SCHEDULE 14A
(Rule 14a-101)
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
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(Name of Registrant as Specified In Its Charter)
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MAX RE CAPITAL LTD.
(a Bermuda company)
Max Re House
2 Front Street
Hamilton HM 11
Bermuda
NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 2004
1. | To elect four Class 1 directors of the Company to serve until the Company’s annual general meeting of shareholders in 2007. |
2. | To ratify the appointment of KPMG, Hamilton, Bermuda, as the Company’s independent auditors for 2004. |
3. | To authorize the election of four Class 1 directors of Max Re Ltd., a wholly-owned subsidiary of the Company (“Max Re”), to serve until the annual general meeting of the shareholders of Max Re in 2007. |
4. | To authorize the ratification of the appointment of KPMG, Hamilton, Bermuda, as Max Re’s independent auditors for 2004. |
5. | To act upon such other matters as may properly come before the Meeting or any adjournments thereof. |
![](https://capedge.com/proxy/DEF 14A/0001145443-04-000391/cooneyrjsig.jpg)
Chairman of the Board
March 24, 2004
Hamilton, Bermuda
MAX RE CAPITAL LTD.
(a Bermuda company)
Max Re House
2 Front Street
Hamilton HM 11
Bermuda
______________
PROXY STATEMENT
______________
ANNUAL GENERAL MEETING OF SHAREHOLDERS
VOTING SECURITIES AND VOTE REQUIRED
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any holder who fails to respond to such a request or who, in their judgment, submits incomplete or inaccurate information. The directors retain certain discretion to make such final adjustments that they consider fair and reasonable in all the circumstances as to the aggregate number of votes attaching to the Common Shares of any shareholder to ensure that no person shall be a 9.5% Shareholder at any time.
SOLICITATION AND REVOCATION
PROPOSAL ONE
ELECTION OF DIRECTORS OF THE COMPANY
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able to serve as a director of the Company if elected. In the event that any nominee is unable to serve as a director, the proxy holders named in the accompanying proxy have advised that they will vote for the election of such substitute or additional nominee(s) as the Board of Directors may propose. The Board of Directors unanimously recommends that you vote FOR the election of each of the nominees.
NOMINEES FOR DIRECTOR OF THE COMPANY WHOSE TERMS, IF ELECTED, WILL EXPIRE IN 2007:
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Head of North American Insurance Practice of Dresdner Kleinwort Wasserstein, Inc. (formerly known as Wasserstein Perella & Co, Inc.). From December 1999 to September 2000, Mr. Torsiello acted as President and a director of INDC Group Inc., a California based insurance company formed to offer a broad line of consumer orientated insurance products through the Internet. From 1987 to 1999, Mr. Torsiello was an investment banker in Salomon Smith Barney Inc., having served as Managing Director from 1995 and Co-Head of the Insurance Group from 1997 to 1999. During 1995, Mr. Torsiello served as a member of the firm’s Capital Commitments Committee. Prior to joining Salomon Smith Barney, Mr. Torsiello was a Senior Manager in KPMG’s New York insurance accounting and audit services unit. Mr. Torsiello is a member of the Board of Advisors of Fordham College of Business Administration.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE ELECTION OF EACH OF THE NOMINEES ABOVE.
DIRECTORS OF THE COMPANY WHOSE TERMS EXPIRE IN 2005:
DIRECTORS OF THE COMPANY WHOSE TERMS EXPIRE IN 2006:
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Moore Capital Advisors, L.L.C. Mr. Bacon is also a member of the Investment Advisory Committee of MCM. From 1985 to 1998, Mr. Bacon ran his own asset management firm. Before this, Mr. Bacon managed the non-equity portfolio of Soros Fund Management Company, from 1983 of 1985. Prior to this, Mr. Bacon was a Vice President at Goldman, Sachs & Co.
Executive Officers of the Company Who are Not Directors
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Assistant Vice President, at Aetna Life and Casualty Company. Mr. Hynes has served as a director of DaVinciRe Holdings Ltd. since 2001.
Composition, Meetings and Committees of the Board of Directors
Composition of the Board of Directors; Board and Committee Meetings
Executive Committee
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Audit and Risk Management Committee
Compensation Committee
Finance and Investment Committee
Nominating and Corporate Governance Committee
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standards combined with the experience and expertise that when added to the experience and expertise of the other members of the Board of Directors will result in the Board of Directors as a whole having experience and expertise in the various areas within which the Board of Directors is called to operate. The shareholder submission should be addressed to the Secretary of the Company at the address that appears on the first page of this Proxy Statement.
