<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
(PXRE LOGO)
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 4, 1998
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of PXRE
CORPORATION ("PXRE") will be held on June 4, 1998 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
seven 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 30, 1998 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,
1998; and
(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
10, 1998, 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 30, 1998
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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 STOCKHOLDERS
OF PXRE CORPORATION
JUNE 4, 1998
---------------------
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 Stockholders to be held on June 4, 1998 and at
any and all adjournments thereof (the "Annual Meeting"). 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 30, 1998.
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 10, 1998 as
the record date for the determination of stockholders entitled to notice of the
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, 13,797,923 shares of Common Stock were issued and outstanding
and held of record by approximately 160 stockholders. Each share of Common Stock
is entitled to one vote on each matter presented at the 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.. FMR Corp. and Affiliates.................. 1,385,063 shares(1) 10.0%
82 Devonshire Street
Boston, MA 02109
Common Stock Harris Associates, Inc. and Affiliates.... 1,211,000 shares(2) 8.8%
Two North LaSalle Street, Suite 500
Chicago, IL 60602
Common Stock T. Rowe Price Associates, Inc............. 1,103,463 shares(3) 8.0%
100 East Pratt Street
Baltimore, MD 21202
Common Stock Heartland Advisors, Inc................... 990,619 shares(4) 7.2%
790 North Milwaukee St.
Milwaukee, WI 53202
Common Stock Franklin Resources, Inc. and Affiliates... 833,500 shares(5) 6.0%
777 Mariners Island Blvd.
San Mateo, CA 94404
</TABLE>
- ---------------
(1) According to the Schedule 13G filed by FMR Corp. ("FMR") and various
affiliates thereof with the Securities and Exchange Commission (the
"Commission"), FMR, Mr. Edward C. Johnson 3d, and Abigail P. Johnson, may be
deemed to beneficially own the 1,385,063 shares of Common Stock indicated
opposite FMR's name in the above table, by virtue of FMR's 100% ownership of
Fidelity Management & Research Company ("Fidelity"). Fidelity, in its
capacity as a registered investment advisor to various registered investment
companies, may be deemed to be the beneficial owner of 1,385,063 shares of
Common Stock. Fidelity Low-Priced Stock Fund, an investment company of which
Fidelity is investment advisor, may be deemed to be the beneficial owner of
725,063 shares of Common Stock (5.25% of PXRE's Common Stock). Neither FMR,
Mr. Johnson nor Ms. Johnson reports sole or shared voting power in respect
of the 1,385,063 shares of Common Stock. Each of FMR, Mr. Johnson and Ms.
Johnson reports sole dispositive power in respect of the 1,385,063 shares of
Common Stock.
(2) According to the Schedule 13G filed by Harris Associates, Inc. ("Harris")
and various affiliates thereof with the Commission, Harris may be deemed to
beneficially own the 1,211,000 shares of Common Stock indicated opposite
Harris' name in the above table, which shares may be deemed to be
beneficially owned by Harris Associates L.P. (the "Partnership"). Harris is
the sole general partner of the Partnership. The Partnership, in its
capacity as a registered investment advisor to various registered investment
companies, may be deemed to be the beneficial owner of the 1,211,000 shares
of Common Stock. Harris Associates Investment Trust (series designated The
Oakmark Smallcap Fund), an investment company of which the Partnership is
investment advisor, may be deemed to be the beneficial owner of 1,186,000
shares of Common Stock (8.6% of PXRE's Common Stock).
(3) According to the Schedule 13G filed by T. Rowe Price Associates, Inc. ("T.
Rowe Price") with the Commission, T. Rowe Price, in its capacity as an
investment advisor, may be deemed to be the beneficial owner of the
1,103,463 shares of Common Stock indicated opposite T. Rowe Price's name in
the above
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<PAGE> 5
table. Such shares are owned by various individual and institutional
investors which T. Rowe Price serves as an investment advisor. T. Rowe Price
has power to direct investments with respect to such shares. T. Rowe Price
disclaims beneficial ownership of the 1,103,463 shares of Common Stock.
(4) According to the Schedule 13G filed by Heartland Advisors, Inc.
("Heartland") with the Commission, Heartland, a registered investment
advisor, may be deemed to beneficially own the 990,619 shares of Common
Stock indicated opposite Heartland's name in the above table. Heartland
reports sole voting power in respect of 940,308 shares of Common Stock and
sole dispositive power in respect of 990,619 shares of Common Stock.
(5) According to the Schedule 13G filed by Franklin Resources, Inc. ("FRI") and
various affiliates thereof with the Commission, FRI (a parent holding
company) and Charles B. Johnson and Rupert H. Johnson, Jr. (principal
shareholders of FRI) may be deemed to beneficially own the 833,500 shares of
Common Stock indicated opposite FRI's name in the above table, which shares
are held by persons and entities advised by FRI or its subsidiaries.
Franklin Advisory Services, Inc. and Franklin Mutual Advisers, Inc.,
investment advisory subsidiaries of FRI, report sole voting and dispositive
power in respect of 425,700 shares and 407,800 shares of Common Stock,
respectively (in each case, less than 5% of PXRE's Common Stock). FRI,
Messrs. Johnson and the investment advisory subsidiaries of FRI disclaim
beneficial ownership of the 833,500 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 stockholders. 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 stockholders. 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 the Annual Meeting, the terms of office of the Class III directors will
terminate; therefore, the Board of Directors has nominated Bernard Kelly, Edward
P. Lyons and David W. Searfoss (all of whom are also presently serving on the
Board) for re-election as Class III directors to serve three-year terms until
the annual meeting of stockholders is held in 2001 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
Gerald L. Radke (53) 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. From
August 1993 until the merger (the "Merger") in December 1996 of
3
<PAGE> 6
Transnational Re Corporation ("TREX") with and into PXRE, Mr. Radke also served
as President, Chief Executive Officer and Chairman of the Board of Directors of
TREX.
Robert W. Fiondella (55) has been Chairman of the Board of Directors,
President and Chief Executive Officer of Phoenix Home Life Mutual Insurance
Company ("Phoenix Home Life") since February 1994. From July 1992 to February
1994, he was President and Principal Operating Officer of Phoenix Home Life, and
from February 1989 to June 1992, he was President and Chief Operating Officer of
Phoenix Mutual Life Insurance Company, a predecessor of Phoenix Home Life
("Phoenix Mutual"). Mr. Fiondella is also an officer and director of various
Phoenix Home Life subsidiaries.
