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As filed with the Securities and Exchange Commission on April 16, 1999
Registration No. 333-67125
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE PMI GROUP, INC.
(Exact name of issuer as specified in its charter)
Delaware 94-3199675
(State or jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
601 Montgomery Street,
San Francisco, CA 94111
(800) 288-1970
(Address, including zip code, of
registrant's principal executive office)
Victor J. Bacigalupi
Senior Vice President, General Counsel and Secretary
The PMI Group, Inc.
601 Montgomery Street
San Francisco, CA 94111
(415) 788-7878
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
John E. Aguirre
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Approximate date of commencement of proposed sale to the public: At such time
or times after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: * Estimated on the basis of $54.09375, the
average of the high and low prices of shares on the New York Stock Exchange
on November 10, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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[LOGO]
THE PMI GROUP, INC.
601 MONTGOMERY STREET
SAN FRANCISCO, CA 94111
(800) 288-1970
TRADING SYMBOLS:
NYSE: PMA
PACIFIC EXCHANGE: PMA
PROSPECTUS
800,000 SHARES OF COMMON STOCK
THE PMI GROUP, INC. EQUITY INCENTIVE PLAN
AND
THE PMI GROUP, INC. STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
April 16, 1999
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TABLE OF CONTENTS
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TRANSFERABILITY OF OPTIONS.................................................1
1. Transferability of Options to Permitted Transferees...................1
2. Transferability of Options by Permitted Transferees...................1
3. Effect of Participant's Service on Permitted Transferee's Option......1
THE EQUITY INCENTIVE PLAN..................................................2
INTRODUCTION...............................................................2
4. Purpose of the Plan...................................................2
ADMINISTRATION AND ELIGIBILITY.............................................2
5. Administration of the Plan............................................2
6. Eligibility to Receive Awards.........................................2
STOCK OPTIONS..............................................................2
7. Stock Options.........................................................2
8. Option Agreements.....................................................2
9. Exercise Price........................................................3
10. Exercisability of Options.............................................3
11. Expiration of Options.................................................3
12. Adjustments to Shares.................................................4
13. Reload Options........................................................4
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS......................................4
INTRODUCTION...............................................................4
14. Purpose of the Plan...................................................4
ADMINISTRATION AND ELIGIBILITY.............................................4
15. Administration of the Plan............................................4
16. Eligibility to Participate in the Plan................................5
STOCK OPTIONS..............................................................5
17. Annual Grants of Stock Options........................................5
18. Exercise Price........................................................5
19. Exercisability of Options.............................................5
20. Expiration of Options.................................................6
21. Adjustments to Shares Available Under the Non-Employee Director Plan..6
ADDITIONAL INFORMATION CONCERNING THE PLANS................................6
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TABLE OF CONTENTS
(CONTINUES)
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EXERCISE OF STOCK OPTIONS..................................................6
22. Exercise of Stock Options.............................................6
23. Withholding of Taxes..................................................7
OTHER IMPORTANT INFORMATION................................................7
24. Resale Restrictions...................................................7
26. Future of the Plan....................................................7
TAX AND ERISA INFORMATION..................................................7
27. Federal Income Tax Effects on Plan Participants.......................8
28. Federal Income Tax Effects on Permitted Transferees...................8
29. General Federal Estate and Gift Tax Effects of Options that Have Been
Transferred...........................................................8
30. Tax Effect for PMI....................................................8
31. Not Subject to ERISA..................................................9
USE OF PROCEEDS............................................................9
LEGAL OPINION..............................................................9
EXPERTS....................................................................9
AVAILABLE INFORMATION......................................................9
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE..........................9
INFORMATION ABOUT THIS PROSPECTUS.........................................10
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ABOUT THIS PROSPECTUS
The PMI Group, Inc. is offering up to 800,000 shares of its common stock that
permitted transferees may purchase by exercising transferable stock options that
participants have received from PMI's Equity Incentive Plan and PMI's Stock Plan
for Non-Employee Directors. Throughout this prospectus, the Equity Incentive
Plan is referred to as the EIP and the Stock Plan for Non-Employee Directors is
referred to as the Non-Employee Director Plan.
You are a permitted transferee if you are:
. a member of the participant's immediate family, that is, the participant's
spouse, parents, siblings, children, stepchildren and grandchildren; or
. a trust or other entity established solely for the benefit of the
participant and/or members of the participant's immediate family.
This prospectus gives a summary of the main features of the plans, as of the
date of this prospectus, as they relate to transferable stock options. Please
read this prospectus carefully.
