NYMAGIC, INC.
330 Madison Avenue
New York, New York 10017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 13, 1997
April 7, 1997
The Annual Meeting of Shareholders of NYMAGIC, INC. will be held at its
offices at 330 Madison Avenue, New York, New York on May 13, 1997, at 9:30 A.M.
for the following purposes:
1. To elect the five directors who shall constitute Class II
members of the Board of Directors to hold office for the
following three years.
2. To ratify the appointment of KPMG Peat Marwick LLP as the
independent public accountants for the current fiscal year.
3. To consider a shareholder proposal to declassify the Board of
Directors to provide for annual election of directors.
4. To transact such other business as may properly come before the
meeting.
All of the above matters are more fully described in the accompanying
Proxy Statement.
The close of business on March 31, 1997, has been fixed as the record
date for the determination of shareholders entitled to notice of and to vote at
this Annual Meeting. In order that your shares may be represented at this
meeting and to assure a quorum, please sign and return the enclosed Proxy
promptly. A postage paid, return addressed envelope is enclosed. In the event
you are able to attend in person, we will cancel the Proxy at your request.
James A. Lambert
Secretary
<PAGE>
Proxy Statement
Annual Meeting of Shareholders
of
NYMAGIC, INC.
April 7, 1997
This Proxy Statement and accompanying form of proxy are being sent to
the shareholders of NYMAGIC, INC., a New York corporation ("NYMAGIC" or the
"Company"), on or about April 7, 1997, in connection with the solicitation of
proxies to be voted at the Annual Meeting of Shareholders, and any adjournment
thereof (the "Annual Meeting"), to be held at 9:30 a.m. at the offices of the
Company at 330 Madison Avenue, New York, New York on May 13, 1997.
It is the policy of the Company that all proxy (voting instruction)
cards and ballots, which identify shareholders, be kept secret. Proxy cards are
returned in envelopes addressed to Chase Mellon Shareholder Services, L.L.C.,
the Company's transfer agent, which receives, inspects and tabulates the
proxies. When a signed proxy card is returned with choices specified with
respect to voting matters, the shares represented are voted in accordance with
the shareholder's instructions. If a proxy card is returned and the shareholder
has made no specifications with respect to voting matters, the shares will be
voted for all nominees for director identified on page 2, for the proposal to
ratify the appointment of KPMG Peat Marwick LLP as independent accountants and
against the shareholder proposal to reclassify the board of directors. Any
shareholder of NYMAGIC may revoke any proxy given pursuant to this solicitation
by written notice delivered to the Secretary of the Company at any time prior to
its use or by voting in person at the Annual Meeting.
The proxy card provides space for a shareholder to withhold voting for
any of the nominees for the Board of Directors or to abstain from voting on any
proposal if the shareholder chooses to do so. Each matter submitted to the
shareholders requires the affirmative vote of a majority of the votes cast at
the meeting. For purposes of determining whether a quorum is present,
abstentions and broker non-votes will not be included. For purposes of
determining the number of votes cast with respect to any voting matter,
abstentions and broker non-votes will not be included.
The entire expense of this solicitation, which represents the amount
normally expended for an uncontested solicitation, will be borne by the Company.
In addition to solicitation by mail, there may be solicitation made by
directors, officers and regular employees of the Company. The cost of
solicitation may include reimbursements to brokers, custodians, nominees and
other fiduciaries for reasonable out-of-pocket and clerical expenses incurred in
forwarding proxy material to their principals.
The principal executive offices of NYMAGIC are located at 330 Madison
Avenue, New York, New York 10017 (telephone no. (212) 551-0600). The date of
this Proxy Statement is April 7, 1997.
Introduction
This Proxy Statement is being furnished to the holders of shares of
Common Stock, $1.00 par value per share of the Company (the "Common Stock" or
"NYMAGIC Common Stock"), in connection with the solicitation of proxies by the
Board of Directors of NYMAGIC (the "Board" or "Board of Directors") for use at
the Annual Meeting of Shareholders to be held on May 13, 1997, at 9:30 a.m.,
local time, at the offices of NYMAGIC located at 330 Madison Avenue, New York,
New York and at any adjournment thereof. This Proxy Statement and the
accompanying Notice of Meeting of Shareholders and form of Proxy, together with
a copy of the Company's Annual Report, are first being mailed to shareholders of
NYMAGIC on or about April 7, 1997.
<PAGE>
Only shareholders of record of the NYMAGIC's Common Stock outstanding as
of the close of business on March 31, 1997, will be entitled to vote. On March
1, 1997, there were 10,143,052 outstanding shares of Common Stock. Each share of
Common Stock is entitled to one vote. There are no cumulative voting rights.