Franklin D. Haftl (64), who was elected a director of PXRE in February
1997, has been in the insurance and reinsurance industry since 1958 and
currently serves as a director of Unione Italiana Reinsurance Company of
America, Inc. ("Unione"), having previously served as President and Chief
Executive Officer and a director of Unione from October 1988 to March 1994. Mr.
Haftl served as a director of TREX from January 1994 until the Merger in
December 1996. Mr. Haftl is a member of the American Arbitration Association and
has served and continues to serve as umpire on numerous arbitration panels
adjudicating commercial insurance and reinsurance-related disputes.
Bernard Kelly (68), 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 PXRE Ltd. (a corporate member of Lloyd's), 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, Lazard Income Growth & Property Unit Trust
and Nexus Structured Finance Ltd., an agency for private sector finance to state
(U.K.) institutions.
Wendy Luscombe (46), 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 was also a director
of Berkeley Commercial Investments, the commercial real estate investment arm of
Berkeley Group plc, a U.K. public company, until June 1996.
Edward P. Lyons (71) 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.
Philip R. McLoughlin (51) has been Chairman, Chief Executive Officer and a
director of Phoenix Duff & Phelps since October 1995 and, since July 1992, has
been Executive Vice President and Chief Investment Officer of Phoenix Home Life.
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 both World Trust and Emerging World Trust, each 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.
4
<PAGE> 7
David W. Searfoss (47) 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.
Donald H. Trautlein (71) was Chairman and Chief Executive Officer of
Bethlehem Steel Corporation from 1980 until his retirement in 1986. Mr.
Trautlein is currently a director of Data General Corporation. He was elected a
director of PXRE in March 1988.
Wilson Wilde (70) 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
("Hartford Steam Boiler"). Since May 1994, Mr. Wilde has been Chairman of the
Executive Committee, and has continued as a director, of Hartford Steam Boiler.
Mr. Wilde is currently a director of 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.
In addition to the executive officer listed as being a director of PXRE,
PXRE has the following executive officers:
Michael J. Bleisnick (46) 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. From
August 1993 until the Merger in December 1996, Mr. Bleisnick also served as
an Executive Vice President of TREX.
Gordon Forsyth, III (50) 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. From
August 1993 until the Merger in December 1996, Mr. Forsyth also served as
an Executive Vice President of TREX.
Sanford M. Kimmel (45) has been Senior Vice President, Treasurer and
Chief Financial Officer of PXRE since February 1994. From March 1994 until
the Merger in December 1996, Mr. Kimmel 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.
Peter G. Butler (49) has been a Senior Vice President of PXRE since
August 1996 and is the Managing Underwriter for Lloyd's Syndicate 1224. Mr.
Butler has nearly 30 years of insurance/reinsurance underwriting experience
in Lloyd's and the London company market, most recently as active
underwriter for Lloyd's non-marine syndicates 765 and 1179.
A. Joseph Hoane (54) has been a Senior Vice President of PXRE since
February 1997. Prior thereto, he was a Vice President of PXRE since March
1992 and an Assistant Vice President of PXRE since November 1989. From
October 1993 until the Merger in December 1996, Mr. Hoane also served as a
Vice President of TREX.
Eugene J. Sverchek (48) has been a Senior Vice President of PXRE since
April 1991. From August 1993 until the Merger in December 1996, Mr.
Sverchek also served as a Senior Vice President of TREX. Prior to joining
PXRE, he held various positions (including Senior Vice President) during
his
5
<PAGE> 8
sixteen years at MONY Reinsurance Company where he specialized in property
treaty reinsurance underwriting.
Alain Tounquet (45) 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 also served as a
Senior Vice President of TREX from May 1994 until the Merger in December
1996, prior to which he served as a Vice President of TREX since October
1993.
Frank A. LoPiccolo (54) has been a Vice President of PXRE since 1986.
From August 1993 until the Merger in December 1996, Mr. LoPiccolo also
served as a Vice President of TREX.
John C. Brennan (45) has been a Vice President of PXRE and
Transnational Insurance Company since September 1997. Prior thereto, he was
an Associate Vice President of Markel Corporation since May 1997 and a Vice
President of Guy Carpenter/EQECAT since September 1994.
Mark E. Hilsher (43) has been a Vice President of PXRE and
Transnational Insurance Company since September 1997. Prior thereto, he was
a Vice President of Markel Corporation since April 1993 and a Vice
President, Property Manager of Industrial Underwriters, Inc. since March
1989.
All executive officers of PXRE hold office at the pleasure of the Board of
Directors.
The following table sets forth certain information concerning beneficial
ownership of PXRE's Common Stock by the directors, the five executive officers
named below under the heading "EXECUTIVE COMPENSATION" and all directors and
executive officers as a group, as of the record date:
<TABLE>
<CAPTION>
SHARES (AND PERCENT) DIRECTOR
DIRECTORS AND FIVE CURRENT NAMED EXECUTIVE OFFICERS BENEFICIALLY OWNED(1) TERM ENDS
- --------------------------------------------------- --------------------- ---------
<S> <C> <C>
Gerald L. Radke................................... 130,668(2)* 1999
Robert W. Fiondella............................... 4,353(3)* 2000
Franklin D. Haftl................................. 3,048(3)* 1999
Bernard Kelly..................................... 6,353(3)* (4)
Wendy Luscombe.................................... 3,697(3)* 1999
Edward P. Lyons................................... 14,286(3)* (4)
Philip R. McLoughlin.............................. 3,647(3)* 2000
David W. Searfoss................................. 3,647(3)* (4)
Donald H. Trautlein............................... 3,024(3)* 2000
Wilson Wilde...................................... 5,603(3)* 1999
Michael J. Bleisnick.............................. 62,922(5)* --
Gordon Forsyth, III............................... 78,232(6)* --
Sanford M. Kimmel................................. 21,775(7)* --
Eugene J. Sverchek................................ 29,844(8)* --
All directors and executive officers as a group (20
persons)........................................ 438,519(3.2%)(9)
</TABLE>
- ---------------
* 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.
