<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant / /
Filed by a party other than the registrant / /
Check the appropriate box:
/X/ Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
CAPSURE HOLDINGS CORPORATION
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
--------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
--------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
--------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
--------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
--------------------------------------------------------------------------------
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
--------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
--------------------------------------------------------------------------------
(3) Filing party:
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(4) Date filed:
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<PAGE> 2
CAPSURE HOLDINGS CORP.
TWO NORTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606
(312) 879-1900
_________________________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
ON MAY 24, 1995
_________________________
TO: The Shareholders of Capsure Holdings Corp.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Capsure
Holdings Corp. (the "Company") will be held at One North Franklin, Third Floor,
Chicago, Illinois 60606, on Wednesday, May 24, 1995 at 10:00 A.M. CDT, for the
following purposes:
1. To elect twelve directors to serve one-year terms, commencing
immediately upon their election, or to serve until their respective successors
are duly elected and qualified;
2. To approve an amendment to the Company's Certificate of
Incorporation to increase the maximum number of shares of Common Stock the
Company is authorized to issue from 20,000,000 shares to 25,000,000 shares; and
3. To transact such other business as may properly come before the
meeting or any adjournment or adjournments thereof.
The Board of Directors has fixed the close of business on March 27, 1995,
as the record date (the "Record Date") for the determination of shareholders
entitled to notice of, and to vote at, the Annual Meeting. You are cordially
invited to attend the meeting. In the event you will be unable to attend, you
are respectfully requested to fill in, date, sign and return the enclosed proxy
at your earliest convenience in the enclosed return envelope.
By Order of the Board of Directors
Susan Obuchowski
Secretary
March 31, 1995
Chicago, Illinois
<PAGE> 3
________________________________________________________________________________
IMPORTANT:
PLEASE FILL IN, DATE, SIGN AND PROMPTLY MAIL THE ENCLOSED PROXY CARD
IN THE POSTPAID ENVELOPE PROVIDED TO ASSURE THAT YOUR SHARES ARE REPRESENTED AT
THE MEETING. IF YOU ATTEND THE MEETING YOU MAY VOTE IN PERSON IF YOU WISH TO
DO SO EVEN THOUGH YOU HAVE SENT IN YOUR PROXY.
________________________________________________________________________________
<PAGE> 4
CAPSURE HOLDINGS CORP.
TWO NORTH RIVERSIDE PLAZA
CHICAGO, ILLINOIS 60606
(312) 879-1900
_________________________
PROXY STATEMENT
_________________________
INTRODUCTION
This Proxy Statement is being mailed or otherwise furnished to
shareholders of Capsure Holdings Corp., a Delaware corporation (the "Company"),
on or about March 31, 1995, in connection with the solicitation by the Board of
Directors of the Company (the "Board") of proxies to be voted at the Annual
Meeting of Shareholders ("Annual Meeting") of the Company to be held at One
North Franklin, Third Floor, Chicago, Illinois 60606 at 10:00 A.M. CDT, on
Wednesday, May 24, 1995, and at any adjournment thereof. Shareholders who,
after reading this Proxy Statement, have any questions should contact Susan
Obuchowski, Secretary of the Company, in Chicago at (312) 466-4010.
MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING
At the Annual Meeting, shareholders of the Company will consider and vote
upon:
(i) the election of twelve directors of the Company who will serve
one-year terms, commencing immediately upon their election, or to
serve until their respective successors are duly elected and
qualified;
(ii) an amendment to the Company's Certificate of Incorporation to
increase the maximum number of shares of Common Stock the Company
is authorized to issue from 20,000,000 shares to 25,000,000
shares; and
(iii) to transact such other business as may properly come before
the Annual Meeting or any adjournment or adjournments thereof.
1
<PAGE> 5
_______________________
The date of this Proxy Statement is March 31, 1995.
PROXY SOLICITATION
The enclosed proxy is solicited by the Board. The cost of this proxy
solicitation is anticipated to be nominal and will be borne by the Company,
including charges and expenses of brokerage firms and others for forwarding
solicitation material to beneficial owners of the Company's Common Stock. The
solicitation generally will be effected by mail and such cost will include the
cost of preparing and mailing the proxy materials. In addition to the use of
the mails, proxies also may be solicited by personal interview, telephone,
telegraph, telecopy, or other similar means. Although solicitation will be
made primarily through the use of the mail, officers, directors, or employees
of the Company may solicit proxies personally or by the above described means
without additional remuneration for such activity.
1994 ANNUAL REPORTS
Shareholders are concurrently being furnished with a copy of the
Company's 1994 Annual Report which contains its audited financial statements at
December 31, 1994. Any shareholder who has not received an Annual Report may
request such Annual Report by contacting Doreen Lubeck, Investor Relations
Representative of the Company, at Two North Riverside Plaza, Chicago, Illinois
60606, (312) 466-3444, and it will be furnished promptly at no additional
expense.
2
<PAGE> 6
VOTING SECURITIES AND PROXIES
Only shareholders of record at the close of business on March 27, 1995,
(the "Record Date") have the right to receive notice of and to vote at the
Annual Meeting and any adjournment thereof. As of the Record Date, 15,394,149
shares of the Company's Common Stock, $.05 par value, were issued and
outstanding. Each share outstanding on the Record Date for the Annual Meeting
entitles the holder thereof to one vote upon each matter to be voted upon at
the Annual Meeting. The shareholders of a majority of the Company's issued and
outstanding Common Stock, present in person or represented by proxy, shall
constitute a quorum at the Annual Meeting. Abstentions and broker non-votes
are counted for purposes of determining the presence or absence of a quorum for
the transaction of business. If, however, a quorum is not present or
represented at the Annual Meeting, the shareholders entitled to vote at the
Annual Meeting, whether present in person or represented by proxy, shall only
have the power to adjourn the Annual Meeting until such time as a quorum is
present or represented. At such time as a quorum is present or represented by
proxy, the Annual Meeting will reconvene without notice to shareholders, other
than an announcement at the prior adjournment of the Annual Meeting, unless the
adjournment is for more than thirty days or a new record date has been set.
If a proxy in the form enclosed is duly executed and returned, the shares
of the Company's Common Stock represented thereby will be voted in accordance
with the specifications made thereon by the shareholder. If no such
specifications are made, such proxy will be voted (i) for election of the
Management Nominees (as hereinafter defined) for directors; (ii) for approval
of the amendment to the Company's Certificate of Incorporation to increase the
maximum number of shares of Common Stock the Company is authorized to issue
from 20,000,000 shares to 25,000,000 shares; and (iii) at the discretion of
Proxy Agents (as hereinafter defined) with respect to such other business as
may properly come before the Annual Meeting or any adjournment thereof.
