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:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
NYMAGIC, INC.
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
NYMAGIC, INC.
330 Madison Avenue
New York, New York 10017
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held May 16, 2000
April 20, 2000
The Annual Meeting of Shareholders of NYMAGIC, INC. (the "Company") will be
held at its offices at 330 Madison Avenue, New York, New York 10017 on May 16,
2000, 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 or, if Proposal
2 is approved and becomes effective, until the next annual meeting of
shareholders;
2. To consider and act upon a proposal to approve an amendment to the
Company's Certificate of Incorporation to eliminate the requirement that the
Directors be divided into three classes;
3. To consider and act upon a proposal to ratify the re-appointment of KPMG
LLP as the independent public accountants for the year ending December 31, 2000;
and
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 April 6, 2000, 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 mark, date, sign and return the enclosed form of
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.
Paula-Jane Seidman
Corporate Secretary
<PAGE>
Proxy Statement
Annual Meeting of Shareholders
of
NYMAGIC, INC.
April 20, 2000
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 20, 2000, 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 10017 on May 16, 2000.
It is the policy of the Company that all proxy (voting instructions) cards
and ballots, which identify shareholders, be kept secret. Proxy cards are
returned in envelopes addressed to ChaseMellon 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 will be 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 3, FOR the proposal to approve
an amendment to the Company's Certificate of Incorporation to eliminate the
requirement that Directors be divided into three classes and FOR the proposal to
ratify the re-appointment of KPMG LLP as independent public accountants for the
year ending December 31, 2000. Any shareholder of NYMAGIC may revoke any proxy
given pursuant to this solicitation by written notice delivered to the Corporate
Secretary of the Company at any time prior to its use or by voting in person at
the Annual Meeting.
The form of proxy 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. Directors are elected by a
plurality of the votes cast; approval of the proposal to amend the Company's
Certificate of Incorporation requires the affirmative vote of a majority of all
outstanding shares entitled to vote thereon. Each other 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 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; however, for purposes of the proposal to
amend the Company's Certificate of Incorporation, an abstention or a broker
non-vote will be the equivalent of a vote AGAINST such proposal.
The principal executive offices of NYMAGIC are located at 330 Madison
Avenue, New York, New York 10017 [telephone (212) 551-0600].
<PAGE>
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 16, 2000, at 9:30 A.M., local time, at
the offices of NYMAGIC located at 330 Madison Avenue, New York, New York 10017
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 20, 2000.
Only shareholders of record of NYMAGIC Common Stock outstanding as of the
close of business on April 6, 2000, will be entitled to vote. On April 6, 2000,
there were 9,204,652 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") and Howard S. Tuthill, III, as trustee of
the Louise B. Tollefson Florida Intangible Tax Trust (of which Mrs. Tollefson is
the sole beneficiary), own in the aggregate 5,075,309 shares or approximately
55.14%, of the outstanding NYMAGIC Common Stock. The Blackman Family and the
trustee of the Louise B. Tollefson Florida Intangible Tax Trust have indicated
that, with respect to the proposals set forth herein, they will vote in favor of
Proposals No. 1, No. 2 and No. 3.
A list of shareholders entitled to vote at the Annual Meeting will be
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, and at the time and place of, the Annual Meeting.
PROPOSAL NO. 1: ELECTION OF DIRECTORS
The Board of Directors 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.
NYMAGIC's Amended and Restated By-Laws provide for a Board of Directors
consisting of not fewer than 9 nor more than 19 directors divided into three
classes as nearly equal in number as possible. Effective as of the date of the
Annual Meeting, the Board has fixed the number of directors at 15.
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. If, however, the proposal to approve an amendment to the Company's
Certificate of Incorporation to eliminate the requirement that Directors be
divided into three classes is approved and the
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<PAGE>
related amendment is filed with the New York Department of State, the term of
each director will expire at the Company's Annual Meeting of Shareholders to be
held in 2001.
The Board of Directors has nominated Jonathan S. Bannett, Mark W. Blackman,
Charles A. Mitchell, William R. Scarbrough and Louise B. 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
unexpectedly shall 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 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
Name Age Director Since Position
Jonathan S. Bannett (3)(5) 43 1999 Director
Mark W. Blackman (1)(4)(5) 48 1979 Director
Charles A. Mitchell 51 1981 Vice President and Director
William R. Scarbrough (3) 71 1995 Director
Louise B. Tollefson (2)(4) 76 1986 Director
(1) Member of Executive Committee.