Haftl, 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
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<PAGE> 9
"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 stockholders 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 59,635 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
59,635 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) Includes with respect to each of the following individuals, currently
exercisable options to purchase the indicated number of shares of Common
Stock: Mr. Fiondella, 3,853 shares; Mr. Haftl, 2,548 shares; Mr. Kelly,
3,853 shares; Ms. Luscombe, 3,547 shares; Mr. Lyons, 999 shares; Mr.
McLoughlin, 3,547 shares; Mr. Searfoss, 3,547 shares; Mr. Trautlein, 999
shares; and Mr. Wilde, 3,547 shares. In accordance with Rule 13d-3(d)(1)
under the Exchange Act, such shares of Common Stock for which the named
director 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 such director.
(4) Term of office of Class III directors terminates at the forthcoming 1998
Annual Meeting.
(5) Includes currently exercisable options to purchase 50,360 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
50,360 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.
(6) Includes currently exercisable options to purchase 56,715 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
56,715 shares of Common Stock for which Mr. Forsyth holds currently
exercisable options have been added to the total number of issued and
outstanding shares of Common Stock solely for the purpose of calculating the
percentage of such total number of issued and outstanding shares of Common
Stock beneficially owned by Mr. Forsyth.
(7) Includes currently exercisable options to purchase 12,091 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
12,091 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 22,832 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
22,832 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.
(9) Includes currently exercisable options to purchase 274,523 shares of Common
Stock. In accordance with Rule 13d-3(d)(1) under the Exchange Act, the
274,523 shares of Common Stock for which PXRE's directors and executive
officers as a group hold currently exercisable options have been added to
the total number of issued and outstanding shares of Common Stock solely for
the purpose of calculating the percentage of such total number of issued and
outstanding shares of Common Stock beneficially owned by such directors and
executive officers as a group.
7
<PAGE> 10
THE BOARD OF DIRECTORS AND ITS COMMITTEES
AND DIRECTOR COMPENSATION
THE BOARD OF DIRECTORS AND ITS COMMITTEES
In 1997, the Board of Directors met seven (7) times. Except for Mr.
Fiondella, 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 the standing committees on which he or she
served (during the periods that he or she served).
There are four standing committees of the Board of Directors: the Audit
Committee, the Human Resources Committee, the Investment Committee and the
Executive Committee. The committees are composed entirely of directors who are
not employees of PXRE, except that Mr. Radke is a member of the Executive
Committee.
The members of the Audit Committee are Messrs. Kelly (Chairman), Haftl,
McLoughlin, Searfoss and Trautlein and Ms. Luscombe. The members of the Audit
Committee are responsible for assisting the Board of Directors in fulfilling its
responsibilities in connection with PXRE's accounting and financial reporting
practices. In 1997, the Audit Committee met three (3) times.
The members of the Human Resources Committee are Messrs. Fiondella
(Chairman), Lyons, Trautlein 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 1997, the Human
Resources Committee met six (6) times.
The members of the Investment Committee are Messrs. Lyons (Chairman),
Haftl, 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 and trading subsidiaries, including PXRE
Reinsurance Company ("PXRE Reinsurance") and Transnational Insurance Company
("Transnational"), and for overseeing investment management carried out by
Phoenix Duff & Phelps, a public majority-owned subsidiary of Phoenix Home Life.
In 1997, the Investment Committee met two (2) times.
The members of the Executive Committee are Messrs. Radke, Fiondella and
Trautlein. The Executive Committee is vested with the authority to exercise the
powers of the full Board of Directors during the intervals between its meetings.
In 1997, 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.
From time to time the Board of Directors designates other committees of the
Board to carry out certain specified activities, particularly in connection with
financings and other major transactions by PXRE. In 1997, the Board of Directors
designated a committee consisting of Messrs. McLoughlin, Searfoss and Wilde (the
"Capital Securities Committee") and authorized the members of the Capital
Securities Committee to implement an offering of Capital Trust Pass-through
Securities ("TruPS(sm)").
COMPENSATION OF DIRECTORS
CASH COMPENSATION. During the 1997 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 standing committee meeting of $1,000 ($3,000 for the
8
<PAGE> 11
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 1997, PXRE paid a total of $275,000 in directors' fees. Effective
January 1, 1998, non-employee director compensation was restructured such that
non-employee directors are entitled to receive an annual combined retainer of
$25,000 (plus an additional $3,000 for Committee Chairmen) payable at the
beginning of each year plus Board and standing committee meeting fees of $1,500
per meeting. Directors have had 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 (the "401(k) Plan").
OTHER COMPENSATION. On April 17, 1997, PXRE adopted the PXRE Corporation
Director Equity and Deferred Compensation Plan (the "Director Compensation
Plan") which, among other things, provides that deferred amounts shall be
credited with earnings (losses) mirroring the fund or funds provided in the
401(k) Plan that are designated by the director (rather than just the
Intermediate Term U.S. Treasury Portfolio fund). The Director Compensation Plan
also enables non-employee directors to elect to defer receipt of fees for
services as a member of the Board and, with respect to the annual retainer for
such services, payable to such non-employee directors for 1998 through 2007,
allows such directors to elect, prior to the subject year, to receive all or a
portion of the annual retainer amount in shares of PXRE Common Stock or options
to purchase shares of PXRE Common Stock. The number of shares which may be
awarded to a director upon such director's election to receive shares of Common
Stock in lieu of all or a portion of the annual retainer is the number of whole
shares equal to (i) the portion of the annual retainer for which the director
has made such election, divided by (ii) the "fair market value" per share of
Common Stock, as determined pursuant to the Director Compensation Plan.
The number of whole shares of Common Stock subject to an option grant under
the Director Compensation Plan is determined by dividing the portion of the
annual retainer for which the director has made such election by the "option
value", as determined pursuant to the Director Compensation Plan. The exercise
price per share under each option is equal to the "fair market value" per share,
as determined pursuant to the Director Compensation Plan. Options granted under
the Director Compensation Plan are immediately exercisable and may be exercised
until the tenth anniversary of the date of grant. In the event a director
terminates service on the Board, such person's options are exercisable for three
years after the date of termination of service, but not beyond the original
expiration date. In the event of death of a director after terminating service
on the Board, any outstanding options expire on the later of the date applicable
to the director at the time the director terminated service or one year from the
date of death, provided that in no event may an option be exercised beyond its
original expiration date.