General
Shareholder Communications
Compensation of Directors
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Performance Graph
![](https://capedge.com/proxy/DEF 14A/0001145443-04-000391/d14245line.jpg)
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Security Ownership of Certain Beneficial Owners, Officers and Directors
Beneficial Ownership as of March 11, 2004 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Name and Address of Beneficial Owner (1) | Number of Common Shares | Percent of Class (2) | |||||||||
Capital Z Investments, L.P. 54 Thompson Street New York, NY 10012 USA | 5,539,058 | (3) | 11.6 | % | |||||||
College Retirement Equities Fund (“CREF”) TIAA-CREF Institutional Mutual Funds TIAA-CREF Life Funds 730 Third Avenue New York, NY 10017 USA | 2,313,855 | (4) | 5.1 | % | |||||||
Louis Moore Bacon Moore Holdings, LLC 1251 Avenue of the Americas, 53rd Floor New York, NY 10020 USA | 11,078,119 | (5) | 22.1 | % | |||||||
Entities affiliated with Moore Capital Management, LLC (other than Moore Holdings, LLC) 1251 Avenue of the Americas, 53rd Floor New York, NY 10020 USA | 2,333,334 | (6) | 5.1 | % | |||||||
Western General Insurance Ltd. Swan Building, 2nd Floor 26 Victoria Street Hamilton, Bermuda | 4,672,624 | (7) | 10.1 | % | |||||||
Robert J. Cooney | 1,676,570 | (8) | 3.6 | % | |||||||
W. Dave Brining | 495,389 | (9) | 1.1 | % | |||||||
Keith S. Hynes | 510,488 | (10) | 1.1 | % | |||||||
Philip R. Kruse | 355,788 | (11) | * | ||||||||
Peter A. Minton | 236,821 | (12) | * | ||||||||
Zack H. Bacon III | 200,000 | (13) | * | ||||||||
John R. Barber | 0 | (14) | * | ||||||||
W. Marston Becker | 0 | (15) | * |
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Beneficial Ownership as of March 11, 2004 | |||||||||||
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Name and Address of Beneficial Owner (1) | Number of Common Shares | Percent of Class (2) | |||||||||
Laurence W. Cheng | 0 | (3) | * | ||||||||
William H. Heyman | 16,534 | (16) | * | ||||||||
Willis T. King, Jr. | 54,000 | (17) | * | ||||||||
John L. Marion | 1,000 | (18) | * | ||||||||
Steven M. Skala | 40,666 | (19) | * | ||||||||
Mario P. Torsiello | 54,000 | (20) | * | ||||||||
James L. Zech | 39,000 | (21) | * | ||||||||
All directors, nominees and named executive officers as a group (15 persons) | 3,660,256 | (22) | 7.7 | % |
* | Less than 1% |
(1) | Unless otherwise stated, the address for each beneficial owner is c/o Max Re Capital Ltd., Max Re House, 2 Front Street, Hamilton HM 11, Bermuda. |
(2) | The Company’s Bye-laws reduce the total voting power of any U.S. shareholder owning, directly or indirectly, beneficially or otherwise, as described in the Company’s Bye-laws, 9.5% or more of the Common Shares to less than 9.5% of the total voting power of the Company’s capital stock unless otherwise waived at the discretion of the Board of Directors. As a result of the application of the Company’s Bye-laws, the combined voting power of each of Capital Z Investments, L.P. (“Cap Z”) and Moore Holdings, LLC, together with its affiliates, Moore Global Investments, Ltd. and Remington Investment Strategies, L.P. (collectively, the “Moore Group”), respectively, is now limited to less than 9.5%, which results in the increase of the voting power of other shareholders. Pursuant to the Company’s Bye-laws, the voting power of other shareholders, in aggregate, is increased by the same number of votes held by the Moore Group and Cap Z that are subject to the voting limitation. Such increase applies to each of the other shareholders in proportion to its voting power as determined on March 11, 2004, provided that such increase will be limited to the extent necessary to avoid causing any shareholder to have 9.5% or more voting power. The Company’s Bye-laws also limit to less than 9.5% the percentage of the Company’s Common Shares that may be owned by any person, unless otherwise waived by the Board of Directors. The Board has waived this ownership limitation with respect to Cap Z, the Moore Group and Western General. |
(3) | Includes warrants to acquire 2,205,725 Common Shares. Capital Z Investment Management, L.P., a Bermuda limited partnership, is the general partner of Cap Z and exercises voting and investment power with respect to Cap Z’s portfolio assets. As the general partner of Capital Z Investment Management, L.P., Capital Z Investment Management, Ltd., a Bermuda limited liability company, exercises voting and investment power with respect to Cap Z’s portfolio assets at the direction of the investment committee of Capital Z Investment Management, Ltd. Mr. Cheng is a member of the investment committee of Capital Z Investment Management, L.P. Mr. Cheng, a director of the Company and an officer and director of the ultimate general partner of Cap Z and the management company of Cap Z, disclaims any beneficial interest in the Common Shares beneficially owned by Cap Z. |
(4) | CREF’s beneficial ownership of Common Shares is based solely on a Form 13G filed by CREF on February 10, 2004. |
(5) | Includes warrants to acquire 4,411,452 Common Shares beneficially owned by Moore Holdings, LLC (“MH”). Does not include 1,666,667 Common Shares beneficially owned by Moore Global Investments, Ltd. (“MGI”) or 666,667 Common Shares beneficially owned by Remington Investment Strategies, L.P. (“Remington”). Does not include 235,333 Common Shares owned by family members of Mr. Louis Bacon, including 200,000 Common Shares owned by Mr. Zack Bacon, his brother. 1,440,334 of the Common |
