<PAGE>
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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
The PMI Group, 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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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Notes:
<PAGE>
INVITATION TO ANNUAL MEETING
OF STOCKHOLDERS
[LOGO]
THE PMI GROUP, INC.
April 20, 2000
Dear Stockholder,
You are cordially invited to attend the 2000 Annual Meeting of Stockholders
of The PMI Group, Inc. to be held on Thursday, May 18, 2000, at 9:00 a.m.,
Pacific Time. The Meeting will be held on the 17th floor at our headquarters
located at 601 Montgomery Street, San Francisco, California.
We look forward to greeting as many of our stockholders as are able to be
with us. As explained in the accompanying Notice of Annual Meeting of
Stockholders and Proxy Statement, the purposes of the Meeting are the election
of Directors and ratification of the appointment of Ernst & Young LLP as
independent auditors for 2000. Your Board of Directors unanimously recommends
that you vote FOR the nominees for Director identified in the proxy statement
and FOR ratification of the appointment of Ernst & Young LLP At the Meeting,
we will report on our business, and there will be an opportunity for you to
ask questions.
WHETHER OR NOT YOU EXPECT TO ATTEND, TO ENSURE YOUR REPRESENTATION AT THE
MEETING AND THE PRESENCE OF A QUORUM, PLEASE COMPLETE, DATE, SIGN AND MAIL THE
ENCLOSED PROXY PROMPTLY. STOCKHOLDERS OF RECORD MAY ALSO GIVE THEIR PROXY BY
TELEPHONE IN ACCORDANCE WITH THE INSTRUCTIONS ACCOMPANYING THE PROXY CARD. ANY
PERSON GIVING A PROXY HAS THE POWER TO REVOKE IT AT ANY TIME, AND STOCKHOLDERS
WHO ARE PRESENT AT THE MEETING MAY WITHDRAW THEIR PROXIES AND VOTE IN PERSON.
/s/ W. Roger Haughton
W. Roger Haughton
Chairman of the Board of Directors and
Chief Executive Officer
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the Annual Meeting of the Stockholders
("Meeting") of The PMI Group, Inc. ("TPG"), a Delaware corporation, will be
held on Thursday, May 18, 2000, at 9:00 a.m., Pacific Time, at 601 Montgomery
Street, 17th Floor, San Francisco, California, for the following purposes:
1. To elect ten Directors, each to serve for a term as described in the
accompanying Proxy Statement;
2. To ratify the appointment of Ernst & Young LLP as independent auditors
for 2000; and
3. To transact such other business as may properly before the Meeting.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on March 31, 2000, are
entitled to notice of and to vote at the Meeting and any adjournment or
postponement thereof.
By Order of the Board of Directors
/s/ Victor J. Bacigalupi
Victor J. Bacigalupi
Executive Vice President
General Counsel and Secretary
April 20, 2000
YOUR VOTE IS IMPORTANT. PLEASE PROMPTLY COMPLETE,
SIGN, DATE AND RETURN YOUR PROXY CARD.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Voting...................................................................... 1
Proposal--election of directors............................................. 2
Committee and meetings of the board of directors............................ 5
Security ownership of certain beneficial owners and management.............. 7
Executive compensation...................................................... 9
Compensation committee report on executive compensation..................... 14
Performance graph........................................................... 17
Compensation committee interlocks........................................... 18
Section 16(a) beneficial ownership reporting compliance..................... 18
Certain relationships and related transactions.............................. 18
Proposal--ratification of independent auditors.............................. 18
Other matters............................................................... 18
</TABLE>
<PAGE>
PROXY STATEMENT
This Proxy Statement and the accompanying proxy are being mailed on or about
April 20, 2000, in connection with the solicitation of proxies on behalf of
the Board of Directors of The PMI Group, Inc. ("TPG"), a Delaware corporation,
for use at the Annual Meeting of Stockholders to be held at 9:00 a.m., Pacific
Time, May 18, 2000, at 601 Montgomery Street, 17th Floor, San Francisco,
California and at any adjournment or postponement thereof (the "Meeting").
TPG's principal executive office is located at 601 Montgomery Street, San
Francisco, California 94111. The telephone number at that address is (415)
788-7878.
RECORD DATE AND SHARES OUTSTANDING. The record date for determining
stockholders entitled to notice of, and to vote at the Meeting is March 31,
2000, (the "Record Date"). As of that date, approximately 44,104,242 shares of
common stock were outstanding.
REVOCABILITY OF PROXIES. Proxies are revocable by written notice to the
Secretary of TPG at any time prior to their exercise stating that the proxy is
revoked and may also be revoked by signing and delivering a proxy with a later
date or by attending the Meeting and voting in person.
VOTING AND SOLICITATION. For each matter that may come before the Meeting,
every stockholder will be entitled to one vote for each share of common stock
registered in the stockholder's name on the Record Date. The Chairman of the
Board will announce the closing of the polls during the Annual Meeting.
Proxies must be received prior to the closing of the polls in order to be
counted. Instead of submitting a signed proxy card, stockholders may submit
their proxies by telephone using the control number and instructions
accompanying the proxy card. Telephonic voting may not be available to
stockholders who hold their shares through a broker, nominee, fiduciary or
other custodian. The enclosed proxy is solicited by the Board of Directors of
TPG. If the proxy is properly executed and returned, and choices are
specified, the shares represented thereby will be voted at the Meeting in
accordance with those instructions. If no choices are specified, a properly
executed proxy will be voted as follows:
FOR -- election to the Board of the ten individuals nominated by the Board
of Directors; and
FOR -- ratification of the appointment of Ernst & Young LLP as independent
auditors for 2000.
Any other business that may properly come before the meeting will be voted
in the discretion of the proxy holder.
The ten nominees who receive the most votes will be elected to the ten open
directorships even if they get less than a majority of the votes. For approval
of the appointment of Ernst & Young LLP as auditors (Item 2), more shares must
be voted "for" than "against" such proposal.
Votes cast by proxy or in person at the Meeting will be counted by the
persons appointed by TPG to act as election inspectors for the Meeting. The
election inspectors will treat abstentions as shares that are present and
entitled to vote for purposes of determining the presence of a quorum.
While there is no definitive statutory or case law authority in Delaware as
to the proper treatment of abstentions, the Company believes that abstentions
should be counted for purposes of determining both (i) the presence or absence
of the quorum for the transaction of business and (ii) the total number of
votes cast with respect to an Item. Accordingly, abstentions will have the
same effect as a vote against Item 2. Broker non-votes (that is, if the broker
holding shares of a stockholder in street name does not vote with respect to
an item) will be counted for purposes of determining the presence or absence
of a quorum for the transaction of business, but will not be counted for
purposes of determining the number of votes cast with respect to Item 2.
1
<PAGE>
The cost of this solicitation will be borne by TPG. MacKenzie Partners,
Inc., has been retained by TPG to assist in the solicitation of proxies at an
estimated fee of $4,500 plus reimbursement of reasonable expenses. In
addition, TPG may reimburse brokerage firms and other persons representing
beneficial owners of shares for their expenses in forwarding solicitation
material to such beneficial owners. Proxies also may be solicited by certain
of TPG's Directors, officers and employees, personally or by telephone or
telegram, without additional compensation.
TPG's Annual Report to Stockholders for the fiscal year ended December 31,
1999, has been mailed with this document. Stockholders should refer to that
Annual Report for financial and other information about the activities of TPG.
However, the Annual Report to Stockholders is not incorporated by reference
into this Proxy Statement and is not to be deemed a part of this Proxy
Statement.
ITEM 1: ELECTION OF DIRECTORS
NOMINEES FOR ELECTION. A board of ten Directors is to be elected at the
Meeting. Unless otherwise instructed, the proxy holders will vote the proxies
received by them for the ten nominees named below. All of the nominees are
presently Directors of TPG. Each person elected shall serve a one-year term as
a Director until the next Annual Meeting or until a successor is duly elected
and qualified or until his or her earlier death, resignation or removal.
DR. JAMES C. CASTLE
DONALD C. CLARK
W. ROGER HAUGHTON
WAYNE E. HEDIEN
RAYMOND L. OCAMPO JR.
JOHN D. ROACH
DR. KENNETH T. ROSEN
RICHARD L. THOMAS
MARY LEE WIDENER
RONALD H. ZECH
Stockholder Vote Required. Directors shall be elected by a plurality of the
votes cast at the Meeting. Only votes cast for a nominee will be counted.
Votes cast include votes under proxies that are signed, but that do not have
contrary voting instructions. Broker non-votes, abstentions and instructions
on the accompanying proxy card to withhold authority to vote for one or more
of the nominees will be disregarded in the calculation of a plurality of the
votes cast. TPG's bylaws and proxy rules promulgated by the Securities and
Exchange Commission provide stockholders may submit nominations for Directors
at an Annual Meeting if they comply with such requirements. Any stockholder
submitted nomination for director must have been delivered to or mailed and
received by TPG's Secretary at TPG's principal executive offices not later
than the close of business on the 90th day, nor earlier than the close of
business on the 120th day, prior to the first anniversary of the preceding
year's annual meeting to be considered timely. Any nomination not timely
received will not be considered.