(2) Member of Finance Committee.
(3) Member of Audit Committee.
(4) Member of Stock Option and Compensation Committee.
(5) Member of the Nominating Committee.
Jonathan S. Bannett is a Senior Vice President of Penn Independent Corp.,
an insurance agency.
Mark W. Blackman was President of the Company from 1988 until September
1998. He was employed by the Company or its subsidiaries from 1977 until
September 1998. He is the son of Louise B. Tollefson and the brother of John N.
Blackman, Jr.
Charles A. Mitchell has been a Vice President of the Company since 1981. He
has been employed by the Company or its subsidiaries since 1976.
Until his retirement in 1993, William R. Scarbrough was a Vice President
and director of Wm. H. McGee & Co., Inc., a marine and property insurance
company.
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<PAGE>
Louise B. Tollefson has been a director of the company since 1986. She is
the wife of Bennett H. Tollefson and the mother of John N. Blackman, Jr. and
Mark W. Blackman.
Class III Directors - Term Ending 2001
Name Age Director Since Position
Jean H. Goulding 58 1976 Director
John Kean, Jr.(4) 75 1991 Director
Edward J. Waite, III (2)(3) 53 1999 Director
Glenn R. Yanoff (2) 44 1999 Director
(2) Member of Finance Committee.
(3) Member of the Audit Committee.
(4) Member of Stock Option and Compensation Committee.
Jean H. 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. Ms. Goulding served as acting President of the Company from
September 1998 until March 1999.
Until his retirement in 1991, John Kean, Jr. was a Senior Vice President
and director of Guy Carpenter & Co., Inc., a reinsurance intermediary.
Edward J. Waite, III is the President and managing member of Waite &
Associates, LLC, a private investment firm. He serves as Chairman and Chief
Executive Officer of Fiber-Tec, Inc., a manufacturer of non-woven textiles, and
as a director of Niadyne, Inc. Previously, he was Vice President, General
Counsel and Secretary of General Chemical Corporation and was also the Chief
Legal Officer and Secretary of Crompton & Knowles Corporation.
Glenn R. Yanoff is the Chief Executive Officer and President of Crackerjack
Systems, Inc., a corporation which provides services to the insurance industry,
where he has been employed since 1996. He has served as an Assistant Secretary
and Assistant Treasurer of North Sea Insurance Company for more than the last
five years. Mr. Yanoff is also Vice President and an insurance underwriter with
I. Arthur Yanoff & Co., Ltd.
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<PAGE>
Class I Directors - Term Ending 2002*
Name Age Director Since Position
John R. Anderson (2) 56 1999 Director
Robert W. Bailey (4)(5) 66 1999 Chairman and Chief
Executive Officer
and Director
John N. Blackman, Jr. 53 1975 Director
(1)(2)(4)(5)
Costa N. Kensington (3) 52 1999 Director
William A. Thorne (1)(2)(4) 74 1972 Director
Bennett H. Tollefson (1)(2)(4) 80 1999 Director
(1) Member of Executive Committee.
(2) Member of Finance Committee.
(3) Member of Audit Committee.
(4) Member of Stock Option and Compensation Committee.
(5) Member of the Nominating Committee.
John R. Anderson has been the President and owner of Cedarhill Consultants,
Inc. since February 1999. He was a 50% owner of the Compain-Anderson Group,
Inc., a general agency of Guardian Life Insurance Company, from 1991 through
February 1999. He is currently a sales consultant for the S&W Agency, Inc.,
another Guardian Life Insurance Company general agency.
Robert W. Bailey became Chairman and Chief Executive Officer of the Company
in December 1999, having served as acting Chairman from June 1999 and as acting
Chief Executive Officer from August 1999. Until April 1999, Mr. Bailey was
Senior Vice President of AON Re, Inc., a reinsurance intermediary and a
subsidiary of The AON Group. He is also a director of the Kenmark Companies,
which provide various processing services for the insurance industry. Prior to
his position as Senior Vice President of AON Re, Inc., Mr. Bailey was President
and Chief Operating Officer of BEP International, a reinsurance intermediary and
a subsidiary of Sodarcan, and a member of the executive management committee.
John N. Blackman, Jr. served as Chairman of the Board of the Company from
1988 through September 1998. He was employed by the Company or its subsidiaries
from 1973 until September 1998. Mr. Blackman is the son of Louise B. Tollefson
and brother of Mark W. Blackman.