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Shares beneficially owned by MH have been pledged to Citicorp USA, Inc. Mr. Louis Bacon, as the controlling member of MH, may be deemed to beneficially own the Common Shares and warrants to acquire Common Shares beneficially owned by MH. |
(6) | Consists of 1,666,667 Common Shares held of record or beneficially by MGI and 666,667 Common Shares held of record or beneficially by Remington. MCM exercises voting and investment power with respect to portfolio assets held for the account of MGI. Moore Capital Advisors, L.L.C. is the sole general partner of Remington. Mr. Louis Bacon is the majority shareholder of MCM and is the majority equity holder of Moore Capital Advisors, L.L.C. As a result, Mr. Bacon may be deemed to be the beneficial owner of the aggregate shares held of record or beneficially by MGI and Remington. Does not include 6,666,667 Common Shares or warrants to acquire 4,411,452 Common Shares beneficially owned by MH as described in footnote 5. |
(7) | Includes 4,000,000 Common Shares owned by Western General and warrants that are currently excisable to acquire 672,624 Common Shares. Mr. Marion, a Director of the Company and President and Managing Director of Western General, disclaims any beneficial interest in the Common Shares and warrants held by Western General. Does not include 1,000 Common Shares owned by Mr. Marion, as to which Western General disclaims any beneficial interest. |
(8) | Includes (i) warrants that are currently exercisable to acquire 781,291 Common Shares; (ii) 195,279 Common Shares owned by Yenooc Ltd. as to which Mr. Cooney, as sole director, claims beneficial ownership; (iii) 168,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable; and (iv) 24,000 shares of restricted stock issued under the Incentive Plan, which have vested. Does not include (A) warrants to acquire 100,990 Common Shares that are not currently exercisable; (B) 82,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are not currently exercisable; or (C) 135,000 shares of restricted stock issued under the Incentive Plan that remain subject to vesting restrictions. |
(9) | Includes (i) warrants that are currently exercisable to acquire 188,488 Common Shares; (ii) 88,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable; (iii) 14,400 shares of restricted stock issued under the Incentive Plan, which have vested; (iv) 1,334 Common Shares owned by Mr. Brining’s son, a minor; and (v) 667 Common Shares owned by his daughter, a minor. Mr. Brining disclaims beneficial ownership of the Common Shares owned by his son and daughter. Does not include (A) warrants to acquire 18,164 Common Shares that are not currently exercisable; (B) 42,000 Common Shares issuable upon the exercise of options under the Incentive Plan that are not currently exercisable; or (C) 36,600 shares of restricted stock issued under the Incentive Plan that remain subject to vesting restrictions. |
(10) | Includes (i) warrants that are currently exercisable to acquire 168,488 Common Shares; (ii) 80,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable; and (iii) 12,000 shares of restricted stock issued under the Incentive Plan, which have vested. Does not include (A) warrants to acquire 18,164 Common Shares that are not currently exercisable; (B) 40,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are not currently exercisable; or (C) 54,000 shares of restricted stock issued under the Incentive Plan that remain subject to vesting restrictions. |
(11) | Includes (i) warrants that are currently exercisable to acquire 128,488 Common Shares; (ii) 124,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable; and (iii) 12,800 shares of restricted stock issued under the Incentive Plan, which have vested. Does not include (A) warrants to acquire 18,164 Common Shares that are not currently exercisable; (B) 51,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are not currently exercisable; or (C) 28,700 shares of restricted stock issued under the Incentive Plan that remain subject to vesting restrictions. |
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(12) | Includes (i) warrants that are currently exercisable to acquire 98,488 Common Shares; (ii) 72,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable; and (iii) 28,000 shares of restricted stock issued under the Incentive Plan, which have vested. Does not include (A) warrants to acquire 18,164 Common Shares that are not currently exercisable; (B) 38,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are not currently exercisable; or (C) 81,000 shares of restricted stock issued under the Incentive Plan that remain subject to vesting restrictions. |
(13) | All Common Shares beneficially owned by Mr. Zack Bacon have been pledged to HSBC Bank USA pursuant to that certain Pledge and Hypothecation Agreement dated March 12, 2002. Mr. Bacon disclaims any beneficial interest in the Common Shares or warrants beneficially owned by Mr. Louis Bacon, MH and entities affiliated with MCM. |
(14) | Does not include 1,666,666 Common Shares beneficially owned by subsidiaries of Citigroup Inc., as to which Mr. Barber, as an affiliate thereof, disclaims any beneficial interest. The beneficial ownership of shares by subsidiaries of Citigroup Inc. is based solely on a Form 4 filed by Citigroup Inc. for August 2002. |
