<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. ____)*
Capital Re Corporation
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, $.01 par value
- -------------------------------------------------------------------------------
(Title of Class of Securities)
140432 10 5
-------------------------------
(CUSIP Number)
Philip R. Halverson Minnesota Power, 30 West Superior Street, Duluth, MN
55802 (218) 723-3964
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
July 13, 1994
----------------------------------------------------
(Date of Event which Requires Filing this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this statement /X/. (A fee
is not required only if the filing person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter the
disclosure provided in a prior cover page.
The information requested in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall to all other provisions of the Act (however, see the Notes).
<PAGE>
Page 1 of 5 Pages
CUSIP No. 140432 10 5
- -------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Minnesota Power & Light Company
41-0418150
- -------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP * (a) / /
(b) / /
- -------------------------------------------------------------------------------
3 SEC USE ONLY
- -------------------------------------------------------------------------------
4 SOURCE OF FUNDS *
WC
- -------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS
IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) / /
- -------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Minnesota
- -------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 3,074,140
SHARES -----------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY - 0 -
EACH -----------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 3,074,140
WITH -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
- 0 -
- -------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,074,140
- -------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES * / /
- -------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
20.8%
- -------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON *
CO
- -------------------------------------------------------------------------------
This Schedule 13D consists of 5 pages and 1 exhibit.
<PAGE>
Page 2 of 5 Pages
Item 1. Security and Issuer
This statement relates to Common Stock, $.01 par value (the "Common
Stock") of Capital Re Corporation, a Delaware corporation (the "Company").
The principal executive offices of the Company are located at 18th Floor,
1325 Avenue of the Americas, New York, NY 10019.
Prior to this filing, Minnesota Power was exempt from filing Schedule 13D
under Section 13(d)(6)(B) of the Securities Exchange Act of 1934 (the
"Act"). However, Minnesota Power has made annual filings of Schedule 13G
disclosing ownership of the 2,748,640 shares of Common Stock of the
Company owned by Minnesota Power prior to the acquisitions reported under
Item 5(c) herein.
Item 2. Identity and Background
(a) This statement is filed on behalf of Minnesota Power & Light
Company, a Minnesota corporation ("Minnesota Power"). The principal
executive offices of Minnesota Power are at 30 West Superior Street,
Duluth, MN 55802.
(b) Minnesota Power is a diversified electric utility.
(c) In the last five years Minnesota Power has not been convicted in a
criminal proceeding.
(d) During the last five years, Minnesota Power was not a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction which resulted in a judgment, decree, or final order
enjoining future violations of or prohibiting or mandating
activities subject to federal or state securities laws, or a finding
of any violation with respect to such laws.
(e) Minnesota Power is organized in the state of Minnesota.
Attached hereto as Exhibit A is a listing of the name, business address,
and principle occupation of each director and executive officer of
Minnesota Power. Each such director and executive officer is a citizen of
the United States of America and, in the last five years, none have been
subject to proceedings described in paragraphs (c) and (d) above. As of
the date hereof, no director or executive officer is the beneficial owner
of Common Stock or is party to any agreements or arrangements with respect
thereto.
Item 3. Source and Amount of Funds or Other Consideration
$6,762,587 has been expended from Minnesota Power's working capital to
purchase the Common Stock as described under Item 5(c) below.
Item 4. Purpose of Transaction
The Common Stock identified in Item 5(c) was purchased by Minnesota Power
for investment purposes. Depending upon market conditions and Minnesota
Power's internal investment requirements, additional Common Stock may be
acquired by Minnesota Power, and Minnesota Power may determine to sell
Common Stock at any time.
Minnesota Power has no plans or proposals relating to or which would
result in the following with respect to the Company:
- An extraordinary corporate transaction, such as a merger,
reorganization, or sale of a material amount of assets of the
Company or its subsidiaries;
<PAGE>
Page 3 of 5 Pages
- A change in the present board of directors or management of the
Company, including any change in the number or term of directors or
the filling of any existing vacancies on the board;
- A material change in the present capitalization or dividend policy
of the Company;
- A material change in the Company's business or corporate structure;
- A change in the Company's charter, bylaws, or instruments
corresponding thereto or other actions which may impede the
acquisition of control of the Company by any person;
- An action causing a class of securities of the Company to be
delisted from a national securities exchange or cease to be quoted
in an inter-dealer quotation system of a registered national
securities association;
- An action that would cause a class of equity securities of the
Company to become eligible for termination of registration pursuant
to Section 12(g)(4) of the Act;
- An action similar to any of those enumerated above.
