<PAGE>
Section 240.14a-101 Schedule 14A.
Information required in proxy statement.
Schedule 14A Information
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
Transatlantic Holdings, Inc.
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction
applies:
............................................................
(2) Aggregate number of securities to which transaction
applies:
.......................................................
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount
on which the filing fee is calculated and state how it was
determined):
.......................................................
(4) Proposed maximum aggregate value of transaction:
.......................................................
(5) Total fee paid:
.......................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
.......................................................
(2) Form, Schedule or Registration Statement No.:
.......................................................
(3) Filing Party:
.......................................................
(4) Date Filed:
.......................................................
<PAGE>
TRANSATLANTIC HOLDINGS, INC.
80 PINE STREET, NEW YORK, NEW YORK 10005
-------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 18, 2000
-------------------
April 5, 2000
To the Stockholders of
TRANSATLANTIC HOLDINGS, INC.:
The Annual Meeting of stockholders of TRANSATLANTIC HOLDINGS, INC., a
Delaware corporation ('TRH'), will be held at 72 Wall Street, Seventh Floor, New
York, New York, on Thursday, May 18, 2000, at 11:00 o'clock A.M., for the
following purposes:
1. To elect 9 directors of TRH to hold office until the next annual
meeting of stockholders and until their respective successors are
elected and qualified;
2. To consider and act upon the proposed 2000 Stock Option Plan;
3. To act upon a proposal to select PricewaterhouseCoopers LLP as
independent accountants for 2000; and
4. To transact any other business that may properly come before the
meeting.
Stockholders of record at the close of business on March 24, 2000 will be
entitled to vote at the meeting. During the ten days prior to the meeting, a
list of such stockholders will be available for inspection at the offices of TRH
at 80 Pine Street, New York, New York.
Whether or not you expect to attend the meeting, please complete, date and
sign the enclosed proxy card and mail it promptly in the enclosed postage
prepaid envelope.
By Order of the Board of Directors
ELIZABETH M. TUCK
Secretary
<PAGE>
TRANSATLANTIC HOLDINGS, INC.
80 PINE STREET, NEW YORK, N.Y. 10005
-------------------
PROXY STATEMENT
-------------------
April 5, 2000
The enclosed proxy is solicited on behalf of the Board of Directors for use
at the Annual Meeting of Stockholders of TRANSATLANTIC HOLDINGS, INC., a
Delaware corporation ('TRH' or the 'Company'), to be held on May 18, 2000, and
at any adjournment thereof. It may be revoked, by written notice or by
furnishing a proxy subsequent in time, at any time prior to its use. All shares
represented at the meeting by properly executed proxies will be voted as
specified, and, unless otherwise specified, will be voted for the election of
directors, for the adoption of the 2000 Stock Option Plan and for the selection
of PricewaterhouseCoopers LLP as independent accountants for 2000.
Only stockholders of record at the close of business on March 24, 2000 will
be entitled to vote at the meeting. On that date 34,733,421 shares (exclusive of
shares held by TRH) of common stock, par value $1.00 per share ('TRH Common
Stock'), were outstanding, each such share of stock having one vote.
This Proxy Statement, the attached Notice of Annual Meeting and the enclosed
proxy card are first being mailed to stockholders of TRH on or about April 5,
2000.
BENEFICIAL OWNERSHIP
The following table lists the beneficial ownership of each person or group
who, as of March 24, 2000, owned to TRH's knowledge, more than five percent of
the outstanding TRH Common Stock.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT OF
OF BENEFICIAL OWNER OWNERSHIP VOTING SHARES
------------------- --------- -------------
<S> <C> <C>
American International Group, Inc. ('AIG')(1) ... 20,849,420 60.03
70 Pine Street
New York, NY 10270
Davis Selected Advisers, LP(2) .................. 6,041,400 17.39
2949 East Elvira Road, Suite 101
Tucson, Arizona 85706
Tweedy, Browne Company, LLC(3) .................. 1,811,423 5.22
52 Vanderbilt Avenue
New York, NY 10017
</TABLE>
- ---------
(1) Includes 11,743,452 shares directly owned by American Home Assurance
Company, a wholly-owned subsidiary of AIG, which shares with AIG voting and
investment power over such shares. AIG has sole voting and investment power
over the remaining shares.
(2) Davis Selected Advisers, LP filed a Schedule 13G, dated March 7, 2000, with
respect to the shares of TRH Common Stock held by it, which stated that it
was an investment advisor registered under Section 203 of the Investment
Advisers Act of 1940, and that it had sole power to vote or to direct the
vote with respect to 6,041,400 shares, shared voting power with respect to
no shares, sole power to dispose or to direct the disposition with respect
to 6,041,400 shares and shared dispositive power with respect to no shares.
(3) Tweedy, Browne Company, LLC filed a Schedule 13F, dated February 8, 2000,
with respect to the shares of TRH Common Stock held by it, which stated that
it is an institutional investment manager, and that it has sole investment
discretion with respect to 1,811,423 shares, unknown investment discretion
with respect to 250 shares, sole voting authority with respect to 1,749,099
shares, shared voting authority with respect to no shares, unknown voting
authority with respect to 250 shares and no voting authority with respect to
62,324 shares.
<PAGE>
I. ELECTION OF DIRECTORS
Nine directors are to be elected at the meeting to hold office until the
next annual meeting of stockholders and until their respective successors are
elected and qualified. If a quorum is present at the meeting, the affirmative
vote of a plurality of the shares present in person or by proxy and entitled to
vote thereon is required to elect the directors; abstentions and broker
non-votes will have no effect on the outcome of the vote. It is the intention of
the persons named in the accompanying proxy to vote for the election of the
nominees listed below, all of whom are currently members of your Board of
Directors. It is not expected that any of the nominees will become unavailable
for election as a director, but if any nominee should become unavailable prior
to the meeting, proxies will be voted for such persons as the TRH Board of
Directors shall recommend. The nominees, and certain information supplied by
them to TRH, are as follows:
<TABLE>
<S> <C> <C>
[Photo] JAMES BALOG RETIRED CHAIRMAN, 1838 INVESTMENT ADVISORS, L.P.
Age 71 (investment management company)
Director since 1988. He has Director, Galen Partners, L.P. (technical
also served as a director of advisory board), Great-West Life and Annuity
Transatlantic Reinsurance Insurance Company and Trustee, Phoenix
Company ('TRC'), a wholly- Partners, Euclid Mutual Funds (Mutual Funds).
owned subsidiary of TRH,
since 1990 and of Putnam
Reinsurance Company
('Putnam'), a wholly-owned
subsidiary of TRC, since 1988.
[Photo] C. FRED BERGSTEN DIRECTOR, INSTITUTE FOR INTERNATIONAL ECONOMICS
Age 58 (nonprofit research institution)
Director since 1998. He has also
served as a director of TRC and of
Putnam since 1998.
[Photo] IKUO EGASHIRA CHAIRMAN OF THE BOARD OF DIRECTORS, THE NICHIDO
Age 69 FIRE & MARINE INSURANCE COMPANY, LIMITED, TOKYO,
Director since 1995. He has also JAPAN
served as a director of TRC and of (insurance)
Putnam since 1995.
</TABLE>
2
<PAGE>
<TABLE>
<S> <C> <C>
[Photo] MAURICE R. GREENBERG CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AIG
Age 74 (insurance and financial services holding
Chairman since 1986. He has also company)
served as the Chairman of TRC since Director, AIG, Director, President and Chief
1977 and of Putnam since 1986. Executive Officer of C.V. Starr & Co., Inc.
('Starr'), a director of Starr International
Company, Inc. ('SICO'), private holding
companies (see 'Ownership of Certain
Securities'), a director of International
Lease Finance Corporation ('ILFC') (a wholly
owned subsidiary of AIG).
[Photo] JOHN J. MACKOWSKI RETIRED CHAIRMAN AND CHIEF EXECUTIVE
Age 74 OFFICER, THE ATLANTIC MUTUAL COMPANIES
Director since 1990. He has also (insurance)
served as a director of TRC and of Director, Venator Group and Northern Trust
Putnam since 1990. Company of Connecticut
[Photo] EDWARD E. MATTHEWS VICE CHAIRMAN-INVESTMENTS AND FINANCIAL
Age 68 SERVICES, AIG
Director since 1986. He has also Director, AIG, Starr, SICO and ILFC
served as a director of TRC since
1977 and of Putnam since 1986.
[Photo] ROBERT F. ORLICH PRESIDENT AND CHIEF EXECUTIVE OFFICER, TRH,
Age 52 TRC AND PUTNAM
Director since 1994. He has also Chairman, Trans Re Zurich; Director,
served as a director of TRC and of Transatlantic Re Argentina S.A.
Putnam since 1992.
[Photo] HOWARD I. SMITH EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL
Age 55 OFFICER AND COMPTROLLER, AIG
Director since 1994. He has also Director, AIG, Starr, SICO, ILFC, 21st
served as a director of TRC and of Century Insurance Group (a majority owned
Putnam since 1994. subsidiary of AIG) (insurance) and The
Kroll-O'Gara Company
</TABLE>
3
<PAGE>
<TABLE>
<S> <C> <C>
[Photo] THOMAS R. TIZZIO SENIOR VICE CHAIRMAN-GENERAL INSURANCE, AIG
Age 62 Director, AIG, Starr and SICO
Director since 1990. He has also
served as a director of TRC since
1979 and of Putnam since 1990.
</TABLE>
The principal occupation or affiliation of each of the nominees is shown in
bold face type. Except as hereinafter noted, each director has occupied an
executive position with his company or an affiliate thereof for at least the
prior five years. Mr. Egashira served as the President of The Nichido Fire &
Marine Insurance Company, Limited from 1988 to 1995.