Each nominee has consented to being named in this Proxy Statement and has
indicated a willingness to serve if elected. However, if at the Annual Meeting
any of the nominees named above is not available to serve as a Director (an
event that the Board of Directors does not anticipate), the proxies will be
voted for the election as Directors for such other person or persons as the
proxy holders may designate, unless the Board of Directors, in its discretion,
reduces the number of Directors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
NOMINEES NAMED ABOVE, AND UNLESS A STOCKHOLDER GIVES INSTRUCTIONS ON THE PROXY
CARD TO THE CONTRARY, THE PROXY WILL BE VOTED FOR THE NOMINEES.
2
<PAGE>
Nominees for Director
Set forth below for each nominee is certain information, including age as of
April 1, 2000, principal occupation, business experience for at least the past
five years, the first year elected a Director, and the Committees of the Board
of Directors on which each Director serves, which is based on data furnished
by them.
Dr. James C. Castle, 63, has been a Director since May 1997. He is currently
Chairman and Chief Executive Officer of USCS International, Inc., a leading
provider of customer management software and statement presentment services to
the global communications industry, positions he has held since joining the
company in August 1992. On December 21, 1998, USCS became a wholly owned
subsidiary of DST Systems, Inc. Prior to joining USCS International Inc., Dr.
Castle served as Chief Executive Officer and Director of Teradata Corporation
from August 1991 through April 1992. Dr. Castle is also on the boards of
directors of DST Systems, Inc., PAR Technology Corp., ADC Telecommunications,
Inc. and Leasing Solutions, Inc. He is Vice Chair of the Audit Committee.
Donald C. Clark, 68, has been a Director since May 1996. Mr. Clark joined
Household International, Inc., a major consumer financial services company, in
1955 and has held a number of managerial and executive positions with that
company. He was elected to the board of directors of Household International,
Inc., in 1974, President in 1977, Chief Executive Officer in 1982 and Chairman
of the Board in 1984. In 1994, he relinquished the title of Chief Executive
Officer and in 1996 he relinquished the title of Chairman and retired. He is
also on the boards of directors of Armstrong World Industries, Inc., Warner-
Lambert Company and is Chairman of the Board of Trustees of Clarkson
University and Life Trustee of Northwestern University. He is a member of the
Audit Committee and a member of the Governance and Nominating Committee.
W. Roger Haughton, 52, has been Chairman of the Board of TPG since May 1998
and has been a Director and Chief Executive Officer since January 1995. Mr.
Haughton was President of TPG from January 1995 until September 1998. Mr.
Haughton has been Chairman of PMI Mortgage Insurance Co. ("PMI") since May
1995 and has been Chief Executive Officer and President of PMI since January
1993. Mr. Haughton joined PMI in 1985 as Vice President of Underwriting, after
16 years with Allstate Insurance Company ("Allstate"). In 1987, he was
promoted to Vice President/General Manager for PMI's Central Zone, responsible
for all sales and field office operations in that region. In 1989, he became
Group Vice President of Insurance Operations, Claims, Underwriting and
Actuarial Services departments. Mr. Haughton has a long history of active
volunteerism with various affordable housing organizations, including Habitat
for Humanity, and serves as chairman of the board of Social Compact. He is an
Ex Officio member of the Governance and Nominating Committee
Wayne E. Hedien, 66, has been a Director since January 1995 and was a
Director of PMI between February 1983 and May 1990 and between April 1992 and
January 1995. Mr. Hedien was the Chairman of the Board of Allstate Insurance
Company ("Allstate") from July 1989 through December 1994 and was elected to
the same position with The Allstate Corporation in March 1993 in preparation
for The Allstate Corporation's initial public offering. He held a variety of
senior executive positions with Allstate and its affiliates prior to his
retirement from Allstate in December 1994. He is also on the board of
directors of the Morgan Stanley Dean Witter Funds. He is Chair of the
Governance and Nominating Committee and a member of the Compensation
Committee.
Raymond L. Ocampo Jr., 47, has been a Director since May 1999. He has been
Chair of the Berkeley Center for Law & Technology since January 2000 and
Executive Director of the Center from August 1997--December 1999. Before
joining the Berkeley Center for Law & Technology, Mr. Ocampo was Senior Vice
President, General Counsel & Secretary at Oracle Corporation, a leading
Internet and software company, from September 1990 until his retirement. Mr.
Ocampo joined Oracle in July 1986 and held various senior and executive
positions with Oracle until his retirement in November 1996. Mr. Ocampo is a
member of the boards of directors of Blackboard Entertainment Inc.,
HolaMujer.com (a web portal directed at Latina women in the U.S. and Latin
America), Syncronex, Inc. (a workforce directory and portal), and Teamscape
Corporation
3
<PAGE>
(an e-learning infrastructure company). He is also on the boards of advisors
of Spruce Technologies, Inc. (a DVD authoring software company), Advanced
Mobile Solutions (a designer and manufacturer of peripheral products for
cellular phones) and FindLaw.com (the leading legal search portal). He is a
member of the Audit Committee.
John D. Roach, 56, has been a Director since May 1997. Mr. Roach is the
Chairman, President and Chief Executive Officer of Builders FirstSource,
positions he has held since October 1997. Builders FirstSource, formerly known
as Stonegate Resources, is an entity formed to acquire and operate companies
in the building products industry. Prior to joining Builders FirstSource, Mr.
Roach was the Chairman, President and Chief Executive Officer of Fibreboard
Corporation, between July 1991 and July 1997. Prior to joining Fibreboard
Corporation, Mr. Roach was Executive Vice President of Manville Corporation
between 1988 until he left the company in July 1991. Manville Corporation is a
manufacturer of building products, paperboard packaging, fiberglass and
industrial minerals. Mr. Roach first joined Manville Corporation in April 1987
and served as Senior Vice President and Chief Financial Officer between 1987
until 1988. Prior to joining Manville, Mr. Roach was a strategy consultant and
Vice Chairman of Braxton Associates; Vice President and Managing Director of
the Strategic Management Practice for Booz, Allen, Hamilton; and Vice
President and Director of the Boston Consulting Group. Mr. Roach is also on
the board of directors of Morrison Knudsen Corporation. He has previously
served on the boards of directors for Magma Power, Thompson PBE and the
American Stock Exchange. He is Chair of the Compensation Committee.
Dr. Kenneth T. Rosen, 51, has been a Director since January 1995 and was a
Director of PMI between October 1993 and January 1995. Dr. Rosen has been a
Professor of Business Administration at the Haas School of Business since July
1978, and Chairman of the Fisher Center for Real Estate and Urban Economics
since 1979, each at the University of California at Berkeley. He is also
President of the Rosen Consulting Group, a real estate and mortgage market
consulting firm. Dr. Rosen serves as the Chief Executive Officer of Lend Lease
Rosen Real Estate Securities. Dr. Rosen is also on the boards of directors of
Golden West Financial Corporation and Avatar Holdings, Inc. He is a member of
the Compensation Committee.
Richard L. Thomas, 69, has been a Director since July 1996. Mr. Thomas is
the retired Chairman of First Chicago NBD Corporation and its principal
subsidiary, The First National Bank of Chicago. From January 1, 1992 until
December 1, 1995, he was Chairman and CEO of First Chicago Corporation, after
which he served as Chairman of First Chicago NBD Corporation until May 1996.
Mr. Thomas is also on the boards of directors of IMC Global, Inc., The Sabre
Group Holdings, Inc., Sara Lee Corporation and Unicom Corporation. He is Chair
of the Audit Committee and a member of the Governance and Nominating
Committee.
Mary Lee Widener, 61, has been a Director since January 1995 and was a
Director of PMI between October 1993 and January 1995. Ms. Widener has been
Chief Executive Officer of Neighborhood Housing Services of America, Inc.
since May 1974, and also holds the title of President. Ms. Widener has been
the chairperson of the board of directors of the Federal Home Loan Bank of San
Francisco since 1994, serves as vice chairperson of the board of directors of
Social Compact and is a member of the board of directors of the S.H. Cowell
Foundation. She is a member of the Audit Committee.
Ronald H. Zech, 56, has been a Director since May 1998. He is currently
Chairman, Chief Executive Officer and President of GATX Corporation, whose
subsidiaries engage in the leasing and management of railroad cars, provide
equipment and capital asset financing and related services, own and operate
tank storage terminals and pipelines, engage in Great Lakes shipping, and
provide distribution and logistics support services. Mr. Zech was elected
Chairman of GATX Corporation in April 1996, Chief Executive Officer in January
1996, and President in July 1994. Mr. Zech previously served as President and
Chief Executive Officer of GATX Capital Corporation from 1984 to 1994. Mr.
Zech is also on the boards of directors of McGrath RentCorp and two of GATX
Corporation's subsidiaries, General American Transportation and GATX
Corporation. He is Vice Chair of the Compensation Committee.
There are no family relationships among any of the aforementioned persons.
4
<PAGE>
Further Information Concerning the Board of Directors. The Board of
Directors held five meetings during 1999. Each Director attended at least 75%
of the Board meetings and meetings of committees of which he or she is a
member. The Board of Directors has established an Audit Committee, a
Compensation Committee, and a Governance and Nominating Committee. The members
and chair of each committee are determined from time to time by the Board.
