<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:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
[PXRE LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 6, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of PXRE
CORPORATION ("PXRE") will be held on June 6, 1996 commencing at 9:00 a.m. at the
offices of PXRE Corporation, 399 Thornall Street, 14th Floor, Edison, New Jersey
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 April
26, 1996 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,
1996;
(3) To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
Only holders of the Common Stock of PXRE at the close of business on April
12, 1996, 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
April 29, 1996
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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 THIS 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 6, 1996
---------------------
SOLICITATION OF PROXIES
The accompanying Proxy is solicited by the Board of Directors of PXRE
CORPORATION, 399 Thornall Street, 14th Floor, Edison, New Jersey 08837 ("PXRE")
for use at the Annual Meeting of Shareholders to be held on June 6, 1996 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 April 29, 1996.
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 12, 1996 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, 8,752,694 shares of Common Stock were issued and outstanding
and held of record by approximately 145 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>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
TITLE OF CLASS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
- -------------- --------------------------------------- --------------------- --------
<S> <C> <C> <C>
Common Stock Merrill Lynch & Co., Inc. and 738,849 shares(1) 8.4%
Affiliates...........................
World Financial Center, North Tower
250 Vesey Street
New York, New York 10281
Common Stock Brandywine Asset Management Inc........ 715,942 shares(2) 8.2
Three Christina Centre
Suite 1200
201 North Walnut Street
Wilmington, Delaware 19801
Common Stock Phoenix Home Life Mutual Insurance
Company.............................. 636,700 shares(3) 7.3
One American Row
Hartford, Connecticut 06115
Common Stock Weiss, Peck & Greer.................... 527,855 shares(4) 6.0
One New York Plaza
New York, New York 10004
</TABLE>
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(1) According to the Schedule 13G filed by Merrill Lynch & Co., Inc. ("ML&Co.")
and various affiliates thereof with the Securities and Exchange Commission
(the "Commission"), ML&Co., a parent holding company, may be deemed to
beneficially own the 738,849 shares of Common Stock indicated opposite its
name in the above table, certain of which shares are held by Merrill Lynch
Pierce Fenner and Smith ("MLPF&S"), a wholly-owned direct subsidiary of
ML&Co., in proprietary accounts and certain of which shares may be deemed
to be beneficially owned by Merrill Lynch Group, Inc. ("ML Group"), a
wholly-owned direct subsidiary of ML&Co. ML Group and Princeton Services,
Inc. ("PSI"), a wholly-owned direct subsidiary of ML Group, are parent
holding companies each of which may be deemed to beneficially own 738,800
shares of Common Stock, with respect to which they may be deemed to have
shared voting and shared investment power. PSI is the general partner of
Fund Asset Management, L.P. ("FAM") and Merrill Lynch Asset Management
("MLAM"). Merrill Lynch Special Value Fund (the "Fund"), a registered
investment company of which FAM is the investment adviser, and FAM may each
be deemed to be the beneficial owner of, and to have shared voting and
investment power with respect to 660,300 shares of Common Stock (7.5% of
PXRE's Common Stock). MLAM may be deemed to be the beneficial owner of less
than 5% of PXRE's Common Stock in its capacity as investment adviser to
several registered investment companies. Each of ML&Co., MLPFS, ML Group,
PSI, FAM, MLAM and the Fund disclaim beneficial ownership of all such
shares, except in the case of ML&Co. and MLPFS, Common Stock held by MLPFS
in proprietary accounts.
(2) According to the Schedule 13G filed by Brandywine Asset Management, Inc.
("BAM") with the Commission, BAM beneficially owns the 715,942 shares of
Common Stock indicated opposite BAM's name in the above table. BAM holds
sole voting power and sole investment power in respect of 680,511 shares of
Common Stock.
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<PAGE> 5
(3) According to the Schedule 13G filed by Phoenix Home Life Mutual Insurance
Company ("Phoenix Home Life") with the Commission, Phoenix Home Life holds
sole voting power and sole investment power in respect of the 636,700
shares of Common Stock indicated opposite its name in the above table.
(4) According to the Schedule 13G filed by Weiss, Peck & Greer ("WPG") with the
Commission, WPG, in its capacity as a broker-dealer and an investment
adviser, may be deemed to be the beneficial owner of the 527,855 shares of
Common Stock indicated opposite WPG's name in the above table. 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
527,855 shares of Common Stock. WPG disclaims beneficial ownership of the
527,855 shares of Common Stock.
