational shares in PXRE
Reinsurance's "new business" (defined to mean reinsurance business from insurers
and reinsurers which have not ceded reinsurance to PXRE Reinsurance during the
twelve months preceding the date of the Agreement and, therefore, are not deemed
current clients of PXRE Reinsurance) and "additional business" (defined to mean
reinsurance for current clients of PXRE Reinsurance which does not replace
existing coverage) classified as property retrocessional reinsurance business,
marine and aviation retrocessional reinsurance or marine and aviation
reinsurance and facultative excess of loss reinsurance. Transnational is
entitled to share similarly in other property reinsurance business, if any,
which PXRE Reinsurance may, from time to time, propose that Transnational
underwrite and which Transnational's Board of Directors may approve.
PXRE Reinsurance, with respect to the foregoing business, is required to
endeavor to write for Transnational a line generally at least equal to PXRE
Reinsurance's retained line (i.e., gross line net after pro rata cessions to
third party companies under existing or substantially equivalent managed
business retrocessional agreements), provided that the maximum amount written
for Transnational may not exceed three times the amount retained by PXRE
Reinsurance (i.e., 75% Transnational; 25% PXRE Reinsurance), but in no event in
excess of amounts specified from time to time by Transnational's Board of
Directors nor in excess of amounts permitted by applicable law. In the event it
is not practical or feasible to write reinsurance direct for Transnational, PXRE
Reinsurance is required to use its best efforts to retrocede such amount of the
line written by it so as to achieve the foregoing proportionate sharing formula,
subject to the establishment of appropriate security in respect of
Transnational's obligations thereunder.
With respect to the renewal of policies written under the Management
Agreement, Transnational is entitled to at least the same proportion of the
combined lines of Transnational and PXRE Reinsurance as it had originally,
subject to the foregoing limits.
Although Transnational is not entitled to share in any business written by
PXRE Reinsurance for current clients (as described above) or any renewals
thereof, PXRE Reinsurance has agreed to endeavor to increase the amount of
reinsurance written by it with respect to such current clients, which increase
would be considered "additional business" for the purposes of the Management
Agreement, and would generally be allocated first to Transnational to the extent
required to obtain for Transnational a line at least equal to PXRE Reinsurance's
net line.
Pursuant to the Management Agreement, PXRE Reinsurance is required to
present to the Board of Directors of Transnational prior to the start of each
management year a business plan for such ensuing year, including for each line
of business included in Transnational's underwriting guidelines then in effect,
projections of aggregate gross premiums written on a "best case", "worst case"
and "most likely case" basis and any proposed changes in Transnational's
underwriting guidelines for the ensuing year.
Transnational pays PXRE Reinsurance an annual basic management fee under
the Management Agreement equal to 5% of gross premiums written (including
reinstatement premiums less return premiums) of Transnational and its
consolidated subsidiaries (if any) as reflected in Transnational's statutory
quarterly and annual statements filed with state insurance authorities. In
addition, PXRE Reinsurance is entitled to receive from TREX a contingent fee
equal to 20% of "net income" (as defined) in excess of a 20% "return on
29
<PAGE> 32
equity" (as defined) of TREX for each year, or part thereof, that the Management
Agreement remains effective (the first such year for such purpose having
commenced on January 1, 1994).
If net income is not in excess of a 20% "return on equity" (as defined), or
if there is a loss (the aggregate amount of such shortfall and loss, if any,
being considered a "deficit"), the amount of the deficit will be carried forward
as a debit item in the contingent fee computation for the ensuing management
year or years and no contingent fee shall be considered as earned with respect
to such ensuing year or years until the previous deficit has been made good and
a credit balance has been again restored. If net income is in excess of a 20%
"return on equity" (i) 50% of the contingent fee will be payable to PXRE
Reinsurance by TREX within 30 days after the delivery of the computation of the
same by PXRE Reinsurance, and (ii) 50% of the net income in excess of a 20%
"return on equity" will be carried forward as a credit item in the contingent
fee computation for the ensuing management year or years, except upon
termination of the Management Agreement the contingent fee (including
carryforwards of debit and credit items) for the management year in which such
termination occurs will be payable in full with no negative amount being
recoverable from PXRE Reinsurance and no portion of any positive amount being
subject to being carried forward into future years.