TRANSFERABILITY OF OPTIONS
1. TRANSFERABILITY OF OPTIONS TO PERMITTED TRANSFEREES
Participants generally may transfer nonqualified stock options granted under the
plans
. by will or by the laws of descent and distribution
. if the committee permits, by designating one or more beneficiaries to
receive any vested stock option following his or her death, and
. by transfer to a permitted transferee.
Plan provisions continue to apply to a transferred option. The same limitations
that apply to the original option grant to the participant also apply to you as
a permitted transferee, including those plan provisions relating to expiration,
exercise and cancellation of stock options, except as the plans otherwise
describe or the committee otherwise establishes.
2. TRANSFERABILITY OF OPTIONS BY PERMITTED TRANSFEREES
You cannot further transfer an option except by will or the laws of descent and
distribution. If the committee permits, you may designate one or more
beneficiaries to receive any vested stock option following your death.
3. EFFECT OF PARTICIPANT'S SERVICE ON PERMITTED TRANSFEREE'S OPTION
Because the plans continue to govern transferred options, the participant's
employment or service with PMI continues to affect their exercisability.
Therefore, you should pay close attention to the termination of employment or
service provisions of the plans. For example, you should consider the effect of
termination of employment or service on the vesting or termination of the
transferred option.
The grant of an option under either of the plans does not affect the terms and
conditions of the participant's service with PMI. PMI and its affiliates reserve
the right to terminate a participant's employment or service at any time, with
or without cause.
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THE EQUITY INCENTIVE PLAN
INTRODUCTION
4. PURPOSE OF THE PLAN
The purposes of the EIP are to provide key employees of PMI and its subsidiaries
with an opportunity to acquire PMI stock and to strengthen their commitment to
the success of PMI and their desire to remain employed by PMI and its
subsidiaries. An entity generally is a subsidiary of PMI if PMI owns at least
50% of the entity.
ADMINISTRATION AND ELIGIBILITY
5. ADMINISTRATION OF THE PLAN
The Compensation Committee of the board of directors of PMI administers the EIP.
The committee consists of at least two directors of PMI who are not employees of
PMI or any of its subsidiaries. The members of the committee serve at the
pleasure of the board.
The committee has all discretion and authority necessary to administer the EIP
and to control its operation. For example, the committee has the power to
determine which employees will be granted options, and the terms and conditions
of the options. The committee may make whatever rules for the administration and
interpretation of the EIP. The committee's decisions are final and binding on
all persons.
The board may delegate to another committee of the board part or all of the
committee's authority under the EIP. The other committee may consist of one or
more directors who may be officers or employees of PMI or its subsidiaries.
However, only the committee may grant and administer awards to participants who
must comply with Section 16 of the Securities Exchange Act of 1934.
6. ELIGIBILITY TO RECEIVE AWARDS
Employees of PMI and its subsidiaries are eligible for participation in the EIP.
The committee has complete authority to determine which employees will receive
an option. An individual who receives an option is referred to in this
prospectus as a participant.
STOCK OPTIONS
7. STOCK OPTIONS
An option is a right to purchase a specified number of shares stock for a fixed
price during a prescribed period of time. If the value of the stock increases
above your exercise price during its term, your option will enable you to
acquire the stock at a discount. If the value of the stock does not increase
above your exercise price, you will not recognize an economic benefit from your
option.
The principal benefit of your option is the opportunity to have an economic
interest in the value of the stock during the period in which the option is
exercisable, without risking any of your capital.
The committee has complete discretion to determine the number of shares of stock
subject to each option, except that no single employee may receive options
covering more than a total of 150,000 shares.
8. OPTION AGREEMENTS
If the committee awards a participant an option, PMI will send the participant a
written agreement between PMI and the participant that is called an option
agreement. The option agreement shows the exercise price of the option, the
expiration date of the option, the number of shares
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purchasable with the option, any conditions to exercise of the option, and any
other terms and conditions the committee determines in its discretion. The
option agreement also will specify that the option is intended to be a
nonqualified stock option.
9. EXERCISE PRICE
The exercise price is the price at which you may purchase a share of stock when
you exercise your option.
10. EXERCISABILITY OF OPTIONS
You generally cannot exercise an option immediately. Instead, you will be able
to exercise an option as to a particular number of shares of stock when the
option vests. The participant's option agreement explains the time your option
vests, assuming that the participant satisfies all conditions to vesting, for
example, the participant's continued employment.
The committee, in its discretion, determines the vesting schedule for each
option. However, you generally may not exercise an option during the first year
after its grant. In addition, an option will become fully exercisable upon:
. the participant's termination of employment because of retirement, death or
disability, or
. a change of control that occurs before the participant's termination of
employment, unless the committee determines otherwise.