There were four regularly scheduled meetings of the Board of Directors
during 1999. All current directors attended at least 75% of the aggregate of all
meetings of the Board of Directors and of the committees of the Board of
Directors held during the period in which they were eligible to serve, except
Mr. Egashira, who attended 25% of the meetings he was eligible to attend. There
are four regular meetings of the Board of Directors scheduled to be held during
2000.
Messrs. Balog, Bergsten and Mackowski are the current members of the Audit
Committee, which held three meetings during 1999. There are three Audit
Committee meetings scheduled to be held during 2000. The primary function of the
Audit Committee is to give general advice to the Board of Directors and the
officers in matters relating to the audits of the records of accounts of TRH and
its subsidiaries. The Audit Committee reviews the performance and scope of the
audit and non-audit services provided by the independent accountants during the
fiscal year and recommends to the Board of Directors a firm of independent
accountants to serve as auditors during the ensuing fiscal year. In addition,
the Audit Committee reviews reports issued by TRH's internal audit division and
the independent accountants.
The Stock Option and Purchase Plan Committee administers the TRH employee
benefit plans. The current members of the Stock Option and Purchase Plan
Committee are Messrs. Balog and Mackowski. There was one Stock Option and
Purchase Plan Committee meeting during 1999. One Stock Option and Purchase Plan
Committee meeting is scheduled for 2000.
The Compensation Committee determines the cash compensation for senior
management. The current members of the Compensation Committee are Messrs. Balog,
Greenberg, Mackowski and Tizzio. There was one Compensation Committee meeting
during 1999, and one Compensation Committee meeting is scheduled for 2000.
The Board does not have a nominating committee. The full Board would
normally address matters relating to the nomination of directors, but the
Executive Committee of the Board of Directors is also empowered to address such
matters. The Executive Committee has and may exercise all the powers and
authority of the Board of Directors in the management of the business and
affairs of TRH except those powers specifically reserved to the whole Board.
Messrs. Greenberg, Matthews and Orlich are the current members of the Executive
Committee. There was one Executive Committee action in 1999.
4
<PAGE>
OWNERSHIP OF CERTAIN SECURITIES
The following table summarizes the ownership of equity securities of TRH,
and of entities which could be considered parents of TRH, by each of the
directors, each executive officer named in the Summary Compensation Table, and
by the directors and executive officers as a group.
<TABLE>
<CAPTION>
EQUITY SECURITIES OWNED BENEFICIALLY
AS OF JANUARY 31, 2000(1)
-----------------------------------------------------------------------------------------------------
TRH AIG STARR SICO
COMMON STOCK COMMON STOCK COMMON STOCK VOTING STOCK
------------------------- ------------------------- ---------------------- --------------------
AMOUNT AND AMOUNT AND AMOUNT AND AMOUNT AND
NATURE OF PERCENT NATURE OF PERCENT NATURE OF PERCENT NATURE OF PERCENT
BENEFICIAL OF BENEFICIAL OF BENEFICIAL OF BENEFICIAL OF
NAME OWNERSHIP(2)(3) CLASS OWNERSHIP(4)(5) CLASS OWNERSHIP(6) CLASS OWNERSHIP CLASS
- --------------------- --------------- ----- --------------- ----- ------------ ----- --------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James Balog.......... 9,150 .03 -- -- -- -- -- --
C. Fred Bergsten..... -- -- -- -- -- -- -- --
Paul A. Bonny........ 43,797 .13 7,698 (7) -- -- -- --
Ikuo Egashira........ -- -- -- -- -- -- -- --
M.R. Greenberg....... 63,750 .18 30,410,955 1.96 5,000 24.10 10 8.33
John J. Mackowski.... 4,500 .01 -- -- -- -- -- --
Edward E. Matthews... 31,875 .09 1,080,224 .07 2,250 10.84 10 8.33
Robert V. Mucci...... 59,173 .17 12,060 (7) -- -- -- --
Robert F. Orlich..... 141,309 .41 8,026 (7) 250 1.20 -- --
Steven S. Skalicky... 19,144 .06 25,257 (7) -- -- -- --
Howard I. Smith...... 3,750 .01 252,162 .02 1,500 7.23 10 8.33
Thomas R. Tizzio..... 31,875 .09 695,507 .04 1,750 8.43 10 8.33
Javier E. Vijil...... 35,075 .10 64 (7) -- -- -- --
All Directors and
Executive Officers
of TRH as a Group
(14 individuals)... 445,642 1.28 32,492,061 2.10 10,750 51.80 40 33.32
</TABLE>
- ---------
(1) Unless otherwise indicated, the beneficial owners listed have sole voting
and investment power over the shares listed.
(2) Amounts of equity securities shown include shares of TRH Common Stock
subject to options which may be exercised within 60 days as follows:
Balog -- 3,750 shares, Bonny -- 43,312 shares, Greenberg -- 63,750 shares,
Mackowski -- 3,750 shares, Matthews -- 31,875 shares, Mucci -- 39,636
shares, Orlich -- 123,750 shares, Skalicky -- 18,625 shares, Smith -- 3,750
shares, Tizzio -- 31,875 shares, Vijil -- 34,687 shares, all directors and
executive officers of TRH as a group -- 400,960 shares.
Amounts of equity securities shown include shares as to which the individual
shares voting and investment power as follows: Orlich -- 6,228 shares with
his wife, Skalicky -- 108 shares with his wife, all directors and executive
officers of TRH as a group -- 6,336 shares.
Amounts of equity securities also excludes the following securities owned by
members of the named individual's immediate family as to which securities
such individual has disclaimed beneficial ownership: Orlich -- 549 shares,
all directors and executive officers as a group -- 549 shares.
(3) Reflects a stock split effected as a 50 percent stock dividend on the TRH
Common Stock, paid July 18, 1997.
(4) Amounts of equity securities shown include shares of AIG Common Stock
subject to options which may be exercised within 60 days as follows:
Greenberg -- 1,128,123 shares, Matthews -- 359,842 shares, Skalicky -- 7,382
shares, Smith -- 168,690 shares, Tizzio -- 367,394 shares, all directors and
executive officers of TRH as a group -- 2,031,431 shares.
(Footnotes continued on next page)
5
<PAGE>
(Footnotes continued from previous page)
Amounts of equity securities shown include shares as to which the individual
shares voting and investment power as follows: Greenberg -- 29,155,959
shares with his wife and 126,873 shares with co-trustees, Orlich -- 8,026
shares with his wife, Skalicky -- 1,222 shares with his wife,
Tizzio -- 328,113 shares with his wife, all executive officers and directors
of TRH as a group -- 29,620,193 shares.
Amounts of equity securities also excludes the following securities owned by
members of the named individual's immediate family as to which securities
such individual has disclaimed beneficial ownership: Matthews -- 14,600
shares, Tizzio -- 36,411 shares, all directors and executive officers as a
group -- 51,011 shares.
Amount of shares shown for Mr. Greenberg does not include 13,086,536 shares
held as trustee for the Starr Trust, as to which Mr. Greenberg disclaims
beneficial ownership. Inclusion of these shares would increase Mr.
Greenberg's total ownership by .84 percent. Amount of shares shown for Mr.
Greenberg also excludes 4,454,844 shares owned directly by Starr
(representing 24.0964 percent of the shares owned directly by Starr) as to
which Mr. Greenberg disclaims beneficial ownership.
(5) Reflects stock splits effected as 50 percent stock dividends on the AIG
Common Stock, paid July 25, 1997 and July 31, 1998, and a 25 percent stock
dividend on the AIG Common Stock paid July 30, 1999.
(6) As of January 31, 2000, Starr also had outstanding 5,250 shares of Common
Stock Class B, a non-voting stock and 3,838 shares of Preferred Stock Series
X-1. None of the nominees hold such shares. Shares of Starr's Series A
through Series S Preferred Stock, and its 5% Subordinated Preferred Stock
were held by the nominees as follows on January 31, 2000: Preferred Stock,
Series A -- Greenberg (5,000), Matthews (1,500); Preferred Stock, Series
B -- Greenberg (5,000), Matthews (1,750); Preferred Stock, Series
C -- Greenberg (5,000), Matthews (1,750), Tizzio (125); Preferred Stock,
Series D -- Greenberg (5,000), Matthews (1,750), Tizzio (375); Preferred
Stock, Series E -- Greenberg (5,000), Matthews (2,000), Smith (125), Tizzio
(625); Preferred Stock, Series F -- Greenberg (5,000), Matthews (2,000),
Smith (250), Tizzio (1,000); Preferred Stock, Series G -- Greenberg (5,000),
Matthews (2,250), Smith (375), Tizzio (1,000); Preferred Stock, Series H --
Greenberg (5,000), Matthews (2,250), Smith (500), Tizzio (1,000); Preferred
Stock, Series I -- Greenberg (5,000), Matthews (2,250), Smith (500), Tizzio
(1,000); Preferred Stock, Series J -- Greenberg (5,000), Matthews (2,250),
Smith (625), Tizzio (1,000); Preferred Stock, Series K -- Greenberg (5,000),
Matthews (2,250), Smith (625), Tizzio (1,250); Preferred Stock, Series L --
Greenberg (5,000), Matthews (2,250), Smith (625), Tizzio (1,250); Preferred
Stock, Series M -- Greenberg (5,000), Matthews (2,250), Smith (750), Tizzio
(1,500); Preferred Stock, Series N -- Greenberg (5,000), Matthews (2,250),
Smith (1,000), Tizzio (1,500); Preferred Stock, Series O -- Greenberg
(5,000), Matthews (2,250), Smith (1,000), Tizzio (1,500); Preferred Stock
Series P -- Greenberg (5,000), Matthews (2,250), Orlich (125), Smith
(1,000), Tizzio (1,500); Preferred Stock, Series Q -- Greenberg (5,000),
Matthews (2,250), Orlich (250), Smith (1,250), Tizzio (1,750), Preferred
Stock Series R -- Greenberg (5,000), Matthews (2,250), Orlich (250), Smith
(1,375), Tizzio (1,750); Preferred Stock, Series S -- Greenberg (5,000),
Matthews (2,250), Orlich (250), Smith (1,500), Tizzio (1,750) and 5%
Subordinated Preferred Stock -- Greenberg (100). The total outstanding
shares were: Preferred Stock, Series A (8,490), Preferred Stock, Series B
(8,305), Preferred Stock, Series C (7,750), Preferred Stock, Series D
(8,500), Preferred Stock, Series E (9,750), Preferred Stock, Series F
(11,125), Preferred Stock, Series G (11,875), Preferred Stock, Series H
(12,500), Preferred Stock, Series I (12,875), Preferred Stock, Series J
(13,875), Preferred Stock, Series K (14,625), Preferred Stock, Series L
(14,625), Preferred Stock, Series M (16,125), Preferred Stock, Series N
(17,625), Preferred Stock, Series O (17,625), Preferred Stock, Series P
(18,375), Preferred Stock, Series Q (21,875), Preferred Stock, Series R
(23,625), Preferred Stock, Series S (24,875) and 5% Subordinated Preferred
Stock (100).