TREX and Transnational also pay all expenses directly attributable to them,
including a proportionate share of PXRE Reinsurance's rental expenses with
respect to office space based on gross premiums written for the management year.
TREX and Transnational incurred a total of approximately $3,510,000 in fees
and expense reimbursements to PXRE Reinsurance under the Management Agreement
during PXRE's 1994 fiscal year. For PXRE's 1995 fiscal year, the actual amount
of fees and expense reimbursements payable by TREX and Transnational will depend
upon the actual volume of premiums written for Transnational and the actual net
income and return on equity achieved by TREX and, therefore, is not currently
ascertainable.
The Management Agreement has an initial term ending December 31, 1998 and
will automatically renew for successive three-year terms unless either PXRE
Reinsurance gives or TREX and Transnational give at least one year's advance
written notice of non-renewal. The Management Agreement may be terminated by
TREX and Transnational if Transnational's gross written premiums for a calendar
year fall below specified levels. The Management Agreement may also be
terminated upon events constituting a "change of control" (as defined in the
Management Agreement) of TREX, Transnational or PXRE, material breaches of the
Management Agreement by any party or if any party is subject to insolvency or
similar proceedings. If the Management Agreement is terminated for any reason,
PXRE Reinsurance is required, except in specified circumstances, to continue to
provide reinsurance underwriting and/or the other services and facilities
contemplated by the Management Agreement, if requested by TREX and
Transnational, for up to twelve months, to enable TREX and Transnational to
locate facilities, equipment, personnel and management to continue their
operations.
Pursuant to the Management Agreement, PXRE Reinsurance's liability to TREX
and Transnational in respect thereof is limited to PXRE Reinsurance's willful
misconduct or gross negligence, and TREX and Transnational have undertaken to
hold PXRE Reinsurance and certain other specified persons and entities
(collectively, "PXRE Indemnitees") harmless from any loss, claim, damage,
liability or expense (collectively, "losses") resulting to such PXRE
Indemnitees, based upon or related to the conduct by PXRE Reinsurance of TREX's
and Transnational's business, except for losses caused by PXRE Reinsurance's
willful misconduct or gross negligence in respect of which PXRE Reinsurance has
agreed to indemnify TREX and Transnational. The Management Agreement provides
that in no event, however, will PXRE Reinsurance be responsible for losses in
respect of retrocessional and other reinsurance written by Transnational.
Nonetheless, business which
30
<PAGE> 33
is written on Transnational's behalf by PXRE Reinsurance and ceded to
Transnational remains the primary liability of PXRE Reinsurance in the event
that Transnational is unable to meet its contractual responsibilities.
PXRE REINSURANCE AGREEMENT. PXRE Reinsurance and Transnational are parties
to a reinsurance agreement (the "PXRE Reinsurance Agreement"), which serves to
protect Transnational against adverse loss development and uncollectible
reinsurance relating to business written by Transnational prior to November 8,
1993. Under the PXRE Reinsurance Agreement, PXRE Reinsurance has agreed to
indemnify Transnational in respect of business written by Transnational prior to
November 8, 1993 for development of losses in excess of Transnational's reserves
as of September 30, 1993. In 1993, Transnational paid a one-time premium of
$25,000 to PXRE Reinsurance under the PXRE Reinsurance Agreement. No amounts
were paid to Transnational under the PXRE Reinsurance Agreement during PXRE's
1994 fiscal year. Amounts, if any, payable in PXRE's 1995 fiscal year will
depend upon loss development and collectibility of reinsurance with respect to
the covered book of business and, therefore, cannot currently be estimated.