For purposes of the EIP, retirement means a participant's termination of service
at or after age 65 or a termination of service that PMI or the committee
approves as an early retirement. Disability means a mental or physical
condition which the committee determines
. makes a participant unable to carry out the job responsibilities which the
participant held at the time of the disability, and
. which is expected to be permanent or last indefinitely.
A change of control generally occurs when:
. an individual, entity or group acquires 20% or more of PMI's outstanding
stock except acquisitions from PMI, acquisitions by PMI or acquisitions by
any employee benefit plan that PMI sponsors, or
. the current board of directors of PMI no longer makes up a majority of the
board, unless the current board approves the new directors by at least a
majority vote, or
. a reorganization, a merger, or sale of all or most of PMI's assets, or
. PMI's stockholders approve a complete liquidation or dissolution of PMI.
11. EXPIRATION OF OPTIONS
In general, you cannot exercise an option after the earlier of
. the expiration date stated in the participant's option agreement, or
. twelve years from the date of its grant.
However, an option may terminate even earlier if, for example, the participant's
employment ends before the date on which the option otherwise would have
expired. The option agreement explains specific expiration provisions for each
option. Option expiration provisions may vary for different options and
participants, as the committee determines in its discretion.
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After the committee grants an option, the committee, in its discretion and
subject to the terms of the EIP, may extend the maximum term of the option.
The committee, in its discretion, may at any time elect to cancel all or part of
an option and instead pay the participant cash or stock having a value equal to:
. the number of shares of stock subject to such cancelled option, multiplied
by
. the amount if any by which the fair market value of the stock on the date
of cancellation of the option exceeds the exercise price. If the committee
determines that not making a payment upon the cancellation of an option
would be in the best interests of PMI's stockholders, for example, if PMI
declares bankruptcy, THE COMMITTEE MAY VOID AN OPTION AND DECLARE THAT NO
PAYMENT WILL BE MADE TO THE PARTICIPANT FOR CANCELING THE OPTION. However,
the Committee's determination will not be affected in any way by the cost
of the cancellation payment. This means that if the cost of the
cancellation payment would be large, the Committee will not take this into
account in deciding whether or not to make the payment.
12. ADJUSTMENTS TO SHARES
The committee will adjust the shares of stock available under any outstanding
options if PMI experiences a stock split, stock dividend, recapitalization or
other change to the capital structure of PMI.
13. RELOAD OPTIONS
The committee, in its discretion, may provide in an option agreement that if the
exercise price of the option is paid in stock, the participant will receive a
new option, called a reload option. The reload option will be granted as of the
date that the previously granted option is exercised. The reload option will
cover a number of shares equal to:
. the number of shares of stock tendered used to pay the exercise price of
the previously granted option, plus
. if the committee determines, the number of shares of stock PMI retains for
tax withholding.
Reload options will have an exercise price equal to the fair market value of
stock on the grant date. As provided in the option agreement for each reload
option, the terms and conditions of a reload option generally will be similar to
the terms and conditions that apply to the exercised option.
STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
INTRODUCTION
14. PURPOSE OF THE PLAN
The purpose of the Non-Employee Director Plan is to closely align the interests
of eligible directors with the interests of PMI's stockholders. PMI achieves
this goal by tying a significant portion of director compensation to the
performance of the stock. The Non-Employee Director Plan also is intended to
encourage stock ownership on the part of eligible directors.
ADMINISTRATION AND ELIGIBILITY
15. ADMINISTRATION OF THE PLAN
A committee of the board of directors of PMI administers the Non-Employee
Director Plan. The committee consists of one or more members of the board who
are not eligible to participate in the Non-
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Employee Director Plan. The members of the committee are appointed by PMI's
chief executive officer. The committee has all discretion and authority
necessary or appropriate to administer the Non-Employee Director Plan.
16. ELIGIBILITY TO PARTICIPATE IN THE PLAN
Only non-employee directors are eligible to participate in the Non-Employee
Director Plan. A non-employee director is a member of the board who is not an
employee of PMI or any subsidiary of PMI. Participation in the Non-Employee
Director Plan is automatic; there is no requirement for a non-employee director
to complete an enrollment form or agreement in order to participate in the Non-
Employee Director Plan.
Participation in the Non-Employee Director Plan will end when a participant is
no longer is eligible for the Non-Employee Director Plan. For example,
participation will end when the participant ceases to be a board member, he or
she becomes an employee of PMI or a subsidiary, or the Non-Employee Director
Plan is terminated or amended so that the individual no longer is eligible for
the Non-Employee Director Plan.