The Audit Committee consists of Mr. Thomas, Chair, Dr. Castle, Vice Chair,
Mr. Clark, Mr. Ocampo and Ms. Widener. The committee held six meetings in
1999. The committee selects a firm of independent certified public accountants
to audit the books and accounts of TPG and its subsidiaries for the fiscal
year for which they are appointed. In addition, the committee reviews and
approves the scope and costs of all services (including nonaudit services)
provided by the firm selected to conduct the audit. The committee also
monitors the effectiveness of the external and internal audit effort and
financial reporting, and inquires into the adequacy of financial and operating
controls. The committee coordinates with TPG's Compliance Officer with respect
to statutory and other business ethics matters, and receives periodic reports
regarding such matters from the Compliance Officer.
The Compensation Committee consists of Mr. Roach, Chair, Mr. Zech, Vice
Chair, Mr. Hedien and Dr. Rosen. The committee held four meetings in 1999. The
committee makes recommendations to the Board with respect to the
administration of the salaries, bonuses and other compensation to be paid to
the officers and other employees of PMI and TPG and acts as administrator for
The PMI Group, Inc., Equity Incentive Plan and The PMI Group, Inc., Directors'
Deferred Compensation Plan. The committee also evaluates the performance of
management and considers management succession and related matters.
The Governance and Nominating Committee consists of Mr. Hedien, Chair, Mr.
Clark, Mr. Thomas, and Mr. Haughton, Ex Officio. The committee held four
meetings in 1999. The committee develops and monitors TPG's corporate
governance practices and procedures and monitors the responsibilities of board
members, in consultation with the Chairman of the Board. The committee makes
periodic reports to the Board of Directors regarding TPG's governance
practices. The committee assists the Board of Directors in its assessment of
the Chief Executive Officer, and assists the Chairman in the annual self-
assessment process for the Board of Directors. The committee advises the Board
with respect to the size and composition of the Board and recommends
prospective Directors to assist in creating a balance of knowledge, experience
and capability on the Board. The committee reviews recommendations regarding
Director compensation.
Directors' Stock Ownership Guidelines. In order to more closely align the
interest of Non-Employee Directors with those of TPG's stockholders, the Board
of Directors established stock ownership guidelines for all Non-Employee
Directors. The desired level of stock ownership is to be achieved over a
period of five years from the date of first election as a director. Non-
Employee Directors are expected to own TPG common stock that has a market
value equal to a minimum of approximately $110,000, or five times such
director's annual retainer fee. Stock owned for purposes of the guidelines
include: (a) shares purchased in the open market or upon the exercise of
options, including shares held in a retirement plan, (b) stock awarded under
The PMI Group, Inc., Stock Plan For Non-Employee Directors ("Directors Plan"),
(c) TPG common stock equivalents held in The PMI Group, Inc., Director's
Deferred Compensation Plan ("Director's Deferred Compensation Plan"), and (d)
the market value of vested stock options which have an exercise price below
the current market price for TPG common stock. As of March 31, 2000, the
following Non-Employee Directors Dr. Castle, Clark, Hedien, Ocampo, Roach, Dr.
Rosen, Thomas, Widener and Zech have met approximately 338%, 347%, 323%, 61%,
442%, 305%, 1998%, 267%, and 146%, respectively, of the stock ownership
guidelines based on the closing price of TPG common stock on March 31, 2000 of
$47.44 per share.
Directors' Compensation and Benefits. Directors who are employees of TPG or
its subsidiaries do not receive additional compensation for their services as
Directors. Each Director who is not an employee of TPG or any of its
subsidiaries ("Non-Employee Director") receives fees for his or her service as
a Director. Each such Non-Employee Director receives an annual retainer of
$22,000. The Non-Employee Director who serves as a Compensation Committee
Chair receives an additional annual retainer of $6,000. The Non-Employee
5
<PAGE>
Directors who serves as a Committee Chair for the Audit; and the Governance
and Nominating Committees each receives an additional annual retainer of
$2,000. Directors are reimbursed for reasonable expenses to attend meetings.
Non-Employee Directors also receive initial and annual grants of stock options
and shares of TPG Common Stock. The following table sets forth the fees and
other compensation benefits paid to all Non-Employee Directors.
Non-employee Directors' Compensation and Benefits
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Initial Grant of Annual Grant of Annual Grant of
Retainer TPG Stock TPG Stock TPG Common
Fees/1/ Options/2/ Options/3/ Shares/4/
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Board Members........... $22,000 6,000 shares 3,750 shares 450 shares
Chair: Compensation
Committee.............. $ 6,000 N/A N/A N/A
Chair: Audit; and
Governance and......... $ 2,000 N/A N/A N/A
Nominating Committees
</TABLE>
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/1/ Under the Directors' Deferred Compensation Plan, each Non-Employee Director
may defer receipt of his or her retainer fees. The minimum permitted
deferral is $5,000. All amounts deferred are deemed to be invested in
phantom shares of TPG's common stock. On any date, the value of each share
of phantom stock will equal the fair market value of a share of common
stock, including reinvestment of any dividends. At the time when a Director
makes a deferral election, he or she also must elect the time and method for
payment of the deferred amounts. Phantom shares of TPG's common stock will
be paid in cash.
/2/ Granted in the initial year as a Director, the shares are prorated (based on
months of services between June 1 and May 31) and are awarded as soon as
administratively practicable after the Director joins the Board. The stock
option vests in three equal installments on the first, second and third
anniversaries of the grant. The exercise price is equal to 100 percent of
the fair market value on the date of grant.
/3/ Stock options are granted as of the first business day in June of each year
(assuming that he or she remains an eligible Non-Employee Director). The
exercise price of each such option is equal to 100 percent of the fair
market value on the date of grant of the shares covered by the option. The
options granted become exercisable on the first anniversary of the grant
date. All options granted to Non-Employee Directors have a term of not
greater than 10 years from the date of grant. If a Director terminates
service on the Board prior to an option's normal expiration date, the period
of exercisability of the option may be shorter, depending upon the reason
for the termination.
/4/ Granted for each full year of service, prorated for service of less than one
year. Shares are awarded as of the first business day in June of each year
(assuming that he or she remains an eligible Non-Employee Director). Each
Non-Employee Director may receive only one award of common stock during any
calendar year. The number of shares awarded to any Non-Employee Director
will be reduced as necessary so that the fair market value of the shares on
the date of award does not exceed $30,000. The Directors Plan also provides
for an annual cash payment to each Non-Employee Director in an amount equal
to the estimated tax liability on the award of common stock, including taxes
payable on the amount of the tax cash payment.
- -------------------------------------------------------------------------------
6
<PAGE>
Security Ownership of Certain
Beneficial Owners and Management
The following table sets forth, as of March 31, 2000, unless otherwise
noted, certain stock ownership information regarding all stockholders known by
TPG to be the beneficial owners of five percent or more of TPG's common stock,
each nominee and current Director of TPG, and each Named Executive Officer
listed in the 1999 Summary Compensation Table herein, and all Directors,
nominees and Executive Officers as a group. For purposes of this table, a
beneficial owner is generally any person or entity that directly, indirectly,
or through a family relationship has or shares the power to vote or direct the
vote of the shares, has the power to trade or dispose of the shares, or has
the right to acquire the ownership of any shares at any time within 60 days of
March 31, 2000, through the exercise of any option, warrant, right, or
convertible security.
Common Stock Beneficially Owned
<TABLE>
<CAPTION>
Percentage
Number of of
Beneficial Owner Shares Class/1/
---------------- --------- ----------
<S> <C> <C>
AXA Financial, Inc./2/ .............................. 5,444,372 12.34%
1290 Avenue of the Americas
New York, NY 10104
Capital Guardian Trust Company/3/ ................... 4,089,600 9.27%
111000 Santa Monica Boulevard
Los Angeles, CA 90025-3384
Wallace Weitz & Company/4/ .......................... 2,874,800 6.52%
1125 South 103rd Street, Suite 600
Omaha, Nebraska 68124-6008
FMR Corporation/5/ .................................. 2,634,910 5.97%
82 Devonshire Street
Boston, MA 02109
Barclays Global Investors NA/6/ ..................... 2,466,854 5.59%
45 Fremont Street
San Francisco, CA 94105
<CAPTION>
Directors and Nominees
----------------------
<S> <C> <C>
Dr. James C. Castle/7/ .............................. 10,850 *
Donald C. Clark/8/ .................................. 12,300 *
W. Roger Haughton/9/ ................................ 212,295 *
Wayne E. Hedien/10/ ................................. 14,225 *
Raymond L. Ocampo Jr./11/ ........................... 2,450 *
John D. Roach/12/ ................................... 13,100 *
Dr. Kenneth T. Rosen/13/ ............................ 12,425 *
Richard L. Thomas/14/ ............................... 51,575 *
Mary Lee Widener/15/ ................................ 12,925 *
Ronald H. Zech/16/ .................................. 3,900 *
<CAPTION>
Other Executive Officers
------------------------
<S> <C> <C>
L. Stephen Smith/17/ ................................ 112,772 *
Claude J. Seaman/18/ ................................ 54,543 *
John M. Lorenzen, Jr./19/ ........................... 84,321 *
Bradley M. Shuster/20/ .............................. 28,315 *
Thomas C. Brown/21/ ................................. 14,511 *
All Directors, Nominees and Executive Officers as a
group (18 persons including those named above)/22./. 711,877 1.61%
</TABLE>
7
<PAGE>
- --------
* Less than 1%
/1/ As of March 31, 2000, there were outstanding 44,104,242 shares of common
stock, the only class of voting stock of TPG.
