NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on April 29, 1996
To the Shareholders of Capitol Transamerica Corporation (CTC):
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of
Capitol Transamerica Corporation (CTC) will be held at the Madison Concourse
Hotel, 1 West Dayton Street, Madison, WI, on Monday, April 29, 1996 with regi-
stration 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 1999,
2. To ratify the selection of Ernst & Young LLP, as the
Company's independent auditors for 1996; 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 11,
1996 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
March 29, 1996
IMPORTANT: PLEASE MAIL YOUR PROXY PROMPTLY IN THE ENCLOSED ENVELOPE
THE MEETING DATE IS APRIL 29, 1996
<PAGE>
CAPITOL TRANSAMERICA CORPORATION
4610 University Avenue - Madison, Wisconsin 53705-0900
PROXY STATEMENT FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 29, 1996
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 share-
holders to be held on April 29, 1996 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 and
personally voting. The Annual Report of the Company is being mailed to all
shareholders herewith. The proxy materials were first mailed to all share-
holders on or about March 29, 1996.
Capitol Transamerica Corporation is the parent company of Capitol
Indemnity Corporation, Capitol Specialty Insurance Corporation and Capitol
Facilities Corporation.
OUTSTANDING STOCK AND VOTING RIGHTS
As of the close of business on March 11, 1996, there were outstanding
and entitled to vote 7,445,382 shares of the Company's common stock. Share-
holders of record on March 11, 1996 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 11, 1996 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 1,343,669<F1> 17.74%
3100 Lake Mendota Drive
Madison, WI 53705
Neumeier Investment Counsel 610,064<F2> 8.19%
26435 Carmel Rancho Blvd.
Carmel, CA 93923
Robert E. Fait 416,070 5.00%
148 Kings Court
Burlington, WI 53105
<FN>
<F1> Includes 161,543 shares of record and held in Trust for his children and grandchildren to which
he denies beneficial ownership, 11,323 shares in a personal Keogh Retirement Plan, 19,913 shares
in the Company's Employee Stock Ownership Plan and 6,393 shares in a personal IRA. This total also
includes 22,550 shares of stock issuable upon exercise of options granted and outstanding under
Capitol Transamerica Corporation's Stock Option Plan which are not included in the percent of
class calculation.
<F2> Information obtained from Schedule 13G, dated February 6, 1996, 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 366,694 shares and dispositive power over 610,064 shares.
</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 two 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 Paul J. Breitnauer and Reinhart
H. Postweiler to hold office for a term of three years until the Annual Meeting
of Shareholders in 1999 when their terms will expire. 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 3/11/96
and Public Directorships<F1> of Election Shares Percent of Class<F2><F3>
<S> <C> <C> <C>
Class of 1999
(Terms will expire in 1999)
Paul J. Breitnauer, Age 56, Sun Prairie, WI; 1986 93,216 1.21%
Vice President & Treasurer of the Company
Reinhart H. Postweiler, Age 66, Madison, WI; 1977 32,299 0.41%
Retired, formerly with Flad Affiliated Corporation
Director, Bank One-Madison
Class of 1998
(Terms will expire in 1998)
Michael J. Larson, Age 54, Madison, WI; 1991 3,078 0.02%
President, Bank One-Madison
Director, Bank One-Madison
Richard E. Tipple, Age 70, Stoughton, WI; 1970 37,724 0.48%
Retired, formerly with University of Wisconsin
Planning Department
Class of 1997
(Terms will expire in 1997)
George A. Fait, Age 68, Madison, WI; 1960 1,343,669 17.91%
Chairman of the Board and President of
the Company; Director, Bank One-Madison.
Robert W. Goodwin, Age 69, Palm Harbor, FL; 1982 46,638 0.60%
Retired, formerly with Dean, Witter, Reynolds, Inc.
<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 companies. 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 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: 22,550 shares for George A. Fait, 1,430 shares each for
Robert W. Goodwin, Michael J. Larson, Reinhart H. Postweiler and Richard E. Tipple and 2,8880 shares for
Paul J. Breitnauer which are not included in the percent of class calculation.
<F3> Included in the percent of class calculations are 11,323 shares in a personal Keogh Retirement Plan,
19,913 shares in the Company's E.S.O.P. and 6,393 shares in a personal IRA for George A. Fait and
6,455 shares in a personal I.R.A. and 4,324 shares in the Company's E.S.O.P. for Paul J. Breitnauer.
</FN>
</TABLE>
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors held four regular meetings during 1995. Each
director attended 100% 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 November 29, 1995.
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 Compen-
sation 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 1995.
The Investment Committee is responsible for the investment of the
Company's assets. The Committee consists of Messrs. Fait, Goodwin and Larson.
The Investment Committee met four times during 1995 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 committee 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 1995.
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 1995 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,
and Goodwin. The Stock Option Plan Committee held four meetings during 1995.
COMPENSATION OF DIRECTORS
Effective May 3, 1995 director's fees were increased from $750 to
$1,000 per meeting. Directors who were also officers of the companies 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 regu-
larly scheduled Board of Directors meetings. For fiscal year 1995 Capitol
Transamerica Corporation paid a total of $17,150 in director's fees and each
non-employee director received 500 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, 1995, 1994 and 1993 respectively.
