NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on May 8, 1995
To the Shareholders of Capitol Transamerica Corporation:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders
of Capitol Transamerica Corporation (CTC) will be held at the
Holiday Inn-Madison West, 1313 John Q. Hammons Drive, Middleton, WI
53562, on Monday, May 8, 1995 with registration at 2:30 p.m. and the
meeting at 3:00 p.m. central daylight time for the following
purposes:
1. To elect two directors for three year terms expiring in
1998,
2. To ratify the selection of Ernst & Young LLP, as the
Company's independent auditors for the ensuing year; and
3. To transact such other business that may properly come
before the meeting and any adjournments thereof.
The Board of Directors has fixed the close of business on
March 17, 1995 as the record date for the determination of
shareholders entitled to notice of and to vote at the Annual Meeting
and any adjournments thereof.
All shareholders are cordially invited to attend the Annual
Meeting. Whether or not you plan to attend the meeting, the Board
of Directors urges you to complete, date, sign and return the
enclosed proxy as soon as possible in the enclosed business reply
envelope, which requires no postage if mailed in the United States.
You may revoke the proxy at any time prior to its exercise provided
that you comply with the procedures set forth in the Proxy Statement
to which this Notice of Annual Meeting of Shareholders is attached.
If you attend the Annual Meeting, you may if you desire, withdraw
your proxy at the registration desk and vote in person.
By order of the
Board of Directors,
Virgiline M. Schulte
Secretary
Madison, Wisconsin
April 3, 1995
IMPORTANT: PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED
ENVELOPE
THE MEETING DATE IS MAY 8, 1995
<PAGE>
CAPITOL TRANSAMERICA CORPORATION
4610 University Avenue - Madison, Wisconsin 53705-0900
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 8, 1995
SOLICITATION AND REVOCATION OF PROXIES
The accompanying proxy is solicited by the Board of Directors
of Capitol Transamerica Corporation to be used at the Annual Meeting
of Shareholders to be held on May 8, 1995 and any adjournments
thereof. Shares of stock may be voted at the Annual Meeting only if
the shareholder is represented by proxy or is present in person.
The proxy procedure is necessary in order to give all shareholders
an opportunity to vote, because many of our shareholders will not be
able to attend the Annual Meeting in person. The cost of soliciting
proxies will be borne by the Company. When the proxy is properly
executed and returned, the shares it represents will be voted at the
meeting in accordance with the directions noted thereon. If no
choice is specified, the proxy will be voted at the meeting in
accordance with the recommendations of the Board of Directors as set
forth herein. Any shareholder returning a proxy has the power to
revoke it by written notice to the Secretary of the Corporation at
any time before it is voted, by a later dated proxy, or by attending
the meeting personally and voting. The Annual Report of the Company
is being mailed to all shareholders herewith. The proxy materials
were first mailed to all shareholders on or about April 3, 1995.
Capitol Transamerica Corporation is the parent company of
Capitol Indemnity Corporation, Capitol Specialty Insurance
Corporation and Capitol Facilities Corporation, subsidiary
companies.
OUTSTANDING STOCK AND VOTING RIGHTS
As of the close of business on March 17, 1995, there were
outstanding and entitled to vote 6,748,468 shares of the Company's
common stock. Shareholders of record on March 17, 1995 will be
entitled to one vote for each share of common stock held. The
Company has no other class of stock outstanding.