STOCK OPTIONS
17. ANNUAL GRANTS OF STOCK OPTIONS
Under the Non-Employee Director Plan, each participant will receive an initial
stock option covering 3,000 shares of stock. Each participant who was on the
board on June 3, 1996, received his or her initial 3,000 share option at that
time. Each participant who first joins the board after June 3, 1996, will
receive his or her initial 3,000 share option on the first business day of June,
either in the year the director first joins the board if he or she joins the
board prior to such first business day, or in the immediately following year if
the director joins the board after the first business day in June.
Each participant who has received an initial option for 3,000 shares of stock
thereafter automatically will receive annual grants of options to purchase 1,500
shares of stock. All such options will be granted on the first business day in
June beginning in the year after the year in which the director receives the
initial 3,000 share option. However, on any scheduled grant date, a Participant
actually will receive an option only if he or she
. still is a participant, and
. has continuously served as a non-employee director since his or her last
option grant.
18. EXERCISE PRICE
The exercise price of each option will equal 100% of the fair market value on
the date of grant of the shares covered by the option. Under the Non-Employee
Director Plan, fair market value is the mean between the highest and lowest sale
prices of the Stock as reported on the New York Stock Exchange.
19. EXERCISABILITY OF OPTIONS
Each option granted to the participant in his or her initial year of board
service, will become exercisable as to 1,000 shares on the first, second and
third anniversaries of the grant date. Each option automatically granted to a
participant after his or her initial year of board service, that is, 1,500
shares, will become fully exercisable on the first anniversary of the applicable
date of grant. In addition, an option will become fully exercisable upon a
participant's death, disability, retirement, resignation or non-reelection to
the board of directors. However, if a participant's service on the board is
terminated for any other reason
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prior to all shares becoming exercisable, the participant will forfeit the
unexercisable shares.
For purposes of the Non-Employee Director Plan, disability means a permanent and
total disability as the committee determines in its discretion by applying non-
discriminatory standards that it adopts.
20. EXPIRATION OF OPTIONS
Options granted to participants normally expire ten years after the date of
grant assuming the director remains on the board for the entire period of ten
years. If a participant terminates service on the board prior to an option's
normal expiration date, the period of exercisability of the option will vary
depending upon the reason for the termination. You may exercise an option for up
to:
. three months following the participant's termination of service prior to
age 70 for any reason other than death or disability, subject to the
committee's discretion to extend this three-month period to a maximum of
ten years,
. five years following the participant's termination of service at or after
age 70 for any reason other than death or disability, and
. two years following the participant's termination of service due to the
participant's disability. You must exercise the option before the normal
expiration date. In the event of the participant's death, you may exercise
an option for up to two years from the date of death, regardless of the
original expiration date of the option.
21. ADJUSTMENTS TO SHARES AVAILABLE UNDER THE NON-EMPLOYEE DIRECTOR PLAN
The committee may adjust the number of shares of stock available under the Non-
Employee Director Plan, any outstanding stock options and the number of shares
and options to be granted to individual directors in the future. The committee
may make adjustments to reflect any stock splits, stock dividends,
recapitalizations, or other changes to the capital structure of PMI.
ADDITIONAL INFORMATION CONCERNING THE PLANS
EXERCISE OF STOCK OPTIONS
22. EXERCISE OF STOCK OPTIONS
You may exercise an option by signing and delivering a notice of exercise form
to PMI's Human Resources Department accompanied by full payment of the exercise
price.
You must pay the exercise price in full in cash at the time of exercise.
However, the committee, in its discretion, may permit payment of the exercise
price by the tender of previously acquired stock having an aggregate fair market
value at the time of exercise equal to the total exercise price, or such other
means as the committee may approve in its discretion.
As soon as practicable after receipt of the notice of exercise and full payment
for the stock purchased, PMI will deliver to you a share certificate which may
be in book-entry form representing the stock.
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23. WITHHOLDING OF TAXES
Upon your exercise of a transferred option, the participant is responsible for
paying federal, state or local withholding taxes. PMI may withhold or require
the participant to remit to PMI money to cover federal, state, and local taxes,
including any applicable FICA taxes upon exercise of a transferred option. Once
your exercise is completed, stock certificates for the shares will be delivered
to you.
