SCHEDULE 14 C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934 (Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[X] Definitive Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14c-5(d)(2)
ACAP CORPORATION
(Name of Registrant As Specified In Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g)
and 0-11.
1) Title of each class of securities to which transaction
applies:
Acap Corporation Common Stock, par value $.10
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:
4) Date filed:
ACAP CORPORATION
10555 Richmond Avenue
Houston, Texas 77042
------------------------------
NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
To Be Held On April 28, 1997
------------------------------------
To Our Stockholders:
The Annual Meeting of Stockholders of Acap Corporation (the "Company")
will be held Monday, April 28, 1997, at 8:00 a.m., local time, at the
offices of the Company, 10555 Richmond Avenue, Houston, Texas.
The purposes of the meeting are:
1. To elect a Board of Directors to serve for the ensuing year;
2. To consider and act upon such other matters as may properly come
before the meeting or any adjournment thereof.
Holders of the Company's Common Stock of record at the close of business
on March 24, 1997, are entitled to receive notice of and to vote at the
meeting.
The accompanying Information Statement is furnished on behalf of the Board
of Directors of the Company to provide notice of the Company's Annual
Meeting of Stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
For the Board of Directors
H. Kathleen Musselwhite
Secretary
April 7, 1997
<PAGE>
TABLE OF CONTENTS
General Information . . . . . . . . . . . . . . . . . 1
Voting . . . . . . . . . . . . . . . . . . . . . . . 1
Election of Directors . . . . . . . . . . . . . . . . 2
Meetings and Committees . . . . . . . . . . . . . . . 2
Security Ownership of Certain Owners . . . . . . . . 3
Executive Officers . . . . . . . . . . . . . . . . . 3
Security Ownership of Management . . . . . . . . . . 4
Beneficial Ownership Reporting . . . . . . . . . . . 5
Executive Compensation . . . . . . . . . . . . . . . 5
Certain Relationships and Related Transactions . . . 6
Independent Auditors . . . . . . . . . . . . . . . . 7
Quorum for Meeting . . . . . . . . . . . . . . . . . 7
Submission of Stockholder Proposals . . . . . . . . . 7
<PAGE>
ACAP CORPORATION
10555 Richmond Avenue
Houston, Texas 77042
INFORMATION STATEMENT
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
GENERAL INFORMATION
This Information Statement is furnished on behalf of the Board of
Directors of Acap Corporation (the "Company") to provide notice of the
Company's Annual Meeting of Stockholders to be held Monday, April 28,
1997, at 8:00 a.m., local time, at the offices of the Company,
10555 Richmond Avenue, Houston, Texas. This Information Statement is
first being sent or given to stockholders of the Company on or about
April 7, 1997.
VOTING
The common stock, $.10 par value (the "Common Stock"), of the Company is
the only outstanding class of voting securities of the Company. Only
stockholders of record at the close of business on March 24, 1997, the
record date, are entitled to vote at the Annual Meeting. As of the record
date, there were 7,592 shares of Common Stock outstanding (excluding
shares held by the Company's subsidiary, which are not voted) and
approximately 806 holders of the Common Stock. Each share of the
Company's Common Stock is entitled to one vote.
The shares owned by InsCap Corporation, the controlling stockholder of the
Company, will be voted for the election of directors recommended by the
Board of Directors.
ELECTION OF DIRECTORS
A Board of Directors consisting of three members will be elected at the
Annual Meeting, each member to serve until the next Annual Meeting and
until a successor shall be elected and shall qualify. If, for any reason
not known at present, any nominee is not available for election, InsCap
Corporation will vote for such substitute persons, if any, as shall be
designated by the Board of Directors.
The affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting is required to elect a director.
Brief statements setting forth the age (at March 24, 1997), the business
experience during the past five years, the year in which first elected a
director, which includes any period during which such nominee served as a
director of American Capitol Insurance Company ("American Capitol") prior
to the Company's formation, and other information concerning each nominee
appear below. All such nominees are members of the present Board of
Directors.
-1-
<PAGE>
R. Wellington Daniels (82): Mr. Daniels has served as a director since
1987 and is a member of the Audit Committee. Before his retirement in
1979, Mr. Daniels served as Director of National Accounts, American
Cyanamid Corporation. Mr. Daniels has also served as a director of InsCap
since 1990.
William F. Guest (65): Mr. Guest has served as a director since 1984 and
is Chairman of the Board. Mr. Guest has served as Chairman of the Board
and President of the Company since 1985. Mr. Guest is the Chairman of the
Board and Chief Executive Officer of each of the Company's life insurance
subsidiaries and is a director and the President of InsCap. Mr. Guest is
an attorney and prior to joining the Company and its affiliates was
engaged in the private practice of law in Houston, Texas for many years.
C. Stratton Hill, Jr., M.D. (68): Dr. Hill has served as a director since
1984 and is a member and the Chairman of the Audit Committee. Dr. Hill is
also the Medical Director of the Company's life insurance subsidiaries.
Dr. Hill is a physician and has been engaged in the practice of medicine
in Houston, Texas for many years.
MEETINGS AND COMMITTEES OF THE BOARD
During 1996 the Board of Directors of the Company held three meetings. In
addition, there is one standing committee of the Board of Directors which
has the authority and responsibilities and which met during 1996 as
described below. Each incumbent director attended at least 75% of the
total number of meetings of the Board of Directors and the committee of
the Board of Directors on which he served, except for Dr. Hill, who missed
one meeting of the Board of Directors.