John N. Blackman, Jr., Mark W. Blackman and their mother, Louise B. Tollefson
(collectively, the "Blackman Family"), own in the aggregate 5,887,881 shares or
approximately 58.05%, of the Company's Common Stock. The Blackman Family has
indicated that, with respect to the proposals set forth herein, it will vote in
favor of Proposals No. 1 and No. 2 and against Proposal No. 3.
A list of shareholders entitled to vote at the meeting shall be made
available for inspection by shareholders during ordinary business hours at the
offices of NYMAGIC located at 330 Madison Avenue, New York, New York, 10017 for
a period of ten days before the meeting and at the time and place of the
meeting.
Proposal No. 1: Election of Class II Directors
The Board of Directors of the Company has the responsibility for
establishing broad corporate policies and for the overall performance of
NYMAGIC. Although not involved in day-to-day operations, members of the Board of
Directors are kept informed of the Company's business by various reports and
documents sent to them on a regular basis and by operating and financial reports
at the Board and committee meetings made by the Chairman and other officers of
the Company.
Five Directors, who shall constitute Class II members of the Board of
Directors, are to be elected at the Annual Meeting, each to hold office for
three years. Class II, III and I Directors were last elected at the Annual
Meeting of Shareholders held in 1994, 1995 and 1996, respectively.
The Board of Directors has nominated Messrs. Blackman, Mitchell,
Scarbrough and Soper, and Mrs. Tollefson to serve as Class II Directors and,
unless otherwise marked, a proxy will be voted for the election of such persons.
In the event any one or more of such nominees shall unexpectedly become
unavailable for election, votes will be cast, pursuant to authority granted by
the enclosed proxy, for such persons as may be designated by the Board of
Directors.
THE BOARD RECOMMENDS A VOTE "FOR" THE FIVE NOMINEES LISTED BELOW.
The following table presents certain information concerning the nominees
for election as Directors, including all positions and offices with the Company
and its predecessors, terms of office as Director and periods during which the
nominee served as such, current membership on committees of the Board of
Directors of the Company, business experience during the last five years and
directorships held in other business corporations.
Nominees For Class II Directors
Director
Name Age Since Position
- ---- --- ----- --------
Mark W. Blackman(1) 45 1979 President, Director
Charles A. Mitchell 48 1981 Vice-President, Director
William R. Scarbrough (3) 68 1995 Director
Richard T. Soper(1)(3) 71 1972 Director
Louise B. Tollefson (4) 73 1986 Director
(1) Member of Executive Committee.
(2) Member of Finance Committee.
(3) Member of Audit Committee.
(4) Member of Stock Option & Compensation Committee.
<PAGE>
Mark W. Blackman has been a Director since 1979 and was appointed
President in 1988. Mr. Blackman has been employed by the Company or its
subsidiaries since 1977. Mr. Blackman is the son of Louise B. Tollefson and
brother of John N. Blackman, Jr.
Charles A. Mitchell has been a Director and Vice President since 1981.
He has been employed by the Company or its subsidiaries since 1976.
William R. Scarbrough became a Director in June 1995. Until his
retirement in 1993, Mr. Scarbrough was a Vice President and Director of Wm. H.
McGee & Co, Inc.
Richard T. Soper has been a Director since 1972. Mr. Soper is Vice
Chairman of Argent Marine Operations, Inc. Prior to assuming that position in
1990, Mr. Soper served from 1986 as Chairman and President of the American
Bureau of Shipping. From 1978 to 1986, he was Executive Vice President of Sea
Land Service, Inc. and from 1983 to 1986, served as Chairman of the Board of
Intersea Operations, Ltd., Inc.
Louise B. Tollefson has been a Director since 1986. Mrs. Tollefson owns
approximately 18.9% of the Company's Common Stock and is the mother of John N.
Blackman, Jr. and Mark W. Blackman.
Directors and Executive Officers
The following is a list of the other Directors and executive
officers of the Company as of the date hereof:
Class of
Name Age Director Position(s)
- ---- --- -------- -----------
John N. Blackman, Jr. (1)(2) 50 I Chairman of the Board, Director
Thomas J. Condon (2) 52 I Director
Jean H. Goulding 55 III Director
James A. Lambert (1) 41 III General Counsel, Chief Operating
Officer, Secretary, and Director
John Kean, Jr. (4) 72 III Director
Michael S. Shaffet (3) 61 I Director
William A. Thorne (1)(2)(4) 71 I Director
Sergio B. Tobia (4) 58 I Director
Thomas J. Iacopelli 36 Chief Financial Officer
(1) Member of Executive Committee.
(2) Member of Finance Committee.
(3) Member of Audit Committee.
(4) Member of Stock Option & Compensation Committee.
