<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 24, 1995
KEMPER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-10242 36-6169781
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation or
organization)
One Kemper Drive 60049
Long Grove, Illinois (Zip Code)
(Address of principal
executive offices)
Registrant's telephone number, including area code: (708) 320-4700
<PAGE> 2
Kemper Corporation
FORM 8-K
Page
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS........................... 3
ITEM 5. OTHER EVENTS................................................... 5
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.............................. 6
SIGNATURES............................................................. 14
EXHIBIT NO. 2.......................................................... 15
- 2 -
<PAGE> 3
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
DIVESTITURE OF SECURITIES BROKERAGE SEGMENT
On September 13, 1995, Kemper Corporation (the "Company") completed the
divestiture of its securities brokerage segment. These discontinued
operations consist of EVEREN Securities Holdings, Inc., formerly Kemper
Securities Holdings, Inc. ("ESHI"), and its subsidiaries. In connection
with the divestiture, ESHI became wholly owned by EVEREN Capital
Corporation, a newly formed Delaware corporation ("EVEREN"), and EVEREN
became an independent employee owned company with publicly traded
preferred stock. Completion of the divestiture satisfied an important
condition to the Company's previously announced proposed merger
transaction. See "Merger Transaction Update" in Item 5 below of this
Current Report on Form 8-K.
As part of the divestiture, the Company distributed 1,202,805 shares of
Series A Exchangeable Preferred Stock of EVEREN, having a liquidation
preference of $25 per share (an aggregate liquidation preference of $30.1
million) and a dividend rate of 13.5% per annum (the "Exchangeable
Preferred Stock"), to holders of shares of common stock of the Company
("Kemper Common Stock") and to holders of certain Kemper Common Stock
options and phantom stock units as a taxable distribution (the "Kemper
Distribution"). On the same day as the Kemper Distribution, Kemper
Financial Companies, Inc., a subsidiary of the Company ("KFC"), sold
10,437,781 shares of common stock, par value $.01 per share, of EVEREN
(the "EVEREN Common Stock"), representing all of the shares of EVEREN
Common Stock then held by KFC, to the EVEREN Capital Corporation 401(k)
and Employee Stock Ownership Trust which is part of the EVEREN Capital
Corporation 401(k) and Employee Stock Ownership Plan (the "KSOP"), for an
aggregate purchase price of $71.4 million in cash, of which $46.4 million
was paid on September 13, 1995 and $25.0 million is to be paid not later
than January 2, 1996 (the "KSOP Purchase," and together with the Kemper
Distribution, the "Transfers").
Immediately prior to the Transfers, (i) the Company and KFC contributed
to ESHI and its subsidiaries intercompany indebtedness of approximately
$81.8 million owed by ESHI and its subsidiaries to the Company and its
subsidiaries, (ii) a KFC subsidiary purchased certain illiquid securities
from ESHI for approximately $15.6 million, (iii) the Company assumed in
their entirety all of EVEREN's obligations with respect to certain
specified outstanding litigation matters (including the Melridge
securities litigation matter described in Item 3, Legal Proceedings, of
the Company's 1994 Annual Report on Form 10-K), (iv) KFC transferred to
EVEREN all of the outstanding shares of common stock of ESHI in exchange
for 10,437,681 shares of EVEREN Common Stock and 1,202,805 shares of
Exchangeable Preferred Stock, and (v) the Company purchased from KFC, at
a price of approximately $30.1 million, all of the outstanding shares of
Exchangeable Preferred Stock then held by KFC in repayment of
- 3 -
<PAGE> 4
intercompany indebtedness owed by KFC to the Company (collectively, the
"Preliminary Transactions").