<TABLE>
PRINCIPAL SHAREHOLDERS
The following table sets forth information as of March 17, 1995 with respect to
each person or entity known by the Company to be the beneficial owner (as defined by
the Securities and Exchange Commission) of more than 5% of the Company's Common Voting
Stock:
<CAPTION>
Amount & Nature of Percent
Name & Address Beneficial Ownership of Class
<S> <C> <C>
George A. Fait 1,219,470<F1> 17.91%
3100 Lake Mendota Drive
Madison, WI 53705
Neumeier Investment Counsel 469,104<F2> 6.93%
26435 Carmel Rancho Blvd.
Carmel, CA 93923
Robert E. Fait 374,247 5.54%
148 Kings Court
Burlington, WI 53105
<FN>
<F1> Includes 145,861 shares of record and held in Trust for his children and
grandchildren to which he denies beneficial ownership, 10,294 shares in a
personal Keogh Retirement Plan, 17,687 shares in the Company's Employee Stock
Ownership Plan and 5,812 shares in a personal IRA. This total also includes
10,500 shares of stock issuable upon exercise of options granted and outstanding
under Capitol Transamerica Corporation's Stock Option Plan which are not included
<PAGE>
in the percent of class calculation.
<F2> Information obtained from a Schedule 13G, dated February 3, 1995, filed with the
Securities and Exchange Commission by Neumeier Investment Counsel, a California
based company. The Schedule 13G indicates that it has sole voting power over
469,104 shares and dispositive power over all shares held.
</FN>
</TABLE>
PROPOSAL 1. ELECTION OF DIRECTORS
As permitted by Wisconsin law, the Board of Directors of the
Company is divided into three classes, each class having a term of
three years. Each year the term of office of one class expires.
This year the terms of a class consisting of three directors expires
and it is the intention of the Board of Directors that the shares
represented by proxy, unless otherwise indicated thereon, will be
voted for the re-election of Michael J. Larson and Richard E. Tipple
to hold office for a term of three years until the Annual Meeting of
Shareholders in 1998 when their terms will expire. Director Robert
C. Voss whose term expires this year and who has been a director
since 1971 is not running for re-election since mandatory retirement
is required of any Director attaining the age of 70 at the end of
their term of directorship. There are no disagreements between Mr.
Voss and the registrant. There is no reason to believe that either
of the nominees will be unable or unwilling to serve as directors if
elected, but if a nominee should be unable or unwilling to serve,
the shares represented by management proxies will be voted for the
election of such other person for the office of director as the
Board of Directors may recommend in place of such nominee.
Information with respect to the nominees and other directors
is set forth below:
<TABLE>
<CAPTION> Company's Common Stock
Name, Age, Principal Occupation Original Date Owned as of 3/17/95
and Public Directorships<F1> of Election Shares Percent of Class<F2><F3>
<S> <C> <C> <C>
Class of 1998
(Terms will expire in 1998)
Michael J. Larson, Age 53, Madison, WI; 1991 2,299 0.02%
President, Bank One-Madison; Director,
Bank One-Madison.
Richard E. Tipple, Age 69, Stoughton, WI; 1970 34,851 0.50%
Retired, formerly with University of
Wisconsin Planning Department
Class of 1997
(Terms will expire in 1997)
George A. Fait, Age 68, Madison, WI; 1960 1,219,470 17.91%
Chairman of the Board and President of
the Company; Director, Bank One-Madison.
Robert W. Goodwin, Age 69, Palm Harbor, 1982 41,899 0.60%
FL; Retired, formerly with Dean, Witter,
Reynolds, Inc.
Class of 1996
(Terms will expire in 1996)
<PAGE>
Paul J. Breitnauer, Age 55, Sun Prairie, 1986 81,523 1.20%
WI; Vice President & Treasurer of the
Company.
Reinhart H. Postweiler, Age 65, 1977 28,855 0.41%
Madison, WI; Retired, formerly with
Flad Affiliated Corporation; Director,
Bank One-Madison
<FN>
<F1> All of the named Directors and Nominees are also directors of Capitol Indemnity
Corporation, Capitol Specialty Insurance Corporation and Capitol Facilities
Corporation, subsidiary. None of the above directors are
related and there are no arrangements or understandings between directors since each
is acting solely in their described capacity. There have been no known events
during the past five years which are material to the evaluation of the ability or
integrity of any director of the Company.