/2/ Based on Amendment No. 6 to Schedule 13G filed with the Securities and
Exchange Commission (the "SEC") on February 14, 2000,AXA Financial, Inc.,
("AXA") held sole voting power as to 1,058,552 of such shares, held shared
voting power as to 4,233,120 of such shares, held sole dispositive power as
to 4,962,622 of such shares, held shared dispositive power as to 481,750 of
such shares and pursuant to a joint filing agreement among AXA Financial,
Inc., AXA Conseil Vie Assurance Mutuelle, AXA Assurances I.A.R.D., ASA
Assurances Vie Mutuelle, AXA Courtage Assurance Mutuelle, the parties as a
group beneficially owned 5,444,372 of such shares.
/3/ Based on Amendment No. 1 to Schedule 13G filed with the SEC on February
11, 2000, Capital Group International, Inc., ("Capital Group") held sole
voting power as to 3,459,000 of such shares and held sole dispositive power
as to 4,089,600 of such shares. According to the filing, Capital Group had
no shared voting or shared dispositive power over such shares.
/4/ Based on Schedule 13G filed with the SEC on February 4, 2000, Wallace R.
Weitz & Company ("Wallace") held sole voting and sole dispositive power as
to 2,874,800 of such shares. Wallace had no shared voting or shared
dispositive power over such shares.
/5/ Based on Amendment No. 5 to Schedule 13G filed with the SEC on February
14, 2000, FMR Corporation ("FMR"), held sole voting power over 94,300 of
such shares and held sole dispositive power as to 2,634,910 of such shares.
According to the filing, FMR had no shared voting or shared dispositive
power over such shares
/6/ Based on Schedule 13G filed with the SEC on February 14, 2000, Barclays
Global Investors, N.A., ("Barclays") held sole voting power as to 2,210,522
of such shares and held shared dispositive power as to 2,466,854 of such
shares. According to the filing, Barclays had not share voting power or
shared dispositive power over such shares.
/7/ Includes 5,600 shares and options to purchase 5,250 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 1,593 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to The PMI Group, Inc., Directors' Deferred
Compensation Plan. ("Directors' Deferred Compensation Plan").
/8/ Includes 3,300 shares and options to purchase 9,000 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 2,487 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to the Directors' Deferred Compensation Plan.
/9/ Includes 18,953 shares, options to purchase 188,716 shares of common stock
exercisable within 60 days of March 31, 2000, 4,312 shares of common stock
deemed owned under The PMI Group, Inc. Savings and Profit-Sharing Plan (the
"401(k) Plan"), and 314 shares of common stock deemed owned under The PMI
Group, Inc., Employee Stock Purchase Plan (the "ESPP"). Does not include
9,890 shares of common stock equivalents arising from the officer's
election to defer payment of compensation pursuant to The PMI Group, Inc.,
Officer Deferred Compensation Plan ("Officer Deferred Compensation Plan").
/10/ Includes 5,225 shares and options to purchase 9,000 shares of common stock
exercisable within 60 days of March 31, 2000.
/11/ Includes 450 shares, options to purchase 2,000 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 560 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to the Directors' Deferred Compensation Plan.
/12/ Includes 7,850 shares and options to purchase 5,250 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 1,745 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to the Directors' Deferred Compensation Plan.
/13/ Includes 3,425 shares and options to purchase 9,000 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 1,395 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to the Directors' Deferred Compensation Plan.
/14/ Includes 42,950 shares and option to purchase 8,625 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 1,383 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to the Directors' Deferred Compensation Plan and
does not include 6,000 shares of common stock held by the Thomas Family
Limited Partnership, in which Mr. Thomas has a 2.5% ownership interest.
/15/ Includes 3,925 shares and options to purchase 9,000 shares of common stock
exercisable within 60 days of March 31, 2000.
/16/ Includes 2,400 shares and options to purchase 1,500 shares of common stock
exercisable within 60 days of March 31, 2000. Does not include 995 shares
of common stock equivalents arising from the election to defer payment of
Director's fees pursuant to the Directors' Deferred Compensation Plan.
/17/ Includes 13,001 shares, options to purchase 88,557 shares of common stock
exercisable within 60 days of March 31, 2000, 11,034 shares of common stock
deemed owned under the 401(k) Plan, and 180 shares of common stock deemed
owned under the ESPP.
/18/ Includes 2,470 shares, options to purchase 51,489 shares of common stock
exercisable within 60 days of March 31, 2000, and 584 shares of common
stock deemed owned under the 401(k) Plan. Does not include 10,404 shares of
common stock equivalents arising from the election to defer payment of
compensation pursuant to the Officer Deferred Compensation Plan.
/19/ Includes 3,930 shares, options to purchase 79,652 shares of common stock
exercisable within 60 days of March 31, 2000, 353 shares of common stock
deemed owned under the 401(k) Plan, and 386 shares of common stock deemed
owned under the ESPP. Does not include 2,745 shares of common stock
equivalents arising from the election to defer payment of compensation
pursuant to the Officer Deferred Compensation Plan.
/20/ Includes 1,711 shares, options to purchase 25,584 shares of common stock
exercisable within 60 days of March 31, 2000, 288 shares of common stock
deemed owned under the 401(k) Plan, and 732 shares of common stock deemed
owned under the ESPP. Does not include 5,540 shares of common stock
equivalents arising from the election to defer payment of compensation
pursuant to the Officer Deferred Compensation Plan.
/21/ Includes 2,421 shares, options to purchase 5,494 shares of common stock
and 4,500 performance shares exercisable within 60 days of March 31, 2000;
1,364 shares of common stock deemed owned under the 401(k) Plan, and 732
shares of common stock deemed owned under the ESPP.
/22/ Includes 131,186 shares, options to purchase 558,756 shares of common
stock exercisable within 60 days of March 31, 2000 and 19,059 shares of
common stock deemed owned under the 401(k) Plan. Does not include 46,985
shares of common stock equivalents arising from the election to defer
payment of compensation pursuant to the Officer Deferred Compensation Plan
or the Directors' Deferred Compensation Plan.
8
<PAGE>
Executive Compensation. Except as otherwise indicated, the following Summary
Compensation Table sets forth information on compensation for the last three
years for the Chief Executive Officer and for each of the four most highly
compensated executive officers (collectively the "Named Executive Officers")
of TPG.
Summary Compensation Table
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
---------------------- ------------------------------------
Awards
----------------------
Restricted Securities
Name and Principal Stock Underlying LTIP All Other
Position Year Salary Bonus/1/ Awards Options (#) Payouts/2/($) Compensation/3/
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
W. Roger Haughton....... 1999 $550,000 $577,766 $ 0 80,250 $430,124 $102,083
Chairman of the Board
and 1998 500,000 509,500 0 72,596 116,315 7,500
Chief Executive Officer 1997 451,002 203,267 0 33,750 0 6,660
L. Stephen Smith........ 1999 339,000 311,600 0 40,951 176,142 9,100
President and 1998 285,000 245,672 0 32,883 49,837 7,500
Chief Operating Officer 1997 211,656 89,910 0 13,800 0 6,660
Claude J. Seaman........ 1999 265,000 226,182 0 26,400 119,819 109,111
Group Executive Vice 1998 231,666 206,535 0 25,089 33,239 7,500
President Strategic 1997 188,510 67,969 0 9,451 0 6,660
Investments
John M. Lorenzen, Jr.... 1999 250,008 213, 380 0 25,501 167,761 34,725
Executive Vice
President, 1998 240,000 202,320 0 26,138 47,085 7,500
Chief Financial Officer 1997 211,101 85,629 0 12,900 0 6,660
Bradley M. Shuster...... 1999 240,000 199,537 0 23,700 72,707 63,670
Executive Vice
President 1998 215,000 143,405 0 17,936 32,250 7,500
Corporate Development 1997 163,280 66,606 0 6,150 0 6,660
Thomas C. Brown/4/ ..... 1999 265,000 226,182 0 25,200 0 9,100
Executive Vice
President 1998 255,000 171,705 0 19,761 0 7,500
Field Operations 1997 204,000 42,000 141,900 10,501 0 0
</TABLE>
- -------------------------------------------------------------------------------
Note: Executives also receive financial planning assistance, automobile
allowance and reimbursed parking, but such amounts did not exceed the lesser
of $50,000 or 10% of the total annual salary and bonus of each executive.
/1/ Bonus amounts shown for 1999 were earned during 1999 and paid in 2000.
/2/ Represents payout of performance shares awarded under the Equity Incentive
Plan. Amounts shown for 1999 vested upon the achievement of certain
corporate goals for the three-year performance cycle 1997-1999. Messrs.