(7) Less than .01%.
6
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities and Exchange Act of 1934 (the 'Exchange
Act') requires TRH's directors, officers and persons who own more than ten
percent of a registered class of TRH's equity securities, to file with the
Securities and Exchange Commission ('SEC') and the New York Stock Exchange
initial reports of ownership and reports of changes in beneficial ownership of
TRH Common Stock. Directors, officers and greater than ten percent stockholders
are required by SEC regulation to furnish TRH with copies of all Section 16(a)
forms they file. To TRH's knowledge, all Section 16(a) filing requirements
applicable to its directors, officers and ten percent stockholders have been
complied with, except for Mr. Bergsten who failed to timely report the
acquisition of 2,500 options to purchase TRH Common Stock in December, 1999
pursuant to the 1995 Stock Option Plan. In addition, there were two late filings
with respect to 247,600 shares and 21,400 shares of TRH Common Stock acquired by
AIG in January, 1999 and September, 1999, respectively. All of these late
filings have now been made. In making these statements, TRH has relied on
written representations of its directors, officers and ten percent stockholders,
and copies of reports that they have filed with the SEC.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
All directors, except those who are TRH employees, receive an annual
retainer of $17,500 and a fee of $700 for each meeting of the Board or any
committee of TRH or its subsidiaries attended, except for the Chairman, who
receives an annual retainer of $75,000. In addition, certain directors may be
granted stock options in recognition of extraordinary service to the Company. On
December 2, 1999 the Stock Option and Purchase Plan Committee granted options to
purchase 2,500 shares of TRH Common Stock to Mr. C. Fred Bergsten. Additionally,
on December 2, 1999, the full Board of Directors granted options to purchase
2,500 shares of TRH Common Stock to each of Messrs. Balog and Mackowski. These
options were granted pursuant to the TRH 1995 Stock Option Plan. The options
were granted at fair market value on the date of grant ($76.50 per share) and
first become exercisable at a rate of 25% per year commencing in December, 2000.
The following table sets forth the compensation, for services in all
capacities to TRH and its subsidiaries during 1999, of each of the President and
Chief Executive Officer and the four most highly compensated executive officers
of TRH.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
AWARDS
ANNUAL -----------------------
COMPENSATION(1) SECURITIES SICO
------------------- UNDERLYING LTIP ALL OTHER
NAME PRINCIPAL POSITION YEAR SALARY BONUS OPTIONS PAYOUTS(2) COMPENSATION(3)
---- ------------------ ---- ------ ----- ------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert F. Orlich...... President and CEO 1999 $576,923 $304,000 30,000 $ 241,861 $10,000
1998 502,885 320,000 25,000 1,705,701 10,000
1997 403,847 295,000 25,000 130,181 9,500
Steven S. Skalicky.... Exec. V.P. and CFO 1999 $354,231 $100,000 10,000 $ 115,172 $10,000
1998 290,000 88,000 10,000 420,918 10,000
Sr. V.P. and Controller 1997 251,538 68,000 6,000 122,573 9,500
Paul A. Bonny......... Exec. Vice President 1999 $348,373 $ 90,000 10,000 $ 98,719 $38,200
1998 317,092 112,000 10,000 406,334 41,222
Sr. Vice President 1997 267,112 82,000 10,000 79,179 33,389
Javier E. Vijil....... Exec. Vice President 1999 $326,346 $ 81,000 10,000 -- $ 6,666
1998 281,731 89,000 10,000 231,900 4,153
Sr. Vice President 1997 241,538 64,000 10,000 -- 3,166
Robert V. Mucci....... Sr. Vice President 1999 $306,154 $ 81,000 8,000 $ 131,625 $10,000
and Actuary 1998 271,347 72,000 7,500 432,951 10,000
1997 241,154 62,000 6,000 100,876 9,500
(Footnotes on next page)
</TABLE>
7
<PAGE>
(Footnotes from previous page)
(1) With respect to each executive officer named in the table, the aggregate
amount of perquisites and other personal benefits, securities or property
was less than either $50,000 or 10% of the total annual salary and bonuses
reported for such executive officer.
(2) The LTIP payouts will be made by SICO pursuant to its Deferred Compensation
Profit Participation Plan (the 'SICO Plan') and will not be paid by or
charged to TRH. Amounts shown represent the value of shares of AIG Common
Stock allocated and/or paid out under the SICO Plan. The SICO Plan came into
being in 1975 when the voting shareholders and Board of Directors of SICO, a
private holding company whose principal asset consists of AIG Common Stock,
decided that a portion of the capital value of SICO should be used to
provide an incentive plan for the current and succeeding managements of all
American International companies, including TRH. Participation in the SICO
Plan by any person, and the amount of such participation, is at the sole
discretion of SICO's Board of Directors, and none of the costs of the
various benefits provided under such plan is charged to or absorbed by TRH.
The SICO Plan provides that shares may be set aside by SICO for the benefit
of the participant and distributed upon retirement. The SICO Board of
Directors may permit an early pay-out of units under certain circumstances,
and certain of the individuals named in the Summary Compensation Table are
eligible for such early pay-out with respect to units awarded to them for
the periods shown. In September, 1997 and September, 1998 Messrs. Orlich,
Skalicky, Bonny and Mucci received a partial payout relating to the
1991-1992 and 1993-1994 SICO Plans, and in May, 1999 they received a partial
payout relating to the 1995-1996 SICO Plans. The amounts received by the
participants in 1997, and included in the value shown in the table,
represented the market value of shares of AIG Common Stock distributed by
SICO at September 15, 1997, as follows: Orlich -- $130,181;
Skalicky -- $122,573; Bonny -- $79,179; Mucci -- $100,876. The amounts
distributed by SICO to the participants in 1998, and included in the value
shown in the table, represented the market value of shares of AIG Common
Stock at September 15, 1998, as follows: Orlich -- $159,701;
Skalicky -- $150,368; Bonny -- $97,134; Mucci -- $123,751. The amounts
distributed by SICO to the participants in 1999, and included in the value
shown in the table, represented the market value of shares of AIG Common
Stock at May 1, 1999, as follows: Orlich -- $241,861; Skalicky -- $115,172;
Bonny -- $98,719; Mucci -- $131,625. Prior to pay-out, the participant is
not entitled to vote, dispose of or receive dividends with respect to such
shares, and shares are subject to forfeiture under certain conditions,
including but not limited to the participant's voluntary termination of
employment with TRH or AIG prior to normal retirement age. In addition,
SICO's Board of Directors may elect to pay a participant cash in lieu of
shares of AIG Common Stock. The 1997 share amounts and sales prices are
adjusted to reflect the stock split effected as a 50 percent stock dividend
on the AIG Common Stock in July, 1998 and for the 25 percent stock dividend
on the AIG Common Stock in July, 1999. The 1998 share amounts and sales
prices are adjusted to reflect the stock split effected as a 25 percent
stock dividend on the AIG Common Stock in July, 1999. In March, 1999, a
determination was made as to the number of AIG shares allocable to the
accounts of the participants in the SICO Plan with respect to units awarded
in December, 1996 with respect to the January 1, 1997 to December 31, 1998
period. The values shown for the year 1998 also include an amount
representing the number of AIG shares, based on the closing sale price of
AIG Common Stock on December 31, 1998 of $77.30, allocated as follows:
Orlich -- 20,000 shares; Skalicky -- 3,500 shares; Bonny -- 4,000 shares;
Vijil -- 3,000 shares; Mucci -- 4,000 shares.
(3) Amounts shown for Messrs. Orlich, Skalicky, Vijil and Mucci represent
matching contributions under TRH's 401(k) Plan. Amounts shown for Mr. Bonny
reflect contributions by TRH to The AIG Retirement Savings Plan (United
Kingdom.)
8
<PAGE>
Messrs. Greenberg, Matthews, Smith, and Tizzio or certain of them, are
directors and officers of SICO, directors and members of the Starr Foundation
and directors and officers of Starr. These individuals also receive compensation
as officers of Starr for services rendered to Starr as well as compensation from
SICO for services rendered to SICO. These services are not considered to detract
materially from the business time of these individuals available for TRH matters
and such compensation is not included in the compensation for services to TRH
shown in the Summary Compensation Table above.
TRH maintains policies of directors and officers liability insurance for
itself, its directors and officers, its subsidiaries, and their directors and
officers. In 1999, the premiums for this coverage approximated $115,000. In
August, 1998, with the increased ownership of TRH by AIG, TRH, as a subsidiary
of AIG, became covered under AIG's D&O policy. Included in the amount above are
premiums paid to an AIG subsidiary, National Union Insurance Company of
Pittsburgh, Pa., which approximated $52,000.