<F2> Includes shares of stock issuable upon exercise of options granted and outstanding
under Capitol Transamerica Corporation's Stock Option Plans: 10,500 shares for
George A. Fait, 800 shares each for Robert W. Goodwin, Michael J. Larson, Reinhart
H. Postweiler and Richard E. Tipple and 100 shares for Paul J. Breitnauer which are
not included in the percent of class calculation.
<F3> Included in the percent of class calculations are 10,294 shares in a personal Keogh
Retirement Plan, 17,687 shares in the Company's E.S.O.P. Plan and 5,812 shares in
a personal IRA for George A. Fait and 5,869 shares in a personal I.R.A. and 3,712
shares in the Company's E.S.O.P. Plan for Paul J. Breitnauer.
</FN>
</TABLE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held four regular meetings during 1994.
Each director attended at least 75% of the meetings of the Board.
Responsibilities of the various committees of the Board of
Directors are as follows:
The Audit Committee is comprised of Messrs. Breitnauer, Larson
and Postweiler. The members of the committee are responsible for
assisting the Board of Directors in fulfilling its responsibilities
in connection with Capitol Transamerica Corporation's accounting and
financial reporting practices. The regularly scheduled Audit
Committee meeting was held on December 13, 1994.
The Executive Committee is empowered by the By-Laws of the
Company to act on behalf of the Company during intervals between
meetings of the Board of Directors. The Executive Committee also
functions as the Executive Compensation Committee, which is
responsible for establishing the criteria used in establishing the
annual compensation of the Chairman of the Board and all other
officers of the Company. The Committee consists of Messrs. Fait,
Larson, Postweiler and Tipple. The Executive Committee held one
meeting during 1994.
The Investment Committee is responsible for the investment of
the Company's assets. The Committee consists of Messrs. Fait,
Goodwin, Larson and Voss. The Investment Committee met four times
during 1994 in conjunction with the regular Board of Directors
meetings.
The Nominating Committee makes recommendations to the Board of
Directors regarding nominees for election as directors. The
<PAGE>
ommittee consists of Messrs. Tipple, Breitnauer, Fait and
Postweiler. This Committee will also consider nominees recommended
by shareholders of the Company. Recommendations may be submitted in
writing to the Chairman of the Nominating Committee, Mr. Richard
Tipple, at the Company's address. The Committee held one meeting
during 1994.
The Sale & Acquisition Committee makes recommendations to the
Board of Directors concerning any prospective offer to purchase the
Company or subsidiaries and/or the possible acquisition of new
companies or subsidiaries. The Committee consists of Messrs. Fait,
Goodwin, Larson and Postweiler. The Sale and Acquisition Committee
held four meetings during 1994 in conjunction with the regular Board
of Directors meetings.
The Stock Option Plan Committee is responsible for
administering the Company's stock option plans. The Committee
consists of Messrs. Tipple, Fait, Goodwin and Voss. The Stock
Option Plan Committee held four meetings during 1994.
COMPENSATION OF DIRECTORS
During the 1994 fiscal year Capitol Transamerica Corporation
paid director's fees of $750 per meeting to each director of Capitol
Transamerica Corporation and its wholly-owned subsidiaries, except
for directors who were also officers of the companies who received
no cash compensation for attendance at meetings. A committee fee of
$300 is paid to outside directors when meetings are not held in
conjunction with the regularly scheduled Board of Directors
meetings. For fiscal year 1994 Capitol Transamerica Corporation
paid a total of $15,600 in director's fees and each non-employee
director received 300 unqualified stock options for serving on the
respective boards.
REPORT ON EXECUTIVE COMPENSATION
<TABLE>
The following Summary Compensation Table includes individual compensation information
on all Executive Officers earning $100,000 or more in the last three fiscal years. Such
table includes all compensation for services rendered in all capacities during the fiscal
years ended December 31, 1994, 1993 and 1992 respectively.