For purposes of the Director Compensation Plan, "fair market value" means
the average of the high and low share prices quoted for PXRE Common Stock on the
New York Stock Exchange over the twenty (20) trading days prior to the December
31 immediately prior to the calendar year for which the annual retainer is
payable. For purposes of the Director Compensation Plan, "option value" means
the value of an option determined as of December 31 immediately preceding the
calendar year for which the annual retainer is payable in accordance with the
Black-Scholes option valuation model, discounted by 20%.
The Director Compensation Plan is administered by the Board of Directors.
The Board has full power and authority to construe and interpret the Director
Compensation Plan and adopt and amend such rules and
9
<PAGE> 12
regulations for the administration of the Director Compensation Plan as it deems
desirable. The Board may amend the Director Compensation Plan as it deems
advisable, provided that no such amendment may materially and adversely affect
any right of a director with respect to any option previously granted without
such director's written consent. The Board may terminate the Director
Compensation Plan at any time. If not earlier terminated by the Board, the
Director Compensation Plan will terminate immediately following the annual
meeting of PXRE's stockholders in 2007.
Under the PXRE Corporation Director Stock Option Plan, as amended (the
"Director Option Plan"), each non-employee director is automatically granted
annually, on the date of PXRE's Annual Meeting, an option exercisable (subject
to a three-year vesting period) for the purchase of 3,000 shares (previously
1,000 shares prior to the amendment of the Director Option Plan in 1997) of
Common Stock at a price per share equal to the market value at the date of
grant. On the date of the annual meetings of PXRE stockholders in 1995 and 1996,
options for 1,000 shares were granted pursuant to the Director Option Plan to
each non-employee director then in office (i.e., all current non-employee
directors except Mr. Haftl) at exercise prices of $23.25 and $24.95,
respectively. On the date of the annual meeting of PXRE stockholders in 1997,
options for 3,000 shares were granted pursuant to the Director Option Plan to
each non-employee director then in office at an exercise price of $28.14. As of
the record date, options for a total of 43,000 shares had been granted pursuant
to the Director Option Plan, of which a total of 8,000 are currently
exercisable.
The Director Option Plan is administered by the Board of Directors, which
is authorized to interpret the Director Option Plan but has no authority with
respect to the selection of directors to receive options, the number of shares
subject to the Director Option Plan or to each grant thereunder, or the option
price for shares subject to options. The Board may amend the Director Option
Plan as it deems advisable but may not, without further approval of the
stockholders, increase the maximum number of shares under the Director Option
Plan or options to be granted thereunder, change the option price provided in
the Director Option Plan, extend the period during which options may be granted
or exercised, or change the class of persons eligible to receive options.
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 are 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 to Phoenix Home Life (as described below) 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.
Upon becoming a director of PXRE on February 13, 1997, Mr. Haftl was granted the
right to receive 2,000 shares of Common Stock pursuant to the terms of the
Director Plan. As of the record date, eligible non-employee PXRE directors as a
group have the right to receive a total of 12,000 shares of Common Stock
pursuant to the terms of the Director Plan.
10
<PAGE> 13
On each date on which dividends are paid to holders of shares of PXRE
Common Stock, each director who has been granted the right to receive shares of
Common Stock under the Director Plan is paid an amount in cash equal to the
product of (i) the dividend per share for the applicable dividend payment date
and (ii) the number of shares which have been granted to the director but which
have not yet been delivered.
The Director Plan is administered by the Board of Directors, which may
amend or terminate the Director Plan at any time. However, no such amendment or
termination may reduce the number of shares that had been granted to the
directors prior to such amendment or termination.
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, from August 23, 1990 to August 24, 1993, 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. Effective January 1, 1995,
Phoenix Home Life changed such practice and employees of Phoenix Home Life
serving as directors of PXRE are entitled to receive directly any compensation
therefor.
THE AFFIRMATIVE VOTE OF A MAJORITY OF THE SHARES OF COMMON STOCK PRESENT IN
PERSON OR REPRESENTED BY PROXY AT THE ANNUAL MEETING AND ENTITLED TO VOTE 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,
1998. This selection is being presented to the stockholders 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 AND
ENTITLED TO VOTE. 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.
11
<PAGE> 14
EXECUTIVE COMPENSATION
The following tables and narrative text describe the compensation paid in
1997 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...... 1997 $468,270 $214,130 $3,798 $167,301 17,705 $236,328
Chairman, President 1996 457,115 252,032 4,276 111,263 19,394 211,982
and Chief Executive 1995 393,750 294,000 4,488 116,498 18,090 22,903
Officer
Michael J.
Bleisnick.......... 1997 292,544 102,276 -- 83,854 9,377 209,931
Executive Vice 1996 284,969 121,015 -- 53,428 8,071 182,691
President--Domestic 1995 221,710 135,713 -- 67,147 7,347 10,011
Operations
Gordon Forsyth,
III................ 1997 285,048 102,276 -- 83,854 9,377 209,931
Executive Vice 1996 270,423 121,015 -- 53,428 8,071 182,691
President-- 1995 221,710 135,713 -- 67,147 7,347 9,966
International
Officer
Sanford M. Kimmel.... 1997 202,738 64,772 -- 55,341 5,641 196,540
Senior Vice 1996 198,000 74,810 -- 33,029 5,152 178,633
President,
Treasurer 1995 167,399 89,250 -- 35,368 4,253 7,150
and Chief Financial
Officer
Eugene J. Sverchek... 1997 183,689 59,119 -- 48,505 5,429 185,810
Senior Vice 1996 186,851 72,009 -- 31,793 5,152 178,364
President--Domestic 1995 168,649 89,250 -- 35,368 4,673 6,860
Treaty
</TABLE>
- ---------------
(1) For 1997, consists of cash bonuses awarded in 1998 in respect of fiscal year
1997 pursuant to PXRE's Restated Employee Annual Incentive Bonus Plan (the
"Bonus Plan"). For 1996, consists of cash bonuses awarded in 1997 in respect
of fiscal year 1996 pursuant to the Bonus Plan. For 1995, consists of cash
bonuses awarded in 1996 in respect of fiscal year 1995 pursuant to the Bonus
Plan.
(2) For 1997, 1996 and 1995, for Mr. Radke, consists of $3,798, $4,276 and
$4,488, 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".)