Haughton, Smith, Seaman, Lorenzen, and Shuster received 11,394; 4,666;
3,174; 4,444; and 1,926 shares, respectively, of TPG common stock valued at
$37.75 per share on February 17, 2000, the date of vesting.
/3/ Represents employer-matching contributions to each of the Named Executive
Officer's account under The PMI Group, Inc. Savings and Profit-Sharing Plan,
a "401(k)" Plan, and a matching contribution under The PMI Group, Inc.
Officer Deferred Compensation Plan to the accounts of Messrs. Haughton,
Seaman, Lorenzen, and Shuster of 1,905; 2,049; 525; and 1,118 shares,
respectively, of TPG phantom stock units valued at $48.81 per share, the
closing price of TPG common stock on December 31, 1999.
/4/ Mr. Brown resigned from TPG on November 30, 1999 and in connection
therewith, relinquished his executive officer position effective November
30, 1999. See "Agreement With Mr. Brown", below.
- -------------------------------------------------------------------------------
9
<PAGE>
Option Grants. The following table is a summary of all TPG stock options
granted to the Named Executive Officers during 1999. Individual grants are
listed separately for each Named Executive Officer. TPG has not granted any
SARs. All option information has been adjusted to reflect the Company's 3-for-
2 stock split on August 16, 1999.
Option Grants in 1999
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Potential Realizable Value
Number of % of Total at Assumed annual Rates
Shares Options of Stock Appreciation for
Underlying Granted to all Exercise Option Term/3/
Options Employees in Price Expiration ---------------------------
Name Granted/1/ Fiscal Year/2/ ($/share) Date 5%($) 10%($)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
W. Roger Haughton....... 80,250 13.7% $28.67 02/18/09 $ 1,446,774 $ 3,666,409
L. Stephen Smith........ 40,951 7.0 28.67 02/18/09 738,278 1,870,942
Claude J. Seaman........ 26,400 4.5 28.67 02/18/09 475,948 1,206,146
John M. Lorenzen, Jr.... 25,501 4.3 28.67 02/18/09 459,741 1,165,073
Bradley M. Shuster...... 23,700 4.0 28.67 02/18/09 427,272 1,082,790
Thomas C. Brown/4/ ..... 25,200 4.3 28.67 02/18/09 454,314 1,151,321
</TABLE>
- -------------------------------------------------------------------------------
/1/ The options have a per share exercise price equal to the fair market value
of a share of common stock on the grant date and vest in three equal
installments on the first, second and third anniversaries of the grant. The
required exercise price and tax withholding may be paid in cash and/or
shares of common stock that would otherwise have been received on exercise.
/2/ Represents percentage of total options to purchase common stock granted
under The PMI Group, Inc. Equity Incentive Plan ("Equity Incentive Plan")
to employees of TPG and its subsidiaries during 1999.
/3/ Realizable values are reported net of the option exercise price. The dollar
amounts under these columns are the result of calculations at the 5% and
10% rates (determined from the price at the date of grant, not the stock's
current market value) set by the Securities and Exchange Commission and
therefore are not intended to forecast possible future appreciation, if
any, of TPG's stock price. Actual gains, if any, on stock option exercises
are dependent on the future performance of the common stock as well as the
optionholder's continued employment through the vesting period. The
potential realizable value calculation assumes that the optionholder waits
until the end of the option term to exercise the option.
/4/ See "Agreement With Mr. Brown", below.
- -------------------------------------------------------------------------------
The following table shows the number of shares acquired on the exercise of
stock options, value realized on the exercise of options, underlying
unexercised options and the value of options outstanding as of December 31,
1999 for each of the Named Executive Officers. TPG has not granted any SARs.
Options Outstanding
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number of Securities
Underlying Value of Unexercised
Shares Unexercised Options In-the-money Options
Acquired At Fiscal Year-end(#) at Fiscal Year End ($) /1/
on Value ------------------------- -----------------------------
Name Exercise Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
W. Roger Haughton....... 0 $ 0 141,517 154,898 $ 3,001,283 $ 1,865,051
L. Stephen Smith........ 0 $ 0 66,347 74,473 1,415,714 931,259
Claude J. Seaman........ 19,575 $515,600 36,175 51,277 712,618 607,674
John M. Lorenzen, Jr.... 0 $ 0 63,265 52,352 1,356,154 606,018
Bradley M. Shuster...... 0 $ 0 13,392 41,484 182,801 529,298
Thomas C. Brown/2/ ..... 0 $ 0 0 10,987 0 17,463
</TABLE>
- -------------------------------------------------------------------------------
1 Value is based on the closing price of TPG common stock on the New York
Stock Exchange on December 31, 1999 of $48.81 per share, less the exercise
price of the option.
2 See "Agreement With Mr. Brown", below.
- -------------------------------------------------------------------------------
Long-Term Incentive Plan Awards. No performance share awards or any other
long-term incentive plan awards, except for stock option grants, were made to
the Named Executive Officers during 1999.
10
<PAGE>
Agreement With Mr. Brown. In connection with Mr. Brown's resignation, he and
TPG entered into an employment agreement ("Agreement") pursuant to which his
employment relationship with TPG was restructured. Under the Agreement, Mr.
Brown relinquished his position as Executive Vice President of Field
Operations of TPG effective November 30, 1999 and resigned all other officer
and director positions with TPG and it's affiliates.
Under the Agreement, Mr. Brown will provide services to TPG and its
affiliates at the discretion of the President and Chief Operating Officer. He
will be paid $22,083 per month until November 30, 2000 at which time his
employment with TPG will terminate, subject to earlier termination. TPG's
payment to Mr. Brown will be reduced or terminated in the event he is paid or
entitled to receive payment for any other employment or consulting activity he
may undertake for certain periods prior to November 30, 2000. During his
employment, Mr. Brown will remain eligible to participate in most of the
Company's employee benefit programs and will receive a monthly car allowance,
however, Mr. Brown will not be eligible to participate in the Equity Incentive
Plan and the annual Bonus Incentive Plan. Mr. Brown received $226,182 as a
bonus in February 2000 in accordance with the terms of the annual Bonus
Incentive Plan for the 1999 performance year. Mr. Brown will be entitled to
receive 4,500 performance shares vesting on May 30, 2000 and an additional
4,500 performance shares vesting on December 7, 2000, provided he is an
employee of TPG on each vesting date and/or is in compliance with the other
terms of the Agreement. Mr. Brown will also have up to 90 days after
termination of his employment with TPG to exercise any vested stock options
covering 5,494 shares (scheduled to vest on May 30, 2000) and an additional
5,493 shares (scheduled to vest on December 7, 2000) all of which were granted
to him on February 12, 1998, provided, however, that he is an employee on each
vesting date and/or is in compliance with the other terms of the Agreement,
including those listed above. All other awards to Mr. Brown under the Equity
Incentive Plan have terminated.
Change of Control Arrangements. The Equity Incentive Plan provides that upon
a Change of Control (as defined below with respect to the Employment
Agreements), all outstanding stock options and restricted stock awards will
become 100% vested and immediately exercisable, and all performance units and
shares will be deemed earned and become immediately payable, including target
awards which will vest as to 100% of the target amount. Pursuant to the terms
of the Officer Deferred Compensation Plan, upon a Change of Control (defined
as described below) with respect to the Employment Agreements), a
participant's deferred compensation account will be distributed immediately in
a lump sum, including any Company contributions which are distributable in
shares of Common Stock.
TPG has also entered into Change of Control Employment Agreements
("Employment Agreements") with certain senior officers of TPG, including
Messrs. Haughton, Smith, Seaman, Lorenzen, and Shuster (the "Executives"),
each Employment Agreement originally dated as of February 12, 1998. TPG
believes it is imperative to be able to maintain a stable and competent
management base, and that the continued success of TPG depends, to a
significant degree, on the skills and competence of its senior officers. The
Employment Agreements are intended to assure that TPG will have the continued
dedication of its senior officers by diminishing the inevitable distraction of
such officers by virtue of the personal uncertainties and risks arising from
the possibility, threat or occurrence of a change of control of TPG.
Generally, severance benefits will be triggered under the Employment
Agreements if a change of control occurs and the Executive's employment is
terminated (a) by the Executive for "Good Reason" or (b) by TPG other than for
"Cause," Death or "Disability" (as defined in the Employment Agreements)
during the three year period following a Change of Control. Under the
Employment Agreements, "Change of Control," generally means (a) the
acquisition by any individual, entity or group of 20% or more of the then
outstanding shares of common stock of TPG (excluding acquisition directly from
TPG, or by any employee benefit plan sponsored or maintained by TPG); (b) the
current board members cease to constitute at least a majority of the board;
(c) consummation by TPG of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of TPG or the
acquisition of assets of another entity unless, following such business
Combination, all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially
11
<PAGE>
own, directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination; or (d) approval by the stockholders of TPG of a complete
liquidation or dissolution of TPG. Payments and benefits include: a lump-sum
cash payment equal to up to three times (depending on the senior officer
involved) base salary and target incentive bonus; plus an amount equal to the
difference between the aggregate benefit under the Retirement Plan and the
Supplemental Employee Retirement Plan benefit which the Executive would have
accrued (whether or not vested) had the Executive's employment continued for
up to three years (depending on the senior officer involved) after the date of
termination, and the actual vested benefit under such plans as of the date of
the Executive's termination of employment; continuation of welfare benefit
plan coverage for up to three years (depending on the senior officer
involved); and outplacement services. Under certain circumstances, a portion
of the present value of the benefits payable under the Employment Agreement or
upon the acceleration of the vesting of all outstanding stock options,
restricted stock and performance shares could be subject to a 20% excise tax
under the Internal Revenue Code and be nondeductible by TPG. TPG has agreed,
subject to limited exceptions, to reimburse the Executives for any such excise
taxes, together with any additional excise or income taxes resulting from such
reimbursement.