Abstentions are counted in tabulations of the votes cast on proposals presented
to shareholders, whereas broker non-votes are not counted for purposes of
determining whether a proposal has been approved. Under applicable Delaware
law, a broker non-vote will have the same effect as a vote against the proposed
amendment to the Certificate of Incorporation, and will have no effect on the
outcome of the election of directors. A proxy is revocable by either a
subsequently dated, properly executed proxy appointment which is received by
the Company prior to the time votes are counted at the Annual Meeting, or by a
shareholder giving notice of revocation to the Company in writing or during the
Annual Meeting prior to the time votes are counted. The mere presence at the
Annual Meeting of a shareholder who appointed a proxy does not itself revoke
the appointment.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
3
<PAGE> 7
The following table sets forth, as of March 27, 1995, except as noted,
certain information with respect to each person or entity who is known by the
management of the Company to be the beneficial owner of more than 5% of the
outstanding shares of the Company's Common Stock:
<TABLE>
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent
Beneficial Owner Ownership(1) of Class
-------------------- ------------- --------
<S> <C> <C>
Equity Holdings(2) 3,042,253(3) 19.8%
Two North Riverside Plaza
Chicago, IL 60606
Arlington Leasing Co.(4) 997,369(5) 6.5%
Two North Riverside Plaza
Chicago, IL 60606
Robert Fleming Inc. 1,118,990(6) 7.3%
1285 Avenue of the Americas
16th Floor
New York, NY 10019
Foreign & Colonial Management 1,099,730(7) 7.1%
Limited and Hypo Foreign
& Colonial Management (Holdings)
Exchange House
Primrose Street
London EC2A2NY, England
</TABLE>
(1) The number of shares of the Company's Common Stock indicated as
beneficially owned is reported on the basis of regulations of the
Securities and Exchange Commission ("SEC") governing the determination
of beneficial ownership of securities.
(2) Equity Holdings, an Illinois general partnership, is comprised of the
Samuel Zell Revocable Trust with Samuel Zell as Trustee, the Robert H.
and Ann Lurie Trust with Ann Lurie and Sheli Z. Rosenberg as
Co-Trustees, and B/S Investments. Samuel Zell is the Chairman of the
Board and Chief Executive Officer of the Company and Sheli Z.
Rosenberg is an executive officer and director of the
4
<PAGE> 8
Company. B/S Investments is an Illinois general partnership. Certain
direct and indirect beneficial owners of B/S Investments are trusts
created for the benefit of Samuel Zell and his family and for Ann
Lurie and her family. Arthur A. Greenberg, an executive officer of
the Company, and Mmes. Rosenberg and Lurie are trustees or co-trustees
of certain of these trusts which are indirect beneficial owners of B/S
Investments. Messrs. Zell and Greenberg and Mmes. Lurie and Rosenberg
may be deemed to be the beneficial owners of the shares of the
Company's Common Stock owned by Equity Holdings but they each disclaim
beneficial ownership of these shares.
(3) The shares are held by four institutions as collateral for loans to
Equity Holdings. Under the loan agreements, the institutions cannot
vote or exercise any ownership rights relating to the pledged shares
unless there is an event of default thereunder.
(4) Arlington Leasing Co. ("Arlington") is an indirect, wholly owned
subsidiary of Equity Group Investments, Inc. ("EGI"). EGI's
stockholders who own more than 5% of EGI's outstanding stock include
certain trusts created for the benefit of Mr. Zell and Mrs. Lurie and
their families. Mr. Greenberg and Mmes. Lurie and Rosenberg are
trustees or co-trustees of certain of these trusts. Messrs. Zell and
Greenberg and Mmes. Lurie and Rosenberg may be deemed to be the
beneficial owners of the shares of the Company's Common Stock owned by
Arlington but they each disclaim beneficial ownership of these shares.
(5) The shares are held by two financial institutions as collateral for
loans to Arlington. Under the loan agreements, the institutions
cannot vote or exercise any ownership rights relating to the pledged
shares unless there is an event of default thereunder.
(6) Pursuant to a Schedule 13G filed with the SEC for calendar 1994,
Robert Fleming Inc. is a registered investment advisor and has shared
voting and dispositive power for the shares reported herein.
(7) Pursuant to a Schedule 13G filed with the SEC for calendar 1994,
Foreign & Colonial Management Limited is a registered investment
advisor and Hypo Foreign & Colonial Management (Holdings) Limited is a
parent holding company and both have shared voting and dispositive
power for the shares reported herein.
TRANSACTIONS WITH PRINCIPAL STOCKHOLDERS
The Company subleases office space from EGI, a company affiliated with
Equity Holdings and Arlington, at Two North Riverside Plaza, Chicago, Illinois
60606. In
5
<PAGE> 9
addition, EGI provides the Company with certain administrative and office
facility services and charges for such services are included in the rent. The
Company paid approximately $95,400 during 1994 for such services.
Various affiliates of Equity Holdings and Arlington have provided
services with respect to certain aspects of the Company's business including,
but not limited to, financial and accounting services, tax services, computer
services, investor relations services and support services and expenses.
During 1994, the Company paid or was billed approximately $232,000 for such
services.
The Company also provides financial management services to various
affiliates of Equity Holdings and Arlington. During 1994, the Company received
approximately $35,000 for such services which also included reimbursement of
overhead charges.
ELECTION OF DIRECTORS
(PROPOSAL 1)
VOTING AND THE MANAGEMENT NOMINEES
At the Annual Meeting, twelve directors will be elected to serve
one-year terms commencing immediately upon their election, or to serve until
their respective successors are duly elected and qualified. Management's
nominees for the twelve director positions to be filled by vote at the Annual
Meeting are (the "Management Nominees"):
6
<PAGE> 10
Rod F. Dammeyer
Herbert A. Denton
Bradbury Dyer, III
Talton R. Embry
Bruce A. Esselborn
Dan L. Kirby
Joe P. Kirby
Donald W. Phillips
Sheli Z. Rosenberg
L.G. Schafran
Richard I. Weingarten
Samuel Zell
All of the Management Nominees are currently serving as directors of the
Company. For information regarding the Management Nominees, see "Directors and
Executive Officers of the Company."