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 I directors will
terminate; therefore, the Board of Directors has nominated Wendy Luscombe,
Gerald L. Radke and Wilson Wilde (all of whom are also presently serving on the
Board) for re-election as Class I directors to serve three-year terms until the
Annual Meeting of Shareholders is held in 1999 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 (51) has been the President, Chief Executive Officer and a
director of PXRE since 1986 (and its Chairman of the Board of Directors since
June 1995), 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 (53) has been Chairman of the Board of Directors, President
and Chief Executive Officer of 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.
3
<PAGE> 6
Mr. Kelly (65), who was elected a director of PXRE in December 1988, is a
U.K. attorney and Chairman of Bernard Kelly & Associates, a financial
consultant, and was 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 also 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.
Ms. Luscombe (44), 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.
Mr. Lyons (69) was Vice Chairman of the Board of Directors of Olin Corp., a
diversified chemical manufacturing corporation, prior to his retirement in 1986.
Mr. Lyons was a director of Phoenix Home Life until February 1996 and is
currently a director of Phoenix Duff & Phelps Corporation ("Phoenix Duff &
Phelps"), an investment management company.
Mr. McLoughlin (49) has been Executive Vice President and Chief Investment
Officer of Phoenix Home Life since July 1992 and, since October 1995, has been
Vice Chairman, Chief Executive Officer and a director of Phoenix Duff & Phelps.
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, a director of World Trust, a Luxembourg organized investment trust,
and Phoenix Charter Oak Trust Company, as well as a director and officer of
various other Phoenix Home Life subsidiaries.
Mr. Searfoss (45) 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. Searfoss is also an officer and director of
various Phoenix Home Life subsidiaries.
Mr. Trautlein (69) 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 (68) 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 Front Royal Inc., a holding company that owns
specialty insurance carriers and an environmental consulting firm.
Unless otherwise indicated, all directors have served in such capacity
since 1986.
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In addition to the executive officer listed as being a director of PXRE,
PXRE has the following executive officers:
Michael J. Bleisnick (44) 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 (48) 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.
Sanford M. Kimmel (43) 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 (46) 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 (43) 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. Mr. Tounquet has also been a
Senior Vice President of TREX since May 1994, prior to which he served as a
Vice President of TREX since October 1993.
Frank A. LoPiccolo (52) has been a Vice President of PXRE since 1986.
Since August 1993, Mr. LoPiccolo has also served as a Vice President of
TREX.
All executive officers of PXRE hold office at the pleasure of the Board of
Directors.
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<PAGE> 8
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>
DIRECTORS AND FIVE CURRENT NAMED EXECUTIVE SHARES (AND PERCENT) DIRECTOR
OFFICERS BENEFICIALLY OWNED(1) TERM ENDS
------------------------------------------------- --------------------- ---------
<S> <C> <C>
Gerald L. Radke.................................. 109,412(1.2%)(2) (3)
Robert W. Fiondella.............................. 500* 1997
Bernard Kelly.................................... 2,500* 1998
Wendy Luscombe................................... 150* (3)
Edward P. Lyons.................................. 8,000* 1998
Philip R. McLoughlin............................. 100* 1997
David W. Searfoss................................ 100* 1998
Donald H. Trautlein.............................. 1,500* 1997
Wilson Wilde..................................... 1,000* (3)
Michael J. Bleisnick............................. 40,788(4)* --
Gordon Forsyth, III.............................. 48,017(5)* --
Eugene J. Sverchek............................... 8,115(6)* --
Sanford M. Kimmel................................ 1,362(7)* --
All directors and executive officers as a group
(15 persons)................................... 257,421(2.9%)(8)
</TABLE>
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* Beneficially owns less than 1% of PXRE's issued and outstanding Common
Stock.
(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 46,751 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
46,751 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 I directors terminates at the forthcoming 1996
Annual Meeting.
(4) Consists of currently exercisable options to purchase 40,788 shares of
Common Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act,
the 40,788 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 41,884 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
41,884 shares of Common Stock for which Mr. Forsyth holds currently
exercisable options have been added to the total number of issued and
outstanding shares
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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 7,819 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
7,819 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 1,178 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
1,178 shares of Common Stock for which Mr. Kimmel 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. Kimmel.
(8) Includes currently exercisable options to purchase 179,413 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
179,413 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.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
AND DIRECTOR COMPENSATION
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In 1995, 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 1995, 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
1995, the Human Resources Committee met three (3) 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 Duff & Phelps, a public majority-owned
subsidiary of Phoenix Home Life. In 1995, the Investment Committee met four (4)
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
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powers of the full Board of Directors during the intervals between its meetings.