The committee, in its discretion, may permit a participant to satisfy any tax
withholding obligation, in whole or in part, by electing to have PMI withhold
otherwise deliverable stock having a value equal to the amount required to be
withheld or by delivering to PMI already-owned stock in order to satisfy the
withholding requirement. PMI will consider the amount of the withholding
requirement to include any amount which the committee agrees may be withheld at
the time the election is made, not to exceed the amount determined by using the
maximum federal, state or local marginal income tax rates applicable to the
participant on the date that the amount of tax to be withheld is to be
determined. The value of the stock that PMI withholds or the participant
delivers will be based on their fair market value on the date that the taxes are
required to be withheld.
OTHER IMPORTANT INFORMATION
24. RESALE RESTRICTIONS
The committee may impose restrictions on stock acquired from the exercise of
options, including, but not limited to, restrictions relating to federal
securities laws, the requirements of any national securities exchange or system
upon which stock then is listed or traded, or any blue sky or state securities
laws.
The plans generally do not restrict your ability to sell or otherwise transfer
stock acquired under the plans through the exercise of a stock option.
26. FUTURE OF THE PLAN
The board of directors generally may amend, suspend or terminate the plans, or
any part of the plans, at any time and for any reason. However, in some cases
PMI's stockholders must approve material amendments to the plans, for example,
if additional shares are added to the plans.
TAX AND ERISA INFORMATION
The following discussion is intended only as a summary of:
. the general federal income tax consequences of nonqualified stock options
granted under the plans, and the disposition of any stock acquired under
the plans, and
. the general federal income and federal estate and gift tax consequences of
nonqualified stock options that have been transferred under the plans.
However, please note that the federal, state and local tax consequences to any
particular taxpayer will depend upon his or her individual circumstances.
Accordingly, each participant and you are advised to seek the advice of a
qualified tax adviser regarding his or her participation in the plans. In
addition, prior to transferring an option, the participant should consult his or
her personal tax advisor on the federal and state tax consequences of
transferring a stock option, including federal and state estate and gift tax
consequences.
The following discussion assumes that the per share exercise price of an option
is less
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than the fair market value of a share on the date of exercise.
27. FEDERAL INCOME TAX EFFECTS ON PLAN PARTICIPANTS
Participants who hold nonqualified stock options will not have to include any
amount in income at the time of grant but will have ordinary income upon the
exercise of such options to the extent the value on the date of exercise of the
stock and any cash received exceeds the exercise price paid for such stock.
Participants who exercise nonqualified stock options through payment of the
exercise price in stock, or in a combination of stock and cash, will have
ordinary income upon such exercise to the extent that the value on the date of
exercise of the stock purchased exceeds the value of the stock surrendered, less
the amount of any cash paid upon such exercise.
Any gain or loss recognized upon the sale or exchange of stock acquired
generally will be treated as capital gain or loss and will be long-term or
short-term depending on whether the stock has been held for more than one year.
The holding period for the stock will begin just after the time the participant
recognizes income. The amount of such gain or loss will be the difference
between the amount realized upon the sale or exchange of the shares and the
value of the stock at the time income is recognized.
Participants who transfer a nonqualified stock option will not recognize income
at the time of transfer. At the time you exercise the option, the participant
will recognize ordinary income in an amount equal to the excess of the fair
market value of the shares of stock received over the exercise price paid for
this stock. If you exercise an option after the death of a participant, the
participant's estate will recognize ordinary income.
28. FEDERAL INCOME TAX EFFECTS ON PERMITTED TRANSFEREES
You will not recognize income when the participant transfers the option or when
you exercise the option. The tax basis for the shares of stock in your hands
will be the exercise price paid for the option plus the amount of ordinary
income recognized by the participant at the time of exercise. If you later sell
the stock acquired upon exercise, any gain or loss recognized upon the sale or
exchange of stock you have held will be treated as capital gain or loss and will
be long-term or short-term, depending on whether the stock has been held for
more than one year.
29. GENERAL FEDERAL ESTATE AND GIFT TAX EFFECTS OF OPTIONS THAT HAVE BEEN
TRANSFERRED
If a participant transfers an option to you as a completed gift, the participant
may have gift tax liability. Whether the participant will owe gift tax depends
upon whether the participant has exhausted his or her applicable credit which
currently effectively exempts from gift tax the first $625,000 of gifts made
during the participant's lifetime or whether the transfer qualifies for the
annual $10,000 per-donee gift tax exclusion. Once the gift is complete, there
generally is no further estate or gift tax liability for the participant, either
when you exercise the option or later dispose of the stock acquired after
exercising the transferred option.
The Internal Revenue Service has recently ruled that the transfer of a option is
not a completed gift until the option has vested. If the transfer of an option
is incomplete, the option generally will be treated for estate tax purposes as
through it had not been transferred.