Costa N. Kensington is a founder and has been a member of Kensington &
Ressler, LLC, a New York City law firm, for over 20 years.
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* The term of the Class I Directors would expire in 2001 if the proposal to
approve an amendment to the Company's Certificate of Incorporation to
eliminate the requirement that Directors be divided into three classes is
approved and the amendment becomes effective.
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<PAGE>
William A. Thorne has been employed by Hydrocarbon Products Company, Inc.
as Treasurer and has been its Chairman of the Board since March 1983.
Bennett H. Tollefson is an engineer who operated Tollefson Associates, an
engineering and sales agency for 35 years. He previously worked for General
Electric Corporation and the Atomic Energy Commission. He is President and a
member of the Board of Directors of the Rochester Hemophilia Foundation. Mr.
Tollefson is the husband of Louise B. Tollefson.
COMMITTEES OF THE BOARD OF DIRECTORS
NYMAGIC currently has standing Executive, Nominating, Audit, Finance and
Stock Option and 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.
The Audit Committee's responsibilities include (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.
In accordance with the Company's Amended and Restated By-Laws, the Board of
Directors established a Nominating Committee in March 2000. The Nominating
Committee is responsible for recommending qualified candidates for the Director
positions whose terms are to expire or are vacant. The Nominating Committee
provides a report to the Board of Directors setting forth certain information
about each candidate it is recommending. Any Director may recommend other
candidates for available Director positions, provided that specified information
about such candidate is given. The Nominating Committee will consider
responsible recommendations by shareholders of candidates to be nominated as
Directors of the Company. All such recommendations must be in writing and
addressed to the Corporate Secretary of the Company and must provide the
information about the candidate which the Company would need to include in any
Proxy Statement for the election of Directors as well as the consent of the
candidate to being named in the proxy material and to serving if elected. By
accepting a shareholder recommendation for consideration, the Nominating
Committee does not undertake to adopt or to take any other action concerning the
recommendation or to give the proponent its reasons for any action or failure to
act.
The Finance Committee monitors and reviews the Company's financial position
and investments.
The Stock Option and Compensation Committee is charged with the
administration of the Company's Stock Option Plan and the review and approval of
the Company's salary structure and benefit packages.
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<PAGE>
During 1999, the Board held five meetings and the Executive Committee, the
Audit Committee, the Finance Committee and the Stock Option and Compensation
Committee held 0, 4, 4 and 4 meetings, respectively. The current members of each
Committee are identified under "PROPOSAL 1: ELECTION OF DIRECTORS." During 1999,
each of the Company's current directors attended 75% or more of the aggregate of
the meetings of the Board and of each Committee on which he or she served, held
while he or she was a Director.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, position, age and year first
elected for each of the persons currently serving as an executive officer of the
Company. Each executive officer was elected to serve until the organization
meeting of the Board following the Annual Meeting or until his or her earlier
death, resignation or removal.
Name Office Age Year First Elected
Robert W. Bailey Chairman and Chief 66 1999
Executive Officer
Lawrence S. Davis Executive Vice President 52 2000
and Chief Operating Officer
George F. Berg Vice President 58 1997
Charles A. Mitchell Vice President 51 1981
Thomas J. Iacopelli Chief Financial Officer 39 1989
Paula-Jane Seidman Vice President, General 54 1999
Counsel and Corporate
Secretary
A description of Mr. Bailey's and Mr. Mitchell's business experience
appears herein under "PROPOSAL NO. 1: ELECTION OF DIRECTORS." Set forth below is
a description of the business experience of the other executive officers of the
Company during the last five years.
Mr. Davis became Executive Vice President and Chief Operating Officer of
the Company in February 2000. Prior to joining the Company, Mr. Davis was Senior
Vice President of AON RE, Inc., a reinsurance intermediary. Prior to his
position at AON Re, Inc., Mr. Davis was Vice President and Regional Manager of
BEP International Corporation, a reinsurance intermediary.
Mr. Berg has been Vice President-Claims of the Company since 1997. Prior to
his position at the Company, Mr. Berg was Vice President-Claims for the Home
Insurance Company since 1984.
Mr. Iacopelli has been Chief Financial Officer of the Company since 1989.
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<PAGE>
Ms. Seidman has been Vice President, Secretary and General Counsel of the
Company since September 1999, after having served as Assistant Vice President of
the Company since 1997. Prior to joining the Company, Ms. Seidman was Director
and Counsel for the Home Insurance Company/Risk Enterprise Management Ltd. since
1986.