Executive Officer Stock Ownership Guidelines. The Compensation Committee of
the Board of Directors established stock ownership guidelines for TPG's senior
executive officers. The desired level of stock ownership is to be achieved
over a period of five years from the date of becoming an executive officer.
Executive officers are expected to own TPG common stock which has a market
value equal to a minimum range from one to three times such executive's annual
base salary. Stock owned for purposes of the guidelines include: (a) shares
purchased in the open market, or upon the exercise of options; (b) shares held
in a retirement plan, including TPG common stock fund units held under The PMI
Group, Inc., Savings and Profit-Sharing Plan ("401(k) plan"); (c) restricted
stock awarded under the Equity Incentive Plan; (d) TPG common stock
equivalents held in the Officer Deferred Compensation Plan, and (e) the market
value of vested stock options which have an exercise price below the current
market price for TPG common stock. As of March 31, 2000, Messrs. Haughton,
Smith, Seaman, Lorenzen, and Shuster have met approximately 363%, 310%, 366%,
444%, and 184%, respectively, of the stock ownership guidelines based on the
closing price of TPG common stock on March 31, 2000 of $47.44 per share.
General Compensation and Benefit Plans. The Named Executive Officers
participate in certain stock option, retirement and profit-sharing plans
sponsored by TPG, some of which are intended to qualify for tax-favored
treatment under the Internal Revenue Code, as amended ("Code"). These plans
include the Equity Incentive Plan; The PMI Group, Inc. Retirement Plan
("Retirement Plan"), a defined benefit pension plan intended to qualify under
Section 401(a) of the Code; and The PMI Group, Inc. Supplemental Employee
Retirement Plan ("SERP"), a nonqualified plan designed to provide benefits in
excess of those permitted to be provided under the Retirement Plan because of
the Code limitations described below. The Named Executive Officers are
eligible to participate in the Officer Deferred Compensation Plan, which
permits each participant to elect to defer receipt of part or all of his or
her eligible compensation on a pre-tax basis. Under the Officer Deferred
Compensation Plan, TPG makes a matching contribution for each participant
equal to 25% of the amount a participant has deferred into the TPG common
stock equivalent fund. The matching contribution is made in TPG common stock
equivalents and vests after three-years, except in the event of a change of
control, in which case the vesting is automatic. In addition, the Named
Executive Officers are eligible to participate in the 401(k) Plan, a defined
contribution plan intended to qualify under Section 401(a) of the Code. TPG
also makes matching and discretionary matching contributions to the 401(k)
Plan.
The pension benefit under the Retirement Plan and SERP is based on the
executive's average of his or her five highest consecutive years' compensation
in the last 10 years of service. Credited service under the Retirement Plan
includes only service after the completion of TPG's initial public offering in
April 1995 (up to a maximum of 35 years). Credited service for the SERP
includes all service with TPG; Sears, Roebuck and Co.; and Allstate Insurance
Company. Benefits are computed on a straight-line annuity basis and are not
subject to deduction for Social Security or other offset amounts.
12
<PAGE>
Compensation under the Retirement Plan and SERP is based upon the total
annual cash compensation paid to the participant (not to exceed $160,000 for
1999, as limited by the Code) for services rendered to PMI and its affiliates,
including pre-tax deferrals, but excluding items such as certain incentive and
long-term executive compensation plan awards, the value of stock awards and
employer contributions to profit sharing plans. Covered compensation under the
Retirement Plan in 1999 (without Code limitations) was $1,059,500; $582,338;
$469,864; $452,328; and $381,321 for Messrs. Haughton, Smith, Seaman,
Lorenzen, and Shuster, respectively. As of December 31, 1999, Messrs.
Haughton, Smith, Seaman, Lorenzen, and Shuster had approximately 30, 23, 24,
15, and 4 years of credited service, respectively, under the SERP. Messrs.
Haughton, Smith, Seaman, and Lorenzen each had 4.667 years of credited service
under the Retirement Plan. Mr. Shuster had 4.417 years of credited service
under the Retirement Plan.
The following table indicates the annual benefits the Named Executive
Officers would receive at their normal retirement date if they continue as TPG
employees at the specified levels of compensation and for the years of
credited service under the combined formulas of the Retirement Plan and the
SERP.
Pension Plan Table
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
REMUNERATION YEARS OF SERVICE
------------ ------------------------------------------------------------------------
15 20 25 30 35
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
$ 300,000 $ 95,000 $127,000 $159,000 $191,000 $ 223,000
400,000 128,000 171,000 214,000 257,000 300,000
500,000 161,000 215,000 269,000 323,000 377,000
600,000 194,000 259,000 324,000 389,000 454,000
700,000 227,000 303,000 379,000 455,000 531,000
800,000 260,000 347,000 434,000 521,000 608,000
900,000 293,000 391,000 489,000 587,000 685,000
1,000,000 326,000 435,000 544,000 653,000 762,000
1,100,000 359,000 479,000 599,000 719,000 839,000
1,200,000 392,000 523,000 654,000 785,000 916,000
1,300,000 425,000 567,000 709,000 851,000 993,000
1,400,000 458,000 611,000 764,000 917,000 1,070,000
1,500,000 491,000 655,000 819,000 983,000 1,147,000
</TABLE>
- --------
Note: Assumes age 65 normal retirement. Amounts represent total annual benefit
payable under both the Retirement Plan and the SERP. The amount shown is for a
single life annuity. If another form of benefit is elected, such as a joint
and survivor annuity, the benefit amount will be lower.
13
<PAGE>
COMPENSATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
The following Report of the Compensation Committee on Executive Compensation
and related disclosure, including the following Performance Graph, shall not
be deemed incorporated by reference by any general statement incorporating
this Proxy Statement into any filing under the Securities Act of 1933 or under
the Securities Exchange Act of 1934, except to the extent TPG specifically
incorporates this information by reference, and shall not otherwise be deemed
filed under such Acts.
This report is provided by the Compensation Committee (the "Committee") of
the Board of Directors to assist stockholders in understanding the Committee's
objectives and procedures in establishing the compensation of TPG's Chief
Executive Officer and other senior officers of TPG.
As members of the Committee, it is our responsibility to review and to
recommend to the Board of Directors the compensation levels of the Chief
Executive Officer and other senior officers of TPG, to evaluate the
performance of management and to consider management succession and related
matters.
The Committee is composed of independent, non-employee members of the Board
of Directors who are not eligible to participate in any of the executive
compensation programs of TPG. The Committee met four times in 1999 The
Committee sets the overall compensation principles of TPG and reviews the
entire program at least annually for its effectiveness. Every two years, the
Committee conducts a comprehensive review of TPG's compensation philosophy,
policies and programs for its executive officers. The purpose of this review
is to ascertain whether TPG's total compensation program remains competitive
to attract, retain and motivate skilled executives who are capable of
developing and implementing a business strategy designed to build stockholder
value. The most recent comprehensive review occurred in 1998.
The Committee's 1999 compensation actions and policies were based on
recommendations on TPG executive compensation practices from Hewitt Associates
LLC, an outside consulting firm that specializes in executive compensation,
internally generated information, comparative pay practice data, and its own
review of the status of the executive compensation program that was adopted by
TPG in 1996. As a result of its comprehensive review, the Committee
implemented changes to increase the percentage of pay that can be earned under
the annual and long-term incentive compensation programs. To seek to better
align the executive's interests with those of the Company's stockholders, the
Committee also increased the number of shares subject to stock option grants
in lieu of awarding performance shares. Finally, based on the results of the
study, the Committee implemented base salary increases that averaged 6.2% for
the Named Executive Officers (excluding the Chief Executive Officer)
referenced in the Summary Compensation Table.
Compensation Philosophy. TPG's compensation philosophy is to tie total
compensation for executives closely to the creation of stockholder value. TPG
seeks to pay its executives at competitive levels based on the scope of
responsibility applicable to each position. This philosophy is supported
through competitive base salaries, annual and long-term incentives. TPG's
competitors for executive talent are not necessarily the same companies that
would be included in an industry index established to compare stockholder
returns because TPG requires skills and perspectives from a broader range of
backgrounds. Thus, the comparable companies for purposes of executive
compensation are not necessarily limited to those contained in the industry
group index used in the performance comparison graph included in this Proxy
Statement.
Base salary levels are defined as the median (50th percentile) level among
companies for which TPG competes for executive talent. The Committee makes
recommendations to the Board with respect to the base salaries of the CEO, the
President, Executive Vice Presidents, and any officer who is to receive a base
salary of $200,000 or more, and such salaries are set annually by the Board.