30. TAX EFFECT FOR PMI
PMI will receive a deduction for federal income tax purposes in connection with
an
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option granted under the plans only in an amount equal to the ordinary income
realized by the participant and only if applicable withholding requirements are
met.
In addition, the Internal Revenue Code contains special rules regarding the
federal income tax deductibility of compensation paid to PMI's chief executive
officer and to each of the other four most highly compensated executive
officers. In general, PMI may deduct compensation paid to any of these
executives only to the extent that it does not exceed $1 million during any
calendar year. However, PMI can preserve the deductibility of compensation in
excess of this $1 million limit if it complies with conditions found in the
Internal Revenue Code. PMI designed the EIP to permit the committee to grant
options which PMI may fully deduct.
31. NOT SUBJECT TO ERISA
The provisions of the Employee Retirement Income Security Act of 1974 do not
apply to the plans. This means that ERISA's safeguards are not available to
you. For example, ERISA contains anti-alienation provisions which prohibit plan
benefits from being assigned or alienated except in narrow circumstances.
ERISA's anti alienation provisions do not apply to options transferred under the
plans.
USE OF PROCEEDS
PMI intends to use the net proceeds from the exercise of stock options for
general corporate purposes.
LEGAL OPINION
Orrick, Herrington & Sutcliffe LLP has reviewed the validity of the stock
issuable under the plans to permitted transferees.
EXPERTS
The financial statements and the related financial statement schedules
incorporated in this prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1997 have been audited by Deloitte and
Touche LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance upon
the reports of such firm given upon their authority as experts in accounting and
auditing.
AVAILABLE INFORMATION
PMI files annual, quarterly and current reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information PMI files at the SEC's public
reference rooms in 450 5th Street, Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. PMI filings with the SEC are also available to
the public from commercial document retrieval services and at the website
maintained by the SEC at "http://www.sec.gov."
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows PMI to "incorporate by reference" the information it files with
the SEC, which means that PMI can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. PMI incorporates by reference
the documents
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listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Securities Exchange Act of 1934.
1. PMI's annual report on Form 10-K for the year ended December 31, 1997.
2. Quarterly reports on Form 10-Q for the quarters ended March 31, June 30,
and September 30, 1998.
3. The description of PMI's common stock contained in PMI's registration
statement on Form 8-A, filed under the Securities Exchange Act of 1934 on
April 5, 1995.
PMI will provide free of charge to each person to whom a copy of this prospectus
is delivered on oral or written request, a copy of any of the documents
incorporated by reference in this prospectus and in the registration statement
on Form S-3 filed with the SEC relating to the plans. For example, PMI will
provide PMI's annual report, copies of other reports, proxy statements and
communications distributed to PMI's stockholders. However, PMI will not provide
any exhibits to these documents. Requests should be directed to:
Investor Relations Department
The PMI Group, Inc.
601 Montgomery Street
San Francisco, CA 94111
Telephone: (415) 291-6429
Copies of this prospectus, any supplements to the prospectus, and further
information concerning the plans and its administration are available free of
charge on oral or written request to:
Human Resources Department
The PMI Group, Inc.
601 Montgomery Street
San Francisco, CA 94111
Telephone: (415) 291-6345
INFORMATION ABOUT THIS PROSPECTUS
You should rely only on the information incorporated by reference or provided in
this prospectus or any prospectus supplement. PMI has not authorized anyone to
provide you with different or additional information. PMI is not making an offer
to sell any stock in any state or country where the offer is not permitted. You
should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of this
document.
This prospectus may be updated in the future by furnishing to participants or
you an appendix, memorandum, notice or replacement page containing such updated
information. New prospectuses will not be delivered, except upon request.
Accordingly, you should keep this prospectus for future reference.
10
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses relating to the registration of shares will be borne by the
registrant. Such expenses are estimated to be as follows:
<TABLE>
<S> <C>
Registration Fee - Securities and Exchange $12,031
Commission
Accountants' Fees and Expenses $ 3,500
Legal Fees and Expenses $ 7,200
Miscellaneous Expenses $ 4,000
-------
Total $26,731
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law, inter alia,
empowers a Delaware corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than an action by or in the right of the corporation)
by reason of the fact that such person is or was a director, officer, employee
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit or proceeding if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Similar indemnity is authorized for such person against expenses (including
attorneys' fees) actually and reasonably incurred in connection with the defense
or settlement of any such threatened, pending or completed action or suit if
such person acted in good faith and in a manner he or she reasonably believed to
be in or not opposed to the best interests of the corporation, and provided
further that (unless a court of competent jurisdiction otherwise provides) such
person shall not have been adjudged liable to the corporation. Any such
indemnification may be made only as authorized in each specific case upon a
determination by the stockholders or disinterested directors or, if there are no
disinterested directors, or if such disinterested directors so direct, by
independent legal counsel in a written opinion that indemnification is proper
because the indemnitee has met the applicable standard of conduct.