COMPENSATION AND OTHER INFORMATION
Compensation of Directors
Directors who are not also officers of the Company receive $8,000 and
shares of the Company's Common Stock in an amount equal to $10,000 as an annual
retainer, plus 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.
In 1998, Mark W. Blackman entered into a termination of employment
agreement with the Company. Pursuant to that agreement, Mr. Blackman received an
annual salary for 1999 of $317,500 and a lump-sum payment of an equal amount in
2000.
During 1999, the Company paid Jean H. Goulding $143,000 for her services as
acting President from January 1, 1999 through March 31, 1999.
For a description of compensation paid to Mr. Bailey and Mr. Mitchell, see
"COMPENSATION OF EXECUTIVE OFFICERS."
Compensation of Executive Officers
The following Summary Compensation Table shows the compensation paid by the
Company for services rendered during fiscal years 1999, 1998 and 1997 to each
person who served as Chief Executive Officer of the Company at any time during
1999, to the other four most highly compensated executive officers of the
Company as of December 31, 1999 whose salary and bonus exceeded $100,000 in 1999
and to James A. Lambert who ceased to serve as Chief Operating Officer, General
Counsel and Secretary on March 31, 1999.
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<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation Awards
-------------------------- -----------------------------
Restricted
Other Annual Stock All Other
Name and Salary Bonus Compensation Awards Options/ Compensation
Principal Position Year ($) ($) ($) ($) SAR's (#) ($)(1)
- ------------------ ---- --------- -------- ----------------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert W. Bailey 1999 156,462 35,000 -0- -0- 50,000 -0-
Chairman and Chief
Executive Officer (2)
George F. Berg 1999 186,000 187,000 -0- -0- -0- 12,000
Vice President 1998 175,000 3,000 -0- -0- -0- 24,000
1997 163,125 13,000 -0- -0- -0- 24,000
Charles A. Mitchell 1999 169,192 170,000 -0- -0- -0- 12,000
Vice President 1998 159,000 3,000 -0- -0- -0- 24,000
1997 149,224 13,000 -0- -0- -0- 24,000
Thomas J. Iacopelli 1999 145,210 154,500 -0- -0- 10,000 12,000
Chief Financial 1998 135,772 3,000 -0- -0- -0- 20,816
Officer 1997 128,280 13,000 -0- -0- -0- 21,892
Paula-Jane Seidman 1999 130,369 71,000 -0- -0- -0- 12,000
Vice President, 1998 121,462 2,000 -0- -0- -0- 18,520
General Counsel and 1997 85,554 6,000 -0- -0- -0- 13,583
Corporate Secretary
Sergio B. Tobia 1999 195,501 -0- -0- -0- -0- -0-
Chairman and Acting 1998 242,499 -0- -0- -0- -0- -0-
Chief Executive
Officer (3)
Vincent T. Papa 1999 174,087 225,000 -0- -0- 80,000 -0-
President and Chief
Executive Officer (4)
James A. Lambert 1999 94,012 340,688 -0- -0- -0- 531,374(6)
Chief Operating 1998 266,149 5,000 -0- -0- -0- 24,000
Officer, General 1997 245,316 35,000 -0- -0- -0- 24,000
Counsel and Secretary
(5)
</TABLE>
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<PAGE>
(1) The amounts shown in this column, represent contributions made by the
Company on behalf of the officers listed pursuant to the terms of the
Company's defined contribution retirement plans ("retirement benefits").
(2) Mr. Bailey became acting Chief Executive Officer in August 1999 and was
elected Chairman and Chief Executive Officer in December 1999.
(3) Mr. Tobia served as Chairman and acting Chief Executive Officer from
September 1998 to March 1999.
(4) Mr. Papa served as President and Chief Executive Officer from March 1999 to
August 1999.
(5) Mr. Lambert ceased to serve as Chief Operating Officer, General Counsel and
Secretary on March 31, 1999.
(6) This amount represents payments to Mr. Lambert made under the Company's
Executive Severance Pay Plan in connection with his ceasing to serve as
Chief Operating Officer, General Counsel and Secretary. No amount was
contributed in 1999 on behalf of Mr. Lambert pursuant to the Company's
defined contribution retirement plans.
Employment Contracts and Termination of Employment and Change-in-Control
Arrangements
The Company does not maintain any employment contracts or termination of
employment or change-in-control agreements with its executive officers.
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<PAGE>
Stock Option Grant Table
The following table sets forth information regarding stock
option grants to the persons named in the Summary Compensation Table during
1999.