The following table summarizes certain information with respect to benefits
that the proxy rules classify as granted under Long-Term Incentive Plans which
were granted during 1998 (with respect to the 1999-2000 period) to the five
individuals named in the Summary Compensation Table.
SICO LONG-TERM INCENTIVE PLANS -- AWARDS IN 1998(1)
<TABLE>
<CAPTION>
NUMBER OF
NAME UNITS PERFORMANCE PERIOD ESTIMATED FUTURE PAYOUTS
- ---- ----- ------------------ ------------------------
<S> <C> <C> <C>
Orlich..................................... 1,200 Two years 19,200 shares
Skalicky................................... 500 Two years 4,000 shares
Bonny...................................... 500 Two years 4,000 shares
Vijil...................................... 450 Two years 3,600 shares
Mucci...................................... 450 Two years 3,600 shares
</TABLE>
- ---------
(1) Awards represent grants of units under the SICO Plan described in Note 2 to
the Summary Compensation Table with respect to the two-year period from
January 1, 1999 through December 31, 2000. The SICO Plan contains neither
threshold amounts nor maximum payout limitations. The number of shares of
AIG Common Stock allocated to a unit upon payout is based on a percentage
selected by SICO's Board of Directors of between 20 percent and 100 percent
of the increase of SICO's retained earnings attributable to the AIG Common
Stock held by SICO over the two-year period. As a result, the number of
shares to be allocated with respect to units held for the 1999-2000 period
and the value of such shares cannot be determined at this time. The number
of shares shown under 'Estimated Future Payouts' represent the number of
shares allocable to the named individuals based upon the units awarded to
them for the 1999-2000 period, assuming the percentage selected by the SICO
Board of Directors and the increase in SICO's retained earnings for the
1999-2000 period were the same as those used to allocate the shares of AIG
Common Stock for the 1997-1998 period. As noted in the description of the
SICO Plan in Note 2 to the Summary Compensation Table, prior to pay-out, the
participant is not entitled to vote, dispose of or receive dividends with
respect to such shares, and the shares are subject to forfeiture under
certain conditions, including but not limited to the participant's voluntary
termination of employment with TRH or AIG prior to normal retirement age.
-------------------
The following tables set forth information for each of the five individuals
named in the Summary Compensation Table as to (i) grants of options to purchase
TRH Common Stock under the TRH 1995 Stock Option Plan during 1999, and
(ii) option exercises during 1999, and option values as of December 31, 1999,
with respect to options to purchase TRH Common Stock granted under the TRH 1995
Stock Option Plan and the TRH 1990 Stock Option Plan.
9
<PAGE>
OPTION GRANTS IN THE LAST FISCAL YEAR(1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------------------
% OF POTENTIAL REALIZABLE
NUMBER OF TOTAL VALUE(4) AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE FOR OPTION TERM
OPTIONS EMPLOYEES EXERCISE -----------------------
NAME GRANTED IN 1999 PRICE EXPIRATION DATE 5%(2) 10%(3)
---- ------- ------- ----- --------------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Orlich................ 30,000 19.05 $76.50 December 2, 2009 $1,446,000 $3,649,200
Skalicky.............. 10,000 6.35 $76.50 December 2, 2009 482,000 1,216,400
Bonny................. 10,000 6.35 $76.50 December 2, 2009 482,000 1,216,400
Vijil................. 10,000 6.35 $76.50 December 2, 2009 482,000 1,216,400
Mucci................. 8,000 5.08 $76.50 December 2, 2009 385,600 973,120
</TABLE>
- ---------
(1) The options reflected in the table were granted in December 1999 and will
become exercisable at a rate of 25% per year, commencing in December 2000.
(2) The appreciated price would be $124.70 per share.
(3) The appreciated price would be $198.14 per share.
(4) The assumed 5% and 10% annual rates of stock price appreciation used in the
table are prescribed by the proxy rules and are not intended to forecast
possible future appreciation in the price of TRH Common Stock. Options would
have no realized value if there were no appreciation or if there were
depreciation from the price at which the options were granted.
AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR
AND YEAR-END OPTION VALUES(1)
TRANSATLANTIC HOLDINGS, INC. AND AMERICAN INTERNATIONAL GROUP, INC.
<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD
NUMBER OF AT FISCAL YEAR END(2) AT FISCAL YEAR END(4)(5)
SHARES ACQUIRED VALUE --------------------------- ------------------------
NAME ON EXERCISE(1)(2) REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Orlich............... 15,205 $1,027,944 123,750 68,750 $3,970,317 $373,899
Skalicky............. 0 0 26,007 22,375 1,061,705 103,989
Bonny................ 0 0 43,312 25,313 1,433,195 141,436
Vijil................ 0 0 34,687 25,313 990,750 141,436
Mucci................ 0 0 39,636 19,438 1,265,297 121,015
</TABLE>
The following tables break out the options exercises and year-end option
values shown in the table above for each of TRH Common Stock and AIG Common
Stock separately.
TRANSATLANTIC HOLDINGS, INC.
<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD
NUMBER OF AT FISCAL YEAR END AT FISCAL YEAR END(4)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(1) REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Orlich............... 11,250 $634,219 123,750 68,750 $3,970,317 $373,899
Skalicky............. 0 0 18,625 22,375 415,946 103,989
Bonny................ 0 0 43,312 25,313 1,433,195 141,436
Vijil................ 0 0 34,687 25,313 990,750 141,436
Mucci................ 0 0 39,636 19,438 1,265,297 121,015
</TABLE>
10
<PAGE>
AMERICAN INTERNATIONAL GROUP, INC.
<TABLE>
<CAPTION>
TOTAL NUMBER OF TOTAL VALUE OF UNEXERCISED,
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD
NUMBER OF AT FISCAL YEAR END(2) AT FISCAL YEAR END(5)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(1)(2) REALIZED(3) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Orlich................. 3,955 $393,725 0 0 $ 0 $ 0
Skalicky............... 0 0 7,382 0 645,759 0
Bonny.................. 0 0 0 0 0 0
Vijil.................. 0 0 0 0 0 0
Mucci.................. 0 0 0 0 0 0
</TABLE>
- ---------
(1) TRH options are granted with respect to TRH Common Stock and AIG options are
granted with respect to AIG Common Stock.
(2) Adjusted for the 25 percent AIG Common Stock split in July 1999.
(3) Aggregate market value on date of exercise less aggregate option price.
(4) Total value of vested and unvested options based on a fair market value of
TRH Common Stock of $78.0625 per share, as of December 31, 1999.
(5) Total value of vested and unvested options based on a fair market value of
AIG Common Stock of $108.125 per share, as of December 31, 1999.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee of the Board of Directors consists of
Messrs. Balog, Greenberg, Mackowski and Tizzio. No member of the Compensation
Committee is a current officer or employee of the Company (or any of its
subsidiaries) or was such an officer or employee at any time subsequent to June
1990, when the Company became a reporting company under the Exchange Act.
Mr. Greenberg is a director and Chairman and Chief Executive Officer of AIG and
Mr. Tizzio is a director and Senior Vice Chairman-General Insurance of AIG.
Mr. Greenberg and Mr. Tizzio are stockholders, directors and/or executive
officers of SICO and Starr. AIG owns 60.03% of the outstanding TRH Common Stock
and engages in reinsurance and retrocession transactions with TRH, and provides
certain administrative and advisory services to TRH, in the ordinary course of
TRH's business. Approximately $184 million (11%) of gross premiums written by
TRH in 1999 was attributable to reinsurance purchased by the AIG Group (AIG,
together with its subsidiaries, is referred to herein as the 'AIG Group'), for
the production of which TRH paid ceding commissions to the AIG Group of
approximately $34 million in such year. TRH retroceded approximately $100.4
million of gross premiums written to the AIG Group in 1999 and received ceding
commissions of approximately $16.2 million for the production of such business.
TRH's employees participate in benefit plans administered by AIG including a
noncontributory defined benefit pension plan, an employee stock purchase plan
and a voluntary savings plan (a 401(k) plan) which provides for certain matching
contributions. Pursuant to service and expense agreements, the AIG Group
furnishes to TRH certain office space, data processing, human resource related
activities and certain other administrative services. TRH paid approximately
$3.8 million to the AIG Group for these services in 1999. Pursuant to an
investment management contract, AIG Global Investment Corp., an AIG subsidiary,
acts as investment manager for TRH. In addition, during 1999, AIG Capital
Management Corp., an AIG subsidiary, provided investment advisory and management
services for substantially all TRH's assets held as cash equivalents. TRH paid
an aggregate of approximately $6.8 million to AIG Global Investment Corp. and
AIG Capital Management Corp. for such investment management services in 1999.
TRH receives services for the maintenance of certain computer equipment from
A.I. Credit Corp., an AIG subsidiary. TRH paid approximately $1,000 for such
services in 1999. TRH maintains policies of directors and officers liability
insurance for itself, its directors and officers, its subsidiaries, and their
directors and officers. In 1999, the premiums for this coverage approximated
$115,000. In August, 1998, with the increased ownership of TRH by AIG, TRH, as a
subsidiary of AIG, became covered under AIG's D&O policy. Included in the amount
above are premiums paid to an AIG subsidiary, National Union Insurance Company
of Pittsburgh, Pa., which
11
<PAGE>
approximated $52,000. SICO, Starr and the Starr Foundation owned 13.70%, 2.04%
and 2.81%, respectively, of AIG Common Stock at January 31, 2000. Certain of
Starr's subsidiaries operate as insurance agencies or brokers and in such
capacity produce business for TRH. Commissions paid by TRH to Starr for these
services approximated $2,503,000 in 1999. From these payments, which constituted
less than 1.9% of Starr's gross revenues in 1999, Starr is required to pay its
operating expenses and commissions due originating brokers. The amounts
represented less than 0.15% of TRH's gross revenues in 1999. The members of the
Stock Option and Purchase Plan Committee are Messrs. Balog and Mackowski, each
of whom is a 'non-employee director' within the meaning of Rule 16b-3 under the
Exchange Act.