Annual incentive awards are designed to focus management employees on key
financial measures that promote stockholder value through prudent growth and
profitability and is designed to provide market median levels of compensation
for job performance. For example, the 1999 annual incentive award paid cash
amounts
14
<PAGE>
tied to specific financial measures supporting continued growth, profitability
and increased stockholder value. The Committee approves the targets and TPG
performance measures shortly after the beginning of each fiscal year. The
Committee certifies annually that awards payable as annual incentives
correspond to performance goals and the target level established at the
beginning of the year. TPG's independent auditors perform certain agreed-upon
incentive compensation recomputation procedures and issue a report to the
Committee of their results.
Long-term incentives (generally stock options) reward top management for
increasing stockholder value and are designed to develop stock ownership among
key executives. Long-term incentives seek to better align the executive's
interest with those of the stockholders and are targeted to position TPG's
executives competitively between the 50th and 75th percentile of TPG's peer
group. TPG's focus on stockholder value creation is further supported by TPG's
policy for stock ownership levels for senior executives. Stock options are
awarded on an annual basis to executives and non-executive officers and key
employees of the Company and its affiliates. Long-term incentive awards are
made under TPG's Equity Incentive Plan
The Committee also considers whether compensation paid to TPG's senior
executives will be fully tax deductible to TPG. Section 162(m) of the Internal
Revenue Code, as amended (the "Code"), contains special rules regarding the
federal income tax deductibility of compensation paid to the CEO and to each
of the other four most highly compensated Named Executive Officers. The
general rule is that annual compensation paid to any of these executives will
be deductible only to the extent that it does not exceed $1,000,000 or
qualifies as "performance-based" compensation under Section 162(m). The
Committee has adopted a policy with respect to Section 162(m) which is
designed to ensure the compensation program continues to meet all the current
tests required for compensation to be deductible for federal income tax
purposes. The Committee has the discretion to make nondeductible awards, to
the extent consistent with TPG's best interest, to reward employees for
excellent service or recruit new executives while taking into consideration
the financial effects such action may have on TPG.
Base Salaries. In 1999, the Committee recommended increased salaries of Mr.
Haughton and other executive officers to reflect its philosophy of pay for
performance. In 1999, Mr. Haughton's salary was increased from $500,000 to
$550,000. This increase was intended to make Mr. Haughton's salary competitive
with those companies with whom TPG compares itself and recognized the record
operating results in 1998.
Annual Incentives. The 1999 annual incentive award was based upon
satisfactory performance of four TPG performance measures, which include net
operating earnings per share growth, primary insurance in force, market share
and the percentage of pre-tax non-operating profits projected for 2000 from
strategic diversification activities. Each factor was weighed equally. No
payouts are made as an annual incentive award unless TPG earns a threshold
return on average equity level that is at least four percentage points above
the 10-year U.S. Treasury bond yield for the year. The 1999 annual incentive
awards for the executive officers were based solely on achieving the four TPG
performance measures.
For 1999, Mr. Haughton's annual incentive award was based on the four TPG
performance measures. For 1999, Mr. Haughton received an annual incentive
award of $577,766, representing approximately 105 percent of his base salary.
Long-Term Incentives. During 1999, executive officers received an annual
award of stock options that vest in three equal installments on the first,
second and third anniversaries of the grant. All stock options granted during
1999 have a per share exercise price equal to 100 percent of the fair market
value of a share of common stock on the grant date, with a maximum term of up
to 10 years. Performance shares, which are granted only to Senior Vice
Presidents and above, are earned based on TPG's performance against certain
financial measures over a three-year period. Performance shares are payable in
shares of stock or cash, as determined by the Committee. No performance share
grants were made in 1999. In 1999, Mr. Haughton received a performance share
payout of 2,705 shares of common stock, representing approximately 64.4
percent of his Target Award established in 1996. The other executives received
the same percentage payout of performance shares. The performance share payout
was based on the performance goals established for the three-year cycle and
were
15
<PAGE>
based on the average annual increase in net operating income per share for the
performance cycle and achievement of a threshold return on average equity
level that is at least four percentage points above the 10-year U.S. Treasury
bond yield for the year.
In accordance with the Equity Incentive Plan and in connection with the
compensation levels approved by the Committee for key executives, in 1999, Mr.
Haughton was granted a stock option covering 80,250 shares in consideration of
his role and importance to TPG and to strongly align him with stockholder
objectives. The stock option granted to Mr. Haughton give him the right to buy
80,250 shares of TPG common stock, and vests in three equal installments on
the first, second and third anniversaries of the date of grant. The stock
option has an exercise price of $28.66 per share (100 percent of the fair
market value on the date of grant), with a maximum term of 10 years.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
JOHN D. ROACH, CHAIR
RONALD H. ZECH, VICE CHAIR
WAYNE E. HEDIEN
DR. KENNETH T. ROSEN
16
<PAGE>
Performance Graph
The graph shown below compares the cumulative total stockholder return for
TPG's common stock since its initial public offering on April 10, 1995 with
that of the Standard & Poor's 500 Index, the Russell 1000 Financial Services
Index, and the Mortgage Insurance Company Index. The graph plots the changes
in value of an initial $100 investment over the indicated time periods,
assuming all dividends are reinvested quarterly. The total stockholders'
returns are not necessarily indicative of future returns.
Comparison of The PMI Group, Inc. and Benchmarks
TOTAL RETURN INDEX
Total Return* and Total Rate of Return
<TABLE>
-----------------------------------------------------
<CAPTION>
3/9/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
S&P 500 100.00 121.79 149.76 199.73 256.81 310.87
- ------------------------------------------
Total Rate of
Return 210.87%
- ------------------------------------------------------------------------------
The PMI Group, Inc. N/A 121.88 149.79 196.27 134.47 200.16
- ------------------------------------------
Total Rate of
Return 100.16%
- ------------------------------------------------------------------------------
Russell 1000 Financial
Services 100.00 131.19 175.90 264.11 290.54 299.42
- ------------------------------------------
Total Rate of
Return 199.42%
- ------------------------------------------------------------------------------
MI Index N/A 100.00 137.46 230.45 148.73 201.80
- ------------------------------------------
Total Rate of
Return 101.80%
- ------------------------------------------------------------------------------
</TABLE>
Note: These numbers represent an index of total return performance of TPG's
common stock vs. the S&P 500, Russell 1000 Financial Services and the Mortgage
Insurance Company (which includes Radian Group, Inc., MGIC Investment
Corporation and Triad Guaranty, Inc.) indices using the starting date of
3/31/95 with a value of 100. For TPG, the starting date (value of 100) was
April 10, 1995, the date of its initial public offering.
*Total Return = Capital Appreciation + Dividend Income for the period 4/30/95-
12/31/99
- -------------------------------------------------------------------------------
17
<PAGE>
Compensation Committee
Interlocks and
Insider Participation
The Compensation Committee is comprised solely of outside Directors. The
Compensation Committee of the Board of Directors consists of Messrs. Roach,
Chair, Zech, Vice Chair, Hedien, and Dr. Rosen. No executive officer of TPG
served on the compensation committee of another entity or on any other
committee of the board of directors of another entity performing similar
functions during the last fiscal year.
SECTION 16(a) BENEFICIAL
OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires TPG's
Directors and executive officers, and persons who own more than 10 percent of
TPG's common stock to file with the SEC initial reports of ownership and
reports of changes in ownership of the common stock. Directors, officers and
more than 10 percent stockholders are required by SEC regulations to furnish
TPG with copies of all Section 16(a) forms they file.
Based solely upon a review of the copies of these Form 3, 4 and 5 reports
received by TPG, and certain written representations received from TPG's
directors and executive officers, TPG believes that, during 1999, all Section
16(a) filing requirements were satisfied on a timely basis.
CERTAIN RELATIONSHIPS
AND RELATED TRANSACTIONS
None.
ITEM 2: RATIFICATION OF
APPOINTMENT OF INDEPENDENT
AUDITORS
The Board of Directors has appointed Ernst & Young LLP as independent public
auditors to audit the financial statements of TPG for 2000. During 1999,
Deloitte & Touche LLP audited the financial statements of TPG. One or more
representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting of Stockholders and will be available to respond to appropriate
questions. This proposal is presented to the stockholders in order to permit
them to participate in the selection of TPG's auditors. For approval, a
majority of shares present and entitled to vote must be voted "for" this Item.
Abstentions will be counted as shares present at the meeting and will have the
effect of a vote against this Item. Broker non-votes will not be counted as
shares voted and will have no effect on the outcome of the vote. If the
stockholders do not ratify the appointment of Ernst & Young LLP, the Board of
Directors of TPG will consider the appointment of other auditors. Ernst &
Young LLP will also perform internal audit and tax related services in 2000.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE
PROPOSAL TO RATIFY THE APPOINTMENT OF ERNST & YOUNG LLP.
Other Matters
The Board of Directors does not know of any matters to be acted upon at the
Annual Meeting of Stockholders except as specified in the Notice of Annual
Meeting of Stockholders. However, as to any other business that may properly
come before the Annual Meeting of Stockholders, it is intended that proxies,
in the form enclosed, will be voted in respect thereof in accordance with the
judgment of the persons voting such proxies in consultation with the Board of
Directors.