SUMMARY COMPENSATION TABLE
<CAPTION>
Annual Compensation Long-Term Compensation
All Other Options
Name/Title Year Salary Bonus Compensation<F2> (# Awarded shares)<F4>
<S> <C> <C> <C> <C> <C>
George A. Fait 1995 $294,965 $286,145<F1> $15,440 11,000
Chairman of the Board 1994 $65,000 $285,145<F1> 15,097 None
& President 1993 $65,000 $870,346<F1> 7,503 11,550
Paul J. Breitnauer 1995 $99,805 $1,000 $ 8,122 3,300
Vice President & 1994 $98,230 -0- 6,404 None
Treasurer 1993 $98,000 -0- 4,426 550
<FN>
<F1> The bonus paid in the years 1995, 1994 and 1993 was calculated on the results for the prior year and paid
in the first quarter of that year. Such bonus was based on 10% of the excess of gross profits after a 15%
return on beginning shareholders equity. The year 1995 includes a $1,000 incentive bonus.
<F2> Includes net contributions to the Corporation's ESOP of $12,940 in 1995, $12,847 in 1994, and $5,253
in 1993 for George A. Fait, and $5,872 in 1995, $4,154 in 1994 and $2,176 in 1993 for Paul J. Breitnauer
and also $2,250 annually, for each, to the company's 401(k) Savings Plan.
<F3> Incentive bonus.
<F4> Adjusted for December 28, 1995 ten percent stock dividend.
</FN>
OPTION'S/SARS EXERCISED IN LAST FISCAL YEAR
The following table contains information for the named executives concerning the exercise of options
during 1995 and the value of unexercised options at year-end for the Corporation's common stock.
<CAPTION>
Aggregated Options Exercised in Last Fiscal Year and FY-End Option Values
Number of Value of
Options Unexercised Unexercised
Acquired on Value Options at Options at
Exercise Realized 12/31/95 at 12/31/95
Name (# Shares) ($)<F1> (# Shares) ($)<F1>
<S> <C> <C> <C> <C>
George A. Fait -0- $-0- 22,550 $154,919
Paul J. Breitnauer 110 756 3,300 $ 22,671
<FN>
<F1> Based on 12-31-95 Market price of $20.25 less base cost of $13.38 per share.
</FN>
</TABLE>
Compensation Committee Interlocks and Insider Participation
The members of the Corporation's Executive Compensation Committee for
1995 were Messrs. George A. Fait, Michael J. Larson, Reinhart H. Postweiler and
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 com-
posed 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 1995 the Committee established a base salary
of $300,000 annually for the Chairman of the Board with a bonus based on 5% of
the excess of gross profits after a 10% return on beginning shareholders'
equity.
Executive Compensation Committee
George A. Fait, Michael J. Larson, Reinhart H. Postweiler, Richard E. Tipple
<TABLE>
Comparison of Ten Year Cumulative Total Return
The following graph demonstrates a ten 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>
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CATA 100 185 352 432 755 878 2132 1692 1990 2010 2738
S&P 500 100 118 124 145 191 185 242 260 286 290 399
Industry<F1> 100 100 91 95 109 99 121 143 143 136 178
<FN>
<F1> Firemark Insurance Index
</FN>
</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 and approved
by the shareholders on May 7, 1993. Such Plan replaced the 1976 Unqualified
Stock Option Plan and the 1981 Incentive Stock Option Plan that both expired
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 pro-
mote 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, 1995 through December 31, 1995
and January 1 through March 11, 1996:
<CAPTION>
Options Awarded Options Exercised Options Exercised Options Options Available
1-1-95 to 12-31-95 1-1-95 to 12-31-95 1-1-96 to 3-11-96 Outstanding For Award
<S> <C> <C> <C> <C> <C>
1976 Unqualified Plan -0- -0- -0- -0- -0-
1981 Incentive Plan -0- 20,106 41 52,296 -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
1-1-95 to 12-31-95 1-1-95 to 12-31-95 1-1-96 to 3-11-96 Outstanding For Award
<S> <C> <C> <C> <C> <C>
1993 Stock Option Plan 68,600 1,358 2,899 106,966 603,077
</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 11, 1996 of
the common stock of CTC was quoted in the over-the-counter quotations of the
National Association of Securities Dealers at $20.50. There are currently 98
employees, directors and executive officers that hold Stock Options.
Employee Stock Ownership Plan
An 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 Company.
All 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 56,469 shares of the company stock in the Plan which have been
allocated to those employees who are eligible to participate. There are current-
ly 97 active employees in the Plan. The market value of the stock within the
Plan at March 11, 1996 was $1,157,614.
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 contri-
bution are non-forfeitable, with no reversion to the Company. Currently there
are 92 active employees in the Plan and 2 inactive.
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 Market. 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 1995.
PROPOSAL 2. RATIFICATION OF INDEPENDENT AUDITORS
The independent public accountants selected by the Board for the
Company's fiscal year ending December 31, 1996 are Ernst & Young LLP, who also
served in that capacity for the fiscal year ended December 31, 1995. A repre-
sentative of Ernst & Young LLP is expected to be present at the Annual Meeting
and will have the opportunity to make a statement should they desire to do so.
They will also be available to respond to appropriate questions.
SHAREHOLDERS PROPOSALS
The Corporation has not received any shareholder proposals to be
considered for presentation at the 1996 Annual Meeting of Shareholders. If a
shareholder desires to present a proposal for inclusion in next year's Proxy
Statement and to present such proposal at the 1997 Annual Meeting of the Share-
holders 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, 1996.
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
March 29,1996 Secretary
CAPITOL TRANSAMERICA CORPORATION
4610 UNIVERSITY AVE., MADISON, WI 53705
PROXY SOLICITED ON BEHALF OF THE 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 as indi-
cated below, all shares of stock of Capitol Transamerica Corporation of record
in the name of the undersigned at the close of business on March 11, 1996 at
the Annual Meeting of Shareholders of the Corporation to be held April 29, 1996,
and any adjournments or postponements thereof.
1. ELECTION OF DIRECTORS - Class of 1999 - Paul J. Breitnauer and Reinhart
H. Postweiler.
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
Company's independent auditors for 1996.
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.
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, , 1996
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