Pursuant to the Stockholders' Agreement described in Item 6 hereof, two
nominees of Minnesota Power currently serve as directors of the Company.
In their capacity as directors, such individuals may consider from time to
time various plans or proposals of the nature described above presented by
other parties. In such event, such directors intend to act upon such plans
or proposals in accordance with their judgment at the time.
In addition to its representation on the Company's Board of Directors,
Minnesota Power believes it is the largest single shareholder of the
Company. However, Minnesota Power has no present intention of seeking to
exercise control of the Company and disclaims the existence of any control
relationship with the Company.
Item 5. Interest in Securities of the Issuer
(a) Aggregate number of shares of Common Stock owned 3,074,140
Percent of Common Stock outstanding 20.8%
(b) Sole power to vote 3,074,140
Shared power to vote 0
Sole power to dispose 3,074,140
Shared power to dispose 0
(c) Transactions in the Company Common Stock effected by Minnesota Power
during the past 60 days are described below. The prices per share
are exclusive of brokerage fees. All transactions were through a
broker and executed on the New York Stock Exchange:
<PAGE>
Page 4 of 5 Pages
<TABLE>
<CAPTION>
Number of
Date of Transaction Shares Purchased Price Per Share
------------------- ---------------- ---------------
<S> <C> <C>
June 27, 1994 5,300 $20.000
179,700 $20.125
June 30, 1994 7,600 $20.993
July 5, 1994 5,000 $21.250
July 7, 1994 14,600 $21.375
July 8, 1994 23,400 $21.375
July 11, 1994 5,200 $21.351
July 12, 1994 100 $21.250
July 13, 1994 84,600 $21.625
</TABLE>
(d) Not applicable
(e) Not applicable
Item 6. Contracts, Arrangements, Understandings or Relationships to Securities
of the Issuer
The Company, its management stockholders and three Institutional
Stockholders, Minnesota Power, Constellation Investments, Inc.
("Constellation"), and Sibag Finance Corporation ("Sibag"), are parties
to the Capital Re Corporation 1992 Stockholders' Agreement, dated January
17, 1992, as amended by the First Amendment to Capital Re Corporation 1992
Stockholders' Agreement dated December 28, 1992 (collectively referred to
as the "Stockholders' Agreement"). The Stockholders' Agreement
establishes, among other things, agreements with respect to election of
directors and registration rights for shares of Common Stock held by the
Institutional Stockholders. With proper notice, the Stockholders'
Agreement may be terminated by any party effective January 17, 2002.
The Stockholders' Agreement requires each stockholder party thereto to
vote its shares at all elections of directors in favor of two directors
designated by each Institutional Stockholder holding at least 13% of the
outstanding voting stock of the Company, and one director nominated by
each Institutional Stockholder holding at least 8% and up to 13% of that
stock. Under that arrangement, each of Minnesota Power, Constellation and
Sibag currently have the right to designate two persons for election to
the Board of Directors, and have the obligation to vote their shares in
favor of election of those persons. These Institutional Stockholders have
also agreed to vote for the removal of designated directors only for cause
or if requested by the designating Institutional Stockholder. Minnesota
Power will not gain additional representation on the Company's Board of
Directors as a result of its acquisitions reported in Item 5(c) herein.
The Stockholders' Agreement also grants each Institutional Stockholder
certain registration rights with respect to unregistered Common Stock held
by it. One or more holders of at least 10% of the Institutional
Stockholders' aggregate outstanding holdings of Common Stock may request
the Company to register shares of Common Stock held by them on two
occasions. Each of Minnesota Power, Constellation and Sibag own sufficient
shares to exercise such rights individually. In addition, Institutional
Stockholders have unlimited "piggyback" registration rights in an offering
initiated by the Company.
Apart from the express provisions of the Stockholders' Agreement,
Minnesota Power does not have any voting agreement with any other party
with respect to the Common Stock.
<PAGE>
Page 5 of 5 Pages
Item 7. Material to Be Filed as Exhibits
Incorporated by reference are (i) the Capital Re Corporation Stockholders'
Agreement dated January 17, 1992 described under Item 6 above which was
filed in connection with Company's 1992 initial public offering as Exhibit
9.01 to the Company's Registration Statement on Form S-1, (Reg. No. 33-
53618) and (ii) the First Amendment to Capital Re Corporation 1992
Stockholders' Agreement dated December 28, 1992 filed as Exhibit 9.03 to
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1992.
Signature
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and
correct.