COMMITTEE REPORTS ON EXECUTIVE COMPENSATION
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Compensation Committee ('Committee') met on December 2, 1999. The
Committee is composed solely of non-employee directors. The Committee is
responsible for developing and making recommendations to the Board of Directors
with respect to executive officer compensation policies and determines the cash
compensation to be paid to the President and Chief Executive Officer and each of
the other executive officers of the Company. The objectives of the Committee in
determining the amount and type of cash compensation for each executive officer
are to (i) provide a level of base compensation which would allow the Company to
attract, retain and reward superior talent, and (ii) align the executive
officers' interest with the success of the Company through the payment of
bonuses based on the Company's performance. The Committee reviews the actions of
the Stock Option and Purchase Plan Committee and addresses the mix of
compensation forms (salary, bonus, stock options) to foster long-term management
motivation, development and stability.
The Company's compensation policies continue to be subjective, and no
specific formulas are applied in making compensation decisions. Before making
any compensation recommendations, the Committee reviewed and compared the
compensation of each of the senior executive officers of the Company to data
from a special cut of the 1999 Sibson Reinsurance Survey ('Sibson'). The Sibson
special cut is comprised of companies in the New York area against which the
Company competes for personnel. The Committee also reviewed the 1998
compensation of the highest paid executive officers of selected competitors from
publicly available information, as well as financial data such as return on
equity, expense ratio, combined ratio, change in reserves, and the value today
of $100 invested in June 1990. The Committee believes that the Company's
continued strong performance in 1999 was largely attributable to the leadership
of senior management. It was agreed that it would be in the best interest of the
Company and its shareholders to compensate these individuals in a manner
commensurate with their contributions to the Company's success. Accordingly,
based solely on a subjective review, Robert F. Orlich, the Company's President
and Chief Executive Officer, was given an increase in base salary to $625,000
from $575,000 in 1999. Mr. Orlich was also given a year-end 1999 bonus.
Management's recommendations with respect to the other executives of the Company
were also reviewed, considered and approved, based upon a subjective review of
their respective responsibilities and contributions to the Company.
The Committee noted the fact that certain of the Company's executive
officers participate in the SICO Plan. The Company does not have any ownership
interest in, or right to control SICO. Accordingly, the SICO Board makes
determinations about participation in the SICO Plan independently of the Company
and of the Committee.
12
<PAGE>
The Compensation Committee has considered the tax deductibility of
compensation to its executive officers in light of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the 'Code'). No executive officer's
cash compensation in 1999 exceeded $1 million. No executive officer's cash
compensation payable by the Company in 2000 is expected to exceed $1 million.
The Company has structured the TRH 1990 and 1995 Stock Option Plans with the
intention that the compensation resulting from such plans would be deductible in
light of Section 162(m).
COMPENSATION COMMITTEE
JAMES BALOG, M.R. GREENBERG, JOHN J. MACKOWSKI,
THOMAS R. TIZZIO
DECEMBER 2, 1999
REPORT OF THE STOCK OPTION AND PURCHASE PLAN COMMITTEE ON EXECUTIVE COMPENSATION
The Stock Option and Purchase Plan Committee ('Committee') met on
December 2, 1999. The Committee is composed solely of non-employee directors.
The Committee is responsible for administering the TRH employee benefit plans.
The Committee's philosophy is that stock options are a particularly important
part of the compensation that inherently correlates long-term individual
motivation and reward to Company performance. The Committee's approach is
subjective. The Committee does not use specific criteria or formula to calculate
the aggregate number of options granted or the grants to each individual. As
part of its general discussion, the Committee considered the past and potential
contribution to the Company of its executive officers, the amount of options
awarded in prior years, the option grants awarded by other reinsurers as
disclosed in publicly available materials as described above, the successful
financial performance of the Company, the Company's long-term compensation goals
and the cash compensation paid to the Company's executive officers. The
Committee reviewed, considered and approved management's recommendation to grant
160,000 stock options under the TRH 1995 Stock Option Plan at an exercise price
of $76.50 per share, the market price on the date of grant, which includes
30,000 options granted to the Company's President and Chief Executive Officer,
Robert F. Orlich; 10,000 options granted to the Company's Executive Vice
President and Chief Financial Officer, Steven S. Skalicky; 10,000 options
granted to the Company's Executive Vice President/President International
Operations, Paul A. Bonny; 10,000 options granted to the Company's Executive
Vice President/President Latin American Division, Javier E. Vijil and 8,000
options granted to the Company's Senior Vice President and Actuary, Robert V.
Mucci. Management's recommendations are based on a subjective assessment of the
individuals, the nature of their responsibilities and their contribution to the
Company. Included in the option grant are a total of 2,500 stock options to the
following Director: C. Fred Bergsten. The option grant to Mr. Bergsten was made
after reviewing and approving management's recommendations, which were based on
a subjective assessment of his past and prospective contribution to the Company.
STOCK OPTION AND PURCHASE PLAN COMMITTEE
JAMES BALOG, JOHN J. MACKOWSKI
DECEMBER 2, 1999
13
<PAGE>
PERFORMANCE GRAPH
The following Performance Graph compares the cumulative total stockholder
return on TRH Common Stock (assuming reinvestment of dividends) from
December 31, 1994 through December 31, 1999, with the cumulative total return of
the Standard & Poor's Midcap 400 Index and the cumulative total return of the
Insurance (PPTY-CAS)-500 Index which was formerly called Standard & Poor's
Property-Casualty Insurance Index.
CUMULATIVE TOTAL RETURN TO STOCKHOLDERS
VALUE OF $100 INVESTED IN DECEMBER, 1994
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
DEC. 94 DEC. 95 DEC. 96 DEC. 97 DEC. 98 DEC. 99
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
TRANSATLANTIC HOLDINGS, INC. $100 $132.11 $145.92 $195.52 $207.75 $215.98
INSURANCE (PPTY-CAS)-500 100 135.40 164.52 239.33 222.69 166.00
S&P MIDCAP 400 INDEX 100 130.94 156.08 206.43 245.87 282.06
</TABLE>
14
<PAGE>
PENSION BENEFITS
TRH employees are eligible to participate in or have participated in various
AIG benefit plans.
Through March 31, 1985, when such plan was terminated, employees of AIG and
its subsidiaries, including TRH and its subsidiaries, who are citizens of the
United States or non-citizens working in the United States were covered under
the American International Group, Inc. Pension Plan, a contributory, qualified,
defined benefit plan ('Original Pension Plan'). The annual pension for a
participant was equal to 1.75% of Average Final Compensation multiplied by years
of credited service as a participant (up to 40 years) less 1.4286% of his Social
Security Benefit multiplied by years of credited service (limited to 35 years).
Average Final Compensation was defined as the average annual compensation of a
participant during the 3 consecutive years in the last 10 years of his credited
service affording the highest such average, or during all of the years of his
credited service if less than 3 years. Benefits were paid monthly during the
life of the participant, or, if applicable, during the joint lives of the
participant and his contingent annuitant. The annual retirement allowance for
participants with at least 10 years of credited service was not less than 50% of
1.75% of Average Final Compensation, multiplied by years of credited service, or
$1,200, whichever was greater. On April 1, 1985, a new non-contributory,
qualified, defined benefit plan ('Current Retirement Plan') was established,
with provisions substantially the same as the Original Pension Plan, except for
the non contributory feature and except that in the annual pension formula
described above, 1.25% of Average Final Compensation is multiplied by years of
credited service as a participant (up to 44 years) less 1.25% of his Social
Security Benefit multiplied by years of credited service (limited to 35 years).
The 1.25% of Average Final Compensation is also used in the determination of the
minimum retirement allowance. Effective January 1, 1989, the Current Retirement
Plan formula changed in accordance with government mandated regulations from a
Social Security offset to a Social Security integration method of computation
where the offset is the average of the final three years' compensation but no
greater than 150% of the employee's 'covered compensation' (the average of the
Social Security Wage bases during the 35 years preceding the Social Security
retirement age) times credited service up to 35 years, multiplied by an
applicable Social Security retirement age factor. For employees terminating from
active service after January 1, 1993, the benefit formula for credited service
on and after April 1, 1985 changed from 1.25% to 1.35% of Average Final
Compensation. Effective January 1, 1996, the Current Retirement Plan formula now
equals 1.25% times Average Final Compensation up to 150% of the employee's
'covered compensation' plus 1.75% times Average Final Compensation in excess of
150% of 'covered compensation' times years of credited service prior to
April 1, 1985 (up to 35 years) plus 1.75% times Average Final Compensation times
years of credited service in excess of 35 years but limited to 40 years; plus
.925% times Average Final Compensation up to 150% of the employee's 'covered
compensation' plus 1.425% times Average Final Compensation in excess of 150% of
'covered compensation' times years of credited service after April 1, 1985 (up
to 35 years) plus 1.425% times Average Final Compensation times years of
credited service in excess of 35 years but limited to 44 years.
As a result of the termination of the Original Pension Plan, all benefits
accruing to the termination date became vested regardless of an employee's years
of service and annuities were purchased for benefits payable under that plan.
AIG was entitled to receive the surplus remaining in the Original Pension Plan,
other than the portion of the surplus attributable to employee contributions.