(15) | No shares owned. |
(16) | Includes 7,334 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable. Does not include 4,666 Common Shares issuable upon the exercise of options under the Incentive Plan that are not currently exercisable. |
(17) | Includes 14,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable. Does not include 2,000 Common Shares issuable upon the exercise of options under the Incentive Plan that are not currently exercisable. |
(18) | Does not include 4,000,000 Common Shares or warrants that are currently excisable to acquire 672,624 Common Shares beneficially owned by Western General, as to which Mr. Marion, as President and Managing Director of Western General, disclaims any beneficial ownership. |
(19) | Includes 26,666 Common Shares beneficially owned by Stockmoor Pty. Ltd., as to which Mr. Skala, as the sole director thereof and as a beneficiary of a trust of which the ultimate holding company of Stockmoor Pty. Ltd. is a trustee, has a beneficial interest. Includes 14,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable. Does not include 2,000 Common Shares issuable upon the exercise of options under the Incentive Plan that are not currently exercisable. |
(20) | Includes 14,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable. Does not include 2,000 Common Shares issuable upon the exercise of options under the Incentive Plan that are not currently exercisable. |
(21) | Includes 14,000 Common Shares issuable upon the exercise of options issued under the Incentive Plan that are currently exercisable. Does not include 2,000 Common Shares issuable upon the exercise of options under the Incentive Plan that are not currently exercisable. Does not include 1,010,000 Common Shares owned by High Ridge Capital Partners II, L.P., as to which Mr. Zech, as a partner thereof, disclaims any beneficial interest. |
(22) | Includes (i) warrants that are currently exercisable to acquire 1,365,243 Common Shares; (ii) options to acquire 595,334 Common Shares that are currently exercisable; and (iii) 91,200 shares of restricted stock, which have vested. Does not include (A) warrants to acquire 173,646 Common Shares that are not currently exercisable; or (B) options to acquire 265,666 Common Shares that are not currently exercisable, or (C) 335,300 restricted shares issued under the Incentive Plan that remain subject to vesting restrictions. |
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Certain Relationships and Related Transactions
Transactions and Relationships with Strategic Investors
Transactions with Bayerische Hypo- und Vereinsbank AG and Grand Central Re
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in order to participate on a co-insurance basis. Max Re also entered into an aggregate stop loss contract with Grand Central Re, effective January 1, 2003, whereby Grand Central Re provides aggregate reinsurance protection to Max Re on one of its underlying reinsurance contracts. Effective January 1, 2004, the quota share arrangement with Grand Central was amended to temporarily suspend the new business while Grand Central Re considers its long term strategic direction.
Loans to Management
Shareholders’ Agreement and Registration Rights
The Exchange Transaction
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Group and Cap Z beneficially owns in excess of 9.5% of the Company’s Common Shares. Pursuant to the Voting Limitation, the combined voting power of each of the Moore Group and Cap Z is limited to less than 9.5%.
Other
Executive Compensation
Summary Compensation Table
Annual Compensation | Long-Term Compensation | |||||||||||||||||||||||||||||
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Name and Principal Position | Year | Salary | Bonus (1) | Other Annual Compensation (2) | Restricted Stock Awards (3) | Securities Underlying Options (4) | All Other Compensation (5) | |||||||||||||||||||||||
Robert J. Cooney Chairman, President and Chief Executive Officer | 2003 2002 2001 | $600,000 $600,000 $580,000 | $1,200,000 $ 375,000 $ 916,000 | $167,245 $152,104 $164,151 | $498,150 — $384,000 | — 160,000 346,081 | $60,000 $60,000 $58,000 | |||||||||||||||||||||||
W. Dave Brining Executive Vice President | 2003 2002 2001 | $430,000 $430,000 $420,000 | $ 325,000 $ 175,000 $ 497,600 | $139,375 $137,024 $128,988 | $132,840 — $230,400 | — 50,000 126,412 | �� | $43,000 $43,000 $42,000 | ||||||||||||||||||||||
Keith S. Hynes Executive Vice President and Chief Financial Officer | 2003 2002 2001 | $400,000 $385,000 $375,000 | $ 500,000 $ 265,000 $ 478,000 | $147,353 $124,995 $133,725 | $232,470 — $192,000 | — 50,000 116,412 | $40,000 $38,500 $37,500 | |||||||||||||||||||||||
Philip R. Kruse Executive Vice President | 2003 2002 2001 | $360,000 $360,000 $350,000 | $ 365,000 $ 150,000 $ 426,200 | $146,546 $134,422 $118,534 | $ 83,205 — $204,800 | — 50,000 121,412 | $36,000 $36,000 $35,000 | |||||||||||||||||||||||
Peter A. Minton Executive Vice President and Chief Risk Officer | 2003 2002 2001 | $400,000 $350,000 $315,000 | $ 750,000 $ 392,640 $ 448,000 | $133,835 $115,585 $116,780 | $265,680 $250,560 $192,000 | — 50,000 106,412 | $40,000 $35,000 $31,500 |