At the Annual Meeting, if a quorum is present, the vote of a majority
of the Company's Common Stock held by shareholders present in person or
represented by proxy shall elect the directors. It is the present intention of
Samuel Zell and Bruce A. Esselborn, who will serve as the Company's proxy
agents at the Annual Meeting (the "Proxy Agents"), to vote the proxies which
have been duly executed, dated and delivered and which have not been revoked in
accordance with the instructions set forth thereon or if no instruction had
been given or indicated to elect the Management Nominees as directors. The
Board does not believe that any of the Management Nominees will be unwilling or
unable to serve as a director. However, if prior to the election of directors,
any of the Management Nominees becomes unavailable or unable to serve, the
Board reserves the right to name a substitute nominee or nominees and the Proxy
Agents expect to vote the proxies for the election of such substituted nominee
or nominees.
THE BOARD RECOMMENDS A VOTE IN FAVOR OF THE MANAGEMENT NOMINEES. IF A
CHOICE IS SPECIFIED ON THE PROXY BY A SHAREHOLDER, THE SHARES WILL BE VOTED AS
SPECIFIED. IF NO SPECIFICATION IS MADE, THE SHARES WILL BE VOTED "FOR" THE
MANAGEMENT NOMINEES.
7
<PAGE> 11
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the name, age, position and offices
with the Company, present principal occupation or employment and material
occupations and employment for the past five years of each person who is
presently a director, or an executive officer of the Company.
<TABLE>
<CAPTION>
Principal Positions with the Company;
Principal Occupation or Employment and
Name Age Five-Year Employment History
---- --- -----------------------------------------------
<S> <C> <C>
Rod F. Dammeyer 54 Director of the Company since January 19, 1993; President and a director since 1985 and
Chief Executive Officer since 1993 of Itel Corporation ("Itel"); Director since 1992 and
President and Chief Executive Officer since 1994 of Great American Management and
Investment, Inc. ("GAMI"); Director of ANTEC Corporation, Falcon Building Products, Inc.
("Falcon"), Jacor Communications, Inc. ("Jacor"), Lomas Financial Corporation, Revco D.S.,
Inc. ("Revco"), Santa Fe Energy Resources, Inc., and The Vigoro Corporation ("Vigoro");
Trustee of several Van Kampen American Capital, Inc. Closed End Mutual Funds and Series
Trusts.
Herbert A. Denton 47 Director of the Company since August 2, 1988; President of Providence Capital, Inc. since
February 1991; Managing Director of Jefferies & Company, Inc. from January 1987 until
February 1991; a Director of Ramco Energy p.l.c.
Bradbury Dyer, III 52 Director of the Company since August 13, 1986; General Partner, Paragon Associates and
Paragon Associates II; Managing Agent, Paragon Joint Venture; Director of Falcon,
GAMI and Roosevelt Financial Group, Inc.
Talton R. Embry 48 Director of the Company since August 1, 1986; Investment Advisor, Magten Asset Management
Corp. ("Magten"); Co-Chairman of the Board of Revco;
</TABLE>
8
<PAGE> 12
<TABLE>
<S> <C> <C>
Director of Combined Broadcasting Corporation, BDK Holdings, Inc., Thermadyne Holdings
Corp., TSX Corporation, and VARCO International Inc. See "Litigation Relating to
Director".
Bruce A. Esselborn 52 Director of the Company since February 20, 1990 and President since June 24, 1992;
Chairman of the Board since 1988 and President and Chief Executive Officer since
1986 of United Capitol Holding Company and United Capitol Insurance Company ("United
Capitol").
Dan L. Kirby 48 Director of the Company since May 27, 1993; Executive Vice President, General Counsel and
Secretary of Western Surety Company since 1974.
Joe P. Kirby 41 Director of the Company since May 27, 1993; President and Chief Executive Officer of
Western Surety Company since 1979.
Donald W. Phillips 46 Director of the Company since May 9, 1990; President of the Company from March 28, 1990
until June 24, 1992; Executive Vice President of Equity Financial and Management Company
("Equity") since March 1990; Chairman of the Board of Equity Institutional Investors, Inc.
since July 1990.
Sheli Z. Rosenberg 53 Director of the Company since May 15, 1987; Vice President since February 20, 1990;
General Counsel of the Company from February 20, 1990 until September 8, 1994; Member
of the law firm of Rosenberg & Liebentritt, P.C.; President and Chief Executive Officer
since November 1994, Executive Vice President from 1986 until 1994 and Director of EGI;
President and Chief Executive Officer since November 1994, Executive Vice President from
1980 unitl 1994 and a Director of Equity; Director, Vice President and General Counsel of
GAMI; Chairman of the Board of CFI Industries, Inc. from January 1994 until September 1994
and Co-Chairman since September 1994; Director of American Classic Voyages Co. ("American
Classic"), Falcon, Itel, Jacor, Revco and Vigoro; a trustee of Equity Residential
Properties Trust ("Equity
</TABLE>
9
<PAGE> 13
<TABLE>
<S> <C> <C>
Residential"); Vice President of Madison Management Group, Inc. ("Madison") prior to
October 4, 1991. Madison filed for a petition under the Federal bankruptcy laws on
November 8, 1991. Vice President of First Capital Benefit Administrators, Inc. ("Benefits
Administrators") since July 22, 1987. Benefits Administrators filed for a petition under
the Federal bankruptcy laws on January 3, 1995.
L.G. Schafran 56 Director of the Company since August 1, 1986; Managing General Partner of L.G. Schafran &
Associates; Director of Crown Books Corp., Dart Group Corp., Glasstech, Inc., Oxigene,
Inc., Publicker Industries, Inc. and Trak-Auto Corp.
Richard I. Weingarten 44 Director of the Company since March 2, 1994; President of Richard Weingarten & Company,
Inc. since 1991; Managing director of Bear Stearns & Co., Inc. from 1988 until 1991.
Samuel Zell 53 Director of the Company since August 13, 1986; Chairman of the Board and Chief Executive
Officer of the Company since October 15, 1987; President of the Company from July 25,
1989 until March 27, 1990; Chairman of the Board of Broadway Stores, Inc., American
Classic, Equity, EGI, Equity Residential, Falcon, Itel, and Manufactured Home Communities,
Inc. (effective March 31, 1995); Chairman of the Board since 1983 and President and Chief
Executive Officer from 1990 until 1994 of GAMI; Co-Chairman of the Board of Manufactured
Home Communities, Inc. until March 31, 1995 and Revco; Director of Jacor, Sealy
Corporation, and Vigoro; trustee and beneficiary of a managing general partner of Equity
Holdings; President of Madison prior to October 4, 1991. Madison filed for a petition
under the Federal bankruptcy laws on November 8, 1991.
Ronald D. Bobman 30 Vice President - Mergers and Acquisitions of the Company since March 2, 1994; Director -
Mergers and Acquisitions of the Company from January 1991 until March 1994; employed at
Equity Group Investments,
</TABLE>
10
<PAGE> 14
<TABLE>
<S> <C> <C>
Inc. from September 1989 until January 1991, most recently as Director - Mergers and
Acquisitions.