The AIG savings plan ('401(k) Plan') for employees, including employees of
TRH and its subsidiaries, provides for salary reduction contributions by
employees and matching contributions by TRH. The retirement benefits for most
employees who participate in both the Current Retirement Plan and the 401(k)
Plan will be substantially greater than the benefits which would have been
received under the Original Pension Plan.
Annual amounts of normal retirement pension commencing at normal retirement
age of 65 based upon Average Final Compensation and credited service under the
Current Retirement Plan and a supplemental plan ('the Supplemental Plan') are
illustrated in the following table:
15
<PAGE>
ESTIMATED ANNUAL PENSION AT AGE 65
<TABLE>
<CAPTION>
3 YEAR TOTAL YEARS OF CREDITED SERVICE AS A PLAN PARTICIPANT
AVERAGE FINAL --------------------------------------------------------------------------
COMPENSATION 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
------------ -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
$125,000..................... $15,180 $ 22,770 $ 30,360 $ 37,950 $ 45,540 $ 53,130 $ 60,720
150,000..................... 18,743 28,114 37,485 46,856 56,228 65,599 74,970
175,000..................... 22,305 33,458 44,610 55,763 66,915 78,068 89,220
200,000..................... 25,868 38,801 51,735 64,669 77,603 90,536 103,470
225,000..................... 29,430 44,145 58,860 73,575 88,290 103,005 117,720
250,000..................... 32,993 49,489 65,985 82,481 98,978 115,474 131,970
300,000..................... 40,118 60,176 80,235 100,294 120,353 140,411 160,470
375,000..................... 50,805 76,208 101,610 127,013 152,415 177,818 203,220
400,000..................... 54,368 81,551 108,735 135,919 163,103 190,286 217,470
500,000..................... 68,618 102,926 137,235 171,544 205,853 240,161 274,470
</TABLE>
With respect to the individuals named in the Summary Compensation Table on
page 7, other than Mr. Bonny, their respective years of credited service (under
both plans) through December 31, 1999 are as follows: Orlich 13.17 years,
Skalicky 13.42 years, Vijil 5.92 years, Mucci 16.67 years. Pensionable salary
includes only the regular salary paid by TRH and its subsidiaries and does not
include amounts attributable to bonuses or overtime pay. For such named
individuals, pensionable salary during 1999 was as follows: Orlich -- $576,923;
Skalicky -- $354,231; Vijil -- $326,346; Mucci -- $306,154.
Effective January 1, 1991 a Supplemental Plan was provided to pay a benefit
to Current Retirement Plan participants in an amount equal to the reduction in
the benefit payable as a result of the Federal limitation. Messrs. Orlich,
Skalicky, Vijil and Mucci were participants in the Supplemental Plan at
December 31, 1999.
During 1993, 1994 and up to June 1, 1995, Mr. Bonny participated in The AIG
Pension Plan (United Kingdom), a defined benefit plan, in which the TRH
contributions were calculated by the actuaries for that plan. Mr. Bonny
currently participates in The AIG Retirement Savings Plan (United Kingdom), a
defined contribution plan, to which he contributed approximately 8 percent of
his pensionable salary in 1999. Contributions to this plan by TRH vary based on
employee age, pensionable service and the employee's voluntary contributions.
During 1999, TRH contributed approximately 11 percent of Mr. Bonny's pensionable
salary of $348,373 to the plan based on his age, voluntary contribution and his
17.9 years of pensionable service.
RELATIONSHIP WITH AIG
AIG is a holding company which, through its subsidiaries, is primarily
engaged in a broad range of insurance and financial services-related activities
in the United States and abroad. U.S.-based property and casualty insurance
subsidiaries of AIG currently have a group rating of 'A++ (Superior)', the
highest rating classification, by A.M. Best Company. The AIG Group is one of the
largest purchasers of reinsurance in the insurance industry based on premiums
ceded.
AIG owns 60.03% of the outstanding TRH Common Stock. Four of TRH's 9 current
directors, including the Chairman, are executive officers of AIG and hold the
following positions with AIG: Mr. Greenberg is a Director and the Chairman and
Chief Executive Officer; Mr. Matthews is a Director and Vice
Chairman -- Investments and Financial Services; Mr. Smith is a Director,
Executive Vice President, Chief Financial Officer and Comptroller and
Mr. Tizzio is a Director and Senior Vice Chairman -- General Insurance.
AIG GROUP REINSURANCE
TRH, through its wholly-owned subsidiaries TRC, Putnam and Trans Re Zurich
either accepts or rejects the AIG Group reinsurance offered based upon TRH's
assessment of risk selection, pricing, terms and conditions. Historically, and
with few exceptions, TRH has generally not set terms and conditions as lead
underwriter with respect to the AIG Group treaty reinsurance; however, TRH may
in the future set terms and conditions with respect to such business as a lead
underwriter and intends that
16
<PAGE>
the terms and conditions of any such reinsurance will be negotiated on an arms'
length basis. The Underwriting Committee of the Board of Directors of TRH, which
includes directors of TRH who are not employees of the AIG Group, monitor TRH's
underwriting policies. (See 'Compensation Committee Interlocks and Insider
Participation').
Approximately $184 million (11%), $167 million (11%) and $181 million (12%)
of gross premiums written by TRH in the years 1999, 1998 and 1997, respectively,
were attributable to reinsurance purchased by the AIG Group, for the production
of which TRH paid ceding commissions to the AIG Group of approximately $34
million, $31 million and $32 million, respectively, in such years. TRH has no
goal with respect to the portion of AIG Group versus non-AIG Group business it
accepts. TRH's objective in determining its business mix is to evaluate each
underwriting opportunity individually with a view to maximizing overall
underwriting results.
TRH retroceded approximately $100.4 million of gross premiums written to the
AIG Group in 1999 and received ceding commissions of approximately $16.2 million
for the production of such business.
CERTAIN TRANSACTIONS WITH THE AIG GROUP
Pursuant to service and expense agreements, the AIG Group furnishes to TRH
certain office space, data processing, human resource related activities and
certain other administrative services. TRH may terminate the agreements by
giving six months' written notice to AIG. TRH paid approximately $3.8 million to
the AIG Group for these services in 1999. (See 'Compensation Committee
Interlocks and Insider Participation').
Pursuant to an investment management contract, AIG Global Investment Corp.,
an AIG subsidiary, acts as investment manager for TRH. Under the terms of this
agreement, AIG Global Investment Corp. has discretion to manage all the
investment activities of TRH, except with respect to its cash equivalents,
subject to the directions of TRH's Board of Directors and within the limits
imposed by the New York Insurance Law. The agreement may be terminated by either
party at any time. AIG Global Investment Corp. also provides investment
management services for other clients. In addition, during 1999, AIG Capital
Management Corp., an AIG subsidiary, provided investment advisory and management
services for substantially all TRH's cash equivalents. TRH paid an aggregate of
approximately $6.8 million to AIG Global Investment Corp. and AIG Capital
Management Corp. for such investment management services in 1999.
TRH receives services for the maintenance of certain computer equipment from
A.I. Credit Corp., an AIG subsidiary. TRH paid approximately $1,000 for such
services in 1999.
TRH's employees participate in benefit plans administered by AIG including a
noncontributory defined benefit pension plan, an employee stock purchase plan
and a voluntary savings plan (a 401(k) plan) which provides for certain matching
contributions.
TRH maintains policies of directors and officers liability insurance for
itself, its directors and officers, its subsidiaries, and their directors and
officers. In 1999, the premiums for this coverage approximated $115,000. In
August, 1998, with the increased ownership of TRH by AIG, TRH, as a subsidiary
of AIG, became covered under AIG's D&O policy. Included in the amount above are
premiums paid to an AIG subsidiary, National Union Insurance Company of
Pittsburgh, Pa., which approximated $52,000.
These services have been obtained at a cost which, in the opinion of TRH,
has not exceeded the cost of obtaining such services from unaffiliated sources.
The cost of certain of these services may increase or decrease in the future,
subject to negotiation, but in any event are expected not to exceed the cost of
obtaining such services from unaffiliated sources.
RELATIONSHIP WITH SICO AND STARR
SICO and Starr owned 13.70% and 2.04%, respectively of AIG's outstanding
common stock at January 31, 2000. Messrs. Greenberg, Matthews, Orlich, Smith and
Tizzio, directors of TRH, are also stockholders, executive officers or directors
of SICO or Starr. (See 'Ownership of Certain Securities').
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Certain of Starr's subsidiaries operate as insurance agencies or brokers and
in such capacity produce business for TRH. Commissions paid by TRH to Starr for
these services approximated $2,503,000 in 1999. From these payments, which
constituted less than 1.9% of Starr's gross revenues in 1999, Starr is required
to pay its operating expenses and commissions due originating brokers. The
amounts are paid on terms available to unaffiliated parties and represent less
than 0.15% of TRH's gross revenues in 1999.
II. APPROVAL OF A PROPOSAL TO ADOPT THE 2000 STOCK OPTION PLAN
Your Board of Directors recommends that the shareholders approve a proposal
to adopt the 2000 Stock Option Plan (the '2000 Plan'). A copy of the 2000 Plan
is attached as Appendix A. Upon adoption of the 2000 Plan, no additional options
will be granted under the 1995 Stock Option Plan (the '1995 Plan'). The 1995
Plan will remain effective until previously granted options have been exercised,
cancelled or have expired.
The purpose of the 2000 Plan is to advance the growth and prosperity of TRH
and its subsidiaries by providing their officers and other key employees, and
the nonemployee directors of TRH, with additional incentives. The Board believes
that the 2000 Plan will help attract, retain and motivate the Company's
nonemployee directors, officers and other key employees as well as help to
achieve the goal of aligning employee and stockholder interests, and is
therefore in the best interests of the Company. The 2000 Plan is to be
administered by a committee of the Board of Directors (the 'Committee') whose
members are both 'disinterested directors' within the meaning of Rule 16b-3
under the Exchange Act and 'outside directors' within the meaning of
Section 162(m) of the Code.