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------------------
Number of Percent of Potential Realizable
Securities Options Value at Assumed Annual
Underlying Granted to Rates of Stock Price
Options Granted Employees in Exercise Price Expiration Appreciation for Option
Name (#) 1999 ($/Sh) Date Term (1)
- ---- ----------------------------- --------------- ------------ -----------------------
5% ($) 10%($)
------ ------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Bailey 30,000(2) 21.4 12.59 9/15/09 269,787 653,313
20,000(2) 14.3 12.05 12/21/09 151,563 384,092
George F. Berg -0- -0- -0- -0- -0- -0-
Charles A. Mitchell -0- -0- -0- -0- -0- -0-
Thomas J. Iacopelli 10,000(3) 7.1 12.59 9/15/09 89,929 217,771
Paula-Jane Seidman -0- -0- -0- -0- -0- -0-
Sergio B. Tobia -0- -0- -0- -0- -0- -0-
Vincent T. Papa 80,000(4) 57.1 13.95 (4) -0- -0-
James A. Lambert -0- -0- -0- -0- -0- -0-
</TABLE>
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(1) The values shown assume that the price of the Common Stock will appreciate
at the annual rates shown. These rates are arbitrarily assumed rates
established by the Securities and Exchange Commission (the "SEC") and are
not intended as a forecast of future appreciation. The actual gain, if any,
realized by the recipient will depend upon the actual performance of the
Common Stock.
(2) These options vest in three equal installments on the first three
anniversaries of the date of grant.
(3) These options vest in five equal installments on the first five
anniversaries of the date of grant.
(4) The options to Mr. Papa are no longer outstanding.
Option Exercises and Year-End Values
The following table shows stock options exercised by persons named in the
Summary Compensation Table in 1999, including the aggregate value of gains on
the date of exercise. In addition, this table includes the number of shares
covered by both exercisable and unexercisable stock options as of December 31,
1999. Also reported are values for "in-the-money" options that represent the
spread between the exercise price of any such existing stock options and the
year-end price of the NYMAGIC Common Stock.
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<TABLE>
<CAPTION>
Number of Unexercised Value of Unexercised
Options at In-the-Money Options at
December 31, 1999 (#) December 31, 1999 ($)
------------------------- -----------------------
Shares
Acquired on Value
Name Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert W. Bailey -0- -0- -0- 50,000 -0- 40,675
George F. Berg -0- -0- 4,000 4,000 -0- -0-
Charles A. Mitchell -0- -0- 13,000 2,000 -0- -0-
Thomas J. Iacopelli -0- -0- 8,500 11,500 -0- 5,975
Paula-Jane Seidman -0- -0- -0- -0- -0- -0-
Sergio B. Tobia -0- -0- -0- -0- -0- -0-
Vincent T. Papa -0- -0- -0- -0- -0- -0-
James A. Lambert -0- -0- -0- -0- -0- -0-
</TABLE>
Retirement Plans
The Company maintains two retirement plans for the benefit of employees.
Both plans provide for 100% vesting upon completion of two years of service. The
Money Purchase Plan provides for a yearly contribution equal to 7-1/2% of an
employee's cash compensation, subject to certain limitations under the Internal
Revenue Code, for each year of service during which the employee has completed
1,000 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, the Company made no
contribution under the Profit Sharing Plan. The Company's contributions for 1999
under the Money Purchase Plan for the benefit of Mr. Bailey, Mr. Berg, Mr.
Mitchell, Mr. Iacopelli, Ms. Seidman, Mr. Tobia, Mr. Papa and Mr. Lambert were
$0, $12,000, $12,000, $12,000, $12,000, $0, $0, and $0, respectively. The
Company does not maintain any defined benefit retirement plans.
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 beneficial ownership and reports of
changes in beneficial ownership with the SEC. Executive officers and directors
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) reports which they file.
The Company prepares Section 16(a) reports 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
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<PAGE>
the Company's executive officers and directors, the Company believes that,
except as described below, in 1999 all Section 16(a) filing requirements
applicable to its executive officers, directors and greater than 10% beneficial
owners were complied with on a timely basis, except that Mrs. Tollefson and
Howard S. Tuthill III, trustee of the Louise B. Tollefson Florida Intangible Tax
Trust, were late in filing reports of Mrs. Tollefson's transfer of Common Stock
to such Trust in December 1999.