The Company and EVEREN, and certain of their respective subsidiaries,
entered into certain agreements setting forth the various actions agreed
to be taken by such parties to effectuate the Transfers and the
Preliminary Transactions and also to provide for, among other things, (i)
the orderly separation of EVEREN and its subsidiaries from the Company,
(ii) the indemnification of EVEREN by KFC for the first $20.0 million of
employer contributions (other than 401(k) contributions) to the KSOP,
(iii) the provision by EVEREN and the Company of certain support services
to each other for a period of time following the Transfers, (iv) the
limited use by EVEREN of the "Kemper" name for transitional purposes
only, (v) indemnities from EVEREN to the Company and its subsidiaries
with respect to all liabilities arising out of the operation of the
business of EVEREN not specifically assumed by the Company or a
subsidiary of the Company, (vi) indemnities from the Company to EVEREN
with respect to all liabilities arising out of the operation of the
business of the Company and its subsidiaries (other than that of EVEREN
and its subsidiaries), and (vii) the allocation and management of certain
tax matters. Certain agreements entered into by the Company and its
subsidiaries in connection with the Transfers and the Preliminary
Transactions are filed as exhibits to this Current Report on Form 8-K and
are incorporated herein by reference.
ESHI and subsidiaries have been reported as discontinued operations in
the Company's periodic reports since the first quarter of 1995. See the
pro forma financial statements included in Item 7 below in this Form 8-K.
- 4 -
<PAGE> 5
ITEM 5. OTHER EVENTS
A. KFS ACQUISITION OF DREMAN ASSETS
On August 24, 1995, the Company's principal asset management subsidiary,
Kemper Financial Services, Inc. ("KFS"), announced the completion of the
acquisition of substantially all of the assets of Dreman Value
Management, L.P. ("Dreman"), including assignment of the Dreman-managed
mutual funds' advisory contracts. The acquisition required an initial
cash payment of approximately $18 million and calls for contingent cash
payments in future periods.
The four Dreman mutual funds account for approximately $60 million of
assets under management and, following the acquisition, were renamed as
follows: the Kemper-Dreman High Return Fund, the Kemper-Dreman Small Cap
Value Fund, the Kemper-Dreman Contrarian Fund, and the Kemper-Dreman
Fixed Income Fund. Dreman also had approximately $1.5 billion of
institutional assets under management which, subject to advisory client
approvals, would be managed by a KFS subsidiary. The acquisition
broadened KFS' retail and institutional product offerings to include the
value style of equity investing and complement KFS' growth style.
B. MERGER TRANSACTION UPDATE
On September 6, 1995, the Company announced a $0.30 per share adjustment
in the merger consideration to be received by its common stockholders in
the previously announced proposed merger transaction with an investor
group comprised of Zurich Insurance Company and Insurance Partners. The
Company and the investor group agreed to the adjustment, to $49.80 per
share from $49.50 per share, because of increased benefits to the
investor group from modifications the Company announced in late August
with respect to its plan to divest its securities brokerage segment. A
copy of the Amendment Agreement dated as of September 6, 1995, pursuant
to which the parties agreed to the adjustment, is filed herewith as
exhibit no. 2 and is incorporated herein by reference.
Completion of the merger transaction remains subject to certain
conditions, including certain approvals by state insurance regulators and
the common stockholders of the Company. On September 26, 1995, the
investor group filed with the Illinois Department of Insurance a Form A
seeking approval of the change of control of the Company's life insurance
subsidiaries. At special meetings held September 19, 1995, the
shareholders of investment companies with assets managed by KFS and its
subsidiaries (the "Kemper Funds") representing more than 90 percent of
the Kemper Funds' net assets approved new investment advisory contracts
with KFS and its asset management subsidiaries, as required to satisfy
one of the conditions to the merger agreement. The investment group has
informed the Company that it currently expects that the transaction will
close in early January 1996.
- 5 -
<PAGE> 6
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired - not applicable.
(b) Pro forma financial information.
The following unaudited pro forma condensed consolidated statements of
operations for the six months ended June 30, 1995 and the year ended
December 31, 1994 present the Company's results of operations as adjusted
to give effect to the divestiture of ESHI and its subsidiaries as if it
occurred on January 1, 1994. The accompanying unaudited pro forma
consolidated balance sheet as of June 30, 1995 presents the Company's
financial position as if the divestiture occurred on June 30, 1995. The
Company's historical financial statements reflected ESHI and its
subsidiaries as discontinued operations since the first quarter of 1995
and as the Company's securities brokerage segment in and for 1994.