John N. Blackman, Jr. has been a Director since 1975 and was appointed
Chairman of the Board in 1988. Mr. Blackman has been employed by MMO and
affiliates since 1973 and in December 1988 became Chairman of the Board of MMO,
PMMO, and Midwest. Mr. Blackman is the son of Louise B. Tollefson and brother of
Mark W. Blackman.
Thomas J. Condon was elected to the Board of Directors in June 1987. He
is a Vice-President of Investments and Investment Advisor with A.G. Edwards &
Sons, Inc., which he joined in September 1993. Mr. Condon formerly served as
Senior Vice President at Peoples Westchester Savings Bank from 1981 through
September 1993.
Jean H. Goulding has been a Director since 1976. Ms. Goulding was
employed by the Company or its subsidiaries from 1965 to 1992 and served as
Executive Vice President-Underwriting from 1988 until her retirement in 1992.
James A. Lambert has been a Director since 1986. Mr. Lambert was
appointed Chief Operating Officer in 1989 and has served as General Counsel and
Secretary since 1986.
<PAGE>
John Kean, Jr. has been a Director since 1991. Until his retirement in
1991, Mr. Kean was a Senior Vice President and Director of Guy Carpenter & Co.,
Inc.
Michael S. Shaffet has been a Director since September 1990. Mr. Shaffet
is the Treasurer and Chief Financial Officer of M. Fabrikant & Sons, Inc. Prior
to assuming that position in 1989, he was a partner in Berman, Shaffet & Schain,
the accountants for MMO and affiliates.
William A. Thorne has been a Director since 1972. Mr. Thorne has been
employed by Hydrocarbon Products Company, Inc. as its Treasurer and has been its
Chairman of the Board since March 1983.
Sergio B. Tobia has been a Director since 1981. Mr. Tobia was a Senior
Vice President and Director of Sorema North America Reinsurance Co. from 1989
until his retirement in 1996.
Thomas J. Iacopelli joined the Company in 1985 as its Assistant
Controller. In 1987, Mr. Iacopelli was appointed Controller of the Company and
in 1989 he was appointed Chief Financial Officer of the Company. Prior to
joining the Company, Mr. Iacopelli was employed by the accounting and consulting
firm of Coopers & Lybrand. Mr. Iacopelli is a Certified Public Accountant.
Compensation and Other Information
Compensation of Directors
Directors who are not also officers of the Company receive an annual
retainer fee of $4,000 and an additional $1,000 for each meeting of the Board of
Directors and $750 for any Committee meeting attended. Directors who are also
officers of the Company receive $350 for each meeting of the Board of Directors
and any Committee meeting attended. All Directors of the Company's subsidiaries
receive $250 for each meeting of the Board of Directors and $100 for any
Committee meeting attended.
Compensation of Executive Officers
The following Summary Compensation Table shows the compensation paid by
the Company for services rendered during fiscal years 1996, 1995, and 1994 for
the person who was the President at the end of the last fiscal year and the four
most highly compensated named executive officers of the Company whose salary and
bonus exceeded $100,000 in 1996.
Summary Compensation Table
<TABLE>
Annual Compensation Long Term Compensation Awards
-------------------------------------------- ----------------------------- All Other
Name and Other Annual Restricted Stock Compensation
Principal Position Year Salary($) Bonus($) Compensation($)(2) Awards($) Options/SARs(#) ($)(1)
- ------------------ ---- --------- -------- ------------------ ------------------------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
John N. Blackman, Jr. 1996 304,375 40,000 336,600 -0- -0- 145,244
Chairman 1995 279,094 40,000 -0- -0- -0- 149,940
1994 254,455 35,000 -0- -0- -0- 149,940
Mark W. Blackman 1996 304,375 40,000 336,600 -0- -0- 145,244
President 1995 279,038 40,000 -0- -0- -0- 149,940
1994 254,455 35,000 -0- -0- -0- 149,940
James A. Lambert 1996 229,932 35,000 -0- -0- -0- 22,500
General Counsel & 1995 209,547 35,000 -0- -0- -0- 22,500
Secretary 1994 182,719 30,000 -0- -0- 12,500 22,500
Felix Salgado, Jr. 1996 150,144 14,000 30,000 -0- -0- 22,500
Vice President 1995 145,621 14,000 -0- -0- -0- 22,500
1994 137,868 14,000 -0- -0- -0- 31,880
Thomas J Iacopelli 1996 123,327 13,000 52,125 -0- -0- 20,449
Chief Financial 1995 115,218 13,000 -0- -0- 7,500 19,233
Officer 1994 109,289 10,000 -0- -0- 2,500 17,893
</TABLE>
<PAGE>
(1) The amounts shown in this column for 1996, represent contributions
made by the Company in 1996 on behalf of all eligible employees, including the
officers listed above, pursuant to the terms of the Company's defined
contribution retirement plans ("retirement benefits"). The amounts shown in this
column represent the retirement benefits paid in that year as well as certain
amounts for Mr. John N. Blackman, Jr. and Mr. Mark W. Blackman, which represent
compensation provided to them for the purchase of life insurance as follows:
$79,225 each, as the premium for term life insurance, and $43,519 each,
representing the dollar value benefit to each of them for an interest free loan
for the payment of the premium for whole life insurance, calculated using an
imputed interest rate of 7.5%. For years 1994 and 1995, those amounts are
$57,450, $69,990 and 7.44%, respectively.