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, 1995 and ending December 31, 1999, assuming $100 invested in the
Company's Common Stock and in each index on January 1, 1995 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 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.
[PERFORMANCE GRAPH.]
- ----------
(1) Based on information for a peer group of the Company's competitors as
obtained from and compiled by 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. The following companies
were added to the peer group this year by Value Line, Inc.: Ace, Ltd.
(ACL), Allmerical Financial (AFC), Allstate Corp. (ALL), American Financial
Group (AFG), Hartford Financial (HIG), Market Corp. (MKL), Mercury General
(MCY), NAC Re. Corp. (NRC), Old Republic (ORI), and Transatlantic Holdings
(TRH).
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<PAGE>
Comparison of Five-Year Cumulative Total Return for NYMAGIC, INC., Standard
& Poors 500 and Value Line Insurance: Prop/Cas Index* (Performance Results
Through 12/31/99)
NYMAGIC, INC. Standard & Poors 500 Insurance:
Prop/Cas
1994 $100.00 $100.00 $100.00
1995 94.72 137.50 140.52
1996 102.50 169.47 179.66
1997 159.73 226.03 277.08
1998 122.18 290.22 281.31
1999 79.89 349.08 234.89
*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.
Compensation Committee Report
The Stock Option and Compensation Committee of the Board of Directors (the
"Committee") meets quarterly and reviews certain aspects of the Company's
compensation as it affects executives and non-executives alike. The Committee's
review procedures during 1999 are summarized below. In June 1999, the
composition of the Committee was substantially changed following the Company's
1999 Annual Meeting of Shareholders.
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 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. 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. The objective is to
provide each such officer with sufficient compensation to cause
him or her to maintain continued employment with the Company.
o The Committee reviewed the compensation levels of the current
Chairman and Chief Executive Officer in conjunction with the
information developed from industry surveys. The Committee
compares current salaries of the Company's Chairman and Chief
Executive Officers with those salaries of executives in similar
positions in the insurance industry. It is the Committee's
objective to maintain a salary level which is consistent with the
mid point range of salaries. There are no specific performance
goals for the current Chairman and
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<PAGE>
Chief Executive Officer and no performance related compensation
incentives other than options.
o The Committee reviewed the compensation levels for executive
officers excluding the current Chairman and Chief Executive
Officer 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 current Chairman and Chief
Executive Officer. 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 current Chairman and Chief Executive Officer's
compensation in particular. Bonuses are generally awarded based
upon length of service and job responsibilities.
o In connection with the review of non-cash compensation of
executives and senior officers, the current Chairman and Chief
Executive Officer from time to time, makes recommendations to the
Committee with respect to the award or repricing of options
pursuant to the Company's Stock Option Plan. Through the use of
options which vest over a three 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 shareholders generally. 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. 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.
o Payments made by the Company to Mr. Papa were made in accordance
with an Employment Agreement between the Company and Mr. Papa.
The terms of this Employment Agreement were established through
arm's length negotiations between Mr. Papa and representatives of
the Company. In its negotiations with Mr. Papa, the Company
retained an independent consultant.
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<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 chief executive officer and
certain other executive officers to the extent such compensation exceeds
$1,000,000 in any year and does not qualify for an exception under the statute
or 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,
John Kean, Jr., Chairman
Robert W. Bailey
John N. Blackman, Jr.
Mark W. Blackman
William A. Thorne
Louise B. Tollefson
Bennett H. Tollefson
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information as of March 1, 2000 or as
otherwise indicated, 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, each executive officer named in the Summary
Compensation Table, and all directors and officers as a group. Except as
described in the notes below, all owners listed have sole power to vote and
dispose of the shares held by them.