The pro forma financial statements should be read in conjunction with the
Company's consolidated financial statements and notes thereto previously
filed as part of the Company's most recent annual and quarterly reports
on Forms 10-K and 10-Q. The pro forma information below is provided for
informational purposes only and is not necessarily indicative of what the
actual financial position or results of operations of the Company would
have been had the transactions actually occurred on the dates indicated,
nor does it purport to indicate the future financial position or results
of operations of the Company. Results of operations for the six months
ended June 30, 1995 may not be indicative of results of operations to be
expected for a full year. The pro forma adjustments are based upon
available information and assumptions believed to be reasonable in the
circumstances. There can be no assurance that such information and
assumptions will not change from those reflected in the pro forma
financial statements and notes thereto.
- 6 -
<PAGE> 7
KEMPER CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 1995
(in thousands, except share data)
(unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Investments:
Fixed maturities available for sale, at fair value
(cost 1995, $3,583,537; 1994, $3,711,839) $5,425,143 15,859(1) $5,441,002
Equity securities 29,890 29,890
Short-term investments 431,261 431,261
Joint venture mortgage loans 615,034 615,034
Third-party mortgage loans 379,935 379,935
Other real estate-related investments 318,384 318,384
Other loans and investments 438,149 438,149
------------------------------------------
Total investments 7,637,796 15,859 7,653,655
Cash 299,125 46,400 (2) 283,266
(46,400)(3)
(15,859)(1)
Other accounts and notes receivable 402,677 25,000 (4) 436,677
9,000 (5)
Reinsurance recoverable 657,685 657,685
Deferred insurance policy acquisition costs 666,186 666,186
Deferred investment product sales costs 154,466 154,466
Other assets 77,137 77,137
Net assets of discontinued operations 132,686 (102,616)(6) 0
(30,070)(6)(7)
Assets of separate accounts 1,691,119 1,691,119
------------------------------------------
Total assets $11,718,877 (98,686) $11,620,191
==========================================
LIABILITIES
Life policy benefits $6,869,230 $6,869,230
Ceded life policy benefits 657,685 657,685
Other accounts payable and liabilities 502,692 (4,083)(8) 498,609
Notes payable 50,000 (46,400)(3) 3,600
Long-term debt 346,250 346,250
Convertible debentures 26,676 26,676
Liabilities of separate accounts 1,691,119 1,691,119
------------------------------------------
Total liabilities 10,143,652 (50,483) 10,093,169
------------------------------------------
Commitments and contingent liabilities
STOCKHOLDERS' EQUITY
Preferred stock-no par value (outstanding
1995, 6,680,839; 1994, 6,681,157 shares) 360,355 360,355
Common stock-$5.00 par value (issued 1995,
66,535,507; 1994,66,229,940 shares) 332,678 332,678
Additional paid-in capital 376,907 376,907
Unrealized loss on foregn currency translations (34,900) (34,900)
Unrealized gain on investments 38,260 38,260
Retained earnings 1,530,646 (18,133)(9) 1,482,443
(30,070)(7)
Treasury shares, at cost (1995, 31,809,486; 1994,
31,812,456 shares) (1,028,721) (1,028,721)
------------------------------------------
Total stockholders' equity 1,575,225 (48,203) 1,527,022
------------------------------------------
Total liabilities and stockholders' equity $11,718,877 (98,686) $11,620,191
==========================================
</TABLE>
- 7 -
<PAGE> 8
Notes to Pro Forma Consolidated
Balance Sheet
as of June 30, 1995
(1) Purchase from ESHI of illiquid securities.
(2) Receipt of cash proceeds on date of divestiture.
(3) Use of cash proceeds (see (1) above) to reduce the Company's
short-term debt.
(4) Receivable for the remainder of the purchase price payable by the
KSOP no later than January 2, 1996.
(5) Federal income tax benefit recorded in the third quarter of 1995 due
to modifications to original plan of divestiture.
(6) Elimination of net assets of the discontinued securities brokerage
operations.
(7) Distribution of EVEREN Preferred Stock to holders of Kemper common
stock and certain Kemper common stock options and phantom stock
units.
(8) Adjustment of intercompany payables and receivables.
(9) Reflects additional (third-quarter 1995) loss on divestiture, net of
tax.