18
<PAGE>
Stockholder Proposals
for 2001 Annual Meeting
Stockholders are entitled to present proposals for action at a forthcoming
stockholders' meeting if they comply with the requirements of TPG's Bylaws and
the proxy rules promulgated by the Securities and Exchange Commission.
Proposals of stockholders intended for presentation at the 2001 Annual Meeting
must be received by TPG for inclusion in its Proxy Statement and form of Proxy
relating to that meeting by December 22, 2000. Such proposals should be sent
in writing by certified mail to the Secretary of TPG at 601 Montgomery Street,
San Francisco, California 94111. Faxed proposals will not be accepted.
Stockholders whose proposals are not included in the Proxy Statement and
form of Proxy, but who still intend to submit a proposal at an Annual Meeting,
and stockholders who intend to submit nominations for Directors at an Annual
Meeting are required to notify TPG of their proposals or nominations and to
provide certain other information, in accordance with TPG's Bylaws, not before
January 20, 2001, nor later than February 18, 2001, to be timely for
consideration at the 2001 Annual Meeting. Such proposals and nominations
should be sent in writing by certified mail to TPG's Secretary at 601
Montgomery Street, San Francisco, California 94111. Faxed proposals or
nominations will not be accepted.
/s/ Victor J. Bacigalupi
Victor J. Bacigalupi
Executive Vice President,
General Counsel and Secretary
April 20, 2000
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE
PREPAID ENVELOPE.
19
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
THE PMI GROUP, INC.
The undersigned hereby appoints W. Roger Haughton, Victor J. Bacigalupi and
L. Stephen Smith proxies, with power to act without the other and with power of
substitution, and hereby authorizes them to represent and vote all the shares of
Common Stock of The PMI Group, Inc. standing in the name of the undersigned with
all powers which the undersigned would possess if present at the Annual Meeting
of Stockholders of The PMI Group, Inc. to be held May 18, 2000 or any
adjournments or postponements thereof as designated on the other side, and upon
any and all such other matters as may properly come before the Meeting, or any
adjournments or postponements thereof.
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
*FOLD AND DETACH HERE*
ANNUAL MEETING OF STOCKHOLDERS
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO
ATTEND THE ANNUAL MEETING OF THE PMI
GROUP, INC.: THURSDAY, MAY 18, 2000
9:00 A.M.
THE PMI GROUP, INC.
CONFERENCE CENTER, 17TH FLOOR
601 MONTGOMERY STREET
SAN FRANCISCO, CA 94111
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE OTHER SIDE OF THIS CARD.
OR, IF YOU ARE A STOCKHOLDER OF RECORD, USE THE TOLL-FREE TELEPHONE NUMBER SET
FORTH ON THE REVERSE SIDE OF THIS PROXY CARD TO AUTHORIZE A PROXY TO VOTE YOUR
SHARES. YOU WILL REDUCE PMI'S EXPENSE IN SOLICITING PROXIES IF YOU AUTHORIZE A
PROXY TO VOTE BY TELEPHONE.
23
<PAGE>
The Board of Directors recommends a vote FOR Items Please mark [X]
1 and 2. Unless contrary Instructions are given your vote as
below, this proxy will be voted in accordance with indicated in
the recommendations of the Board of Directors. this example
FOR all nominees listed below WITHHOLD AUTHORITY for all
nominees listed below
[__] [__]
ITEM 1-ELECTION OF DIRECTORS
Nominees:
01 Dr. James C Castle 06 John D. Roach
02 Donald C. Clark 07 Dr. Kenneth T. Rosen
03 W. Roger Haughton 08 Richard L. Thomas
04 Wayne E. Hedien 09 Mary Lee Widener
05 Raymond L. Ocampo Jr. 10 Ronald H. Zech
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.
Withold Authority For: ______________________
________________________________________________________________________________
Item 2 - Ratification of appointment of FOR AGAINST ABSTAIN
independent auditors [___] [___] [___]
I PLAN TO ATTEND THE MEETING YES NO
[___] [___]
SIGNATURE__________________ SIGNATURE_________________ DATE_______________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
*FOLD AND DETACH HERE*
VOTE BY TELEPHONE
QUICK * * * EASY * * * IMMEDIATE
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
* You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
OPTION #1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL PROPOSALS.
PRESS 1
-------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
OPTION #2: IF YOU CHOOSE TO VOTE ON EACH PROPOSAL SEPARATELY, PRESS 0.
YOU WILL HEAR THESE INSTRUCTIONS.
---------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
To withhold FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.
Proposals 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1. \
PLEASE DO NOT RETURN THE ABOVE PROXY CARD IF VOTED BY PHONE
-----------------------------------------------------------
CALL * * TOLL FREE * * ON A TOUCH TONE TELEPHONE
1-800-293-8533 - ANYTIME
There is NO CHARGE to you for this call.
24
<PAGE>
PROXY
VOTING INSTRUCTIONS
TO THE TRUSTEE SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE PMI GROUP, INC.
The undersigned hereby authorizes and instructs the Trustee of The PMI
Group, Inc. Savings and Profit-Sharing Plan to represent and vote, as designated
on the reverse side, all shares of Common Stock of The PMI Group, Inc. which the
undersigned would be entitled to vote at the Annual Meeting of Stockholders of
said corporation to be held on May 18, 2000 and any adjournments thereof, with
all powers that the undersigned would possess if personally present, with
respect to the following:
(CONTINUED, AND TO BE MARKED, DATED AND SIGNED, ON THE OTHER SIDE)
*FOLD AND DETACH HERE*
ANNUAL MEETING OF STOCKHOLDERS
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO
ATTEND THE ANNUAL MEETING OF THE PMI
GROUP, INC.: THURSDAY, MAY 18, 2000
9:00 A.M.
THE PMI GROUP, INC.
CONFERENCE CENTER, 17TH FLOOR
601 MONTGOMERY STREET
SAN FRANCISCO, CA 94111
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND DATE THE OTHER SIDE OF THIS CARD.
OR, IF YOU ARE A SHAREHOLDER OF RECORD, USE THE TOLL-FREE TELEPHONE NUMBER SET
FORTH ON THE REVERSE SIDE OF THIS PROXY CARD TO AUTHORIZE A PROXY TO VOTE YOUR
SHARES. YOU WILL REDUCE PMI'S EXPENSE IN SOLICITING PROXIES IF YOU AUTHORIZE A
PROXY TO VOTE BY TELEPHONE.
25
<PAGE>
The Board of Directors recommends a vote FOR Please mark your vote as [X]
Items 1 and 2. indicated in this example
FOR all nominees WITHHOLD AUTHORITY
listed below for all nominees listed below
[__] [__]
ITEM 1-ELECTION OF DIRECTORS
Nominees:
01 Dr. James C Castle 06 John D. Roach
02 Donald C. Clark 07 Dr. Kenneth T. Rosen
03 W. Roger Haughton 08 Richard L. Thomas
04 Wayne E. Hedien 09 Mary Lee Widener
05 Raymond L. Ocampo Jr. 10 Ronald H. Zech
INSTRUCTIONS: To withhold authority to vote for any individual nominee, write
the nominee's name in the space provided below.
Withold Authority For: ________________________
________________________________________________________________________________
ITEM 2
Item 2 - Ratification of appointment of FOR AGAINST ABSTAIN
independent auditors [___] [___] [___]
I PLAN TO ATTEND THE MEETING YES NO
[___] [___]
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS SPECIFIED HEREON, BUT
IF NO SPECIFICATION IS MADE, THE TRUSTEE WILL VOTE ALL OF THE SHARES FOR WHICH
YOU ARE ENTITLED TO PROVIDE INSTRUCTION IN THE SAME PROPORTION AS SHARES FOR
WHICH INSTRUCTIONS ARE RECEIVED. THE TRUSTEE MAY VOTE ACCORDING TO ITS
DISCRETION ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE THE MEETING.
SIGNATURE_____________________ SIGNATURE___________________ DATE______________
NOTE: Please sign as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
*FOLD AND DETACH HERE*
VOTE BY TELEPHONE
QUICK * * * EASY * * * IMMEDIATE
Your telephone vote authorizes the named proxies to vote your shares in the same
manner as if you marked, signed and returned your proxy card.
* You will be asked to enter a Control Number which is located in the box in
the lower right hand corner of this form.
OPTION #1: TO VOTE AS THE BOARD OF DIRECTORS RECOMMENDS ON ALL PROPOSALS.
PRESS 1
-------
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1.
OPTION #2: IF YOU CHOOSE TO VOTE ON EACH PROPOSAL SEPARATELY, PRESS 0.
YOU WILL HEAR THESE INSTRUCTIONS.
---------------------------------
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL
nominees, press 9.
To withhold FOR AN INDIVIDUAL nominee, press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1. \
PLEASE DO NOT RETURN THE ABOVE PROXY CARD IF VOTED BY PHONE
-----------------------------------------------------------
CALL * * TOLL FREE * * ON A TOUCH TONE TELEPHONE
1-800-293-8533 - ANYTIME
There is NO CHARGE to you for this call.
26