(3) Consists of awards to Messrs. Radke, Bleisnick, Forsyth, Kimmel and
Sverchek, respectively, in respect of fiscal year 1997, of 2,844, 1,358,
1,358, 859 and 785 restricted shares of PXRE Common Stock, in respect of
fiscal year 1996, of 4,140, 1,988, 1,988, 1,229 and 1,183 restricted shares
of PXRE's Common Stock and 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 pursuant to
the Bonus Plan. Pursuant to the terms of the Bonus Plan, such
12
<PAGE> 15
restricted shares will vest and become 100% nonforfeitable, with respect to
the 1995 grants, in one installment on January 1, 1999, with respect to the
1996 grants, in one installment on January 1, 2000 and with respect to the
1997 grants, in one installment on January 1, 2001. During the holding
periods, such shares are entitled to receive dividends, if any, declared
with respect to PXRE's Common Stock. Also includes awards to Messrs. Radke,
Bleisnick, Forsyth, Kimmel and Sverchek, respectively, in respect of fiscal
year 1997, of 2,895, 1,534, 1,534, 1,058 and 888 restricted shares of PXRE
Common Stock pursuant to PXRE's 1992 Officer Incentive Plan. Pursuant to the
1992 Officer Incentive Plan, such restricted shares will vest in four equal
annual installments, with the final installment on February 13, 2001. During
the holding periods, such shares are entitled to receive dividends, if any,
declared with respect to PXRE's Common Stock. The aggregate holdings and
market value of restricted stock held on December 31, 1997 by Mr. Radke was
11,691 restricted shares with a market value of $388,024; by Mr. Bleisnick
was 6,059 restricted shares with market value of $201,098; by Mr. Forsyth
was 6,059 restricted shares with market value of $201,098; by Mr. Kimmel was
3,517 restricted shares with market value of $116,729; and by Mr. Sverchek
was 3,397 restricted shares with market value of $112,746.
(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: $23,413, $21,923 and $15,766 contributed by PXRE
in 1997, 1996 and 1995, respectively, to the 401(k) Plan (which is a
contributory defined contribution plan), $1,712 paid by PXRE during each of
1997, 1996 and 1995 with respect to a supplemental term life insurance
policy for Mr. Radke's benefit, $1,602 paid by PXRE during each of 1997,
1996 and 1995 with respect to a supplemental disability insurance policy for
Mr. Radke's benefit, $4,642, $5,168 and $3,823 representing the amount of
interest accrued in 1997, 1996 and 1995, 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 1997, 1996 and 1995
(see "CERTAIN BUSINESS RELATIONSHIPS" below) and, for 1996, $181,577 paid in
February 1997 (but earned as of December 31, 1996) and, for 1997, $204,959
paid in February 1998 (but earned as of December 31, 1997) pursuant to the
Transnational Re Officer Incentive Plan assumed by PXRE in the Merger (the
"TREX Plan"); for Mr. Bleisnick, consists of: $14,252, $13,212 and $9,570
contributed by PXRE in 1997, 1996 and 1995, respectively, to the 401(k)
Plan, $441 paid by PXRE during 1995, with respect to a supplemental term
life insurance policy for Mr. Bleisnick's benefit, $7,200 paid by PXRE to
Mr. Bleisnick during 1997, with respect to a car allowance, and, for 1996,
$169,479 paid in February 1997 (but earned as of December 31, 1996) and, for
1997, $188,479 paid in February 1998 (but earned as of December 31, 1997)
pursuant to the TREX Plan; for Mr. Forsyth, consists of: $14,252, $13,212
and $9,495 contributed by PXRE in 1997, 1996 and 1995, respectively, to the
401(k) Plan, $471 paid by PXRE during 1995 with respect to a supplemental
term life insurance policy for Mr. Forsyth's benefit, $7,200 paid by PXRE to
Mr. Forsyth during 1997, with respect to a car allowance, and, for 1996,
$169,479 paid in February 1997 (but earned as of December 31, 1996) and, for
1997, $188,479 paid in February 1998 (but earned as of December 31, 1997)
pursuant to the TREX Plan; for Mr. Kimmel, consists of $9,861, $9,154 and
$7,150 contributed by PXRE in 1997, 1996 and 1995 to the 401(k) Plan, $7,200
paid by PXRE to Mr. Kimmel during 1997 with respect to a car allowance and,
for 1996, $169,479 paid in February 1997 (but earned as of December 31,
1996) and, for 1997, $179,479 paid in February 1998 (but earned as of
December 31, 1997) pursuant to the TREX Plan; and for Mr. Sverchek, consists
of: $9,131, $8,885 and $6,860 contributed by PXRE in 1997, 1996 and 1995,
respectively, to the 401(k) Plan, $7,200 paid by PXRE to Mr. Sverchek during
1997 with respect to a car allowance and, for 1996, $169,479 paid in
February 1997 (but earned as of December 31, 1996) and, for 1997 $169,479
paid in February 1998 (but earned as of December 31, 1997) pursuant to the
TREX Plan.
13
<PAGE> 16
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION PRESENT
NAME GRANTED(#)(1) FISCAL YEAR PRICE($/SH) DATE VALUE($)(2)
- ---- ------------- ------------ ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Gerald L. Radke...................... 17,705 21.5% $26.668 2/13/07 $174,571
Michael J. Bleisnick................. 9,377 11.4 26.668 2/13/07 92,457
Gordon Forsyth, III.................. 9,377 11.4 26.668 2/13/07 92,457
Sanford M. Kimmel.................... 5,641 6.9 26.668 2/13/07 55,620
Eugene J. Sverchek................... 5,429 6.6 26.668 2/13/07 53,692
</TABLE>
- ---------------
(1) Consists of non-qualified options granted pursuant to PXRE's 1992 Officer
Incentive Plan. Under such Plan, the option exercise price may be less than,
equal to or greater than the fair market value of the Common Stock of PXRE
on the date the option is granted, but may not be less than 50% of such fair
market value. For this purpose, the fair market value of a share of PXRE's
Common Stock is the average of the high and low prices per share quoted on
the New York Stock Exchange 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 13, 1997). 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 $0.84 per share (the quarterly dividend on PXRE's Common
Stock having been increased in November 1997 from $0.21 per share to $0.25
per share). Based on this model, the present value of the options on the
February 13, 1997 grant date was determined
14
<PAGE> 17
to be $9.86 per option. PXRE does not advocate or necessarily agree that the
Black-Scholes model can properly determine the value of an option.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND OPTION VALUES AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
STOCK OPTIONS AT IN-THE-MONEY STOCK
SHARES 12/31/97 OPTIONS AT 12/31/97
ACQUIRED ON VALUE (#)(2) ($)(3)
NAME EXERCISE(#) REALIZED($)(1) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---- ------------ --------------- ------------------------- -------------------------
<S> <C> <C> <C> <C>
Gerald L. Radke............ 23,367 $358,021 41,440/45,693 $356,579/$354,053
Michael J. Bleisnick....... 3,250 42,656 42,381/20,884 $763,062/$159,096
Gordon Forsyth, III........ 7,576 147,384 48,736/20,884 $840,970/$159,096
Sanford M. Kimmel.......... 0 0 7,084/12,944 $62,584/$99,006
Eugene J. Sverchek......... 0 0 17,919/12,729 $254,564/$97,511
</TABLE>
- ---------------
(1) Represents the difference between the closing prices of PXRE's Common Stock
as reported on the New York Stock Exchange on the dates of exercise and the
exercise prices of the options.