In 1995, the Executive Committee did not meet.
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 1995 fiscal year PXRE paid annual retainers
of $16,000 (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 Board and Committee meeting of $1,000 ($3,000 for the Chairman) to each
director of PXRE, except for directors who were also officers of PXRE who
individually received no compensation for attendance at meetings. For fiscal
1995 PXRE paid a total of $238,000 in directors' fees. 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
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 automatically receives annual grants of options
to purchase 1,000 shares of PXRE Common Stock. Such options, which are granted
each year on the date of PXRE's Annual Meeting with an exercise price equal to
the market value of the Common Stock on such date, become exercisable in three
annual installments commencing on the date of the next succeeding annual meeting
and expire on the tenth anniversary of the date of grant.
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
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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.
Until 1995, 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 (including options granted pursuant to the Director Stock Option Plan).
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,
1996. 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.
9
<PAGE> 12
EXECUTIVE COMPENSATION
The following tables and narrative text describe the compensation paid in
1995 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........ 1995 $393,750 $ 294,000 $ 4,488 $126,000 18,090 $22,903
Chairman, President 1994 368,846 275,625 4,934 118,125 17,592 20,284
and Chief Executive 1993 345,705 301,175 3,571 100,011 14,352 17,991
Officer
Michael J. Bleisnick... 1995 221,710 135,713 6,000 58,163 7,347 10,011
Executive Vice 1994 211,307 124,103 -- 53,213 7,120 5,777
President -- Domestic 1993 192,583 136,500 -- 40,803 4,586 5,069
Operations
Gordon Forsyth, III.... 1995 221,710 135,713 6,000 58,163 7,347 9,966
Executive Vice 1994 211,307 124,103 -- 53,213 7,120 6,930
President -- 1993 190,348 136,500 -- 40,803 4,452 5,705
International
Operations
Eugene J. Sverchek..... 1995 168,649 89,250 6,000 38,250 4,673 6,860
Senior Vice 1994 151,305 81,375 -- 34,875 4,398 4,546
President -- Domestic 1993 137,819 87,550 -- 28,571 3,668 4,382
Treaty
Sanford M. Kimmel...... 1995 167,399 89,250 6,000 38,250 4,523 7,150
Senior Vice 1994 135,599 72,214 -- 30,949 4,712 --
President, Treasurer 1993 -- -- -- -- -- --
and Chief Financial
Officer
</TABLE>
- ---------------
(1) For 1995, consists of cash bonuses awarded in 1996 in respect of fiscal year
1995 pursuant to PXRE's Restated Employee Annual Incentive Bonus Plan. 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 1995, 1994 and 1993, for Mr. Radke, consists of $4,488, $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 1995, for Messrs. Bleisnick, Forsyth, Sverchek and
Kimmel, consists of automobile allowances.
(3) Consists of awards to Messrs. Radke, Bleisnick, Forsyth, Sverchek and
Kimmel, respectively, in respect of fiscal year 1995, of 4,707, 2,713,
2,713, 1,429 and 1,429 restricted shares of PXRE's Common Stock, in respect
of fiscal year 1994, of 4,643, 2,092, 2,092, 1,371 and 1,217 restricted
shares of PXRE's Common
10
<PAGE> 13
Stock and in respect of fiscal year 1993, of 4,211, 1,718, 1,718, 1,203 and
0 restricted shares of PXRE's Common Stock pursuant to PXRE's Restated
Employee Annual Incentive Bonus Plan. In accordance with the Commission's
rules, the above dollar values were calculated by multiplying the closing
prices of PXRE's Common Stock on February 15, 1996, February 16, 1995 and
February 10, 1994, the dates of such grants (i.e., $24.75, $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, with respect to the 1994 grants, in one installment on
January 1, 1998, and with respect to the 1995 grants, in one installment on
January 1, 1999. During the holding periods such shares are entitled to
receive dividends, if any, declared with respect to PXRE's Common Stock.
(4) Consists of non-qualified options granted in respect of PXRE's Common Stock
pursuant to PXRE's 1992 Officer Incentive Plan.
(5) For Mr. Radke, consists of: $15,766, $11,178 and $10,232 contributed by PXRE
in 1995, 1994 and 1993, respectively, to the 401(k) Plan (which is a
contributory defined contribution plan), $1,712 paid by PXRE during each of
1995, 1994 and 1993 with respect to a supplemental term life insurance
policy for Mr. Radke's benefit, $1,602 paid by PXRE during each of 1995,
1994 and 1993 with respect to a supplemental disability insurance policy
for Mr. Radke's benefit and $3,823, $5,792 and $4,445 representing the
amount of interest accrued in 1995, 1994 and 1993, 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
1995, 1994 and 1993 (see "CERTAIN BUSINESS RELATIONSHIPS" below); for Mr.
Bleisnick, consists of: $9,570, $5,336 and $4,628 contributed by PXRE in
1995, 1994 and 1993, respectively, to the 401(k) Plan, and $441 paid by
PXRE during each of 1995, 1994 and 1993, with respect to a supplemental
term life insurance policy for Mr. Bleisnick's benefit; for Mr. Forsyth,
consists of: $9,495, $6,459 and $5,234 contributed by PXRE in 1995, 1994
and 1993, respectively, to the 401(k) Plan, and $471 paid by PXRE during
each of 1995, 1994 and 1993 with respect to a supplemental term life
insurance policy for Mr. Forsyth's benefit; for Mr. Sverchek, consists of:
$6,860, $4,546 and $4,382 contributed by PXRE in 1995, 1994 and 1993,
respectively, to the 401(k) Plan; and for Mr. Kimmel, consists of $7,150
contributed by PXRE in 1995 to the 401(k) Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
--------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO GRANT DATE
OPTIONS EMPLOYEES IN EXERCISE OR EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR BASE PRICE($/SH) DATE VALUE($)(2)
- --------------------------------- ------------- ------------ ---------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Gerald L. Radke.................. 18,090 28.0% $ 24.875 2/16/05 $ 449,988
Michael J. Bleisnick............. 7,347 11.3 24.875 2/16/05 182,756
Gordon Forsyth, III.............. 7,347 11.3 24.875 2/16/05 182,756
Eugene J. Sverchek............... 4,398 6.8 24.875 2/16/05 109,400
Sanford M. Kimmel................ 4,712 7.3 24.875 2/16/05 117,211
</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
11
<PAGE> 14
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 (February 16,
1995). 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 $0.72 per share (the quarterly dividend on PXRE's Common
Stock having been increased in November 1995 from $0.015 per share to $0.18
per share). Based on this model, the present value of the options on the
February 16, 1995 grant date was determined to be $24.875 per option. PXRE
does not advocate or necessarily agree that the Black-Scholes model can
properly determine the value of an option.
12
<PAGE> 15
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT DECEMBER 31, 1995
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY STOCK
SHARES STOCK OPTIONS AT 12/31/95 OPTIONS AT 12/31/95
ACQUIRED ON VALUE (#)(2) ($)(3)
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- -------------------------- ------------ --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald L. Radke........... 13,000 $ 170,336 46,751/46,650 $1,238,901/$1,236,225
Michael J. Bleisnick...... 0 0 40,788/18,029 $1,080,882/$477,768
Gordon Forsyth, III....... 0 0 41,884/17,864 $1,109,926/$473,396
Eugene J. Sverchek........ 0 0 7,819/12,248 $207,203/$324,572
Sanford M. Kimmel......... 0 0 1,178/8,057 $31,217/$213,510
</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 43,367 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, 35,177 of which options were
exercisable at December 31, 1995, and options for 50,034 shares of PXRE
Common Stock granted in 1993, 1994 and 1995 pursuant to PXRE's 1992 Officer
Incentive Plan at exercise prices of $25.00, $23.875 and $24.875 per share,
respectively, 11,574 of which options were exercisable at December 31,
1995; 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, 1995, 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, 23,715 of which
options were exercisable at December 31, 1995, and options for 19,053
shares of PXRE Common Stock granted in 1993, 1994 and 1995 pursuant to
PXRE's 1992 Officer Incentive Plan at exercise prices of $25.00, $23.875
and $24.875 per share, respectively, 4,073 of which options were
exercisable at December 31, 1995; 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, 37,878 of which options were exercisable at December 31, 1995, and
options for 18,919 shares of PXRE Common Stock granted in 1993, 1994 and
1995 pursuant to PXRE's 1992 Officer Incentive Plan at exercise prices of
$25.00, $23.875 and $24.875 per share, respectively, 4,006 of which options
were exercisable at December 31, 1995; 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,
4,886 of which options were exercisable at December 31, 1995, and options
for 12,739 shares of PXRE Common Stock granted in 1993, 1994 and 1995
pursuant to PXRE's 1992 Officer Incentive Plan at exercise prices of
$25.00, $23.875 and $24.875 per share, respectively, 2,933 of which options
were exercisable at December 31, 1995; and for Mr. Kimmel, consists of
options for 9,235 shares of PXRE Common Stock granted in 1994 and 1995
pursuant to PXRE's 1992 Officer Incentive Plan at exercise prices of
$23.875 and $24.875 per share, respectively, 1,178 of which options were
exercisable at December 31, 1995.