REGISTRATION RIGHTS AGREEMENT. PXRE Reinsurance and TREX are parties to a
registration rights agreement (the "Registration Rights Agreement") whereby PXRE
Reinsurance is entitled to certain "piggyback" and "demand" registration rights,
subject to the conditions contained in such agreement. In general, in connection
with any registration of stock pursuant to the Registration Rights Agreement,
TREX will bear all registration and filing fees, printing expenses, fees and
disbursements of counsel for each of TREX and PXRE Reinsurance, "blue sky" fees
and expenses and the expense of any special audits incident to or required by
any such registration. For each such registration of TREX stock, PXRE
Reinsurance will bear all underwriting discounts, selling commissions and
transfer taxes applicable to such sales. No amounts were paid under the
Registration Rights Agreement during PXRE's 1994 fiscal year. Amounts, if any,
payable in PXRE's 1995 fiscal year will depend upon whether a registration of
TREX stock pursuant to the Registration Rights Agreement occurs during such
period.
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
In addition to the relationships described above under "EXECUTIVE
COMPENSATION -- Compensation Committee Interlocks and Insider Participation",
Mr. Searfoss is an executive officer of Phoenix Home Life. Reference is made to
the discussion under "EXECUTIVE COMPENSATION -- Compensation Committee
Interlocks and Insider Participation" regarding the investment advisory
relationship between a subsidiary of PXRE and an indirect subsidiary of Phoenix
Home Life.
LOAN TO MR. RADKE
In 1988, PXRE loaned Mr. Radke $70,125 pursuant to a demand promissory note
to fund certain estimated tax liabilities of Mr. Radke incurred in connection
with the organization of PXRE. All of the principal amount of such loan remained
outstanding as of March 31, 1995. Interest accrues on the unpaid principal
amount of the loan at a rate of 7.2% per annum, subject to adjustment from time
to time to the Federal short-term rate for the appropriate semi-annual period.
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<PAGE> 34
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Section 16(a) of the Exchange Act requires PXRE's directors and executive
officers, and persons who own more than 10% of a registered class of PXRE's
equity securities, to file with the Commission initial reports of ownership
(Form 3) and reports of changes in ownership (Form 4) of PXRE's registered
equity securities. Executive officers, directors and greater-than-10%
shareholders are also required to furnish PXRE with copies of all Section 16(a)
reports that they file.
A year-end report on Form 5 is required to be filed only if there are
previously unreported transactions or holdings to report. Nevertheless, PXRE is
required to disclose the names of executive officers, directors and
greater-than-10% shareholders who did not file a Form 5 report unless PXRE has
obtained written statements from such persons that no filing was required.
To PXRE's knowledge, based solely upon a review of the copies of such
reports, and any amendments thereto, furnished to PXRE and written
representations that no Form 5 reports were required, during the fiscal year
ended December 31, 1994 all Section 16(a) filing requirements applicable to
PXRE's executive officers, directors and greater-than-10% shareholders were
complied with.
SHAREHOLDER PROPOSALS
If a shareholder desires to present a proposal for inclusion in next year's
Proxy Statement and to present such proposal at the 1996 Annual Meeting of
Shareholders of PXRE, such shareholder must submit such proposal in writing to
PXRE Corporation, 399 Thornall Street, Edison, New Jersey 08837, Attention:
Treasurer, for receipt by PXRE not later than January 4, 1996.
GENERAL
PXRE's Annual Report to Shareholders, which contains financial statements
for the year ended December 31, 1994 as well as other information concerning the
operations of PXRE, is being sent to you with this Proxy Statement.
PXRE FILES WITH THE SECURITIES AND EXCHANGE COMMISSION AN ANNUAL REPORT ON
FORM 10-K. A COPY OF THE REPORT FOR FISCAL 1994 WILL BE FURNISHED WITHOUT CHARGE
TO ANY SHAREHOLDER SENDING A WRITTEN REQUEST THEREFOR TO TREASURER, PXRE
CORPORATION, 399 THORNALL STREET, EDISON, NEW JERSEY 08837. PXRE Corporation has
no knowledge of any matters other than those set forth in this Proxy Statement
or referred to in the accompanying Notice of Annual Meeting of Shareholders,
which will be presented at the meeting. However, if any other matters should
properly come before the meeting it is intended that Proxies shall be voted
thereon in accordance with the best judgment of the person or persons voting
such Proxies.
PXRE CORPORATION
Edison, New Jersey
May 3, 1995
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APPENDIX A
PXRE CORPORATION
DIRECTOR STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Plan is to secure for PXRE Corporation and its
stockholders the benefits inherent in increased common stock ownership by
directors of the Company who are not employees of the Company or any of its
subsidiaries.