(2) For Mr. Radke, consists of options for 87,133 shares of PXRE Common Stock
granted in 1993-1997 pursuant to PXRE's 1992 Officer Incentive Plan at
exercise prices ranging from $23.875 to $26.688 per share, 41,440 of which
options were exercisable at December 31, 1997; for Mr. Bleisnick, consists
of 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, all of which options were exercisable at December
31, 1997, and options for 36,501 shares of PXRE Common Stock granted in
1993-1997 pursuant to PXRE's 1992 Officer Incentive Plan at exercise prices
ranging from $23.875 to $26.688 per share, 15,617 of which options were
exercisable at December 31, 1997; for Mr. Forsyth, consists of options for
33,253 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, all of which options were exercisable at December 31, 1997, and
options for 36,367 shares of PXRE Common Stock granted in 1993-1997 pursuant
to PXRE's 1992 Officer Incentive Plan at exercise prices ranging from
$23.875 to $26.688 per share, 15,483 of which options were exercisable at
December 31, 1997; for Mr. Kimmel, consists of options for 20,028 shares of
PXRE Common Stock granted in 1994-1997 pursuant to PXRE's 1992 Officer
Incentive Plan at exercise prices of $23.875 to $26.688 per share,
respectively, 7,084 of which options were exercisable at December 31, 1997;
and 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, all of which options were exercisable
at December 31, 1997, and options for 23,320 shares of PXRE Common Stock
granted in 1993-1997 pursuant to PXRE's 1992 Officer Incentive Plan at
exercise prices ranging from $23.875 to $26.688 per share, 10,591 of which
options were exercisable at December 31, 1997.
(3) Represents the difference between the closing price of PXRE's Common Stock
as reported on the New York Stock Exchange on December 31, 1997 ($33.19) and
the exercise prices of the options.
15
<PAGE> 18
PENSION PLAN
The following table indicates estimated total annual benefits payable under
PXRE's Retirement Plan and Supplemental Executive Retirement Plan as a life
annuity upon retirement at age 62 in 1997, to persons of specified Average
Annual Earnings and years of service classifications.
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------
AVERAGE ANNUAL EARNINGS 5 10 15 20 25
- ----------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$125,000.................................... $ 16,667 $ 33,333 $ 50,000 $ 50,437 $ 63,047
150,000.................................... 20,000 40,000 60,000 61,187 76,484
175,000.................................... 23,333 46,667 70,000 71,937 89,922
200,000.................................... 26,667 53,333 80,000 82,687 103,359
225,000.................................... 30,000 60,000 90,000 93,437 116,797
250,000.................................... 33,333 66,667 100,000 104,187 130,234
300,000.................................... 40,000 80,000 120,000 125,687 157,109
400,000.................................... 53,333 106,667 160,000 168,687 210,859
500,000.................................... 66,667 133,333 200,000 211,687 264,609
600,000.................................... 80,000 160,000 240,000 254,687 318,359
700,000.................................... 93,333 186,667 280,000 297,687 372,109
800,000.................................... 106,667 213,333 320,000 340,687 425,859
900,000.................................... 120,000 240,000 360,000 383,687 479,609
</TABLE>
Benefits include benefits that may be payable from the Retirement Plan and
the Supplemental Executive Retirement Plan (in conjunction with the predecessor
actuarial retirement plan).
For each of the named current executive officers, Average Annual Earnings
for 1997 is: Mr. Radke: $573,400; Mr. Bleisnick: $326,419; Mr. Forsyth:
$326,399; Mr. Kimmel: $264,758; and Mr. Sverchek: $225,036. Average Annual
Earnings consists of a three-year average of base salary (as shown in the
"Salary" column of the Summary Compensation Table) and the average amount of
bonuses paid over the preceding ten years (or shorter period of employment). The
full years of credited service under the plans as of December 31, 1997 for each
of the named current executive officers is: Mr. Radke: 25; Mr. Bleisnick: 13;
Mr. Forsyth: 11; Mr. Kimmel: 3; and Mr. Sverchek: 6.
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<PAGE> 19
STOCK PERFORMANCE GRAPH
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.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG PXRE CORPORATION, S&P 500 AND
DOW JONES PROPERTY AND CASUALTY INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) PXRE CORP S & P 500 DOW JONES P&C
<S> <C> <C> <C>
1992 100 100 100
1993 175 110 101
1994 186 112 106
1995 179 153 149
1996 173 189 178
1997 239 252 263
</TABLE>
The total return assumes that dividends were reinvested quarterly and is
based on a $100 investment on December 31, 1992. For each subsequent year, the
total return for PXRE and for each index is stated as of December 31 of such
year.
17
<PAGE> 20
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 stockholder value, by aligning closely the financial
interests of the Company's executives with those of its stockholders.
Emphasis is placed on the achievements of the Company as an integrated
unit.
The Human Resources Committee of the Company has established an executive
compensation program to achieve the following goals:
1. To attract and retain key executives critical to the long-term
success of the Company.
2. To promote the enhancement of stockholder 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
1997 the Committee determined that it was appropriate to increase executive base
salaries by an average of 6.34%.