(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, 1995 ($26.50) and the exercise prices of the options.
13
<PAGE> 16
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 62.
<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 $ 40,512 $ 50,640
125,000..................................... 16,667 33,333 50,000 50,262 64,077
150,000..................................... 20,000 40,000 60,000 62,012 77,515
175,000..................................... 23,333 46,667 70,000 72,762 90,952
200,000..................................... 26,667 53,333 80,000 83,512 104,390
225,000..................................... 30,000 60,000 90,000 94,262 117,827
250,000..................................... 33,333 66,667 100,000 105,012 131,265
275,000..................................... 36,667 73,333 110,000 115,762 144,702
300,000..................................... 40,000 80,000 120,000 126,512 158,140
400,000..................................... 53,333 106,667 160,000 169,512 211,890
500,000..................................... 66,667 133,333 200,000 212,512 265,640
</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 and bonuses only. For each of the
named current executive officers, annual covered compensation for 1995 is the
amount shown for 1995 in the Salary column of the Summary Compensation Table,
above. The full years of credited service under the plans as of December 31,
1995 for each of the named current executive officers is: Mr. Radke: 23; Mr.
Bleisnick: 11; Mr. Forsyth: 9; Mr. Sverchek: 4; and Mr. Kimmel: 1.
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.
14
<PAGE> 17
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 S&P 500 DOW JONES P&C
<S> <C> <C> <C>
1990 100 100 100
1991 135.48 130.47 124.36
1992 203.22 140.41 151.43
1993 351.61 154.56 152.68
1994 364.51 156.6 160.55
1995 341.93 215.45 226.82
</TABLE>
The total return assumes that dividends were reinvested quarterly and is
based on a $100 investment on December 31, 1990. For each subsequent year, the
total return for PXRE and for each index is stated as of December 31 of such
year.
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.
15
<PAGE> 18
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
1995 the Committee determined that it was appropriate to increase executive base
salaries by an average of 9.0%.
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 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 1996, the Committee determined that total bonus amounts equal
to $1,711,614 were payable to the Company's executives under the Restated
Employee Annual Incentive Bonus Plan based on the 1995 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 $1,198,130 and
restricted stock grants valued at $513,484 containing a three year vesting
provision.
16
<PAGE> 19
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 64,621
shares of the Company's Common Stock at an exercise price of $24.875 per share
(market value on grant date) in February 1995 to the Company's 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 1995 under this Plan.
The Internal Revenue Code has set limitations on the deductibility of
compensation paid to executive officers effective in 1995. 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
1995 based upon a number of factors and criteria. The Chief Executive Officer's
base salary was increased by 6.7% during 1995 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.
In February 1996, the Committee granted an award to the Chief Executive
Officer under the Restated Employee Annual Incentive Bonus Plan consisting of a
cash payment of $294,000 and a restricted stock grant valued at $126,000 and
containing a three year vesting provision.
17
<PAGE> 20
In February 1995, the Chief Executive Officer received options to purchase
a total of 18,090 shares of Common Stock at an exercise price of $24.875 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 15, 1996
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. During 1995 and as of the record date, Phoenix
Home Life owned approximately 7.3% of the issued and outstanding Common Stock of
PXRE. PXRE Reinsurance, a wholly-owned subsidiary of PXRE, and Phoenix Duff &
Phelps Corporation, a public majority-owned subsidiary of Phoenix Home Life, are
parties to an investment advisory agreement. Pursuant to this agreement, which
is terminable by either party on 60 days' notice, Phoenix Duff & Phelps
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 $200,000 to Phoenix Duff & Phelps for services performed
pursuant to such agreement in fiscal year 1995. For 1996, the amount of
investment advisory fees payable pursuant to such agreement will be equal to
0.15% of average assets under management plus out-of-pocket expenses. Management
of PXRE expects such fees for 1996 will be approximately $350,000, plus
out-of-pocket expenses. 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.