SECTION 2. DEFINITIONS
Whenever used in this plan, the following terms shall have the definitions
set forth in this section:
<TABLE>
<C> <C> <S>
2.1 -- "BOARD OF DIRECTORS" shall mean the Board of Directors of PXRE Corporation.
2.2 -- "CHANGE OF CONTROL" has the meaning provided in Section 7.2 of the Plan.
2.3 -- "CODE" shall mean the Internal Revenue Code of 1986, as amended.
2.4 -- "COMPANY" shall mean PXRE Corporation.
2.5 -- "DATE OF GRANT" shall mean the date of the Annual Meeting as of which a
Director is granted an Option under Section 5.1.
2.6 -- "DIRECTOR" shall mean a member of the Board of Directors who is not a
full-time employee of the Company or a subsidiary.
2.7 -- "DISABILITY" shall mean the inability, in the judgment of the Board, of a
Director to perform his or her duties due to mental or physical
impairment.
2.8 -- "EFFECTIVE DATE" shall mean the date provided in Section 12 of the Plan.
2.9 -- "FAIR MARKET VALUE" as of any day shall mean the arithmetic mean of the per
share bid and asked price for Shares on such day as reported by the NASDAQ
Interdealer Quotation System, or if the shares are listed on an exchange,
the average of the high and low per share prices quoted for Shares on such
date. If the Shares are not publicly traded, Fair Market Value shall be
determined by the Board in a manner consistent with the requirements of
Section 422 of the Code.
2.10 -- "OPTION" shall mean an option to purchase Shares granted under Section 5 of
the Plan.
2.11 -- "RETIREMENT" shall mean retirement from the Board as of the Annual Meeting
of Stockholders coinciding with or next following the Director's
attainment of age of 72.
2.12 -- "RULE 16B-3" shall mean Rule 16b-3 promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act").
2.13 -- "SHARES OF STOCK" OR "SHARES" shall mean shares of the Common Stock, par
value $0.01 per share, of the Company.
2.14 -- "TERM-YEAR" shall mean the period from one Annual Meeting to the subsequent
Annual Meeting.
</TABLE>
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<PAGE> 36
SECTION 3. AMOUNT OF STOCK
The stock which may be issued and sold under the Plan shall not exceed
100,000 Shares, subject to adjustment as provided in Section 6 below. The Shares
to be issued may be either authorized and unissued shares, treasury shares,
issued shares acquired by the Company or its subsidiaries or any combination
thereof. In the event that Options granted under the Plan shall terminate or
expire without being exercised in whole or in part, new Options may be granted
covering the shares not purchased under such lapsed Options.
SECTION 4. ELIGIBILITY
Each Director shall be eligible to receive an Option in accordance with
Section 5 below.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS
Each Option granted under the Plan shall be evidenced by an agreement in
such form as the Board shall prescribe from time to time in accordance with the
Plan and shall comply with the following terms and conditions:
5.1 GRANTS. As of the date of the Annual Meeting of Stockholders of the
Company each year on and after the Effective Date, each Director who has been
elected or re-elected or who is continuing as a member of the Board as of the
adjournment of the Annual Meeting shall automatically receive an Option for
1,000 Shares.
5.2 EXERCISE PRICE. The Option exercise price shall be the Fair Market
Value of the Shares on the Date of Grant of the Option.
5.3 VESTING. Except as provided in Sections 5.4, 5.5 and 7.1, no portion
of an Option shall be exercisable prior to the Director's completion of one
Term-year on the Board next following the Date of Grant, and thereafter the
Option shall be exercisable with respect to 333 Shares on and after the
Director's completion of his or her first Term-year following the Date of Grant,
it shall be exercisable for an additional 333 Shares on and after the Director's
completion of a second Term-year following the Date of Grant, and it shall be
exercisable for the remaining 334 Shares on or after the Director's completion
of a third Term-year after the Date of Grant.
5.4 OPTION EXPIRATION. No portion of an Option shall be exercisable after
the expiration of ten years from the Option's Date of Grant.