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term Compensation
All Other Options
Name/Title Year Salary Bonus<F1> Compensation<F2> (# Awarded shares)
<S> <C> <C> <C> <C> <C>
George A. Fait 1994 $65,000 $285,145 $15,097 None,
Chairman of the Board 1993 $65,000 $870,346 7,503 10,500
& President 1992 $65,000 $463,896 5,232 None
Paul J. Breitnauer 1994 $98,230 -0- 6,404 None
Vice President & 1993 $98,000 -0- 4,426 500
Treasurer 1992 $90,224 -0- 3,387 None
<FN>
<F1> The bonus for the years 1994, 1993 and 1992 was calculated on the results for each individual
year and was paid in the first quarter of the following year. Such bonus was based on 10% of the
excess gross profits after a 15% return on beginning shareholders equity.
<F2> Includes net contributions to the Corporation's Employee Stock Ownership Plan of $12,847 in 1994,
$5,253 in 1993, and $2,982 in 1992 for George A. Fait and $4,154 in 1994, $2,176 in 1993 and
$1,137 in 1992 for Paul J. Breitnauer and also $2,250 annually, for each, to the company's
401(k) Plan.
</FN>
OPTION'S/SARS EXERCISED IN LAST FISCAL YEAR
<PAGE>
The following table contains information for the named executives concerning the exercise of
options during 1994 and the value of unexercised options at year-end for the Corporation's common stock.
<CAPTION>
Aggregated Options Exercised in Last Fiscal Year and FY-End Option Values
Number of Value of
Options Unexercised Unexercised
Acquired on Value Options at Options at
Exercise Realized 12/31/94 at 12/31/94
Name (# Shares) ($)<F1> (# Shares) ($)<F1>
<S> <C> <C> <C> <C>
George A. Fait -0- $-0- 10,500 $26,250
Paul J. Breitnauer 400 1,000 100 $250
<FN>
<F1> Based on 12-31-94 Market price of $16.75 less base cost of $14.25 per share.
</FN>
</TABLE>
Compensation Committee Interlocks and Insider Participation
The members of the Corporation's Executive Compensation
Committee for 1994 were Mr. George A. Fait, Mr. Michael J. Larson,
Mr. Reinhart H. Postweiler and Mr. Richard E. Tipple.
Mr. George A. Fait, Chairman of the Board and President of
Capitol Transamerica Corporation serves as a Director of Bank One -
Madison, and Mr. Michael J. Larson, President of Bank One - Madison
serves on the Board of Capitol Transamerica Corporation, Mr.
Reinhart H. Postweiler, Director, serves on both Boards and all
serve on the Executive Compensation Committee of Capitol
Transamerica Corporation.
Executive Compensation Committee Report
The Executive Compensation Committee of the Board of Directors
is composed of three independent outside directors and Mr. George A.
Fait, Chairman of the Board and President of the Company. The
Committee is responsible for setting and administering the annual
compensation of the Chairman of the Board and all other officers of
the Company. In 1983 the Committee established a base annual salary
of $65,000 for the Chairman of the Board with a bonus based on 10%
of the excess of gross profits after a 15% return on beginning
shareholders' equity, such plan was confirmed and continued by the
Executive Compensation Committee and is effective for the calendar
year of 1995.
Executive Compensation Committee
George A. Fait, Michael J. Larson, Reinhart H. Postweiler, Richard E. Tipple
<TABLE>
Comparison of Five Year Cumulative Total Return
The following graph demonstrates a five year comparison of cumulative total return for Capitol Transamerica
Corporation, the Standard & Poor's 500 Index and Firemark Insurance Index (Property & Casualty commercial Peer
Group).