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.
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
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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 Kimmel participate in the
Plan, with 11 others. Were a change of control of PXRE to have occurred on
December 31, 1995 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 Kimmel would have been $800,000,
$235,000, $235,000, $170,000 and $170,000, 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.
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,
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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.
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
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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 and Sverchek held
outstanding non-qualified options to purchase 23,367, 36,514, 40,829 and 7,328
shares of Common Stock, respectively, pursuant to the 1988 Option Plan; and of
such options, 23,367, 36,514, 40,829 and 7,328, respectively, had vested in
accordance with the provisions of the 1988 Option Plan, and were exercisable, as
of the record date. (Mr. Kimmel is omitted from the foregoing discussion because
he is not a participant in the 1988 Option Plan.)
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 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
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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, Mr. Bleisnick held outstanding and fully exercisable
options to purchase 13,000 shares of Common Stock pursuant to the 1987 Option
Plan. Messrs. Radke and Forsyth have fully exercised the options granted to them
pursuant to the 1987 Option Plan. (Mr. Sverchek and Mr. Kimmel 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.
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
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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 Kimmel are each eligible to
participate in the Restated Bonus Plan. In February 1996, Restricted Share and
cash bonus awards under the Restated Bonus Plan were made to Messrs. Radke,
Bleisnick, Forsyth, Sverchek and Kimmel in respect of fiscal year 1995, 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, 1999, 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.
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,
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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 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 16b3(e)
thereunder.
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Messrs. Radke, Bleisnick, Forsyth, Sverchek and Kimmel are each eligible to
participate in the 1992 Incentive Plan. In February 1995, non-qualified options
were granted under the 1992 Incentive Plan to Messrs. Radke, Bleisnick, Forsyth,
Sverchek and Kimmel in respect of fiscal year 1995, as noted in the Option Grant
Table above.
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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,
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
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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 equity"
(as defined) of TREX for each year, or part thereof, that the Management
Agreement remains effective (the first such year 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 is carried forward as a
debit item in the contingent fee computation for the ensuing management year or
years and no contingent fee is 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" is 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 is 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 $4,154,200 in fees
and expense reimbursements to PXRE Reinsurance under the Management Agreement
during PXRE's 1995 fiscal year. For PXRE's 1996 fiscal year, the actual amount
of fees and expense reimbursements payable by TREX and
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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
is scheduled to renew automatically 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 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
1995 fiscal year. Amounts, if any, payable in PXRE's 1996 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
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under the Registration Rights Agreement during PXRE's 1995 fiscal year. Amounts,
if any, payable in PXRE's 1996 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 and Mr. McLoughlin are executive officers of Phoenix Home Life and
Mr. Kelly is a director of an affiliate thereof. 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 a 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, 1996. 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.
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, 1995 all Section 16(a) filing requirements applicable to
PXRE's executive officers, directors and greater-than-10% shareholders were
complied with, except that an option exercise and subsequent sale transaction by
Mr. Alain Tounquet, a Senior Vice President of the Company, which occurred in
August 1995 was inadvertently not reported on Form 4 and was therefore reported
on Form 5 in February 1996.
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 1997 Annual Meeting of
Shareholders of PXRE, such shareholder must submit such
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proposal in writing to PXRE Corporation, 399 Thornall Street, Edison, New Jersey
08837, Attention: Treasurer, for receipt by PXRE not later than December 31,
1996.
GENERAL
PXRE's Annual Report to Shareholders, which contains financial statements
for the year ended December 31, 1995 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 1995 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
April 29, 1996
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APPENDIX A
PROXY PXRE CORPORATION PROXY
ANNUAL MEETING OF SHAREHOLDERS
JUNE 6, 1996
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 offices of PXRE Corporation,
399 Thornall Street, 14th Floor, Edison, New Jersey on June 6, 1996 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 OR HER NAME.
Wendy Luscombe Gerald L. Radke Wilson Wilde
(2) To ratify the appointment of Price Waterhouse LLP as PXRE Corporation's
independent public accountants for the fiscal year ending December 31, 1996.
/ / APPROVE / / DISAPPROVE / / ABSTAIN
(See other side)
(3) 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 AND FOR THE RATIFICATION OF
PRICE WATERHOUSE LLP AS INDEPENDENT PUBLIC ACCOUNTANTS FOR THE FISCAL YEAR
ENDING DECEMBER 31, 1996.
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: , 1996
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Signature
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Signature