5.5 EXERCISE WHEN NO LONGER A DIRECTOR. No Option shall be exercisable
unless the person exercising the Option has been, at all times during the period
beginning with the Date of Grant of the Option and ending on the date of such
exercise, a Director of the Company, except that:
(a) RETIREMENT OR DISABILITY. If such a person shall cease to be a
Director by reason of Retirement or Disability while holding an Option
(whether or not then exercisable) that has not expired, such person may, at
any time within three years following such termination (but in no event
after the Option has expired under the provisions of Section 5.4), exercise
the Option with respect to any shares as to which such person has not
exercised the Option on the date the person ceased to be a Director;
provided, however, that no Shares issuable on exercise of the Option may be
sold, assigned, pledged or otherwise transferred for the period of time
after the date of the grant of the Option as is specified in Rule 16b-3;
A-2
<PAGE> 37
(b) DEATH. If such a person shall cease to be a Director by reason of
death while holding an Option (whether or not then exercisable) that has
not expired, his or her executors, administrators, heirs, legatees or
distributees, as the case may be, may, at any time within three years
following such termination (but in no event after the Option has expired
under the provisions of Section 5.4), exercise the Option with respect to
any shares as to which such person has not exercised the Option on the date
the person died; provided, however, that no shares of Common Stock issuable
on exercise of the Option may be sold, assigned, pledged or otherwise
transferred for the period of time after the date of the grant of the
Option as is specified in Rule 16b-3;
(c) OTHER. If such a person shall cease to be a Director for reasons
other than Retirement, Disability or death, while holding an Option then
exercisable that has not expired, such person may, at any time within three
months after the date he or she ceases to be a Director (but in no event
after the Option has expired under the provisions of Section 5.4 above),
exercise the Option with respect to any Shares as to which such person
could have but has not exercised the Option on the date the person ceased
to be a Director; and
(d) DEATH OF A FORMER DIRECTOR. If any person should die within three
years following the date he or she ceased to be a Director by reason of
Retirement or Disability or within three months following the date he or
she ceased to be a Director for reasons other than Retirement, Disability
or death, the decedent's estate or any person who acquires the right to
exercise the Option by reason of the decedent's death may exercise the
Option (to the extent that the decedent was entitled to do so on the date
the decedent ceased to be a Director) at any time (but in no event after
the Option has expired under the provisions of Section 5.4) within the
period ending on the later of (i) the last day of the period within which
the decedent could have exercised the Option but for his or her death and
(ii) the first anniversary of such person's death.
5.6 EXERCISE NOTICE. A Director may exercise all or part of an Option that
is exercisable under Section 5.5 by delivering a written notice substantially in
the form attached hereto to the Treasurer of the Company specifying the number
of Shares to be purchased and providing payment in full of the exercise price in
United States dollars by certified check or bank draft.
5.7 PERSONAL REPRESENTATIVES. In the event any Option is exercised by the
executors, administrators, heirs, legatees or distributees of the estate of a
deceased Director or by the guardian or legal representative of a disabled
former Director, the Company shall be under no obligation to issue Shares
thereunder unless and until the Company is satisfied that the person or persons
exercising the Option are the duly appointed legal representatives of the
deceased Director's estate or the proper legatees or distributees thereof or the
duly appointed guardian or legal representative of the disabled former Director.
SECTION 6. ADJUSTMENT IN THE EVENT OF CHANGE IN STOCK
In the event the outstanding Shares are increased or changed into or
exchanged for a different number or kind of shares of capital stock or other
securities of the Company by reason of any stock dividend or split,
recapitalization, reclassification, merger, consolidation, combination of Shares
or other corporate change, the Board shall make such substitution or adjustment,
if any, as it deems to be equitable, in the number or kind of Shares or other
securities as to which Options may be granted and in the number of Shares or the
exercise price under unexercised Options granted prior to such change.
In the case of any such substitution or adjustment, the aggregate Option
price in each Stock Option Agreement of all the Shares covered thereby prior to
such substitution or adjustment shall be the Option price
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for all the shares or other securities substituted for such Shares or to which
such Shares are adjusted, and the Option price per share after such substitution
or adjustment shall be determined accordingly; provided, however, that no such
determination shall obligate the Company to issue or sell fractional shares or
other securities.