<TABLE>
<CAPTION>
Amount and Nature Percent of Common Stock
Name of Ownership Outstanding
- ---- ------------ -----------
<S> <C> <C>
Dimensional Fund Advisors, Inc. 636,100 (1) 6.73%
1299 Ocean Avenue - 11th Floor
Santa Monica, CA 90401
Howard S. Tuthill, III, as Trustee 1,080,667 (2) 11.74%
of the Louise B. Tollefson
Florida Intangible Tax Trust
Four Stamford Plaza
Stamford, CT 06904
Robert G. Simses and First Union National 733,944 (3) 7.79%
Bank, as trustees of the Louise B. Tollefson
Charitable Lead Annuity
Trust and the Bennett H. Tollefson
Charitable Lead Unitrust
140 Royal Palm Way
Palm Beach, FL 33480
John R. Anderson 704 *
Robert W. Bailey 704 *
Jonathan S. Bannett 1,404 *
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Amount and Nature Percent of Common Stock
Name of Ownership Outstanding
- ---- ------------ -----------
<S> <C> <C>
John N. Blackman, Jr. 2,011,700 (4) 21.85%
Mark W. Blackman 1,978,378 (5) 21.49%
Jean H. Goulding 23,164 *
John Kean, Jr. 1,564 *
Costa N. Kensington 2,404 *
Charles A. Mitchell 13,700 (6) *
William R. Scarbrough 1,664 *
William A. Thorne 33,964 (7) *
Bennett H. Tollefson 802 *
Louise B. Tollefson 1,085,231 (8) 11.79%
Edward J. Waite, III 5,704 *
Glenn R. Yanoff 8,854 (9) *
George F. Berg 9,750 (6) *
Thomas J. Iacopelli 8,750 (6) *
Paula-Jane Seidman -0- *
All directors and officers as a group 5,188,441(10) 56.21%
(18 persons)
</TABLE>
* Less than 1% of issued and outstanding Common Stock.
(1) Based on a Schedule 13G dated February 4, 2000 filed with the SEC,
Dimensional Fund Advisors Inc. ("Dimensional") has sole voting and
investment power with respect to all 636,100 shares owned as of December
31, 1999. Such shares are held for registered investment companies for
which Dimensional acts as investment advisor. Dimensional disclaims
beneficial ownership of all of these shares.
(2) Howard S. Tuthill, III, as Trustee of the Louise B. Tollefson Florida
Intangible Tax Trust, of which Mrs. Tollefson is the sole beneficiary, has
filed a report on Schedule 13D disclosing ownership of 1,080,667 shares of
Common Stock in connection with certain aspects of estate and tax planning
for Louise B. Tollefson.
(3) Robert G. Simses, as co-trustee of the Louise B. Tollefson Charitable Lead
Annuity Trust and the Bennett H. Tollefson Charitable Lead Unitrust, has
filed a Schedule 13D dated April 10, 2000. The co-trustees of these trusts
share voting and dispositive power.
(4) Mr. Blackman is also 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.
(5) Trusts for the benefit of Mr. Blackman's children own, in total, 110,000
shares of the Company's Common Stock and Mr. Blackman's wife owns 60,000
shares of the Company's Common Stock, which shares are included herein.
(6) Of the shares shown as beneficially owned by the following individuals, the
amount listed next to each name include shares with respect to which
options are currently exercisable by that person:
Mr. Berg - 4,000
Mr. Iacopelli - 8,500
Mr. Mitchell - 13,000
(7) Of the shares shown as beneficially owned by Mr. Thorne, 17,764 shares are
held by him individually and 16,200 shares are held by Mr. Thorne and his
wife as joint tenants.
(8) This amount includes the 1,080,667 shares owned by the Louise B. Tollefson
Florida Intangible Tax Trust. Such shares will be distributed to Mrs.
Tollefson on or about April 30, 2000.
(9) Of the shares owned by Mr. Yanoff, 3,254 shares are held by him
individually and 5,600 shares are held by Mr. Yanoff and his wife as joint
tenants.
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<PAGE>
(10) Of the 5,188,441 shares indicated as beneficially owned by all directors
and officers as a group, 25,500 shares represent shares which could be
acquired within 60 days of March 1, 2000 upon exercise of options. 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 payments of $212,259 in 1999 to the firm of Kensington &
Ressler L.L.C. for legal services. Costa N. Kensington, a director of the
Company, is a member in the firm of Kensington & Ressler L.L.C.
PROPOSAL NO. 2: AMENDMENT OF THE CERTIFICATE OF INCORPORATION
On March 15, 2000, the Board of Directors authorized an amendment to
eliminate the requirement that the Directors be divided into three classes.
Article NINTH of the Company's Certificate of Incorporation would be amended to
delete the following sentence: "The Directors of the Corporation shall be
divided into three classes."
[In determining to authorize the amendment and to recommend its approval by
the shareholders at the Annual Meeting, the Board of Directors considered a
number of factors, including:
o the practices of other companies;
o the prospect that retaining a classified board could have the
effect of hindering or otherwise delaying an acquisition or other
transaction favored by holders of a substantial amount of the
Company Common Stock;
o the prospect that an annual review of the performance of all
Directors by the newly-formed Nominating Committee will enhance
the functioning of that Committee; and
o the Board's belief that a Board of Directors that is not
classified may be able to manage the business of the Company more
effectively and responsively.