(2) The amounts shown in this column represent proceeds from the
exercise of stock options.
Employment Contracts and Termination of Employment and
Change-in-Control Arrangements
The Company does not maintain any employment contracts with its
executive officers and has no compensatory plan or arrangement for the benefit
of executive officers which would provide compensation to executive officers in
the event of their termination or resignation or a change-in-control of the
Company.
Stock Options
No stock options were granted to the named executive officers in 1996 under
the Company's stock options plans. For a description of the Company's stock
option plans, see "Stock Option Plans."
Aggregated Stock Option/SAR Exercises and Year-End Values
The following table shows stock options exercised by named executive
officers in 1996, including the aggregate value of gains on the date of
exercise. In addition, this table includes the number of shares covered by both
exercisable and non-exercisable stock options as of December 31, 1996. Also
reported are values for "in-the-money" options that represent the positive
spread between the exercise price of any such existing stock options and the
year-end price of the Company's Common Stock.
<TABLE>
Aggregated Option/SAR Exercises in Last Fiscal Year
and Year-End Option/SAR Values
Shares Number of Unexercised Value of Unexercised
Acquired Value Options/SARs at In-The-Money Options SARs at
on Realized December 31, 1996 (#) December 31, 1996 ($)
Name Exercise(#) ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- --------------------------- ----------------------------
<S> <C> <C> <C> <C> <C> <C>
John N. Blackman, Jr. 60,000 $336,600 -0- -0- -0- -0-
Mark W. Blackman 60,000 $336,600 -0- -0- -0- -0-
James A. Lambert -0- -0- 39,944 15,056 $216,850 $ 27,450
Felix Salgado, Jr. 5,000 $ 30,000 9,444 7,556 $ 14,440 -0-
Thomas J. Iacopelli 7,500 $ 52,125 3,500 6,500 $ 31,305 $ 39,420
</TABLE>
Retirement Plans
The Company maintains two retirement plans for the benefit of employees.
Both plans provide for 100% vesting upon completion of three years of service.
The Money Purchase Plan provides for a yearly contribution equal to 7-1/2% of an
employee's cash compensation for each year of service during which the employee
has completed 1000 hours of service and is employed on the last day of the plan
year. The Profit Sharing Plan does not provide for any specified level of
contribution but any contribution made is subject to the restrictions set forth
above for the Money Purchase Plan. For the most recent plan year, a contribution
equal to 7-1/2% of cash compensation was made to all eligible participants in
the Profit Sharing Plan. The Company does not maintain any defined benefit
retirement plans.
Executive Life Insurance Plan
The Company maintains an Executive Life Insurance Plan for eligible
officers. Under the Plan, the Company pays life insurance premiums for the
benefit of participating officers with such amounts secured by a lien on the
policy and repaid in full upon termination of the policy.
<PAGE>
Stock Option Plans
In 1983, the Company's Board of Directors and Shareholders approved the
Company's 1983 Employee Stock Option Plan (the "1983 Plan"). The 1983 Plan
authorized the granting to employees of the Company options to purchase an
aggregate of 250,000 shares of the Company's Common Stock under the 1983 Plan.
Under the 1983 Plan, the option price may not be less than the fair market value
on the date of grant, or less than 110% of the fair market value in the case of
an employee who owns 10% of the total combined voting power or value of the
Common Stock of the Company immediately before the grant of any option. The 1983
Plan is administered by the Stock Option & Compensation Committee.
In 1986, the Company's Board of Directors and Shareholders approved the
1986 Stock Option Plan (the "1986 Plan"), to provide a means whereby the
Company, through the grant of non-qualified stock options to key officers and
employees, may attract and retain persons of ability as officers and employees.
The 1986 Plan authorizes the issuance of options to purchase up to 500,000
shares of the Company's Common Stock at not less than 95% of the fair market
value at the date of grant. The 1986 Plan is administered by the Stock Option &
Compensation Committee.
In 1991, the Company's Board of Directors and Shareholders approved the
1991 Stock Option Plan (the "1991 Plan"), to provide a means whereby the
Company, through the grant of non-qualified stock options to key officers and
employees, may attract and retain persons of ability as officers and employees.