SECTION 7. ACCELERATION.
7.1 CHANGE OF CONTROL; DELISTING. Notwithstanding any other provisions of
the Plan, upon the earlier of (a) a "Change of Control" of the Company (as
defined below), or (b) the Shares of the Company ceasing to be publicly traded,
any unexercisable portion of an Option shall become exercisable.
7.2 CHANGE OF CONTROL DEFINED. For the purposes hereof, a "Change of
Control" of the Company shall be deemed to have occurred if:
(a) any "person" (as such term is used in Section 13(d) and 14(d) of
the Exchange Act other than the Company becomes the "beneficial owner" (as
determined for purposes of Regulation 13-D under the Exchange Act as
currently in effect), directly or indirectly, of securities of the Company
representing 30% or more of the combined voting power of the Company's then
outstanding securities; or
(b) the stockholders of the Company approve (i) any merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the holders of the voting
securities of the Company outstanding immediately prior thereto holding
immediately thereafter securities representing more than 80% of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or (ii) any sale or other disposition (in one transaction or
a series of related transactions) of all, or substantially all, of the
assets of the Company; or
(c) the stockholders of the Company approve a plan or proposal for the
liquidation or dissolution of the Company; or
(d) during any period of two consecutive years (not including any
period prior to June 8, 1995), individuals who at the beginning of such
period constitute the entire Board of Directors of the Company and any new
director, whose election to the Board or nomination for election to the
Board by the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination
for election was previously so approved, cease for any reason to constitute
a majority of the Board.
SECTION 8. MISCELLANEOUS PROVISIONS
8.1 NO RIGHT TO DIRECTORSHIP. Neither the Plan nor any action taken
hereunder shall be construed as giving any Director any right to be retained in
the service of the Company.
8.2 OPTIONS NONTRANSFERABLE. A Director's interest in an Option and his or
her rights under the Plan may not be assigned or transferred in whole or in part
either directly or by operation of law or otherwise (except under a qualified
domestic relations order (as defined in Section 414(p) of the Code) or, in the
event of 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 Director in the Plan shall be subject to any obligation or
liability of such Director.
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8.3 COMPLIANCE WITH LAW. No Shares shall be issued hereunder unless
counsel for the Company shall be satisfied that such issuance will be in
compliance with all applicable federal, state and other securities, insurance
and other laws and regulations.
8.4 EXPENSES. The expenses of the Plan shall be borne by the Company.
8.5 UNFUNDED. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the issuance of Shares upon exercise of any
Option under the Plan and issuance of Shares upon exercise of Options shall be
subordinate to the claims of the Company's general creditors.
8.6 ACCEPTANCE. By accepting any Option or other benefit under the Plan,
each Director and each person claiming under or through such person 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 or the Board.
8.7 CONSTRUCTION. It is the intent of the Company that the Plan comply in
all respects with Rule 16b-3 or any successor rule, that any ambiguities or
inconsistencies in construction of the Plan be interpreted to give effect to
such intention and that if any provision of the Plan is found not to be in
compliance with Rule 16b-3, such provision shall be deemed null and void to the
extent required to permit the Plan to comply with Rule 16b-3. The Board may
adopt rules and regulations under, and amend, the Plan in furtherance of the
intent of the foregoing.
In all other respects the Plan and Options granted thereunder shall be
governed by, and construed in accordance with the laws of the State of Delaware
without regard to the conflict of laws principles thereof.
SECTION 9. AMENDMENT OR DISCONTINUANCE
The Plan may be amended at any time and from time to time by the Board as
the Board shall deem advisable, including, but not limited to, amendments
necessary to qualify for any exemption or to comply with applicable law or
regulations; provided, however, that except as provided in Section 6 above, the
Board may not, without further approval by the holders of a majority of the
outstanding Shares of the Company entitled to vote thereon increase the maximum
number of Shares as to which Options may be granted under the Plan, increase the
number of shares subject to an Option, change the Option exercise price
described in Section 5.2 above, extend the period during which Options may be
granted or exercised under the Plan or change the class of persons eligible to
receive Options under the Plan. Subject to the provision of Section 8.7 relating
to Rule 16b-3, no amendment of the Plan shall materially and adversely affect
any right of any Director with respect to any Option theretofore granted without
such Director's written consent. Notwithstanding the foregoing, this Plan may
not be amended more frequently than once every six months (other than to comply
with changes in the Code or the Employee Retirement Income Security Act of 1974,
as amended) or such other period as may be permitted by Rule 16b-3(c)(2)(ii)(B).