Arthur A. Greenberg 54 Senior Vice President of the Company since January 1, 1989, and Treasurer of the Company
since February 5, 1990; Chief Financial Officer of the Company from July 25, 1989 until
May 27, 1993; Executive Vice President and Director of EGI and Equity; President of
Greenberg & Pociask, Ltd.; Director of American Classic and Vigoro; Vice President, Chief
Financial Officer and Treasurer of Madison prior to October 4, 1991. Madison filed for a
petition under the Federal bankruptcy laws on November 8, 1991.
Mary Jane Robertson 41 Senior Vice President and Chief Financial Officer of the Company since May 27, 1993;
Executive Vice President and Chief Financial Officer of United Capitol since August 20,
1991; Senior Vice President, Chief Financial Officer and Controller of United Capitol from
February 1990 until August 1991.
Kelly L. Stonebraker 40 Vice President and General Counsel of the Company since September 8, 1994; Attorney at
Rosenberg & Liebentritt, P.C. since September 1990; Attorney at Katten, Muchin & Zavis
from September 1981 until September 1990.
Steven S. Zeitman 46 Executive Vice President and Chief Underwriting Officer of United Capitol since August
20, 1991; Senior Vice President of United Capitol from 1988 until August 1991.
John M. Zoeller 34 Vice President-Taxes of the Company since March 1992; Director of Taxes of the Company
from June 1991 until March 1992; Tax Manager of the Company from January 1990 until June
1991; Vice President-Taxes of GAMI from December 1991 until March 1995; Director of Taxes
of GAMI from June 1991 until December 1991; Tax Manager of GAMI from January 1988 until
June 1991; member of Greenberg & Pociask, Ltd. since January 1994.
</TABLE>
11
<PAGE> 15
LITIGATION RELATING TO DIRECTOR
On September 9, 1993, Mr. Embry and Magten, without admitting or denying
the allegations in a complaint by the SEC, consented to the entry of judgments
enjoining them from violating (and, in the case of Mr. Embry, aiding and
abetting violations of) anti-fraud and other provisions of the Securities
Exchange Act of 1934, as amended, the Investment Advisers Act of 1940, as
amended, and the Investment Company Act of 1940, as amended. The SEC's
complaint alleged principally that Mr. Embry failed to advise clients of
certain personal trades relevant to the clients' holdings, to obtain certain
consents required under applicable law in connection therewith and to comply
with certain reporting requirements. The complaint did not involve the
securities of the Company. As part of the settlement, Mr. Embry made a $1
million payment for the benefit of certain of Magten's clients.
BOARD AND COMMITTEE MEETINGS
The Board has an Executive Committee which consists of Messrs. Dyer,
Esselborn and Zell. The Executive Committee did not hold any meetings in 1994.
The Executive Committee possesses and may exercise the full and complete
authority of the Board in the management and business affairs of the Company
during the intervals between the meetings of the Board. All action by the
Executive Committee is reported to the Board at its next meeting and such
action is subject to revision and alteration by the Board, provided that no
rights of third persons can be prejudicially affected by the subsequent action
of the Board. Vacancies on the Executive Committee are filled by the Board.
However, during the temporary absence of a member of the Executive Committee,
due to illness or inability to attend a meeting for other cause, the remaining
member(s) of the Executive Committee may appoint a member of the Board to act
in the place and with all the authority of such absent member. The current
members of the Executive Committee will continue in office until the Committee
is dissolved, terminated or reorganized, or if such members are replaced.
The Company also has an Audit Committee which consists of Messrs. Denton,
Embry and Schafran. During 1994, the Audit Committee held two meetings. The
Audit Committee has the power to (i) recommend to the Board the independent
certified public accountants to be selected to serve the Company, (ii) review
with the independent certified public accountants the planned scope and results
of the annual audit, their reports and recommendations, (iii) review with the
independent certified public accountants matters relating to the Company's
system of internal controls, and (iv) review the Company's policies with
respect to corporate governance, including policies relating to compliance with
laws and regulations and conflicts of interest.
12
<PAGE> 16
The Company also has a Compensation Committee which consists of Messrs.
Dammeyer, Denton and Schafran. During 1994, the Compensation Committee held
one meeting. The Compensation Committee reviews and makes recommendations
concerning proposals by management with respect to compensation, bonuses, stock
option grants, employment agreements and other benefits and policies regarding
such matters for the Company.
The Company also has an Investment Committee which consists of Messrs.
Dyer, Embry, Esselborn, Phillips and Zell. During 1994, the Investment
Committee held five meetings. The Investment Committee establishes investment
policies and oversees the management of the Company's investment portfolio.
During 1994, five meetings of the Board were held. All directors were
present at least for 75% of the meetings of the Board and the committees that
they were eligible to attend, except for Mr. Dan Kirby who attended five out of
seven meetings he was eligible to attend and Mr. Zell who attended eight out of
twelve meetings he was eligible to attend.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Other
Annual All Other
Name and Salary Bonus Compensation Options Compensation
Principal Position Year ($) ($) ($) (#) ($)
------------------ ---- --------- ------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C>
Samuel Zell 1994 0 0 150,000(1) 25,000 0
Chairman of the Board and 1993 0 0 50,000(1) 25,000 0
Chief Executive Officer 1992 0 0 50,000(1) 5,000 0
of the Company
Bruce A. Esselborn 1994 387,500 112,500 854(2) 5,000 24,948(3)
President of the Company 1993 387,500 125,000 1,007(2) 5,000 32,569(3)
and Chairman, President 1992 299,728 125,000 3,501(2) 5,000 28,246(3)
and Chief Executive Officer
of United Capitol
Dan L. Kirby 1994 250,000 250,000 408(5) 5,000 9,000(6)
Executive Vice President, 1993 250,000 250,000 396(5) 5,000 11,572(6)
General Counsel & Secretary 1992(4) 86,538 253,794 7,265(5) 50,000 23,800(6)
of Western Surety Company
Joe P. Kirby 1994 250,000 250,000 0 5,000 9,000(8)
President and Chief 1993 250,000 250,000 336(7) 5,000 11,572(8)
Executive Officer of 1992(4) 86,538 252,389 4,649(7) 50,000 14,985(8)
Western Surety Company
</TABLE>
13
<PAGE> 17
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Mary Jane Robertson 1994 200,000 30,000 0 8,500 15,034(9)
Senior Vice President 1993 200,000 30,000 0 0 21,566(9)
Chief Financial Officer and 1992 184,395 30,000 0 0 16,413(9)
Executive Vice President of the
Company and Chief Financial
Officer of United Capitol
</TABLE>
(1) Mr. Zell received $150,000 in 1994 and $50,000 in 1993 and 1992 for his
services as Chairman of the Board, Chief Executive Officer and Chairman
of the Executive Committee.
(2) Included $854 in 1994, $1,007 in 1993 and $2,456 in 1992 of
reimbursements of personal investment advisory fees and $1,045 in 1992 of
reimbursement of income taxes paid on automobile fringe benefits.
(3) Included (i) $11,760 in 1994, $10,060 in 1993 and $8,600 in 1992 of
company-paid premiums on a policy owned by him; (ii) $4,620 in 1994,
$4,497 in 1993 and $4,364 in 1992 of 401(k) plan company matching
contributions; (iii) $8,568 in 1994, $18,012 in 1993 and $13,782 in 1992
of company contributions under a defined contribution retirement plan;
and (iv) $1,500 in 1992 of directors' fees from Western Surety Company.
(4) Only includes amounts from August 14, 1992, the date of the Company's
acquisition of Western Surety Company.
(5) Included $408 in 1994, $396 in 1993 and $366 in 1992 of reimbursements of
health club dues and $6,899 in 1992 of reimbursement of income taxes paid
on company-paid premiums on life insurance policies owned by him.
(6) Included $9,000 in 1994 and $11,572 in 1993 of 401(k) plan company
matching and profit sharing contributions and $23,800 in 1992 of
company-paid premiums on life insurance policies owned by him.
(7) Included $336 in 1993 and $306 in 1992 of reimbursements of health club
fees and $4,343 in 1992 of reimbursement of income taxes paid on
company-paid premiums on life insurance policies owned by him.
(8) Included $9,000 in 1994 and $11,572 in 1993 of 401(k) plan company
matching and profit-sharing contributions and $14,985 in 1992 of
company-paid premiums on life insurance policies owned by him.
(9) Included (i) $4,620 in 1994, $4,497 in 1993 and $4,364 in 1992 of 401(k)
plan company matching contributions; (ii) $10,414 in 1994, $17,069 in
1993 and
14
<PAGE> 18
$10,549 in 1992 of company contributions under a defined contribution
retirement plan; and (iii) $1,500 in 1992 of directors' fees from Western
Surety Company.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Potential Realizable
Individual Grants Value at Assumed
------------------------ Annual Rates of
Stock Price
Number of % of Total Appreciation for
Securities Granted to Option Term
Underlying Employees Exercise or --------------------
Option Granted Fiscal Base Price Expiration
Name (#)(1) Year(2) ($/Sh) Date 5%($)(3) 10%($)(4)
---------------------- -------------- -------- ----------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Samuel Zell 5,000 2.5 14.75 5/19/04 46,381 117,539
20,000 10.0 13.00 8/16/04 163,513 414,373
Bruce A. Esselborn 5,000 2.5 14.75 5/19/04 46,381 117,539
Dan L. Kirby 5,000 2.5 14.75 5/19/04 46,381 117,539
Joe P. Kirby 5,000 2.5 14.75 5/19/04 46,381 117,539
Mary Jane Robertson 8,500 4.3 13.00 8/16/04 69,493 176,109
</TABLE>
(1) The Options granted during 1994 to purchase 5,000 shares were exercisable
after May 19, 1994, for Messrs. Zell, Esselborn, Dan Kirby and Joe Kirby.
The Options granted to Mr. Zell (20,000) and Ms. Robertson (8,500) are
exercisable in four equal annual cumulative installments beginning one
year after the grant date of August 16, 1994.
(2) Does not include options granted to non-employee directors and
consultants. If such grants are included, the percentage would be 1.7%
for the options to purchase 5,000 shares; 6.8% for Mr. Zell's options to
purchase 20,000 shares; and 2.9% for Ms. Robertson's options to purchase
8,500 shares.
(3) Assumes a price of $24.03 at the end of ten years for the options to
purchase 5,000 shares and a price of $21.18 at the end of ten years for
Mr. Zell's options to purchase 20,000 shares and Ms. Robertson's options
to purchase 8,500 shares.
(4) Assumes a price of $38.26 at the end of ten years for the options to
purchase 5,000 shares and a price of $33.72 at the end of ten years for
Mr. Zell's options to purchase 20,000 shares and Ms. Robertson's options
to purchase 8,500 shares.
15
<PAGE> 19
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR,
AND FISCAL YEAR-END OPTION VALUE
<TABLE>
<CAPTION>
Value of
Number of Unexercised
Unexercised In-the-Money
Options at Options at
Shares Value FY-End(#) FY-End($)
Acquired on Realized Exercisable/ Exercisable/
Name Exercise(#) ($) Unexercisable Unexercisable
----------- ------------ ------------- --------------- -----------------
<S> <C> <C> <C> <C>
Samuel Zell -0- -0- 20,000/35,000 34,375/49,375
Bruce A. Esselborn -0- -0- 165,000/0 1,210,000/0
Dan L. Kirby -0- -0- 60,000/0 273,125/0
Joe P. Kirby -0- -0- 60,000/0 273,125/0
Mary Jane Robertson -0- -0- 100,000/8,500 787,500/13,813
</TABLE>
COMPENSATION OF DIRECTORS
Samuel Zell, Chairman of the Board and Chief Executive Officer of the
Company, was compensated at the annual rate of $150,000 for his services as a
Director, Chairman of the Board, Chief Executive Officer and Member of the
Executive Committee during 1994. Such amount has been included in the Summary
Compensation Table on page . Other Directors, except for employees of the
Company or its subsidiaries, were compensated at the annual rate of $15,000 and
received $500 for each meeting of the Board and committees of the Board of the
Company which they attended. Additionally, as of the date of the first
Directors' meeting following each Annual Meeting, each Director receives
options to purchase 5,000 shares at the fair market value as of the grant date.
United Capitol pays its non-Company or subsidiary employee directors an
annual retainer of $12,000. Messrs. Phillips and Greenberg and Mrs. Rosenberg,
who are members of such Board, each were compensated pursuant to this policy
for 1994. Western Surety Company pays its non-Company or subsidiary employee
directors an annual retainer of $12,000. Mr. Greenberg and Mrs. Rosenberg, who
are members of such Board, each were compensated pursuant to this policy for
1994.
16
<PAGE> 20
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company and certain of its subsidiaries and Mr. Esselborn have an
agreement providing for the continuation of Mr. Esselborn's employment through
at least February 19, 1995, with salary adjustments determined by such
subsidiaries, an annual bonus of up to $200,000, a stock option grant for the
purchase of 150,000 shares of Common Stock (granted on February 20, 1990),
Company-paid premiums for a $2,000,000 life insurance policy with Mr. Esselborn
designating the beneficiary and certain other employee benefits. The Company
and Mr. Esselborn entered into a new agreement as of February 20, 1995,
providing for the continuation of Mr. Esselborn's employment through February
19, 1997, with salary adjustments, an annual bonus of up to $200,000,
company-paid premiums on a $2,000,000 life insurance policy with Mr. Esselborn
designating the beneficiary and certain other employee benefits.
The Company and certain of its subsidiaries and Ms. Robertson have an
agreement providing for the continuation of Ms. Robertson's employment through
at least February 19, 1995, with salary adjustments determined by such
subsidiaries, an annual bonus, a stock option grant for the purchase of 100,000
shares of Common Stock (granted on February 20, 1990) and certain other
employee benefits. The Company and Ms. Robertson entered into a new agreement
as of February 20, 1995, providing for the continuation of Ms. Robertson's
employment through February 19, 1997, with salary adjustments, an annual bonus
and certain other employee benefits.
The Company and certain of its subsidiaries and Dan L. Kirby have an
agreement providing for the continuation of Mr. Kirby's employment through at
least August 14, 1995, with salary adjustments determined by certain of such
subsidiaries, an annual bonus not to exceed $250,000 based upon premiums earned
by Western Surety Company, a stock option grant for the purchase of 50,000
shares of Common Stock (granted on August 14, 1992) and certain other employee
benefits.
The Company and certain of its subsidiaries and Joe P. Kirby have an
agreement providing for the continuation of Mr. Kirby's employment through at
least August 14, 1995, with salary adjustments determined by certain of such
subsidiaries, an annual bonus not to exceed $250,000 based upon premiums earned
by Western Surety Company, a stock option grant for the purchase of 50,000
shares of Common Stock (granted on August 14, 1992) and certain other employee
benefits.
17
<PAGE> 21
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
The members of the Company's Compensation Committee are Messrs. Dammeyer,
Denton and Schafran.
The following relationships existed during 1994:
Ms. Rosenberg and Mr. Zell are executive officers and directors of the
Company and Ms. Rosenberg is a director and member of the Compensation
Committee of Itel, and Mr. Zell is an executive officer and director of Itel.
Mr. Dammeyer is an executive officer and director of Itel and is a director and
member of the Compensation Committee of the Company.
Ms. Rosenberg and Mr. Zell are executive officers and directors of the
Company and Ms. Rosenberg and Mr. Zell are executive officers, directors and
members of the Compensation Committee of GAMI. Mr. Dammeyer is an executive
officer and director of GAMI and is a director and member of the Compensation
Committee of the Company.
Ms. Rosenberg is an executive officer and director of the Company and is
a trustee of Equity Residential. Mr. Zell is an executive officer and trustee
of Equity Residential and an executive officer and director of the Company.
For the year ended December 31, 1994, the Company paid approximately
$196,700 in fees for legal services to the law firm of Rosenberg & Liebentritt,
P.C. of which Mrs. Rosenberg and Mr. Stonebraker are members. For the year
ended December 31, 1994, the company paid Seyarth Shaw Fairweather & Geraldson
("Seyfarth") approximately $222,200. Ms. Rosenberg's husband is a partner at
Seyfarth. Additionally, see "Security Ownership of Certain Beneficial
Owners-Transactions with Principal Stockholders."
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The compensation policy of the Company for its executive officers
(including those named in the Summary Compensation Table) has been to pay base
salaries and annual bonuses that are both competitive and recognize the
accomplishment of the Company's stated goals. In addition, the Company
established the 1990 Stock Option Plan to provide long-term incentive
opportunities for employees, officers and directors of the Company.
18
<PAGE> 22
The Company established its basic goals five years ago. These goals
included building a financial services business primarily focusing on
insurance. The Company's first step to accomplish its goals was the 1990
acquisition of United Capitol. In furtherance of its goals, the Company
completed the acquisition of Western Surety Company during 1992, Fischer
Underwriting Group in 1993, and the acquisition of Universal Surety of America
during 1994. Since the Company began realizing its goal of being an insurance
company with the acquisition of United Capitol, a second performance graph has
been included which illustrates the performance of the Company's Common Stock,
the S&P 500 and the S&P Property and Casualty Insurance Index with a beginning
point of January 31, 1990, and an ending point of December 31, 1994, to
correspond with the February 20, 1990, acquisition of United Capitol.
Based on the Board's judgment of the accomplishments by certain executive
officers of these stated goals, salary increases and/or bonuses were awarded to
the named United Capitol executives. As a condition precedent to the Western
Surety Company acquisition, the Company entered into employment contracts with
two executive officers of Western Surety Company (see "Employee Contracts and
Termination of Employment and Change-In-Control Arrangements"). In furtherance
of the Company's compensation policy, incentive bonuses provided for in those
contracts are based on the amount of premiums earned by Western Surety Company.
Historically, the Chairman of the Board and Chief Executive Officer of
the Company received a $50,000 fee for serving in such capacities. As of
January 1, 1994, that amount was increased to $150,000. This fee is not
directly tied to the performance of the Company but rather reflects the
commencement of the Company's strategic plan and the initial implementation of
this plan and Mr. Zell's contributions to it.
Long-term incentive opportunities were made available to each of the
executive officers (other than the Chief Executive Officer) in the form of
significant grants of stock options at the time of the Company's acquisition of
either United Capitol or Western Surety Company. These options were designed
to promote the long-term interests between such individuals and the Company
shareholders and to assist in the retention of such officers. It continues to
be the Company's intention to accomplish these objectives and, therefore, at
the time of an acquisition of a company, major option grants will be made to
retain certain executive officers of the acquired company at exercise prices at
the time of grant determined in part by the market price of the Company's stock
at the date the options are to be granted. In 1994, options to purchase 20,000
shares were awarded to Mr. Zell in recognition of his accomplishments as
Chairman of the Board and Chief Executive Officer.
Rod F. Dammeyer
Herbert A. Denton
L.G. Schafran
19
<PAGE> 23
PERFORMANCE GRAPHS
Below is a graph comparing total shareholder return on the Company's
Common Stock over the last five years with two broad equity market indices, S&P
Property and Casualty Insurance and S&P Domestic Integrated Oil, and a
published industry index, the S&P 500, as required by the rules of the SEC.
The Company has presented both of the broad equity market indices since it has
operated in both arenas at different times during the five years shown. A
second graph has also been provided for the period January 31, 1990, through
December 31, 1994, which only uses the S&P Property and Casualty Insurance
Index. This time period corresponds to the Company's involvement in the
property and casualty insurance business.