If the proposed amendment to the Company's Certificate of Incorporation is
approved at the Annual Meeting and becomes effective, the term of office of all
Directors will expire at the Annual Meeting of Shareholders to be held in 2001.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
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<PAGE>
PROPOSAL NO. 3: RATIFICATION OF THE RE-APPOINTMENT OF INDEPENDENT PUBLIC
ACCOUNTANTS
KPMG LLP, the independent public accountants engaged as the principal
accountants to audit the Company's financial statements for the fiscal year
ended December 31, 1999, has been extended an offer to continue as the Company's
independent public accountants for the fiscal year ending December 31, 2000. The
Company's Board of Directors, following the recommendations of the Audit
Committee, recommends that shareholders ratify the re-appointment of KPMG LLP as
the Company's independent public accountants for the fiscal year ending December
31, 2000. If the shareholders do not ratify the re-appointment of KPMG LLP, the
selection of independent public accountants will be reconsidered by the Audit
Committee.
THE BOARD RECOMMENDS A VOTE "FOR" THIS PROPOSAL.
Representatives of KPMG 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.
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.
The 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 without additional compensation
therefor. 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.
Effective February 28, 1999, the Company obtained an insurance policy
insuring the Directors and officers of the Company and its subsidiaries against
certain liabilities they may incur in the performance of their duties and
insuring the Company against obligations to indemnify such persons against such
liabilities. A one-year policy expiring February 29, 2000 has been obtained from
Reliance National Insurance Company at a premium of $35,000. The foregoing
information is provided to shareholders of the Company pursuant to Section
726(d) of the New York Business Corporation Law.
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<PAGE>
SUBMISSION OF SHAREHOLDER PROPOSALS AND DISCRETIONARY VOTING
Shareholder proposals intended to be presented at NYMAGIC's Annual Meeting
expected to be held onMay 15, 2001, must be received by the Corporate Secretary
of NYMAGIC no later than December22, 2000 in order for such proposal to be
included in the Board's proxy materials for such meeting. The proponent and the
proposal must satisfy the conditions set by the SEC for any such proposal to be
included in the Proxy Statement and form of proxy for that meeting.
The Company did not receive notice by April 3, 2000 that any shareholder
proposes to bring any business before the Annual Meeting. Accordingly, the
persons named in the enclosed form of proxy will have discretionary authority to
vote on any matter that is properly brought before the Annual Meeting other than
the election of directors, approval of the amendment to the Company's
Certificate of Incorporation to eliminate the requirement that the Directors be
divided into three classes and ratification of the re-appointment of independent
accountants. Proxies named in the form of proxy used by the Board of Directors
in connection with the 2001 Annual Meeting of Shareholders will have
discretionary authority to vote on any matter properly brought before that
meeting as to which the Company has not received notice by March 6, 2001. If
there are shareholder proposals as to which the Company has received notice by
that date, the Proxy Statement will advise on the nature of the matter and how
the proxies intend to exercise their discretion if those matters are in fact
brought before the 2001 Annual Meeting of Shareholders.
NYMAGIC, INC.
Paula-Jane Seidman
Corporate Secretary
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<PAGE>
PRELIMINARY COPY
PROXY
NYMAGIC, INC
PROXY SOLICITED ON BEHALF OF THE NYMAGIC, INC. BOARD OF DIRECTORS
The undersigned hereby constitutes and appoints Robert W. Bailey and
Paula-Jane Seidman 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 16, 2000, at 9:30 A.M., local time, and at any
adjournment thereof, on all matters coming before said meeting.
FOLD AND DETACH HERE
<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 3.
Please mark your vote as indicated in this example [X]
ELECTION OF Jonathan S. Bannett, Mark W. Blackman, Charles A. Mitchell, William
R. Scarbrough, 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 2003 Annual Meeting.
(Mark only one.)
FOR WITHHOLD AUTHORITY
[ ] [ ]
2. RATIFICATION OF THE RE-APPOINTMENT OF KPMG, LLP as independent accountants of
the Company. (Mark only one).
FOR AGAINST ABSTAIN
[ ] [ ] [ ]
3. Approval of an amendment to the Company's Certificate of Incorporation to
eliminate the requirement that DirectorS be divided into three classes. (Mark
only one.)
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 [___], 1998.
(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
should each sign.)
Date________________________________
Signature____________________________
Signature____________________________
FOLD AND DETACH HERE