July 15, 1994 Minnesota Power & Light Company
- ------------------------
Date
By: /s/ Philip R. Halverson
--------------------------------------
Philip R. Halverson
General Counsel and Corporate Secretary
<PAGE>
Exhibit A
<TABLE>
Directors and Executive Officers of Minnesota Power
<CAPTION>
Principal Occupation and
Name Title at Minnesota Power Business Address
<S> <C> <C>
Merrill K. Cragun Director President
Cragun Corporation
2001 Pine Beach Road
East Gull Lake
Brainerd, MN 56401
Dennis E. Evans Director President & CEO
Hanrow Financial Group, Ltd.
3600 IDS Center
Minneapolis, MN 55402
Sr. Kathleen Hofer Director CEO of BHS
President & CEO of
St. Mary's Med. Center
Benedictine Health System
503 East Third Street
Duluth, MN 55805
Peter J. Johnson Director President
Hoover Construction Company
P.O. Box 1007
Virginia, MN 55792
Mary E. Junck Director Publisher & CEO
The Baltimore Sun
501 North Calvert Street
Baltimore, MD 21278-0001
Robert S. Mars, Jr. Director Chairman
W.P. & R.S. Mars Company
4410 Grand Avenue
Duluth, MN 55807
Paula F. McQueen Director President
Webb, McQueen & Company
Certified Public Accountants
Suite 6
1625 West Marion Avenue
Punta Gorda, FL 33950
Robert S. Nickoloff Director Chairman of the Board
Medical Innovation Capital, Inc.
9900 Bren Road East, Suite 421
Minnetonka, MN 55343
Jack I. Rajala Director President
Rajala Lumber Company
Box 578
Deer River, MN 56636
Charles A. Russell Director President
Norwest Bank MN North, N.A.
Duluth Office
230 West Superior Street
Duluth, MN 55802
</TABLE>
<PAGE>
Exhibit A
(Continued)
<TABLE>
<CAPTION>
Principal Occupation and
Name Title at Minnesota Power Business Address
<S> <C> <C>
Donald C. Wegmiller Director Vice Chairman and President
Management Compensation
Group/HealthCare
Suite 370
608 Second Avenue South
Minneapolis, MN 55402
Arend J. Sandbulte Chairman, President and Chief Minnesota Power
Executive Officer 30 West Superior Street
Duluth, MN 55802
Robert D. Edwards Executive Vice President and Chief Minnesota Power
Operating Officer 30 West Superior Street
Duluth, MN 55802
Jack R. McDonald Executive Vice President-Finance Minnesota Power
and Corporate Development 30 West Superior Street
Duluth, MN 55802
Warren Candy Vice President Minnesota Power
30 West Superior Street
Duluth, MN 55802
Roger P. Engle Vice President Minnesota Power
30 West Superior Street
Duluth, MN 55802
David G. Gartzke Vice President-Finance and Chief Minnesota Power
Financial Officer 30 West Superior Street
Duluth, MN 55802
Philip R. Halverson General Counsel and Corporate Minnesota Power
Secretary 30 West Superior Street
Duluth, MN 55802
Allen D. Harmon Group Vice President-Electric Minnesota Power
Utility Operations 30 West Superior Street
Duluth, MN 55802
Eugene G. McGillis Vice President Minnesota Power
30 West Superior Street
Duluth, MN 55802
Gerald B. Ostroski Vice President Minnesota Power
30 West Superior Street
Duluth, MN 55802
Bert T. Phillips Group Vice President-Water Minnesota Power
Resource Operations 30 West Superior Street
Duluth, MN 55802
Charles M. Reichert Vice President Minnesota Power
30 West Superior Street
Duluth, MN 55802
Kevin G. Robb Vice President Minnesota Power
30 West Superior Street
Duluth, MN 55802
</TABLE>
<PAGE>
Exhibit A
(Continued)
<TABLE>
<CAPTION>
Principal Occupation and
Name Title at Minnesota Power Business Address
<S> <C> <C>
Mark A. Schober Corporate Controller Minnesota Power
30 West Superior Street
Duluth, MN 55802
Stephen D. Sherner Vice President-Power Sourcing and Minnesota Power
Delivery 30 West Superior Street
Duluth, MN 55802
Geraldine R. VanTassel Vice President - Corporate Minnesota Power
Resource Planning 30 West Superior Street
Duluth, MN 55802
James K. Vizanko Corporate Treasurer Minnesota Power
30 West Superior Street
Duluth, MN 55802
</TABLE>