(1) | Bonus amounts for 2003 were paid in February 2004. Bonus amounts for 2002 were paid in February 2003. The cash portion of bonus amounts for 2001 was paid in March 2002. Bonus amounts for 2001 for Messrs. Cooney, Brining, Hynes, Kruse and Minton include cash awards of $820,000, $440,000, $430,000, $375,000 and $415,000, respectively. Bonus amounts for 2001 also include the portion of restricted stock awards vested at the time of grant. Messrs. Cooney, Brining, Hynes, Kruse and Minton received 6,000, 3,600, 3,000, 3,200 and 3,000 vested shares, respectively, with an aggregate value of $96,000, $57,600, $48,000, $51,200 and $48,000, respectively, based on a price per Common Share of $16.00 at the date of grant. The restricted stock awards were granted under the Incentive Plan and vest 20% on the date of grant and 20% on each of the four anniversaries of the date of grant, subject to certain conditions and restrictions relating to, among other things, forfeiture in the event of termination of employment and transferability. |
(2) | The 2003 amounts consist of housing allowances for Messrs. Cooney, Brining, Hynes, Kruse and Minton of $120,000, $96,000, $108,000, $120,000 and $120,000, respectively, and reimbursements for home leave, a car allowance, club dues, financial planning and tax preparation costs. The 2002 and 2001 amounts each |
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consist of housing allowances for Messrs. Cooney, Brining, Hynes, Kruse and Minton of $120,000, $96,000, $84,000, $96,000 and $96,000, respectively, and reimbursements for home leave, a car allowance, club dues, financial planning and tax preparation costs. |
(3) | As of December 31, 2003, Messrs. Cooney, Brining, Hynes, Kruse and Minton held 75,000, 30,000, 36,000, 23,500 and 64,000 shares of restricted stock, respectively, with an aggregate value of $1,687,500, $675,000, $810,000, $528,750 and $1,440,000, respectively, based on a price per Common Share of $22.50 on December 31, 2003. Of these shares, 6,000, 3,600, 3,000, 3,200 and 10,000 shares were vested and 69,000, 26,400, 33,000, 20,300 and 34,000 shares remained restricted for Messrs. Cooney, Brining, Hynes, Kruse and Minton, respectively, as of December 31, 2003. The restricted stock awards for 2003 represent grants of 45,000, 12,000, 21,000, 7,500 and 24,000 to Messrs. Cooney, Brining, Hynes, Kruse and Minton, respectively, and were granted on January 31, 2003. The awards have a value, at grant, of $11.07 per share. The restricted stock awards were granted under the Incentive Plan and vest in their entirety on January 1, 2006, subject to certain conditions and restrictions relating to, among other things, forfeiture in the event of termination of employment and transferability. The restricted stock award for 2002 of 20,000 shares to Mr. Minton was granted on January 1, 2002. This award had a value, at grant, of $15.66 per share. The restricted stock awards for 2001 represent aggregate grants of 30,000, 18,000, 15,000, 16,000 and 15,000 shares to Messrs. Cooney, Brining, Hynes, Kruse and Minton, respectively, and were granted on January 1, 2001. These awards had a value, at grant, of $16.00 per share. The restricted stock awards were granted under the Incentive Plan and vest 20% on the date of grant and 20% on each of the four anniversaries of the date of grant, subject to certain conditions and restrictions relating to, among other things, forfeiture in the event of termination of employment and transferability. Under the Incentive Plan, Messrs. Cooney, Brining, Hynes, Kruse and Minton are eligible to receive dividends on their shares of restricted stock if the Company declares dividends on its Common Shares. |
(4) | On January 1, 2002, Messrs. Cooney, Brining, Hynes, Kruse and Minton were granted options under the Incentive Plan to purchase 160,000, 50,000, 50,000, 50,000 and 50,000 Common Shares, respectively. In 2001, Messrs. Cooney, Brining, Hynes, Kruse and Minton were granted warrants to purchase 256,081, 46,412, 46,412, 46,412, and 46,412 Common Shares, respectively, and options under the Incentive Plan to purchase 90,000, 80,000, 70,000, 75,000 and 60,000 Common Shares, respectively. The warrants and options vest 20% on the date of grant and 20% on each of the four anniversaries of the date of grant and are subject to certain restrictions relating to, among other things, forfeiture in the event of termination of employment and transferability. |
(5) | Represents a match of deferred compensation by Max Re, pursuant to the terms of the Max Re Deferred Compensation Plan. |
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Securities Authorized for Issuance Under Equity Compensation Plans
Equity Compensation Plan Information
Plan category | Number of securities to be issued upon exercise of outstanding options, warrants and rights | Weighted-average exercise price of outstanding options, warrants and rights | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(a) | (b) | (c) | ||||||||||||
Equity compensation plans approved by security holders | 4,940,665 | (1) | $ | 15.28 | 2,124,921 | (2) | ||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||||
Total | 4,940,665 | (1) | $ | 15.28 | 2,124,921 | (2) |