- 8 -
<PAGE> 9
KEMPER CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1995
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
REVENUE
Asset management income $200,883 $200,883
Net investment income 268,118 268,118
Insurance premium income 77,910 77,910
Realized investment loss (27,808) (27,808)
Other income 50,716 50,716
------------------------------------------
Total revenue 569,819 0 569,819
------------------------------------------
BENEFITS AND EXPENSES
Asset management expenses 124,604 124,604
Amortized investment product sales costs 26,559 26,559
Insurance claim costs and policyholder benefits 244,566 244,566
Amortization of policy acquisition costs 52,309 52,309
Interest expense 19,482 (1,450)(1) 18,032
Other expenses 15,627 14,177
------------------------------------------
Total expenses 483,147 (1,450) 480,247
------------------------------------------
Earnings from continuing operations before tax 86,672 1,450 89,572
Income tax expense 46,237 508 (2) 46,745
------------------------------------------
Income from continuing operations 40,435 942 42,827
Gain (loss) from discontinued operations, net of tax (2,712) 2,712 (3) --
Gain (loss) on divestiture of discontinued operations,
net of tax (66,099) 66,099 (4) --
------------------------------------------
Net income (loss) ($28,376) 69,753 $42,827
==========================================
Net income (loss) applicable to common stockholders ($40,270) 69,753 $29,483
==========================================
Net income (loss) per share:
Primary
Income from continuing operations $0.82 0.03 $0.85
Income (loss) from discontinued operations (1.97) 1.97 --
------------------------------------------
Net income (loss) per share ($1.15) 2.00 $0.85
==========================================
Fully diluted
Income from continuing operations $0.82 0.03 $0.85
Income (loss) from discontinued operations (1.97) 1.97 --
------------------------------------------
Net income (loss) per share ($1.15) 2.00 $0.85
==========================================
Cash dividends declared and paid per common share $0.46 $0.46
======== =======
</TABLE>
- 9 -
<PAGE> 10
Notes to Pro Forma Consolidated
Statement of Operations
for the six months ended June 30, 1995
(1) Reduction of interest expense due to the Company's use of cash
proceeds from KFC's sale of ESHI to repay $46.4 million of
short-term debt.
(2) Federal income tax increase due to reduction of interest expense.
(See note (1) above.)
(3) Elimination of losses from securities brokerage operations due to
the divestiture.
(4) Elimination of the loss on divestiture recorded by the Company in
the first half of 1995 and elimination of $0.4 million of losses
from other discontinued operations recorded in the first half of
1995 due to adjustments to estimated liabilities with respect to
property-casualty, reinsurance and risk management operations
divested in 1993. (The Company recorded in the third quarter
of 1995 an additional after-tax loss on divestiture of approximately
$18.1 million.)
- 10 -
<PAGE> 11
KEMPER CORPORATION AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(in thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Pro Forma
Historical Adjustments Pro Forma
---------- ----------- ---------
<S> <C> <C> <C>
REVENUE
Asset management income $447,044 (1,850)(1) $445,194
Net investment income 484,796 5,501 (1) 490,297
Insurance premium income 151,830 151,830
Securities brokerage income 500,621 (500,621)(1) 0
Realized investment loss (81,479) (81,479)
Other income 99,009 99,009
---------------------------------------------
Total revenue 1,601,821 (496,970) 1,104,851
---------------------------------------------
BENEFITS AND EXPENSES
Asset management expenses 259,433 22,293 (2) 281,726
Amortized investment product sales costs 57,324 57,324
Insurance claim costs and policyholder benefits 474,614 474,614
Amortization of policy acquisition costs 59,169 59,169
Insurance operating expenses 10,894 10,894
Securities brokerage expenses 492,708 (492,708)(2) 0
Interest expense 80,744 (39,329)(2) 38,863
(2,552)(3)
Other expenses 46,329 46,329
---------------------------------------------
Total expenses 1,481,215 (512,296) 968,919
---------------------------------------------
Earnings from continuing operations before tax 120,606 15,326 135,932
Income tax expense 34,893 10,537 (4) 46,323
893 (5)
---------------------------------------------
Income from continuing operations 85,713 3,896 89,609
Gain (loss) on sale of discontinued operations to
related party, net of tax (576) 576 (6) --
Gain (loss) on other sales of discontinued operations,
net of tax 6,303 (6,303)(6) --
---------------------------------------------
Net income $91,440 (1,831) $89,609
=============================================
Net income (loss) applicable to common stockholders $67,850 (1,831) $66,019
=============================================
Net income (loss) per share:
Primary
Income from continuing operations $1.80 0.11 $1.91
Income (loss) from discontinued operations 0.17 (0.17) --
---------------------------------------------
Net income (loss) per share $1.97 (0.06) $1.91
=============================================
Fully diluted
Income from continuing operations $1.80 0.11 $1.91
Income (loss) from discontinued operations 0.17 (0.17) --
---------------------------------------------
Net income (loss) per share $1.97 (0.06) $1.91
=============================================
Cash dividends declared and paid per common share $0.46 $0.46
========= ========
</TABLE>
- 11 -
<PAGE> 12
Notes to Pro Forma Consolidated
Statement of Operations
for the year ended December 31, 1994
(1) Elimination of the discontinued securities brokerage operations'
revenue from the historical consolidated statement of operations for
the year ended December 31, 1994, when such operations were
classified as the Company's securities brokerage segment.