Under the 2000 Plan, options may be granted to such nonemployee directors,
officers and other key employees to purchase up to an aggregate of 1,500,000
shares of TRH Common Stock, at exercise prices not less than the fair market
value of such stock at the dates of grant. Stock options that are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Code may only be granted to employees. Shares to be reserved for issuance
under the 2000 Plan will consist of newly issued shares or shares acquired by
TRH from time to time and held as treasury stock. Options granted to employees
may be exercisable for periods not exceeding ten years from grant dates and
shall be granted upon such other terms and conditions as the Committee may
approve; provided, however, that options granted to an employee generally are
not exercisable following the employee's termination of employment except that
(i) if such termination of employment is at or after normal retirement age
or due to disability or death, any portion of a stock option, whether or not
exercisable at the time of such termination, may be exercised by the optionee
(or in case of death by the person or persons to whom the optionee's rights
under such stock option are transferred by will or the laws of descent and
distribution) at any time within the term of the stock option; and (ii) if
such termination of employment is not at or after normal retirement age or due
to disability or death, with the approval of the Committee, any portion of
a stock option may be exercised by the optionee within three months after
such termination, but only to the extent such stock option was exercisable at
the time of such termination. Options granted to nonemployee directors will
be on such terms and conditions, including terms and conditions regarding
exercisability and duration, as the Committee determines. No cash consideration
will be received for the granting of options. The exercise price may be paid
in cash, shares of TRH Common Stock (valued at fair market value) or a
combination thereof. Options will not be transferable otherwise than by will
or the laws of descent and distribution. The 2000 Plan provides that the
Committee shall determine at the time of grant to an employee whether all or
any part of a stock option shall be an incentive stock option. The number of
shares available for options or issuable upon the exercise of options, and
option prices, will be subject to antidilution and similar adjustments. Shares
subject to options which terminate or expire prior to exercise will be available
for further options under the 2000 Plan. No options may be granted under the
2000 Plan after December 31, 2009. The Board may from time to time amend
the 2000 Plan, but no alteration or amendment may be made without the approval
of stockholders if such approval is required by applicable law.
Because the granting of options under the provisions of the 2000 Plan will
be entirely within the discretion of the Committee, it is not possible to
designate the employees or nonemployee directors to whom options will be granted
under the 2000 Plan or the number of shares to be covered by such
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options. The 2000 Plan provides that options may not be granted to any one
person to purchase more than 250,00 shares of TRH Common Stock covered by the
2000 Plan. It is expected that the aggregate number of optionees under the
2000 Plan is not likely to exceed 100.
The market value of the TRH Common Stock on March 24, 2000 was $79.5625 per
share.
TAX MATTERS
Upon the grant or exercise of an incentive stock option, no income will be
realized by the optionee for federal income tax purposes, and TRH will not be
entitled to any tax deduction. If the shares received on the exercise of an
incentive stock option are not disposed of within the one-year period beginning
on the date of the transfer of such shares to the optionee, nor within the
two-year period beginning on the date of the grant of the option, any profit
realized by the optionee upon the disposition of such shares will be taxed as
long-term capital gain. In such event, no tax deduction will be allowed to TRH.
In order for the exercise of an incentive stock option to qualify for the
foregoing treatment, the optionee generally must be an employee of TRH or a
subsidiary from the date of grant of the option through the date three months
before the date of exercise, except in the case of death or disability, where
special rules apply. If the shares are disposed of within the one-year period
from the date of transfer of such shares to the optionee or within the two-year
period from the date of the grant of the option, the excess of the fair market
value of the shares on the date of exercise or, if less, the fair market value
on the date of disposition, over the exercise price will be taxable as ordinary
income of the optionee at the time of disposition, and TRH will be entitled to a
corresponding tax deduction at such time.
Upon the grant of an option which is not an incentive stock option,
including an option granted to a nonemployee director, no income will be
realized by the optionee. Upon the exercise of such an option, the amount by
which the fair market value of the shares at the time of exercise exceeds the
exercise price will be taxed as ordinary income of the optionee and TRH will be
entitled to a corresponding deduction. The optionee may be required to pay to
TRH the applicable withholding taxes with respect to the ordinary income
realized on exercise of a nonqualified stock option.
Approval of the 2000 Plan requires approval by a majority of the votes cast
on the proposal, provided that the total votes cast represent over 50% in
interest of all of the shares of TRH Common Stock entitled to vote on the
proposal. Abstentions will have the effect of a vote 'against' the adoption of
the 2000 Plan and broker non-votes will have the effect of reducing the number
of affirmative votes required to achieve the majority vote.
The 2000 Plan is being submitted to the stockholders for their approval as a
matter of Board policy, to comply with the New York Stock Exchange listing
requirements and to qualify compensation paid thereunder as deductible for
purposes of Section 162(m) of the Code. If the 2000 Plan is not approved by
stockholders, it will not be put into effect and options will not be granted
thereunder.
AIG has informed TRH that it intends to vote its shares of TRH Common Stock
in favor of the adoption of the 2000 Plan.
Your Board of Directors recommends a vote FOR the proposal to approve the
adoption of the 2000 Plan.
III. SELECTION OF INDEPENDENT ACCOUNTANTS
The Audit Committee and the Board of Directors have recommended the
employment of PricewaterhouseCoopers LLP as independent accountants of TRH for
2000. The firm, and its predecessors, has served as TRC's independent
accountants since 1977 and TRH's since 1986. Representatives of the firm are
expected to be present at the Annual Meeting with an opportunity to make a
statement if they desire to do so and to be available to respond to appropriate
questions.
Your Board of Directors recommends a vote FOR the proposal to employ
PricewaterhouseCoopers LLP.
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IV. STOCKHOLDER PROPOSALS FOR 2001 ANNUAL MEETING
All suggestions from stockholders are given careful attention. Proposals
intended to be presented at the 2001 annual meeting, and included in the Proxy
Statement, should be sent to the TRH Secretary at 80 Pine Street, New York, New
York 10005 and must be received by December 6, 2000. In addition, under TRH's
By-laws, stockholders must comply with specified procedures to nominate
directors or introduce an item of business at an annual meeting. Nominations or
an item of business to be introduced at an annual meeting must be submitted in
writing and received by TRH generally not less than 90 days nor more than
120 days in advance of an annual meeting. To be in proper written form, a
stockholder's notice must contain the specific information required by TRH's
By-laws. A copy of TRH's By-laws which describes the advance notice procedures
can be obtained from the TRH Secretary.
V. OTHER MATTERS
While management knows of no other issues, if any other matters properly
come before the meeting, it is the intention of the persons named in the
accompanying proxy form to vote the proxy in accordance with their judgment on
such matters.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any other filing by TRH under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of this Proxy Statement entitled 'Committee Reports on Executive
Compensation' and 'Performance Graph' shall not be deemed to be so incorporated,
unless specifically otherwise provided in such filing.
PROXY SOLICITATION
TRH will bear the cost of this solicitation of proxies. Proxies may be
solicited by mail, personal interview, telephone and telegraph by directors,
their associates and approximately five officers and regular employees of TRH
and its subsidiaries without receiving additional compensation. In addition to
the foregoing, TRH has retained W.F. Doring & Co., Inc. to assist in the
solicitation of proxies for a fee of approximately $3,000 plus reasonable
out-of-pocket expenses and disbursements of that firm. TRH will also reimburse
brokers and others holding stock in their names, or in the names of nominees,
for forwarding proxy materials to their principals.
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APPENDIX A
TRANSATLANTIC HOLDINGS, INC.
2000 STOCK OPTION PLAN (THE 'PLAN')
1. Purpose. The purpose of this Plan is to advance the interests of
Transatlantic Holdings, Inc. ('TRH') by providing certain key employees of TRH
and its subsidiaries, and members of the board of directors of TRH (the
'Board') upon whose judgement, initiative and efforts the successful conduct of
the business of TRH largely depends, with an additional incentive to continue
their efforts on behalf of TRH and its subsidiaries, as well as to attract
people of training, experience and ability to TRH and its subsidiaries.
2. Administration. Except as otherwise provided herein, the Plan shall be
administered by a committee (the 'Committee') of the Board to be drawn solely
from members of the Board who are not and have not been officers of TRH or its
subsidiaries. The Committee shall consist of at least two (2) directors of TRH,
each of which shall be (a) a Nonemployee Director (within the meaning of
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended)
and (b) to the extent necessary for any stock option granted hereunder intended
to qualify as Performance Based Compensation (within the meaning of
Section 162(m)(4)(C) of the Code (as defined below) and the regulations
promulgated thereunder) to so qualify, an Outside Director (within the meaning
of Section 162(m) of the Code and the regulations promulgated thereunder). For
purposes of the preceding sentence, if one or more members of the Committee is
not, in the case of clause (a) of the preceding sentence, a Nonemployee
Director, or, in the case of clause (b) of the preceding sentence, an Outside
Director, and, in either case, recuses himself or herself or abstains from
voting with respect to a particular action taken by the Committee, then the
Committee, with respect to that action, shall be deemed to consist only of the
members of the Committee who have not recused themselves or abstained from
voting. The Committee is authorized, subject to the provisions of the Plan, to
establish such rules and regulations as it deems necessary for the proper
administration of the Plan and to make such determinations and interpretations
and to take such action in connection with the Plan and any stock options
granted thereunder as it deems necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
optionees and on their legal representatives and beneficiaries. The Committee
shall have the authority, in its absolute discretion, to determine which
employees of TRH and its subsidiaries shall receive stock options, the time when
stock options shall be granted, the terms of such options and the number of
shares for which options shall be granted. Notwithstanding anything to the
contrary contained herein, the Board may, in its sole discretion, at any time
and from time to time, grant stock options (including grants to members of the
Board who are not employees of TRH and its subsidiaries) or administer the Plan,
in which case the Board shall have all of the authority and responsibility
granted to the Committee herein.