(1) | Includes 2,188,479 Common Shares issuable upon the exercise of options that were outstanding under the Incentive Plan as of December 31, 2003. The Incentive Plan was approved by the shareholders of the Company at the Annual General Meeting of Shareholders in 2000 and an amendment to the Incentive Plan was approved by shareholders at the Annual General Meeting of Shareholders in 2002. Also includes 2,752,186 Common Shares issuable upon the exercise of warrants granted in 1999, 2000 and 2001 to the Named Executive Officers and certain other employees of the Company pursuant to their respective employment agreements with the Company. The terms in the employment agreements providing for the granting of these warrants were approved by written shareholder resolution in December 1999. |
(2) | Represents the difference between the number of securities issuable under the Incentive Plan (5,000,000) and the number of securities issued under the Incentive Plan as of December 31, 2003 (2,875,079), which consist of options to acquire 2,188,479 Common Shares as well as 686,600 shares of restricted stock. |
Warrant and Stock Option Grants in Last Fiscal Year
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Aggregated Option Exercises in Last Fiscal Year
Name | Shares acquired on exercise | Value Realized | Number of Securities Underlying Unexercised Options/SARs at Fiscal Year End Exercisable/Unexercisable (1) | Value of Unexercised In-the-Money Options/SARs at Fiscal Year End Exercisable/Unexercisable | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Robert J. Cooney | — | — | 852,053/280,228 | $6,122,510/$1,887,917 | ||||||
W. Dave Brining | — | — | 256,039/80,613 | $1,826,246/$530,899 | ||||||
Keith S. Hynes | — | — | 230,039/76,613 | $1,637,246/$504,899 | ||||||
Philip R. Kruse | — | — | 233,039/88,613 | $1,656,746/$592,899 | ||||||
Peter A. Minton | — | — | 140,039/86,613 | $968,246/$583,899 |
(1) | Represent warrants to purchase 882,281, 206,652, 186,652, 146,652 and 116,652 Common Shares of the Company, and options to purchase 250,000, 130,000, 120,000, 175,000 and 110,000 Common Shares granted under the Incentive Plan, held by Messrs. Cooney, Brining, Hynes, Kruse and Minton, respectively. |
Deferred Compensation Plans
Employment Contracts and Termination of Employment and Change-In-Control Arrangements
19
bonus. In the event of his termination without Cause or for Good Reason or upon the Company electing not to extend the term of the employment agreement subsequent to August 1, 2004 and on or prior to August 1, 2009, Mr. Cooney will be entitled to a lump-sum payment between $1.5 million and $550,000, calculated on a straight-line basis, and in the event of his termination on or after August 1, 2009, he will be entitled to an amount equal to $550,000. Notwithstanding the foregoing, if Mr. Cooney is terminated upon a Change in Control, Mr. Cooney, in lieu of the $1.5 million or pro-rata payment described above, will be entitled to receive a lump-sum payment equal to two times his then current base salary and last paid bonus. In addition, in the event such payments are subject to golden parachute excise taxes under Section 4999 of the U.S. Internal Revenue Code of 1986, as amended, Mr. Cooney will receive a tax gross-up premium payment for the full amount of such excise tax. Mr. Cooney is also entitled to a deferred hiring bonus payment of $750,000 on the earlier of (i) his termination of employment for any reason or (ii) March 31, 2005. Mr. Cooney’s employment agreement also contains provisions relating to confidentiality, non-solicitation and non-disparagement.
Compensation Committee Interlocks and Insider Participation
20
Compensation Committee Report on Executive Compensation
(for fiscal year 2003)
Zack H. Bacon III
Laurence W. Cheng
Willis T. King, Jr.
Mario P. Torsiello
Report of the Audit and Risk Management Committee
21
(for fiscal year 2004)
William H. Heyman
John L. Marion
Mario P. Torsiello
James L. Zech
Principal Accountant Fees and Services
Audit Fees
Audit-Related Fees
22
December 31, 2002 were $4,330. These fees were in respect of services provided by KPMG related to regulatory returns filed in Bermuda and Ireland.
Tax Fees
All Other Fees
General
Pre-Approval of Audit and Non-Audit Services
Section 16(a) Beneficial Ownership Reporting Compliance
23
PROPOSAL TWO
THE COMPANY AUDITORS PROPOSAL
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE AUDITORS PROPOSAL.
PROPOSAL THREE
AUTHORIZATION OF ELECTION OF DIRECTORS OF MAX RE
NOMINEES FOR DIRECTOR OF MAX RE WHOSE TERMS, IF ELECTED, WILL EXPIRE IN 2007:
W. Marston Becker
Robert J. Cooney
Mario P. Torsiello
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” AUTHORIZATION OF THE ELECTION OF THE NOMINEES ABOVE.
24
DIRECTORS OF MAX RE WHOSE TERMS WILL EXPIRE IN 2005:
Willis T. King, Jr.
Steven M. Skala
DIRECTOR OF MAX RE WHOSE TERMS WILL EXPIRE IN 2006:
Laurence W. Cheng
John L. Marion
James L. Zech
PROPOSAL FOUR
MAX RE AUDITORS PROPOSAL
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE “FOR” THE APPROVAL OF THE AUDITORS PROPOSAL.
ADDITIONAL INFORMATION
Other Action at the Meeting
Shareholder Proposals for Annual Meeting of Shareholders in 2005
25
the 2005 Proxy Statement. Such proposals should be directed to the attention of the Secretary, Max Re Capital Ltd., P.O. Box HM 2565, Hamilton HM KX, Bermuda.
Costs of Solicitation
![](https://capedge.com/proxy/DEF 14A/0001145443-04-000391/cooneyrjsig.jpg)
Chairman of the Board
Dated: March 24, 2004
26
Annex A
Max Re Capital Ltd.