(2) Elimination of the discontinued securities brokerage operations'
expenses. (See note (1) above.)
(3) Reduction of interest expense due to the Company's use of cash
proceeds from KFC's sale of ESHI to repay $46.4 million of
short-term debt.
(4) Federal income tax adjustment due to elimination of securities
brokerage revenue and expenses.
(5) Federal income tax adjustment due to reduction of interest expense.
(6) Elimination of gain and loss with respect to discontinued
property-casualty, reinsurance and risk management operations
divested in 1993.
- 12 -
<PAGE> 13
(c) Exhibits
Exhibit No.
2 Amendment Agreement, dated as of September 6, 1995, among
Zurich Insurance Company, Insurance Partners, L.P., Insurance
Partners Offshore (Bermuda), L.P., ZIP Acquisition Corp. and
Kemper Corporation ("Kemper").
10 Transactions Agreement, dated as of September 13, 1995, between
EVEREN Capital Corporation ("EVEREN"), Kemper Financial
Companies, Inc. ("KFC") and Kemper.*
99.1 Interim Services Agreement, dated as of September 13, 1995,
between EVEREN and Kemper.*
99.2 Stock Purchase Agreement, dated as of September 13, 1995,
between EVEREN and KFC.*
99.3 Stock Purchase Agreement, dated as of September 13, 1995,
between the Trustee of the EVEREN Capital Corporation 401(k)
and Employee Stock Ownership Trust and KFC.*
99.4 Securities Purchase Agreement, dated as of September 13, 1995,
between EVEREN Securities Holdings, Inc. ("ESHI") and KFC.*
99.5 Assumption Agreement, dated as of September 13, 1995, between
Kemper and EVEREN Securities, Inc. ("ESI").*
99.6 Names Agreement, dated as of September 13, 1995, among
EVEREN, ESHI, ESI, EVEREN Clearing Corp. and Kemper.*
99.7 Tax Sharing Agreement, dated as of September 13, 1995, between
EVEREN and Kemper.*
99.8 Employee Benefits Agreement, dated as of September 13, 1995,
among Kemper, Kemper Financial Services, Inc., INVEST Financial
Corporation and EVEREN.*
*The nine asterisked exhibits above are incorporated herein by reference
to exhibits nos. 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.12, 10.13 and
10.14, respectively, to the Current Report on Form 8-K filed
September 27, 1995 by EVEREN Capital Corporation (file no. 1-13864).
- 13 -
<PAGE> 14
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
KEMPER CORPORATION
By: /s/JOHN H. FITZPATRICK
---------------------------
John H. Fitzpatrick
Executive Vice President
and Chief Financial Officer
September 28, 1995
- 14 -
<PAGE> 1
EXHIBIT NO. 2
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of September 6, 1995, among Zurich
Insurance Company, a corporation organized under the laws of Switzerland
("Zurich"), Insurance Partners, L.P., a Delaware limited partnership
("IP"), Insurance Partners Offshore (Bermuda), L.P., a Bermuda limited
partnership ("IP Bermuda" and, together with IP, "Insurance Partners"),
ZIP Acquisition Corp., a Delaware corporation ("ZIP"), and Kemper
Corporation, a Delaware corporation (the "Company").