SECTION 10. ADMINISTRATION
The Plan shall be administered by the Board. The Board shall have all the
powers vested in it by the terms of the Plan, such powers to include authority
(within the limitations described herein) to prescribe the form of the agreement
embodying Options granted under the Plan. The Board shall, subject to the
provisions of the Plan, have the power to construe the Plan, to determine all
questions arising thereunder and to adopt and amend such rules and regulations
for the administration of the Plan as it may deem desirable. Any decision of the
Board in the administration of the Plan, as described herein, shall be final and
conclusive. The
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Board may act only by a majority of its members in office, except that the
members thereof may authorize any one or more of their number or the Secretary
or any other officer of the Company to execute and deliver documents on behalf
of the Board. No member of the Board shall be liable for anything done or
omitted to be done by such member or by any other member of the Board in
connection with the Plan, except in circumstances involving actual bad faith.
SECTION 11. TERMINATION
This Plan shall terminate upon the earlier of the following dates or events
to occur:
(a) upon the adoption of a resolution of the Board terminating the
Plan; or
(b) immediately following the automatic grant of Options at the Annual
Meeting in 2005.
SECTION 12. EFFECTIVE DATE OF PLAN
The Plan shall become effective as of April 20, 1995, provided that the
adoption of the Plan shall have been approved by the affirmative vote of the
holders of a majority of the outstanding Shares of the Company present in person
or represented by proxy at the 1995 Annual Meeting of Stockholders.
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APPENDIX B
PROXY PXRE CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS
JUNE 8, 1995
THIS PROXY IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Gerald L. Radke, F. Sedgwick Browne and
Sanford M. Kimmel, and each or any of them, with full power of substitution, the
proxies of the undersigned to vote all of the shares of Common Stock of PXRE
Corporation which the undersigned is entitled to vote at the Annual Meeting of
Shareholders of PXRE Corporation to be held at The Millenium Hilton Hotel, 55
Church Street, New York, New York on June 8, 1995 commencing at 9:00 a.m. and at
any adjournment or adjournments thereof, with all the powers the undersigned
would possess if personally present upon:
(1) ELECTION OF DIRECTORS: Authority to vote this Proxy for the election of
the following persons as directors is:
GRANTED / / WITHHELD / /
(Except as indicated otherwise)
IF THERE IS ANY INDIVIDUAL DIRECTOR WITH RESPECT TO WHOM YOU DESIRE TO
WITHHOLD YOUR VOTE, YOU MAY DO SO BY LINING THROUGH OR OTHERWISE STRIKING
OUT HIS NAME.
Bernard Kelly Edward P. Lyons David W. Searfoss
(2) To ratify the appointment of Price Waterhouse LLP as PXRE Corporation's
independent public accountants for the fiscal year ending December 31,
1995.
/ / APPROVE / / DISAPPROVE / / ABSTAIN
(See other side)
(3) To approve the adoption of the PXRE Corporation Director Stock Option
Plan.
/ / APPROVE / / DISAPPROVE / / ABSTAIN
(4) In their discretion, such other matters as may properly come before the
meeting.
UNLESS A CONTRARY DIRECTION IS INDICATED, THE SHARES REPRESENTED BY THIS
PROXY SHALL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR THE RATIFICATION OF
PRICE WATERHOUSE LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1995 AND FOR THE PROPOSAL TO ADOPT THE PXRE CORPORATION
DIRECTOR STOCK OPTION PLAN.
Please sign exactly as your
name appears on this Proxy.
If signing for estates,
trusts or corporations,
title or capacity should be
stated. If shares are held
jointly, each holder should
sign.
Dated , 1995
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Signature
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Signature