Purpose
Committee Membership
Meetings
Committee Authority and Responsibilities
A-1
remuneration the Chief Executive Officer requests the Committee to review and affirm. Such responsibility includes the following:
(a) | To review and to make periodic recommendations to the Board as to the general compensation and benefits policies and practices of the Company, including incentive-compensation plans and equity-based plans; |
(b) | To review and adopt, and to recommend to the Board (and for shareholder approval where required by applicable law or the Memorandum of Association) compensation and benefits policies, plans and programs and amendments thereto, determining eligible employees and the type, amount and timing of such compensation and benefits; |
(c) | To oversee the administration of such policies, plans and programs and, on an ongoing basis to monitor them to assure that they remain competitive and within the Board’s compensation objectives for executive officers and such other members of senior management; |
(d) | To review and affirm contractual employment and compensation arrangements with executive officers and other members of senior management who are the responsibility of the Board or whose compensation the Chief Executive Officer requests the Committee to review and affirm; |
(e) | To review and approve corporate goals and objectives relevant to the Chief Executive Officer’s compensation package and to evaluate the Chief Executive Officer’s performance and compensation based on such goals and objectives as set forth in clause (g) below; |
(f) | To (i) establish a procedure for evaluating the Chief Executive Officer’s performance, (ii) annually evaluate such performance and (iii) review, after completion of the annual evaluation, with the Chief Executive Officer the results of the Committee’s evaluation of the Chief Executive Officer’s performance; |
(g) | To review, at least annually, and set the base salary and annual and long-term incentive compensation of the Chief Executive Officer, after taking into account the annual evaluation of the Chief Executive Officer referred to in clause (f) above; |
(h) | To review and to make recommendations to the Board at least annually with respect to the base salary and annual and long-term incentive compensation of the other executive officers and other members of senior management (upon the recommendation of the Chief Executive Officer) who are the responsibility of the Board or whose compensation the Chief Executive Officer requests the Committee to review and affirm; |
(i) | To prepare an annual executive compensation report for the shareholders of the Company in accordance with the rules and regulations of the SEC; and |
(j) | To perform such other duties as the Board may assign to the Committee. |
A-2
Annual Evaluation Procedures
Studies
Miscellaneous
Adopted by the Compensation Committee and approved
by the Board of Directors on January 30, 2004.
A-3
Annex B
Max Re Capital Ltd.
Charter of the Nominating and Corporate Governance Committee of the Board of Directors
Purpose
Committee Membership
Meetings
Committee Authority and Responsibilities
Board Candidates and Nominees
1. | Develop and recommend to the Board director qualification criteria and establish procedures for evaluating the suitability of potential director nominees. Such criteria shall include the possession of such knowledge, experience, skills, expertise and diversity so as to enhance the Board’s ability to manage and direct the affairs and business of the Company, including, when applicable, to enhance the |
B-1
ability of committees of the Board to fulfill their duties and/or to satisfy any independence requirements imposed by law, regulation or Nasdaq or NYSE, as applicable, listing standards. The Committee shall also consider the number of other public company boards on which director candidates and nominees sit in determining eligibility for election. |
2. | Actively identify and attract candidates for director and review potential nominees proposed by management, shareholders or others. The Committee shall have the sole authority to retain or terminate any search firm to be used to identify director candidates, including sole authority to approve a search firm’s fees and other retention terms, such fees to be borne by the Company. |
3. | Recommend to the Board the director nominees for election by the shareholders, pursuant to the Bye-laws of the Company, which recommendations shall be consistent with the Board’s criteria for selecting new directors. |
4. | Review the suitability for continued service as a director of each Board member when his or her term expires and when he or she has a significant change in status, including but not limited to an employment change, and to recommend whether or not the director should be re-nominated. |
5. | Review and make recommendations to the Board with regard to length of Board service, director compensation and a retirement policy for members of the Board. The Committee shall have the sole authority to retain or terminate any firm to be used to evaluate director compensation, including sole authority to approve a firm’s fees and other retention terms, such fees to be borne by the Company. |
6. | Review and oversee any orientation programs for newly elected members of the Board and continuing director education programs and to assist the Board in the implementation of such programs. |
Board Composition and Procedures
7. | Review annually with the Board the composition of the Board as a whole and recommend, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Board as a whole and contains at least the minimum number of independent directors required by Nasdaq or NYSE, as applicable, listing standards. |
8. | Review periodically the size of the Board and recommend to the Board any appropriate changes. |
9. | Make recommendations on the frequency, content and structure of Board meetings. |
10. | Make recommendations concerning any other aspect of the procedures of the Board that the Committee considers warranted, including but not limited to procedures with respect to the waiver by the Board of any Company rule, guideline, procedure or corporate governance principle. |
Board Committees