Section 145 further authorizes a corporation to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another corporation or enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would otherwise have the power to indemnify him under Section 145. The Company
maintains policies
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<PAGE>
insuring its and its subsidiaries' officers and directors against certain
liabilities for actions taken in such capacities, including liabilities under
the Securities Act of 1933.
Article V of the By-laws of the Company provides for indemnification
of the directors and officers of the Company to the fullest extent permitted by
law, as now in effect or later amended. In addition, the By-laws provide for
indemnification against expenses incurred by a director or officer to be paid by
the Company in advance of the final disposition of such action, suit or
proceeding; provided, however, that if required by the Delaware General
Corporation Law, an advancement of expenses will be made only upon receipt of an
undertaking by or on behalf of the director or officer to repay such amount if
it shall be ultimately determined that he is not entitled to be indemnified by
the Company. The By-laws further provide for a contractual cause of action on
the part of directors and officers of the Company with respect to
indemnification claims which have not been paid by the Company.
The Company also has provided liability insurance for each director
and officer for certain losses arising from claims or charges made against them
while acting in their capacities as directors or officers of the Company.
The Company has entered into indemnification agreements with its
directors and executive officers that require the Company to indemnify such
persons against all expenses (including attorneys' fees and amounts paid in
settlement), judgments, fines and penalties which are actually incurred in
connection with any threatened, pending or completed action, suit or other
proceeding (including an action by or in the right of the Company) to which such
person is, was or is threatened to be made a party, by reason of the fact that
such person is or was a director or officer of the Company, or is or was serving
at the request of the Company as a director, officer, employee or other agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, to the fullest extent permitted by applicable law and the
Company's Restated Certificate of Incorporation and By-laws. The indemnification
agreements also set forth certain procedures that will apply in the event of a
claim for indemnification thereunder.
Article Nine of the Company's Restated Certificate of Incorporation
limits to the fullest extent permitted by the Delaware General Corporation Law,
as the same exists or may have been amended, the personal liability of the
Company's directors to the Company or its stockholders for monetary damages for
a breach of their fiduciary duty as directors. Section 102(b)(7) of the Delaware
General Corporation Law currently provides that such provisions do not eliminate
or limit the liability of a director (i) for a breach of the director's duty of
loyalty to the Company or its stockholders, (ii) for acts or omissions not in
good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law (relating
to the declaration of dividends and purchase or redemption of shares in
violation of the Delaware General Corporation Law), or (iv) for any transaction
from which the director derived an improper personal benefit.
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<PAGE>
ITEM 16. EXHIBITS.
4.1 Restated Certificate of Incorporation of The PMI Group, Inc. (incorporated
by reference to Exhibit 3.1 to the registrant's Registration Statement on
Form S-1, Commission File No. 33-88542).
4.2 By-Laws of The PMI Group, Inc. (incorporated by reference to Exhibit 3(ii)
to the registrant's report on Form 8-K, Commission File No. 001-13664,
filed with the Commission on September 29, 1998).
4.3 The PMI Group, Inc. Equity Incentive Plan, as amended (incorporated by
reference to Exhibit 10.2 of the registrant's Quarterly Report on Form 10-
Q, Commission File No. 001-13664, filed with Commission on August 13, 1998
and Exhibit 4.3 of the registrant's Registration Statement on Form S-3,
Commission File No. 333-67125, filed with the Commission on November 12,
1998).
4.4 Form of The PMI Group, Inc. Equity Incentive Plan Nonqualified Stock Option
Agreement (incorporated by reference to Exhibit 4.4 of the registrant's
Registration Statement on Form S-3, Commission File No. 333-67125, filed
with the Commission on November 12, 1998).
4.5 The PMI Group, Inc. Stock Plan for Non-Employee Directors, as amended
(incorporated by reference to Exhibit 10.3 of the registrant's Quarterly
Report on Form 10-Q, Commission File No. 001-13664, filed with Commission
on August 13, 1998 and Exhibit 4.5 of the registrant's Registration
Statement on Form S-3, Commission File No. 333-67125, filed with the
Commission on November 12, 1998).
4.6 Form of The PMI Group, Inc. Stock Plan for Non-Employee Directors
Nonqualified Stock Option Agreement (incorporated by reference to Exhibit
4.6 of the registrant's Registration Statement on Form S-3, Commission File
No. 333-67125, filed with the Commission on November 12, 1998).