The 1991 Plan authorizes the issuance of options to purchase up to 500,000
shares of the Company's Common Stock at not less than 95% of the fair market
value at the date of grant. The 1991 Plan is administered by the Stock Option &
Compensation Committee.
Compensation Committee Interlocks and Insider Participation
Directors Tobia, Kean, Thorne and Tollefson served as members of the
Stock Option & Compensation Committee of the Board of Directors during the most
recent fiscal year.
Sergio B. Tobia is a retired Senior Vice President, Chief Administrative
Officer and Director of Sorema North American Reinsurance Company. Such
reinsurance company participates in the Company's ceded business from time to
time and the Company anticipates doing business with such reinsurer during
fiscal 1997.
Louise B. Tollefson is the mother of the Chairman and the President and,
individually, owns approximately 18.9% of the Company's issued and outstanding
shares of Common Stock.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934 (the "Securities
Exchange Act") requires the Company's executive officers and directors, and
persons who own more than 10% of a registered class of the Company's equity
securities, to file initial reports of ownership and reports of changes in
ownership with the SEC. Executive officers and directors are required by SEC
regulations to furnish the Company with copies of all Section 16(a) forms which
they file.
The Company prepares Section 16(a) forms on behalf of its officers and
directors based on the information provided by them. Based solely on a review of
this information, copies of such forms furnished to the Company and written
representations from the Company's executive officers and directors, the Company
believes that in 1996 all Section 16(a) filing requirements applicable to its
executive officers, directors and greater than 10% beneficial owners were
complied with.
<PAGE>
Share Investment Performance Graph
In accordance with SEC rules, set forth below is a line graph comparing
the cumulative total stockholder return on the Company's Common Stock to the
total return of the S&P 500 Index and a peer group(1) of the Company's
competitors, obtained from Value Line, Inc. for the period of five fiscal years
commencing January 1, 1992 and ending December 31, 1996, assuming $100 invested
in the Company's Common Stock and in each index and assuming reinvestment of
dividends.
Although inclusion of a share performance graph in this Proxy Statement
appears to suggest that Executive Compensation should be based on stock
performance alone, the Stock Option and Compensation Committee of the Board of
Directors considers many factors in determining compensation. See "Compensation
Committee Report".
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act, as amended, that might incorporate future filings,
including this Proxy Statement, in whole or in part, the following Share
Investment Performance Graph and the Compensation Committee Report contained in
this Proxy Statement shall not be incorporated by reference into any such
filings.
[In the original document the table below was represented as a line graph.]
Comparison of Five-Year Cumulative Total Return*
NYMAGIC INC, Standard & Poors 500 And Value Line Insurance:Prop/Cas Index
(Performance Results Through 12/31/96)
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
NYMAGIC INC. $100.00 $ 75.03 $ 69.02 $ 50.84 $ 48.16 $ 52.11
Standard & Poors 500 $100.00 $107.79 $118.66 $120.56 $165.78 $204.32
Insurance:Prop/Cas $100.00 $125.15 $123.81 $124.60 $165.24 $183.72
Assumes $100 invested at the close of trading 12/91 in NYMAGIC INC common stock,
Standard & Poors 500, and Insurance:Prop/Cas.
* Cumulative total return assumes reinvestment of dividends.
Source: Value Line, Inc.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
(1) Based on information for a self-constructed peer group of the Company's
competitors as obtained from Value Line, Inc., which includes the
following companies: 20th Cent. Inds. Cal. (TW), Berkley W.R. Corp.
(BKLY), Chubb Corporation (CB), Cincinnati Financial Corp., (CINF),
USF&G Corporation (FG), Fremont General Corp. (FMT), Frontier Insurance
Group (FTR), Gainsco Inc. (GNA), General Reinsurance Corporation (GRN),
Hartford Steam Boiler (HSB), Orion Capital Corp. (OC), Ohio Casualty
Corp. (OCAS), Progressive Corp. Ohio (PGR), SAFECO Corporation (SAFC),
Selective Insurance Group, Inc. (SIGI), and St. Paul Insurance Co.
(SPC), all of which were included in the prior year's peer group.