11. | Make recommendations to the Board regarding the size and composition of each standing committee of the Board, including the identification of individuals qualified to serve as members of a committee, including the Committee, and recommend individual directors to fill any vacancy that might occur on a committee, including the Committee. |
12. | Monitor the functioning of the committees of the Board and make recommendations for any changes, including the creation and elimination of committees. |
13. | Review annually committee assignments and the policy with respect to the rotation of members of the committees and/or chairpersons, and report any recommendations to the Board. |
B-2
14. | Recommend that the Board establish such special committees as may be desirable or necessary from time to time in order to address ethical, legal or other matters that may arise. The Committee’s power to make such a recommendation under this Charter shall be without prejudice to the right of any other committee of the Board, or any individual director, to make such a recommendation at any time. |
Corporate Governance
15. | Develop and review periodically, and at least annually, the corporate governance guidelines adopted by the Board to assure that they are appropriate for the Company and comply with the requirements of the Nasdaq or NYSE, as applicable, and recommend any desirable changes to the Board. |
16. | Consider any corporate governance issues that may arise from time to time, and develop appropriate recommendations for the Board. |
17. | Review significant shareholder relations issues, corporate political contributions and the Company’s charitable contributions. |
18. | Review, at least annually, the Company’s Code of Business Conduct and Ethics and make recommendations to the Board for any changes deemed appropriate. |
19. | Review requests from directors and executive officers of the Company for waivers from the Company’s Code of Business Conduct and Ethics, make recommendations to the Board concerning such requests or grant such requests on behalf of the Board if appropriate, and review any required disclosures relating to such waivers. |
Performance Evaluation
20. | Oversee the evaluation of the Board as a whole and its committees and establish procedures to allow it to exercise this oversight function. |
21. | Review and recommend continuing education programs for directors of the Company that support the Committee’s objective to promote the competence and integrity of the Board and its members. |
22. | Annually conduct an evaluation of the Committee’s performance and, in light of this, consider changes in its membership, charter or procedures. The Committee shall report to the Board the results of its evaluation, including recommended charter, membership and other changes. |
23. | Assist the Board in evaluating the performance of and other factors relating to the retention of the Chief Executive Officer. |
24. | Assist the Board in the evaluation of the performance of other executive officers. It is recognized that subject to the oversight by the Board and this Committee and subject to the responsibilities of the Compensation Committee, the Chief Executive Officer will have primary responsibility for evaluating the performance of other executive officers. |
Miscellaneous
B-3
IF THIS PROXY IS PROPERLY EXECUTED AND RETURNED, THE COMMON SHARES REPRESENTED THEREBY WILL BE VOTED. IF A CHOICE IS SPECIFIED BY THE SHAREHOLDER, THE SHARES WILL BE VOTED ACCORDINGLY. IF NOT OTHERWISE SPECIFIED, THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4. | Please Mark Here for Address Change or Comments | o | |||
SEE REVERSE SIDE |
FOR | AGAINST | ABSTAIN | 2. | Auditors. Appointment of KPMG, Hamilton, Bermuda, as independent auditors of Max Re Capital Ltd. for 2004. | FOR | AGAINST | ABSTAIN | ||||||||||||||||||||
1A. | To elect John R. Barber to the Board of Directors of Max Re Capital Ltd. | o | o | o | 3A. | To elect John R. Barber to the Board of Directors of Max Re Ltd. | o | o | o | ||||||||||||||||||
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||||||||
1B. | To elect W. Marston Becker to the Board of Directors of Max Re Capital Ltd. | o | o | o | o | o | o | 3B. | To elect W. Marston Becker to the Board of Directors of Max Re Ltd. | o | o | o | |||||||||||||||
FOR | AGAINST | ABSTAIN | 4. | Auditors. Appointment of KPMG, Hamilton, Bermuda, as independent auditors of Max Re Ltd. for 2004. | FOR | AGAINST | ABSTAIN | ||||||||||||||||||||
1C. | To elect Robert J. Cooney to the Board of Directors of Max Re Capital Ltd. | o | o | o | 3C. | To elect Robert J. Cooney to the Board of Directors of Max Re Ltd. | o | o | o | ||||||||||||||||||
FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | FOR | AGAINST | ABSTAIN | |||||||||||||||||||
1D. | To elect Mario P. Torsiello to the Board of Directors of Max Re Capital Ltd. | o | o | o | o | o | o | 3D. | To elect Mario P. Torsiello to the Board of Directors of Max Re Ltd. | o | o | o | |||||||||||||||
In the case of joint tenancies, co-executors or co-trustees, all should sign. Persons signing as attorney, executor, administrator, trustee or guardian should indicate their full title. | In their discretion, the proxies are authorized to vote upon |
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Vote by Internet or Mail
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Internet Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site. | OR | Mail Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope. |
If you vote your proxy by Internet,
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You can view the Annual Report and Proxy Statement
on the Internet at www.maxre.bm
MAX RE CAPITAL LTD. The undersigned hereby appoints N. James Tees and Sheila A. Gringley, each of them, as proxies of the undersigned, each with full power to act without the others and with full power of substitution, to vote all the Common Shares of Max Re Capital Ltd. held in the name of the undersigned at the close of business on March 11, 2004, at the Annual General Meeting of Shareholders to be held on April 29, 2004, at 10:00 a.m. (local time), and at any adjournment thereof, with all the powers the undersigned would have if personally present, as set forth below. | ||
Address Change/Comments (Mark the corresponding box on the reverse side) | ||
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