WHEREAS, the parties have entered into an Agreement and Plan of
Merger dated as of May 15, 1995 (the "Agreement");
WHEREAS, the parties wish to amend certain provisions of the
Agreement; and
WHEREAS, Section 7.3 of the Agreement provides in relevant part that
at any time prior to the Effective Time, the parties may modify or amend
the Agreement, by written agreement executed and delivered by duly
authorized officers of the respective parties.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt of which is hereby acknowledged,
Zurich, Insurance Partners, ZIP and the Company hereby agree as follows:
1. Terms not specifically defined herein shall have the meanings
set forth in the Agreement.
2. The parties agree that the Merger Consideration to be (i)
received for each share of Common Stock and (ii) used in the calculation
of the cash payment to holders of Company Stock Options and Phantom Stock
Rights in the Merger shall be $49.80 without interest. Accordingly, all
references in the Agreement to "$49.50 per share" shall be amended to
read "$49.80 per share" for all intents and purposes under the Agreement.
3. References in the Agreement to the ESOP Sale shall be deemed to
be references to (i) a sale by KFC to the ESOP of approximately 96% of
the Newco Common Stock for $71.4 million, (ii) the issuance of
approximately 4% of the Newco Common Stock to the management of KSI,
(iii) the issuance of Newco non-voting common stock to the management of
KSI representing approximately a 1% common equity interest in Newco, (iv)
the sale of approximately $30 million aggregate liquidation preference of
Series A Exchangeable Preferred Stock of Newco (the "Newco Preferred
Stock") by KFC to the Company as payment for intercompany indebtedness
and (v) the distribution of approximately $30 million aggregate
liquidation preference of Newco Preferred Stock by the Company to its
- 15 -
<PAGE> 2
stockholders. Each of the transactions in clauses (i) - (v) shall be
effected pursuant to the terms and conditions set forth in Annex A
attached hereto. In furtherance thereof, Schedule I of the Disclosure
Schedule is amended and replaced in its entirety by Annex A attached
hereto.
4. This Agreement may be executed in one or more counterparts, all
of which shall be considered one and the same Agreement and shall become
effective when one or more counterparts have been signed by each of the
parties and delivered to the other parties.
5. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without regard to conflicts of law
principles thereof.
IN WITNESS WHEREOF, each of Zurich, IP, IP Bermuda, ZIP and the
Company has caused this agreement to be signed by its respective officers
thereunto duly authorized, all as of the date first written above.
ZURICH INSURANCE COMPANY
By: /s/ROLF HUEPPI
--------------
Name: Rolf Hueppi
Title: Chairman and Chief Executive Officer
By: /s/KASPAR HOTZ
--------------
Name: Kaspar Hotz
Title: General Counsel
INSURANCE PARTNERS, L.P.
By: Insurance GenPar, L.P., its general partner
By: Insurance GenPar MGP, L.P., its general
partner
By: Insurance GenPar MGP, Inc., its general
partner
By: /s/STEVEN B. GRUBER
-------------------
Name: Steven B. Gruber
Title: Vice President and
Assistant Secretary
- 16 -
<PAGE> 3
INSURANCE PARTNERS OFFSHORE
(BERMUDA), L.P.
By: Insurance GenPar (Bermuda), L.P.,
its general partner
By: Insurance GenPar (Bermuda) MGP, L.P.,
its general partner
By: Insurance GenPar (Bermuda) MGP, Ltd.,
its general partner
By: /s/DANIEL DOCTOROFF
-------------------
Name: Daniel Doctoroff
Title: Vice President and
Assistant Secretary
ZIP ACQUISITION CORP.
By: /s/DANIEL DOCTOROFF
-------------------
Name: Daniel Doctoroff
Title: Vice President
KEMPER CORPORATION
By: /s/DAVID B. MATHIS
------------------
Name: David B. Mathis
Title: Chairman of the Board and
Chief Executive Officer
- 17 -