5.1 Opinion of Orrick, Herrington & Sutcliffe LLP (incorporated by reference to
Exhibit 5.1 of the registrant's Registration Statement on Form S-3,
Commission File No. 333-67125, filed with the Commission on November 12,
1998).
23.1 Consent of Deloitte & Touche LLP, Independent Auditors (incorporated by
reference to Exhibit 23.1 of the registrant's Registration Statement on
Form S-3, Commission File No. 333-67125, filed with the Commission on
November 12, 1998).
23.2 Consent of Orrick, Herrington & Sutcliffe LLP (incorporated by reference to
Exhibit 5.1 of the registrant's Registration Statement on Form S-3,
Commission File No. 333-67125, filed with the Commission on November 12,
1998).
24.1 Power of Attorney of Directors (previously filed on p. ii-6).
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<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933 each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of the
Plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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<PAGE>
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE>
Signatures
THE REGISTRANT
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the Registration Statement (File No. 333-67125) to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of San
Francisco, State of California on the 12th day of April, 1999.
THE PMI GROUP, INC.
(Registrant)
/s/ Victor J. Bacigalupi
- -----------------------------
Victor J. Bacigalupi
Senior Vice President, General Counsel and Secretary
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
Principal Executive Officer:
*
- ------------------------------
W. Roger Haughton Chief Executive Officer April 12, 1999
Principal Financial Officer:
/s/ John M. Lorenzen, Jr.
- ------------------------------
John M. Lorenzen, Jr. Executive Vice April 12, 1999
President and Chief
Financial Officer
Principal Accounting Officer:
/s/ William A. Seymore.
- ------------------------------
William A. Seymore Vice President April 12, 1999
and Controller
*By /s/ Victor J. Bacigalupi
-------------------------
Victor J. Bacigalupi
Attorney-in-Fact
</TABLE>
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<PAGE>
EXHIBIT INDEX
4.1 Restated Certificate of Incorporation of The PMI Group, Inc. (incorporated
by reference to Exhibit 3.1 to the registrant's Registration Statement on
Form S-1, Commission File No. 33-88542).
4.2 By-Laws of The PMI Group, Inc. (incorporated by reference to Exhibit 3(ii)
to the registrant's report on Form 8-K, Commission File No. 001-13664,
filed with the Commission on September 29, 1998).
4.3 The PMI Group, Inc. Equity Incentive Plan, as amended (incorporated by
reference to Exhibit 10.2 of the registrant's Quarterly Report on Form 10-
Q, Commission File No. 001-13664, filed with Commission on August 13, 1998
and Exhibit 4.3 of the registrant's Registration Statement on Form S-3,
Commission File No. 333-67125, filed with the Commission on November 12,
1998).
4.4 Form of The PMI Group, Inc. Equity Incentive Plan Nonqualified Stock Option
Agreement (incorporated by reference to Exhibit 4.4 of the registrant's
Registration Statement on Form S-3, Commission File No. 333-67125, filed
with the Commission on November 12, 1998).
4.5 The PMI Group, Inc. Stock Plan for Non-Employee Directors, as amended
(incorporated by reference to Exhibit 10.3 of the registrant's Quarterly
Report on Form 10-Q, Commission File No. 001-13664, filed with Commission
on August 13, 1998 and Exhibit 4.5 of the registrant's Registration
Statement on Form S-3, Commission File No. 333-67125, filed with the
Commission on November 12, 1998).
4.6 Form of The PMI Group, Inc. Stock Plan for Non-Employee Directors
Nonqualified Stock Option Agreement (incorporated by reference to Exhibit
4.6 of the registrant's Registration Statement on Form S-3, Commission File
No. 333-67125, filed with the Commission on November 12, 1998).
5.2 Opinion of Orrick, Herrington & Sutcliffe LLP (incorporated by reference to
Exhibit 5.1 of the registrant's Registration Statement on Form S-3,
Commission File No. 333-67125, filed with the Commission on November 12,
1998).
23.1 Consent of Deloitte & Touche LLP, Independent Auditors (incorporated by
reference to Exhibit 23.1 of the registrant's Registration Statement on
Form S-3, Commission File No. 333-67125, filed with the Commission on
November 12, 1998).
23.2 Consent of Orrick, Herrington & Sutcliffe LLP (incorporated by reference to
Exhibit 5.1 of the registrant's Registration Statement on Form S-3,
Commission File No. 333-67125, filed with the Commission on November 12,
1998).
24.1 Power of Attorney of Directors (previously filed on p. ii-6).
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