3. Stock Subject to the Plan. Subject to adjustment as provided in Section 7
hereof, the maximum number of shares that may be issued under the Plan is
1,500,000 shares of the common stock, par value $1.00 per share (the 'Common
Stock') of TRH as such shares shall exist on January 1, 2000 which shares of
Common Stock may, in the discretion of the Committee, be either authorized but
unissued shares or shares previously issued and reacquired by TRH. Upon the
expiration or termination (in whole or in part) of unexercised options, shares
of Common Stock subject thereto shall again be available for issuance under the
Plan.
4. Eligibility. Employees of TRH and its subsidiaries, and members of the
Board, shall be eligible to receive stock options under the Plan. Only employees
shall be eligible to receive stock options that are intended to qualify as
'incentive stock options' within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the 'Code').
5. Grant of Stock Options.
(a) Stock options may be granted to eligible recipients in such number and
at such times during the term of this Plan as the Committee shall determine:
provided, however, that (i) the maximum number of shares of Common Stock as to
which stock options may be granted under this Plan to any one individual in any
one year may not exceed 100,000 shares (as adjusted pursuant to the provisions
of Section 7) and (ii) options to purchase more than 250,000 shares of Common
Stock set forth in Section
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3 above (as adjusted pursuant to the provisions of Section 7) shall not be
granted under this Plan to any one person.
(b) At the time of grant, the Committee shall determine (i) whether all or
any part of a stock option granted to an eligible employee shall be an incentive
stock option and (ii) the number of shares subject to such incentive stock
option. The form of any stock option which is all or in part an incentive stock
option shall clearly indicate that such stock option is an incentive stock
option or, if applicable, the number of shares subject to the incentive stock
option. The aggregate fair market value (determined as of the time the option is
granted) of the stock with respect to which incentive stock options are
exercisable for the first time by an eligible employee during any calendar year
(under all such plans of TRH and of any subsidiary corporation of TRH) shall not
exceed $100,000.
6. Terms and Conditions of Stock Options. All stock options granted under
the Plan shall be in such form as the Committee may from time to time determine
and shall be subject to the following terms and conditions:
(a) Option Price. The option price per share with respect to each stock
option shall be determined by the Committee but shall not be less than 100% of
the fair market value of the Common Stock on the date the stock option is
granted.
(b) Term of Option. In no event shall any stock option be exercisable after
the expiration of 10 years from the date on which the stock option is granted.
(c) Exercise of Stock Option and Payment for Shares. Except as provided in
paragraph (e) of this Section below, the shares covered by each stock option
may not be purchased for one year after the date on which the stock option
is granted, but thereafter may be purchased in such installments as shall
be determined by the Committee at the time the stock option is granted. Any
shares not purchased on the applicable installment date may be purchased
thereafter at any time prior to the final expiration of the stock option. To
exercise a stock option, the optionee shall give written notice to TRH
specifying the number of shares to be purchased and accompanied by payment of
the full purchase price therefor: (i) in cash or by certified or official bank
check, (ii) in shares of Common Stock held by the optionee for at least six
months, valued as of the date of exercise, of the same class as those to be
granted by exercise of the option, or (iii) in a combination of (i) and (ii).
Notwithstanding the foregoing, at the sole discretion of the Committee, upon the
request of the optionee, the Committee may permit, on such other terms and
conditions as the Committee may determine, the deferral of delivery to a date or
dates specified by the optionee of all or some of the shares otherwise
deliverable by TRH to the optionee upon the exercise of the option. The Common
Stock will be valued on the date of exercise at the fair market value as
determined by the Committee. Any person exercising a stock option shall make
such representations and agreements and furnish such information as the
Committee may in its discretion deem necessary or desirable to assure compliance
by TRH, on terms acceptable to TRH, with the provisions of the Securities Act of
1933, as amended, and any other applicable legal requirements. If an optionee so
requests, shares purchased may be issued in the name of the optionee and another
jointly with the right of survivorship.
(d) Non-transferability of Options. No stock option granted under the Plan
shall be transferable by the optionee other than by will or the laws of descent
and distribution, and such stock option shall be exercisable, during his or her
lifetime, only by the optionee.
(e) Termination of Employment. Except as otherwise provided by the
Committee, no part of any stock option granted to an employee (including an
officer) may be exercised after the termination of his or her employment with
TRH and its subsidiaries, except that
(i) if such termination of employment is at or after normal retirement
age or due to disability or death, any portion of a stock option, whether or
not exercisable at the time of such termination, may be exercised by the
optionee (or in case of death by the person or persons to whom the
optionee's rights under such stock option are transferred by will or the
laws of descent and distribution) at any time within the term of the stock
option; and
(ii) if such termination of employment is not at or after normal
retirement age or due to disability or death, with the approval of the
Committee, any portion of a stock option may be
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exercised by the optionee within three months after such termination, but
only to the extent such stock option was exercisable at the time of such
termination.
7. Adjustment in Event of Changes in Capitalization. In the event of a
recapitalization, stock split, stock dividend, combination or exchange of
shares, merger, consolidation, rights offering, separation, spinoff,
extraordinary dividend, reorganization or liquidation, or any other change in
the corporate structure or shares of TRH, subsequent to January 1, 2000, the
Committee shall make such equitable adjustments, designed to protect dilution or
enlargement of rights, as it may deem appropriate, in the number and kind of
shares authorized by the Plan, in the limitations set forth in Section 5(a) and,
with respect to outstanding stock options, in the number and kind of shares
covered thereby and in the option price.
8. Rights as a Stockholder. An optionee shall have no rights as a
stockholder with respect to any shares covered by a stock option until the date
of issuance of a stock certificate for such shares.
9. Withholding Taxes. Whenever shares of Common Stock are to be issued in
satisfaction of stock options granted under the Plan, TRH shall have the right
to require the recipient to remit to TRH an amount sufficient to satisfy all
applicable withholding tax requirements prior to the delivery of any certificate
or certificates for shares.
10. Term of Plan. No stock options shall be granted pursuant to the Plan
after December 31, 2009 but stock options theretofore granted may extend beyond
such date and the terms and conditions of the Plan shall continue to apply
thereto.
11. Choice of Law. THIS PLAN SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
12. Termination or Amendment of Plan. The Board may at any time terminate
the Plan with respect to any shares of Common Stock of TRH not at the time
subject to option, and may from time to time alter or amend the Plan or any part
thereof, provided that no change may be made in any stock option theretofore
granted which would impair the rights of an optionee without the consent of such
optionee, and further, that no alteration or amendment may be made without the
approval of stockholders if such approval is required by applicable law.
13. Approval of Stockholders. The Plan is being adopted as of
January 1, 2000 by the Board subject to approval by the stockholders of
TRH at the 2000 Annual Meeting of Stockholders. Any stock options granted
under the Plan prior to the date of such stockholder approval are expressly
conditioned on such stockholder approval.
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APPENDIX 1
PROXY CARD
PROXY TRANSATLANTIC HOLDINGS, INC. PROXY
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS -- MAY 18, 2000
Maurice R. Greenberg and Robert F. Orlich, and each of them with full power of
substitution, are hereby authorized to represent and vote all shares of common
stock of Transatlantic Holdings, Inc. held of record on March 24, 2000 by the
undersigned at the Annual Meeting of Stockholders to be held on May 18, 2000 and
at any adjournment thereof.
The undersigned hereby revokes any proxy or proxies heretofore given to vote
such stock, and hereby ratifies and confirms all that said attorneys and
proxies, or their substitutes, may do by virtue hereof. If only one attorney and
proxy shall be present and acting, then that one shall have and may exercise all
of the powers of said attorneys and proxies.
The undersigned hereby acknowledges receipt of the notice of said Annual Meeting
of Stockholders, the Proxy Statement relating thereto and the Annual Report for
1999.
The shares represented by this proxy will be voted in accordance with the
specifications made herein. If no specifications are made, such shares will be
voted FOR the election of directors, FOR the proposals described in items 2 and
3, and in their discretion to vote upon any other matters that may properly come
before the meeting.
MANAGEMENT URGES YOU TO SIGN AND RETURN THIS PROXY IMMEDIATELY TO ENSURE ITS
VOTE AT THE ANNUAL MEETING TO BE HELD ON MAY 18, 2000
No postage is required if returned in the enclosed envelope and mailed in the
United States.
(Continued and to be signed on other side.)
<PAGE>
TRANSATLANTIC HOLDINGS, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER, USING DARK INK ONLY. [ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3.
For Withhold For All
All All (Except nominee(s)
written below)
1. ELECTION OF DIRECTORS-- [ ] [ ] [ ]
Nominees: 01-James Balog, 02-C. Fred
Bergsten, 03-Ikuo Egashira, 04-Maurice ----------------------------------
R. Greenberg, 05-John J. Mackowski,
06-Edward E. Matthews, 07-Robert F.
Orlich, 08-Howard I. Smith and
09-Thomas R. Tizzio
For Against Abstain
2. Approval of adoption of the 2000
Stock Option Plan: [ ] [ ] [ ]
For Against Abstain
3. Proposal to select PricewaterhouseCoopers
LLP as independent accountants: [ ] [ ] [ ]
Dated:______________________________ 2000
Signature(s)____________________________________________________________________
________________________________________________________________________________
Signature of stockholder should correspond exactly with the name stenciled
hereon. Joint owners should both sign individually. When signing as attorney,
executor, administrator, trustee or guardian, please give your full title as
such. If a corporation, please sign full corporate name by a duly authorized
officer. If a partnership, please sign partnership name by an authorized person.
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.