<CAPTION>
12/31/89 12/31/90 12/31/91 12/31/92 12/31/93 12/31/94
<S> <C> <C> <C> <C> <C> <C>
CATA 100 116 281 223 245 242
S&P 500<F1> 100 97 126 136 148 150
Industry<F2> 100 87 118 148 162 148
<FN>
<F1> Includes Reinvested Dividends
<F2> Firemark Insurance Index Property & Casualty Commercial Peer Group
</FN>
<PAGE>
</TABLE>
COMPENSATION PLANS
Stock Option Plans
Capitol Transamerica Corporation has a stock option plan which
was adopted by the Board of Directors at the January 14, 1993
meeting. Such Plan replaced the 1976 Unqualified Stock Option Plan
and the 1981 Incentive Stock Option Plan that both expired on
October 25, 1991. The purpose of the Plan is to induce Employees to
remain in the employ of the Company or its subsidiaries, to attract
and retain qualified Non-Employee Directors and to encourage
Employees, Key Persons and Non-Employee Directors to secure or
increase on reasonable terms their stock ownership in the Company.
The Board of Directors of the Company believes that the Plan will
promote continuity of management and increased incentive and
personal interest in the welfare of the Company by those who are
primarily responsible for shaping and carrying out the long-range
plans of the Company and securing its continued growth and financial
success.
<TABLE>
The table below summarizes certain information with respect to the Company's option plans which expired
October 25,1991 and sets forth all options exercised during the periods January 1, 1994 through December 31, 1994
and January 1 through March 17, 1995:
<CAPTION>
Options Awarded Options Exercised Options Exercised Options Options Available
1-1-94 to 12-31-94 1-1-94 to 12-31-94 1-1-95 to 3-17-95 Outstanding For Award
<S> <C> <C> <C> <C> <C>
1976 Unqualified Plan -0- 4,215 -0- -0- -0-
1981 Incentive Plan -0- 26,271 4,979 60,116 -0-
The table below summarizes stock options awarded and exercised under the Capitol Transamerica Corporation
Stock Option Plan adopted January 14, 1993:
<CAPTION>
Options Awarded Options Exercised Options Exercised Options Options Available
1-1-94 to 12-31-94 1-1-94 to 12-31-94 1-1-95 to 3-17-95 Outstanding For Award
<S> <C> <C> <C> <C> <C>
1993 Stock Option Plan 12,500 700 -0- 39,600 609,800
</TABLE>
All options under the Stock Option Plans were issued at 100%
of the fair market value on the date of grant. The market value on
March 17, 1995 of the common stock of CTC was quoted in the over-
the-counter quotations of the National Association of Securities
Dealers at $16.00 bid and $16.50 ask. There are currently 53
employees and 5 directors that hold Stock Options.
Employee Stock Ownership Plan
An Employee Stock Ownership Plan (ESOP) was adopted in 1988
for the purpose of inducing employees to remain in the employ of the
Company, to attract new employees and to provide such employees the
opportunity to participate in the ownership of the Corporation. All
<PAGE>
present and future employees of the Company and its subsidiaries are
eligible to participate in accordance with the terms of the Plan.
Presently there are 50,361 shares of the company stock in the Plan
of which 48,771 shares have been allocated to those employees who
are eligible to participate. There are 1,590 shares available for
allocation and award. There are currently 92 active employees in the
Plan and 12 in-active. The market value of the stock within the
Plan at March 17, 1995 was $805,776.00.
Employee 401(k) Savings Plan
The Company has an Employer sponsored 401(k) Plan for all
employees who have been employed by the Company for 12 consecutive
months, under which the Company contributes an amount equal to 150%
of each participants eligible contribution for the plan year that
does not exceed 6% of compensation and shall be no greater than
$1,500 for each employee and $2,250 for the employer for a maximum
combined total of $3,750 for each limitation (plan) year. The
employee may contribute non-matching funds not to exceed 10% of
gross annual salary. Both the individual participants contribution
and the Company's contribution are non-forfeitable, with no
reversion to the Company. Currently there are 87 active employees
in the Plan and 2 in-active.
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
executive officers and directors, and persons who beneficially own
more than ten percent (10%) of the Company's stock, to file initial
reports of ownership and reports of changes in ownership with the
Securities and Exchange Commission (SEC) and the NASDAQ Stock
Exchange. Executive officers, directors and greater than ten
percent (10%) beneficial owners are required by SEC regulations to
furnish the Company with copies of all Section 16(a) forms they
file.