<PAGE>
Compensation Committee Report
Summary of Compensation Policies for Executive Officers
The Stock Option & Compensation Committee of the Board of Directors (the
"Committee") meets quarterly and reviews certain aspects of the Company's
compensation as affects executives and non-executives alike. The Committee's
review procedures for use during 1996 are summarized below.
o The Company develops compensation data for all employees utilizing
national and regional surveys for the insurance and brokerage
industries. The Company's executive positions including the three named
executive officers other than the Chairman and the President are matched
to comparable survey positions and compensation data. The referenced
surveys for the insurance and brokerage industries do not disclose the
identities of individual participants and survey data for comparable
executive positions is not generally available. The Committee uses such
survey data in connection with reviewing salaries on an individual basis
with the objective of providing each such officer with sufficient
compensation to cause them to maintain their continued employment with
the Company.
o The Committee reviews the compensation levels of the Chairman and
President in conjunction with the information developed from industry
surveys. The Committee, at the request of the Chairman and the
President, has kept the salaries of these two executive officers beneath
the higher end of the median range of salaries indicated by the
compensation surveys. In light of the significant ownership position of
the Chairman and the President, the effect of their salaries in
maintaining their continued employment is not deemed to be as
significant as with the other executive officers. Additionally, the
pricing pressures which exist in the markets within which the Company
competes have adversely impacted the Company's ability to show growth in
earnings. It has not been deemed appropriate during this time period to
increase the salaries of these two executive officers towards the higher
end of the median range of salaries indicated by the compensation
surveys. There are no specific performance goals for these officers and
no performance related compensation incentives other than options.
o The Committee reviews the compensation levels for executive officers
excluding the Chairman and the President within the context of salary
recommendations for such officers and the industry salary information.
The Committee does not utilize performance objectives for executives and
senior officers as such are deemed inappropriate for the industry and
markets within which the Company competes. Rather, the Committee
balances the competitive marketplace pressures which might cause an
officer to leave the Company along with corporate needs in the context
of the recommendations of the Chairman and the President. It is the
Committee's objective to maintain quality management without increasing
the Company's salary expense beyond the median range indicated by the
compensation surveys. No specific relationship between corporate
performance for the last fiscal year and each element of compensation
was considered by the Committee in determining executive compensation in
general or the Chairman's and the President's compensation in
particular. Bonuses are generally awarded based upon length of service
and job responsibilities.
o In connection with the review of executives and senior officers, the
Chairman and the President, from time to time, make recommendations to
the Committee with respect to the award or repricing of options pursuant
to the Company's Stock Option Plans. Through the use of options which
vest over a five to ten year period and a competitive base salary, the
Committee attempts to meet competitive marketplace pressures while at
the same time focusing long-term compensation gains for officers on
areas which provide similar benefits to non-employee shareholders. The
options are awarded in a quantity designed to be sufficient to provide
each option recipient with an incentive to maintain continued employment
with the Company. In light of their significant ownership position with
the Company, the Chairman and the President have not been awarded
additional options for the past six years. No outside factors other than
comparative surveys were considered by the Committee in determining each
element of compensation. In particular, the Committee did not consider
the amounts of options outstanding or previously granted or the
aggregate size of current awards in deciding to award additional
options, although the repricing of previous grants was taken into
consideration.
<PAGE>
The Company has reviewed the recent amendments to the Internal Revenue Code and
related regulations of the Internal Revenue Service which limit the
deductibility of executive compensation paid to the Chairman and the President
and each of the other three most highly compensated officers at the end of any
fiscal year to the extent such compensation exceeds $1,000,000 in any year and
does not qualify for an exception under the statute or proposed regulations. The
Committee does not believe that annual cash compensation will be likely to
exceed $1,000,000 for any executive officer in the foreseeable future and has
therefore concluded that no action with respect to qualifying such compensation
for deductibility was necessary at this time. The Committee will continue to
evaluate the advisability of qualifying the deductibility of such compensation
in the future.
Respectfully submitted,
Sergio B. Tobia, Chairman
John Kean, Jr.
William A. Thorne
Louise B. Tollefson
Security Ownership of Certain
Beneficial Owners and Management
The following table sets forth information as of March 1, 1997, with
respect to beneficial ownership of NYMAGIC Common Stock by beneficial owners
known by the Company to own more than 5% of such stock, directors and nominees
and directors and officers as a group. Except as described in the notes below,
all owners listed have power to vote and dispose of the shares held by them.
Percent of
Amount and Nature Common Stock
Name of Ownership Outstanding
- ---- ------------ -----------
The Capital Group Companies, Inc. 846,500(5) 8.35%
333 South Hope Street
Los Angeles, Ca. 90071
David L. Babson & Co. 577,500(6) 5.69%
One Memorial Drive
Cambridge, MA 02142
John N. Blackman, Jr. 2,010,996(1) 19.83%
Mark W. Blackman 1,962,674(2) 19.35%
Thomas J. Condon 100
Jean H. Goulding 26,600 *
James A. Lambert 40,944(3) *
Charles A. Mitchell 5,700(3) *
William R. Scarbrough 100 *
Michael S. Shaffet 1,150(4) *
William A. Thorne 32,400(4) *
Sergio B. Tobia 3,220 *
Louise B. Tollefson 1,914,211 18.87%
All directors and officers as a
group (14 persons) 6,001,845(7) 58.89%
* Less than 1% of issued and outstanding Common Stock.
(1) Mr. Blackman is the Trustee of trusts for the benefit of his minor
children which own, in total, 92,822 shares of the Company's Common Stock, which
shares are included herein.
(2) Trusts for the benefit of Mr. Blackman's children own, in total,
54,876 shares of the Company's Common Stock, which shares are included herein.
<PAGE>
(3) Of the shares shown as beneficially owned by the following
individuals, the amount listed next to each name are shares with respect to
which options are currently exercisable by that person: Mr. Mitchell - 5,000,
and Mr. Lambert - 39,944.
(4) Of the shares shown as beneficially owned by Mr. Thorne, 16,200
shares are held by him individually and 16,200 shares are held by Mr. Thorne and
his wife as joint tenants. Of the shares shown as beneficially owned by Mr.
Shaffet, 400 shares are held individually by his wife.
(5) Capital Guardian Trust Company, a bank and an operating subsidiary
of The Capital Group Companies, Inc., has filed a report on Schedule 13G
disclosing beneficial ownership of 846,500 shares.
(6) David L. Babson & Co., Inc. has filed a report on Schedule 13G
disclosing beneficial ownership of 577,500 shares.
(7) Of the 6,001,845 shares indicated as beneficially owned by all
directors and officers as a group, 48,444 are shares with respect to which
options are currently exercisable. See "Compensation and Other Information-Stock
Option Plans". These shares are included in the total number of outstanding
shares for the purpose of determining the percentage of Common Stock
beneficially owned by all directors and officers as a group.
Certain Transactions
The Company made annual charitable donations to the John N. Blackman,
Sr. Foundation (the "Foundation") in the amount of approximately $480,000 in
1996, 1995 and 1994. The Foundation was established by Mr. John N. Blackman,
Sr., the founder of the Company, shortly before his death in 1988. The
Foundation supports numerous charities with a primary emphasis on those
charities assisting the indigent, disabled or disadvantaged. The Foundation is
managed by Mr. John N. Blackman, Jr., Mr. Mark W. Blackman and Mr. James A.
Lambert, all of whom donate their time and receive no form of remuneration from
the Foundation.
Proposal No. 2: Selection of Independent Public Accountants
KPMG Peat Marwick LLP, the independent accountant engaged as the
principal accountant to audit the Company's financial statements for the fiscal
year ending December 31, 1996, has been extended an offer to continue as the
Company's independent accountant for the fiscal year ending December 31, 1997.
The Company's Board of Directors, following the recommendations of the Audit
Committee, recommends that shareholders approve the selection of KPMG Peat
Marwick LLP as the Company's independent accountant for the fiscal year ending
December 31, 1997.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
Representatives of KPMG Peat Marwick LLP will be present at the Annual
Meeting and will be given an opportunity to make a statement, if they so desire,
and to respond to appropriate questions.
Proposal No. 3: Shareholder proposal
The following shareholder proposals were submitted pursuant to Rule
14a-8 of the Securities Exchange Act of 1934. The Corporation will furnish the
names and addresses of the proponents of the statements and information
concerning the number of shares of Common Stock that each proponent beneficiary
owns, to any person, orally or in writing, promptly upon receipt of any oral or
written request therefor.
<PAGE>
Resolution to Eliminate Classified Board of Directors
RESOLVED, that the stockholders of the Corporation request that the
Board of Directors take the necessary steps, in accordance with state
law, to declassify the Board of Directors so that all directors are
elected annually, such declassification to be effected in a manner that
does not affect the unexpired terms of directors previously elected.
Supporting Statement:
"The election of directors is the primary avenue for stockholders to
influence corporate governance policies and to hold management accountable for
its implementation of those policies. I believe that the classification of the
Board of Directors, which results in only a portion of the Board being elected
annually, is not in the best interests of the Corporation and its stockholders.
The Board of Directors of the Corporation is divided into three classes
serving staggered three-year terms. I believe that the Corporation's classified
Board of Directors maintains the incumbency of the current Board and therefore
of current management, which in turn limits management's accountability to
stockholders.
The elimination of the Corporation's classified Board would require each
new director to stand for election annually and allow stockholders an
opportunity to register their views on the performance of the Board collectively
and each director individually. I believe this is one of the best methods
available to stockholders to insure that the Corporation will be managed in a
manner that is in the best interests of the stockholders.
A classified board might also be seen as an impediment to a potential
takeover of the Corporation's stock at a premium price. With the inability to
replace a majority of the board at one annual meeting, an outside suitor might
be reluctant to make an offer in the first place.
I am a founding member of the Investors Rights Association of America
and I believe that concerns expressed by companies with classified boards that
the annual election of all directors could leave companies without experienced
directors in the event that all incumbents are voted out by stockholders, are
unfounded. In my view, in the unlikely event that stockholders vote to replace
all directors, this decision would express stockholder dissatisfaction with the
incumbent directors and reflect the need for change.
I urge your support. Vote for this resolution."
Corporation's statement in opposition to proposal no. 3
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" THE SHAREHOLDER
PROPOSAL TO DECLASSIFY THE BOARD OF DIRECTORS.
The Board of Directors believes that the success of the Company in
producing long-term shareholder value, as reflected in capital appreciation,
requires long-term strategic planning and careful and consistent application of
the Corporation's financial and other resources. The Board believes that a
classified Board helps provide continuity in management by ensuring that a
majority of the Board at any given time would have prior experience as directors
of the Company.
Other Matters
NYMAGIC knows of no matters other than those described above that may
come before the Annual Meeting. As to other matters, if any, that properly may
come before the Annual Meeting, NYMAGIC intends that proxies in the accompanying
form will be voted in respect thereof in accordance with the judgment of the
person or persons voting the proxies.
<PAGE>
Committees of the Board of Directors
NYMAGIC has no standing nominating committee of the Board of Directors
or committee performing a similar function. The Board and all committees of the
Board, each held at least four meetings during the fiscal year ended December
31, 1996. Each of the Company's current directors attended 75% or more of the
aggregate of the meetings of the Board and each Committee on which he or she
served.
The Company currently has standing Executive, Audit, Finance and Stock
Option & Compensation Committees. The Executive Committee may exercise all
powers of the Board of Directors in the management of the business and affairs
of the Company during intervals between meetings of the full Board of Directors.
Among the Audit Committee's responsibilities are (i) reviewing the Company's
external and internal audit functions and the adequacy of the internal
accounting and financial controls, (ii) reviewing with the independent auditors
their report on the Company's financial statements, and (iii) reviewing the
professional services proposed to be provided by the independent auditors to
consider the possible effect of such services on their independence. The Finance
Committee monitors and reviews the Company's financial position and investments.
The Stock Option & Compensation Committee is charged with the administration of
the Company's Stock Option Plans and the review and approval of the Company's
salary structure and benefit packages, with recommendations thereon to be given
to the Chairman of the Board of Directors.
Last Date of Submission of Shareholder Proposals and Additional Information
Shareholder proposals intended to be presented at NYMAGIC's Annual
Meeting to be held on May 12, 1998, must be received by NYMAGIC no later than
December 8, 1997, and must satisfy the conditions set by the SEC for shareholder
proposals to be included in the Proxy Statement and form of Proxy for that
meeting.
NYMAGIC, INC.
James A. Lambert
Secretary
<PAGE>
PROXY
NYMAGIC, INC.
PROXY SOLICITED ON BEHALF OF THE NYMAGIC, INC. BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints John N. Blackman, Jr.
and James A. Lambert and each of them, with full power of substitution,
attorneys and proxies to represent and to vote all of the shares of Common Stock
which the undersigned would be entitled to vote, with all powers the undersigned
would possess if personally present, at the Annual Meeting of Shareholders of
NYMAGIC, INC. (the "Company"), to be held at the Company's offices, 330 Madison
Avenue, New York, New York, on May 13, 1997, at 9:30 A.M., local time, and at
any adjournment thereof, on all matters coming before said meeting.
<PAGE>
This proxy, when properly executed will be voted in the manner directed
herein by the undersigned shareholder. If no direction is made, this proxy
will be voted for Proposals 1, 2, and 4, and against Proposal 3.
1. ELECTION OF MARK W. BLACKMAN, CHARLES A. MITCHELL, WILLIAM R.
SCARBROUGH, RICHARD T. SOPER, & LOUISE B. TOLLEFSON.
(Strike out name(s) of any nominee(s) against whom you are voting) as
Directors of the Company to serve for three years until the Company's
2000 Annual Meeting. (Mark only One).
For |_| Against |_| Abstain |_|
2. RATIFICATION OF THE RE-APPOINTMENT OF KPMG PEAT MARWICK, LLP as
independent accountants of of the Company. (Mark only One).
For |_| Against |_| Abstain |_|
3. Shareholder proposal to declassify the Board of Directors to provide
annual Election of Directors
For |_| Against |_| Abstain |_|
4. In their discretion upon any other business which may properly come
before the meeting or any adjournment thereof.
The undersigned acknowledges receipt of the accompanying Proxy Statement
and Annual Report dated APRIL 7, 1997.
(When signing as attorney, trustee, executor, administrator, guardian, corporate
officer, etc., please give full title. If more than one trustee, all should
sign. Joint owners must each sign.)
Date
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Signature
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Signature
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PLEASE DATE AND SIGN EXACTLY AS NAME APPEARS ON ABOVE LABEL.