ANNUAL INCENTIVES. The Restated Employee Annual Incentive Bonus Plan,
adopted by the Company in 1992 and amended in 1994 and 1997, is intended to
reflect the Company's belief that management's contribution to stockholder
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
18
<PAGE> 21
bonus award (plus or minus 20% for officers, 40% for non-officers) to reflect
individual performance. The maximum cash and restricted stock bonus awards that
a participant who is a covered employee at the end of the year may receive is $1
million.
Commencing with awards for 1996, awards to officers who are tax residents
of Belgium (or other countries) that tax restricted stock awards in the year
received (rather than in the year that the restrictions lapse) are made in cash
units credited to an unfunded account. The units vest at the same time that
restricted stock awards vest, and are paid to the officer in cash. No earnings
or losses are credited to the account.
In February 1998, the Committee determined that total bonus amounts equal
to $994,559 were payable to the Company's executive officers under the Restated
Employee Annual Incentive Bonus Plan based on the 1997 performance of the
Company. These awards, which were based on a 12.6% return on equity calculated
under the Plan and a corresponding adjustment in individual performance
percentages to .92%, consisted of cash payments of $696,189 and restricted stock
grants valued at $298,367 containing a three-year vesting provision.
LONG-TERM INCENTIVES. In March 1992, the Committee made its final awards
under the Company's 1988 Stock Option Plan, which was effectively "frozen" by
the Board of Directors as of December 31, 1992 so that no further options could
thereafter be granted under such Plan. In May 1992, the stockholders of the
Company approved the 1992 Senior Executive Incentive Plan, which provided for
grants of long-term incentive awards to senior executives of the Company. The
Plan was amended in 1994 by vote of the stockholders of the Company to allow the
grant of long-term incentive awards to any officer of the Company, and the name
of the Plan was changed to 1992 Officer Incentive Plan to recognize the broader
base of participants. The 1992 Officer 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 Officer Incentive Plan will continue to
focus, management's attention on building stockholder value.
The Committee granted non-qualified options to purchase a total of 82,169
shares of Common Stock at an exercise price of $26.688 per share (market value
on grant date) in February 1997 to the Company's officers pursuant to the 1992
Officer 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. Grants with respect to 11,772 shares of
restricted stock were made during or with respect to 1997 under this Plan.
The Internal Revenue Code has set certain limitations on the deductibility
of compensation paid to a public company's five most highly compensated
executive officers. Provided that other compensation objectives are met, it is
the Committee's intention that executive compensation be deductible for federal
income tax purposes. Accordingly, to comply with regulations regarding the
deductibility of executive compensation expense, the Restated Employee Annual
Incentive Bonus Plan and the 1992 Officer Incentive Plan were amended in 1997.
19
<PAGE> 22
ADDITIONAL COMPENSATION. PXRE officers were also responsible for managing
the affairs of Transnational Re Corporation (TREX), under the terms of a
Management Agreement between the companies, from November 1993 until the
December 11, 1996 merger of TREX with PXRE. Commencing January 1, 1994, certain
executive officers of PXRE who were also executive officers of TREX participated
in the Transnational Re Officer Incentive Plan (which was assumed by PXRE in the
Merger), which resulted in cash payments to such executive officers of
$1,241,001 in February 1998 (but earned as of December 31, 1997).
CHIEF EXECUTIVE COMPENSATION
The Committee determined the Chief Executive Officer's compensation for
1997 based upon a number of factors and criteria. The Chief Executive Officer's
base salary was increased by 5.56% during 1997 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 1998, the Committee granted an award to the Chief Executive
Officer under the Restated Employee Annual Incentive Bonus Plan consisting of a
cash payment of $214,130 and a restricted stock grant valued at $91,770 and
containing a three-year vesting provision.
In February 1998, additional cash compensation of $204,959 was paid to the
Chief Executive Officer under the terms of the Transnational Re Officer
Incentive Plan.
In February 1997, the Chief Executive Officer received options to purchase
a total of 17,705 shares of Common Stock at an exercise price of $26.688 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
Robert W. Fiondella, Chairman
Edward P. Lyons
Donald H. Trautlein
Wilson Wilde
February 12, 1998
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 two members,
namely Messrs. Fiondella and Lyons, serve as directors of Phoenix Home Life
and/or one of its affiliates. In 1996, prior to the Merger, Phoenix Home Life
owned approximately 7.3% of the issued and outstanding Common Stock of PXRE.
After the Merger, and as of the record date, Phoenix Home Life owned less than
5% of the issued and outstanding Common Stock of PXRE. Each of PXRE, PXRE
Reinsurance and Transnational are parties to investment advisory agreements with
Phoenix Duff & Phelps, a public majority-owned subsidiary of Phoenix Home Life.
Pursuant to these agreements, which are 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. The amount of investment
advisory fees payable pursuant to such agreements is equal to 0.15% of
20
<PAGE> 23
average assets under management plus out-of-pocket expenses. PXRE incurred fees
of approximately $83,000, PXRE Reinsurance incurred fees of approximately
$372,000, and Transnational incurred fees of approximately $256,000, to Phoenix
Duff & Phelps for services performed in fiscal year 1997. Management of PXRE
expects such fees for 1998 will, in the aggregate, be approximately $641,000,
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 agreements described above are no less
favorable to PXRE, PXRE Reinsurance and Transnational 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 stockholders of PXRE approve a merger or
consolidation of PXRE with another corporation (other than certain situations
where the stockholders 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 stockholders 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
constituted 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 the 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, Kimmel and Sverchek participate in the
Plan, with 17 others. The Merger with TREX was deemed to be a "change of
control" for purposes of the Executive Severance Plan, and remains applicable to
Mr. Radke. Were a change of control of PXRE to have occurred on December 31,
21
<PAGE> 24
1997 and if the employment of the named executive officers with PXRE had then
been terminated as provided in the Executive Severance Plan, it is estimated
that the compensation payable to Messrs. Radke, Bleisnick, Forsyth, Kimmel and
Sverchek would have been $950,000, $289,000, $289,000, $201,000 and $188,000,
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, 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 stockholder 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.
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<PAGE> 25
In addition, under the 1988 Option Plan an 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 canceled.