<TABLE>
<CAPTION>
1989 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Capsure Holdings Corp.($) 100.00 65.08 90.48 173.02 171.43 185.71
S&P 500($) 100.00 96.89 126.42 136.05 149.76 151.74
S&P Property &
Casualty($) 100.00 97.71 122.33 143.26 140.73 147.62
S&P Domestic
Integrated Oil($) 100.00 94.94 88.76 90.64 95.50 100.20
</TABLE>
<TABLE>
<CAPTION>
STARTING
BASIS FEB-DEC
JAN 1990 1990 1991 1992 1993 1994
<S> <C> <C> <C> <C> <C> <C>
Capsure Holdings Corp.($) 100.00 78.92 109.69 209.69 207.69 225.20
S&P 500($) 100.00 103.87 135.52 145.84 160.54 162.66
S&P Property & Casualty($) 100.00 104.22 130.48 152.80 150.10 157.44
</TABLE>
20
<PAGE> 24
DELINQUENT FILINGS PURSUANT TO ITEM 405
OF REGULATION S-K
Under the rules of the SEC, the Company is required to report, based on
its review of reports to the SEC about transactions in its stock furnished to
the Company and written representations of its directors, officers and 10%
shareholders. In 1994, Kelly L. Stonebraker filed a Form 3 late which reported
no securities owned as of such Initial Statement of Beneficial Ownership.
SECURITY OWNERSHIP OF MANAGEMENT
The following information is furnished as of March 27, 1995, with respect
to the shares of the Company's Common Stock beneficially owned by each
director, nominee for director and by those executive officers named in the
Summary Compensation Table and by all directors and executive officers as a
group. Information concerning the directors and officers and their security
holdings has been furnished by them to the Company.
<TABLE>
<CAPTION>
Shares Upon
Name of Shares of Exercise of Stock Percent
Beneficial Owner Common Stock Option(1) Total(2) of Class
---------------- ------------ ---------- ------------- --------
<S> <C> <C> <C> <C>
Rod F. Dammeyer 0 10,000 10,000 *
Herbert A. Denton 7,860 30,000 37,860 *
Bradbury Dyer, III 546,158(3) 30,000 576,158(3) 3.7%
Talton R. Embry 45,675(4) 30,000 75,675(4) *
Bruce A. Esselborn 78,507(5) 170,000(5) 248,507(5) 1.6%
Dan L. Kirby 55,555 60,000 115,555 *
Joe P. Kirby 55,555 60,000 115,555 *
Donald W. Phillips 0 30,000 30,000 *
Sheli Z. Rosenberg 4,062,328(6)(7) 30,000 4,092,328(6)(7) 26.5%
L.G. Schafran 13,768(8) 30,000 43,768(8) *
Richard I. Weingarten 0 5,000 5,000 *
</TABLE>
21
<PAGE> 25
<TABLE>
<S> <C> <C> <C> <C>
Samuel Zell 4,039,622(6)(7) 55,000 4,094,622(6)(7) 26.5%
Mary Jane Robertson 1,500 108,500 110,000 *
All directors and
executive officers as
a group including the
above-named persons 4,874,506 818,500 5,693,006 35.1%
======== ======= ========= ====
</TABLE>
* Less than 1%
(1) Represents beneficial ownership of shares that may be acquired by the
exercise of stock options which are currently exercisable or exercisable
within sixty days of the date of this table.
(2) The amounts of the Company's Common Stock and stock options beneficially
owned are reported on the basis of regulations of the SEC governing the
determination of beneficial ownership of securities.
(3) Includes 544,258 shares of the Company's Common Stock owned by Paragon
Joint Venture ("Paragon"). Paragon is a joint venture formed by Paragon
Associates and Paragon Associates II, both Texas limited partnerships.
Mr. Dyer is the sole general partner of Paragon Associates and Paragon
Associates II. Under the terms of the joint venture agreement of
Paragon, each partner has beneficial ownership in proportion to its
respective account in Paragon. Mr. Dyer does not have full direct
ownership; however, as the general partner of the partners of Paragon, he
may be deemed to have beneficial ownership.
(4) The 45,675 shares are owned as follows: 13,800 shares are owned by Mr.
Embry; 14,400 shares are owned by the Magten Asset Management Corp.
Pension Plan & Trust; 1,675 shares are owned by Mr. Embry's minor
children; 300 shares are owned by Mr. Embry's wife; and 15,500 shares are
owned by the Magten Asset Management Profit Sharing Plan.
(5) Includes 3,500 shares and options to purchase 5,000 shares beneficially
owned by Mr. Esselborn's wife.
(6) Includes 3,042,253 shares of the Company's Common Stock owned by Equity
Holdings. Under regulations of the SEC, Mr. Zell and Mrs. Rosenberg may
be deemed to be the beneficial owners of the shares of the Company's
Common Stock owned by Equity Holdings (see notes (2) and (3) under
"Security
22
<PAGE> 26
Ownership of Certain Beneficial Owners"), but they each disclaim
beneficial ownership of these shares.
(7) Includes 997,369 shares of the Company's Common Stock owned by Arlington.
Under regulations of the SEC, Mr. Zell and Mrs. Rosenberg may be deemed
to be beneficial owners of the shares of the Company's Common Stock (see
notes (4) and (5) under "Security Ownership of Certain Beneficial
Owners"), but they each disclaim beneficial ownership of these shares.
(8) Includes 13,768 shares which are beneficially owned by Mr. Schafran's
spouse. Mr. Schafran disclaims beneficial ownership of such shares.
23
<PAGE> 27
APPROVAL OF AN AMENDMENT TO THE COMPANY'S
CERTIFICATE OF INCORPORATION TO INCREASE THE
MAXIMUM NUMBER OF SHARES OF COMMON STOCK
THE COMPANY IS AUTHORIZED TO ISSUE FROM
20,000,000 SHARES TO 25,000,000 SHARES
(PROPOSAL 2)
The Board of Directors of the Company on March 15, 1995 adopted
resolutions approving a proposed amendment to the Certificate of Incorporation
of the Company, and recommended adoption of the amendment by the shareholders.
Exhibit A to this Proxy Statement contains the proposed amendment to the
Certificate of Incorporation. The following discussion of the proposed
amendment is qualified in its entirety by reference to the text of the proposed
amendment set forth in Exhibit A.
Article Fourth of the Company's Certificate of Incorporation currently
provides that the Company is authorized to issue 20,000,000 shares of $.05 par
value per share of Common Stock and $5,000,000 shares of $.01 par value per
share Preferred Stock. If adopted, the proposed amendment to Article Fourth
would increase the maximum number of shares of Common Stock which the Company
is authorized to issue from 20,000,000 shares to 25,000,000 shares.