Based solely on a review of the copies of such forms furnished
to the Company and written representations from the executive
officers and directors, the Company believes that all Section 16(a)
filing requirements applicable to its executive officers, directors
and greater than ten percent (10%) beneficial owners were complied
with in 1994 with the exception of one late filing by Director
Reinhart Postweiler.
PROPOSAL 2. RATIFICATION OF INDEPENDENT AUDITORS
The independent public accountants selected by the Board for
the Company's fiscal year ending December 31, 1995 are Ernst & Young
LLP who also served in that capacity for the fiscal year ended
December 31, 1994. A representative of the firm is expected to be
present at the Annual Meeting of Shareholders on May 8, 1995 and
will be afforded an opportunity to make any statement they wish and
to answer appropriate questions regarding the Company's financial
statements.
SHAREHOLDERS PROPOSALS
The Corporation has not received any shareholder proposals to
be considered for presentation at the 1995 Annual Meeting of
Shareholders. If a shareholder desires to present a proposal for
inclusion in next year's Proxy Statement and to present such
<PAGE>
proposal at the 1996 Annual Meeting of the Shareholders of Capitol
Transamerica Corporation, the shareholder must submit such proposal
in writing to Capitol Transamerica Corporation, 4610 University
Avenue, Madison, Wisconsin 53705, Attention: Secretary, not later
than December 31, 1995.
OTHER BUSINESS
The meeting is being held for the purposes set forth in the
Notice accompanying this Proxy Statement. The Board of Directors of
the Company does not know of any other matters which may be
presented at the meeting. In the event that any matters other than
those referred to in the accompanying Notice properly come before
the meeting or any adjournment thereof, it is anticipated that the
proxies will be voted according to the best judgment of the person
acting by authorization of these proxies.
CAPITOL TRANSAMERICA CORPORATION
Virgiline M. Schulte
April 3, 1995 Secretary
CAPITOL TRANSAMERICA CORPORATION
4610 UNIVERSITY AVE., MADISON, WI 53705
PROXY SOLICITED ON BEHALF OF BOARD OF DIRECTORS
The undersigned hereby appoints George A. Fait as proxy, and
Virgiline M. Schulte as the alternative proxy, with power of
substitution to vote all shares of stock of Capitol Transamerica
Corporation of record in the name of the undersigned at the close of
business on March 17, 1995 at the Annual Meeting of Shareholders of
the Corporation to be held May 8, 1995, and any adjournments or
postponements thereof as indicated below:
1. ELECTION OF DIRECTORS - Class of 1998 - Michael J. Larson and
Richard E. Tipple.
FOR all nominees listed above WITHHOLD AUTHORITY
(except as indicated to the contrary) for all nominees listed above
(INSTRUCTION: To withhold authority to vote for any such nominees,
write the nominee's name in the space provided below.)
2. The proposal to approve the appointment of Ernst & Young LLP
as the auditors for the Company for 1995.
FOR AGAINST ABSTAIN
3. In their discretion, the Proxies are authorized to vote upon such other
business and matters that may properly come before the meeting.
Please sign and date on the reverse side.
<PAGE>
PROXY NO. CONTINUED FROM REVERSE SIDE NO. OF SHARES
This proxy when properly executed will be voted in the manner directed
herein by the undersigned and shareholder. In the absence of specific direction,
it will be voted in the affirmative for all matters to come before the meeting.
Dated, , 1995
Stockholder(s) Sign Here
Please sign exactly as name(s) appear hereon,
giving your full title if signing as attorney,
executor, administrator, trustee, guardian, etc.
If shares are held jointly, each joint owner
should sign. If a corporation, please sign in
full corporate name, by duly authorized officer.
If a partnership, please sign in partnership name
by authorized person.
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE