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 stockholders of PXRE
approve a merger or consolidation of PXRE with another corporation (other than
certain situations where the stockholders 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 stockholders approve a
plan of liquidation or dissolution of PXRE; or (iv) during a period of two
consecutive years following August 17, 1989 individuals who at the beginning of
such period constituted 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. Bleisnick, Forsyth and Sverchek held
outstanding non-qualified options to purchase 26,764, 33,253 and 7,328 shares of
Common Stock, respectively, pursuant to the 1988 Option Plan. All of such
options had vested in accordance with the provisions of the 1988 Option Plan,
and were exercisable, as of the record date. (Mr. Radke is omitted from the
foregoing discussion because as of the record date he had fully exercised the
options granted to him pursuant to the 1988 Option Plan. Mr. Kimmel is omitted
from the foregoing discussion because he is not a participant in the 1988 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 Bonus 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 consolidated net income
for the fiscal year divided by PXRE's average stockholders' equity for such
fiscal year); and (iii) provides the Restated Bonus Plan Committee (which
administers the Restated Bonus Plan) with the discretion to adjust the final
annual bonus pool amount for allocation to
23
<PAGE> 26
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, 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 requires 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 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. The Restated Bonus Plan
was amended in June 1996 to provide that the Merger with TREX would not be a
Change of Control of PXRE.
Messrs. Radke, Bleisnick, Forsyth, Sverchek and Kimmel are each eligible to
participate in the Restated Bonus Plan. In February 1998, 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 1997, 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, 2001, 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 750,000 shares of the
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<PAGE> 27
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, 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
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(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.
Messrs. Radke, Bleisnick, Forsyth, Sverchek and Kimmel are each eligible to
participate in the 1992 Incentive Plan. In February 1997, non-qualified options
were granted under the 1992 Incentive Plan to Messrs. Radke, Bleisnick, Forsyth,
Sverchek and Kimmel in respect of fiscal year 1997, as noted in the Option Grant
Table above.
TRANSNATIONAL RE OFFICER INCENTIVE PLAN. The Transnational Re Officer
Incentive Plan, an unfunded non-tax-qualified officer incentive plan was assumed
by PXRE in the Merger. According to the TREX Plan, designated officers of TREX
(who are also officers of PXRE) were eligible to participate in an annual bonus
pool equal to the net income (as defined) of TREX for each fiscal year in the
period 1994 through 1998. In connection with the Merger, the TREX Plan was
amended to provide that, among other things, the annual bonus pool for 1996
would be the final annual bonus pool under the TREX Plan and, therefore, amounts
payable pursuant to the TREX Plan would be frozen as of December 31, 1996. The
bonuses payable under the TREX Plan are earned in three equal installments. The
first installment was earned as of December 31, 1996 and was paid in February
1997; the second installment was earned as of December 31, 1997 and was paid in
February 1998; the third installment will be earned (provided that the
participant is an officer of PXRE at such time) on December 31, 1998 and will be
paid prior to March 31 of the following year. Each of the named executive
officers is a participant in the TREX Plan and the amounts earned thereunder in
1997 are set forth in note (5) to the Summary Compensation Table.
CERTAIN BUSINESS RELATIONSHIPS
PHOENIX HOME LIFE MUTUAL INSURANCE COMPANY
In addition to the relationships described above under "EXECUTIVE
COMPENSATION -- Compensation Committee Interlocks and Insider Participation",
Mr. Searfoss is an executive officer of Phoenix Home
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Life, Mr. McLoughlin is an executive officer of Phoenix Home Life and Phoenix
Duff & Phelps and Mr. Searfoss, Mr. McLoughlin and Mr. Kelly serve as directors
of Phoenix Home Life and/or one of its affiliates. Reference is made to the
discussion under "EXECUTIVE COMPENSATION -- Compensation Committee Interlocks
and Insider Participation" regarding the investment advisory relationship
between PXRE and its subsidiaries and Phoenix Duff & Phelps, 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. The loan was repaid in full on March 1, 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
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 and the New York Stock Exchange
reports of ownership and changes in ownership of PXRE's registered equity
securities. Executive officers, directors and greater-than-10% stockholders are
also required to furnish PXRE with copies of all Section 16(a) reports they
file.
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, PXRE believes that, during the fiscal year ended December
31, 1997, all Section 16(a) filing requirements applicable to PXRE's executive
officers, directors and greater-than-10% stockholders were complied with.
STOCKHOLDER PROPOSALS
If a stockholder desires to present a proposal for inclusion in next year's
Proxy Statement and to present such proposal at the 1999 Annual Meeting of
Stockholders of PXRE, such stockholder must submit such proposal in writing to
PXRE Corporation, 399 Thornall Street, Edison, New Jersey 08837, Attention:
Treasurer, for receipt by PXRE not later than December 31, 1998.
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GENERAL
PXRE's Annual Report to Stockholders, which contains financial statements
for the year ended December 31, 1997 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 1997 WILL BE FURNISHED WITHOUT CHARGE
TO ANY STOCKHOLDER SENDING A WRITTEN REQUEST THEREFOR TO TREASURER, PXRE
CORPORATION, 399 THORNALL STREET, EDISON, NEW JERSEY 08837, OR CAN BE ACCESSED
THROUGH PXRE'S WEB SITE AT: WWW.PXRE.COM. 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 Stockholders, 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 30, 1998
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Appendix A
PROXY PXRE CORPORATION PROXY
ANNUAL MEETING OF STOCKHOLDERS
JUNE 4, 1998
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
Stockholders of PXRE Corporation to be held at the offices of PXRE Corporation,
399 Thornall Street, 14th Floor, Edison, New Jersey on June 4, 1998 commencing
at 9:00 a.m. and at any adjournment or adjournments thereof, with all the powers
the undersigned would possess if personally present upon:
(1) ELECTION OF DIRECTORS: Authority to vote this Proxy for the election of the
following persons as directors is:
[ ] GRANTED [ ] WITHHELD
(Except as indicated otherwise)
IF THERE IS ANY INDIVIDUAL DIRECTOR WITH RESPECT TO WHOM YOU DESIRE TO
WITHHOLD YOUR VOTE, YOU MAY DO SO BY LINING THROUGH OR OTHERWISE STRIKING OUT
HIS NAME.
Bernard Kelly Edward P. Lyons David W. Searfoss
(2) To ratify the appointment of Price Waterhouse LLP as PXRE Corporation's
independent public accountants for the fiscal year ending December 31, 1998.
[ ] 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, 1998.
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: 1998
-------------------- ,
--------------------------------
Signature
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Signature