Article Fourth currently and will continue in the proposed amendment to
give the Board of Directors the power to issue the shares of Preferred Stock
authorized in one or more series and to fix the designation, rights, conversion
rights, preferences and limitations of the shares in each series.
Of the 20,000,000 shares of Common Stock presently authorized 16,883,053
(84%) were issued and outstanding or reserved for issuance at March 27, 1995.
Of the 5,000,000 shares of Preferred Stock presently authorized, no shares were
issued and outstanding or reserved for issuance at March 27, 1995. If the
proposed amendment is adopted there will be authorized, unissued and unresolved
8,116,947 shares of Common Stock and 5,000,000 shares of Preferred Stock.
Management believes that it is desirable to increase the number of shares of
Common Stock to provide to the Company the ability to raise capital, make
acquisitions in the future and effect other corporate opportunities. No
further action or authorization by the Company's shareholders would be
necessary prior to issuance of the additional shares, except as may be required
for a particular transaction by applicable law or regulating agencies or by the
rules of any stock exchange on which the Company's securities may then be
listed. The Company's Common Stock is currently listed on the New York Stock
Exchange, Inc.
24
<PAGE> 28
Except for the 1990 Stock Option previously approved by shareholders,
there are presently no negotiations, plans or commitments regarding the
issuance of additional shares of Common Stock or of any shares of Preferred
Stock.
THE BOARD RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE CERTIFICATE OF INCORPORATION. IF A CHOICE IS SPECIFIED
ON THE PROXY BY THE SHAREHOLDERS, THE SHARES WILL BE VOTED AS
SPECIFIED. IF NO CHOICE SPECIFICATION IS MADE, SHARES WILL BE VOTED "FOR"
APPROVAL OF THE AMENDMENT.
INDEPENDENT ACCOUNTANTS
Coopers & Lybrand have been the principal accountants for the Company
since 1989. Representatives of Coopers & Lybrand are expected to be present at
the Annual Meeting, will be given an opportunity to make a statement if they
desire to do so, and will be available to respond to appropriate questions from
shareholders.
SHAREHOLDERS' PROPOSALS FOR 1996 ANNUAL MEETING
A proposal submitted by a shareholder for the 1996 Annual Meeting of
Shareholders of the Company must be received by the Secretary of the Company,
Two North Riverside Plaza, Chicago, Illinois 60606, by December 2, 1995, in
order to be eligible to be included in the Company's proxy statement for that
meeting.
CONCLUSION
The Company knows of no business which will be presented at the Annual
Meeting other than the election of Board, and the amendment to the Certificate
of Incorporation. However, if other matters properly come before the meeting,
it is the intention of the Proxy Agents to vote upon such matters in accordance
with their good judgment in such matters.
By Order of the Board of Directors
Susan Obuchowski
Secretary
25
<PAGE> 29
EXHIBIT A
PROPOSED AMENDMENT
TO ARTICLE FOURTH OF CERTIFICATE OF INCORPORATION
FOURTH: The number of authorized shares of capital stock of the
Corporation is 30,000,000 of which 25,000,000 shares shall be Common Stock, par
value five cents ($.05) per share, and 5,000,000 shares shall be Preferred
Stock, par value one cent ($.01) per share. The Board of Directors is
expressly granted the authority to issue the Preferred Stock in one or more
series and to determine in the resolution or resolutions adopted by the Board
of Directors providing for the issuance thereof (i) the powers, designation,
preferences and relative participating, optional or other rights, and the
qualifications, limitations or restrictions of the shares of said series of
Preferred Stock, (ii) any restrictions on the Corporation in connection with
the Preferred Stock, and (iii) the amount of consideration received in respect
of the Preferred Stock which shall be capital. The holder of each share of
Common Stock shall have the right to one (1) vote per share on each matter
submitted to the stockholders for a vote.
26
<PAGE> 30
CAPSURE HOLDINGS CORP.
Two North Riverside Plaza, Chicago, Illinois 60606
This Proxy is Being Solicited on Behalf of the Board of Directors
For the Annual Meeting of Shareholders to be Held on May 24, 1995
The undersigned hereby appoints BRUCE A. ESSELBORN and SAMUEL ZELL, or
either of them, with individual power of substitution, proxies to vote all
shares of the Common Stock of Capsure Holdings Corp. (the "Company") which the
undersigned may be entitled to vote at the annual meeting of shareholders of
the Company to be held in Chicago, Illinois, on May 24, 1995, and any
adjournment thereof.
1. Authority to vote for the election as directors of the group
of twelve nominees proposed by the board of directors listed
below.
Rod F. Dammeyer, Herbert A. Denton, Bradbury Dyer III, Talton
R. Embry, Bruce A. Esselborn, Dan L. Kirby, Joe P. Kirby,
Donald W. Phillips, Sheli Z. Rosenberg, L.G. Schafran, Richard
Weingarten, Samuel Zell
2. To amend the Company's Certificate of Incorporation to
increase the maximum number of shares of Common Stock the
Company is authorized to issue from 20,000,000 shares to
25,000,000 shares.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES ON THE REVERSE SIDE. IF YOU DO NOT MARK ANY BOXES, YOUR PROXY WILL BE
VOTED IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES
CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE SIDE
SIDE
<PAGE> 31
PLEASE MARK
VOTES AS IN
THIS EXAMPLE. /X/
This Proxy, When Properly Executed, Will Be Voted In The Manner Directed Herein
By The Undersigned Shareholder. If No Direction Is Made, The Proxy Will Be
Voted For Authority To Vote For The Election As Directors Of The Group Of
Twelve Nominees Proposed By The Board Of Directors Listed On The Other Side And
For The Amendment To The Company's Certificate Of Incorporation.
<TABLE>
<CAPTION>
FOR WITHHELD FOR AGAINST ABSTAIN
<S> <C>
1. Election Of Directors. / / / / 2. Amend The Company's / / / / / /
Certificate Of Incorporation .
3. In Their Discretion, The Proxies Are Authorized To Vote
Upon Such Other Matters As May Properly Come
Before The Meeting.
For, Except Vote Withheld From / / / /
The Following Nominees:
--------------------------------------------------------------------
Mark Here For Change Of Address
Signature: ____________________________________ Date: __________
Signature: ____________________________________ Date: __________
Note: Please Sign As Name Appears Hereon. Joint Owners Should
Each Sign. When Signing As Attorney, Executor, Administrator,
Trustee Or Guardian, Please Give Full Name As Such.
</TABLE>