Audit Committee. The Audit Committee has the authority and responsibility
to oversee the work of the independent public accountants for the Company
and to meet with such accountants from time to time to determine the
adequacy of the Company's accounting systems and controls and audit
procedures. One meeting of the Audit Committee was held in 1996.
Other Functions. There is no standing nominating committee or
compensation committee of the Board of Directors, nor is there any
committee of the Board of Directors performing similar functions.
American Capitol maintains a standing compensation committee which has the
responsibility of recommending the amount and form of compensation and
benefits for officers and other key employees of American Capitol. The
Company does not provide separate or additional compensation for its
officers, all of whom are also officers of American Capitol, but is
obligated to reimburse American Capitol for services provided to the
Company by such persons in accordance with the terms of an intercompany
service agreement.
Director Compensation. Directors who are also officers of the Company do
not receive directors' fees or other amounts in compensation for
participation on the Board of Directors or a committee of the Board of
Directors. All other directors are each paid a fee of $500 plus travel
expenses for each meeting of the Board of Directors attended. In
addition, each director who serves as a member of the Audit Committee of
the Board of Directors is paid a fee of $500 plus travel expenses for each
meeting of such committee attended, unless such meeting is held in
conjunction with a meeting of the Board of Directors held on the same day.
-2-
<PAGE>
SECURITY OWNERSHIP OF CERTAIN OWNERS
Set forth below is information with respect to each person, entity or
group known to have been the beneficial owner of more than 5% of the
Company's Common Stock, its sole voting class of securities, as of March
24, 1997.
--------------------------------------------------------------------------
Name and Address of Shares Beneficially Percent of
Beneficial Owner Owned (1) Class
--------------------------------------------------------------------------
InsCap Corporation 3,317 43.69%
10555 Richmond Avenue
Houston, Texas 77042
William F. Guest 3,570 (2) 46.81%
10555 Richmond Avenue
Houston, Texas 77042
(1) Except as otherwise indicated, the beneficial owner of the shares
exercises sole voting and investment powers.
(2) Mr. Guest owns directly and indirectly 455,514 shares, or 51.75%, of
InsCap's issued and outstanding Common Stock, the sole voting class
of securities of InsCap, and as the controlling stockholder of InsCap
is deemed to be the beneficial owner of the shares of the Company
owned by InsCap. In addition to the shares of Company Common Stock
owned indirectly through InsCap, Mr. Guest directly owns 92 shares of
Company Common Stock and is the beneficial owner of 127 shares of
Company Common Stock through a trust for which he acts as trustee and
is deemed to be the beneficial owner of 34 additional shares of
Company Common Stock by virtue of options granted to him to purchase
same.
EXECUTIVE OFFICERS
The By-Laws of the Company provide for the election of executive officers
annually at the meeting of the Board of Directors following the annual
meeting of stockholders. Executive officers serve until their successors
are chosen and qualified or until their death, resignation or removal.
Brief statements setting forth the age (at March 24, 1997), the offices
held and the business experience during the past five years of each
executive officer appear below.
William F. Guest (65): Chairman of the Board and President. For the
biography of Mr. Guest see "Election of Directors."
John D. Cornett (38): Mr. Cornett has served as Executive Vice President
of the Company since 1989 and as Treasurer of the Company since 1985. Mr.
Cornett is a director and the Secretary of InsCap and the President and
Chief Operating Officer and a director of each of the Company's life
insurance subsidiaries. Mr. Cornett is a certified public accountant and,
prior to joining the Company and its affiliates in 1984, Mr. Cornett held
positions with American General Life Insurance Company and Prudential
Insurance Company of America.
-3-
<PAGE>
H. Kathleen Musselwhite (40): Ms. Musselwhite has served as Assistant
Treasurer of the Company since June 1995 and as Secretary of the Company
since March 1997. Ms. Musselwhite is also the Treasurer and Controller,
the Secretary and a director of each of the Company's life insurance
subsidiaries. Ms. Musselwhite is a certified public accountant and, prior
to joining the Company and its affiliates in 1995, Ms. Musselwhite served
as Assistant Controller of American General Corporation (1987-June 1995).
SECURITY OWNERSHIP OF MANAGEMENT
Set forth below is information with respect to shares of each class of
equity securities of the Company and InsCap beneficially owned by
directors of the Company, naming them, and by all directors and officers
of the Company as a group, as of March 24, 1997.
--------------------------------------------------------------------------
Name of Beneficial Amount and Nature of
Owner (1) Beneficial Ownership (2) Percent of Class (3)
--------------------------------------------------------------------------
The Company
Common Stock
William F. Guest 3,570 (4) 46.81%
John D. Cornett 198 (5) 2.60%
C. Stratton Hill, Jr. 6 (8) *
All Officers and Directors 3,774 (6) 49.27%
Series A
Preferred Stock
William F. Guest 12,000 (4) 16.22%
R. Wellington Daniels 2,000 (7) 2.70%
All Officers and Directors 14,000 18.92%
InsCap
Common Stock
William F. Guest 455,514 (4) 51.75%
R. Wellington Daniels 37,000 4.20%
John D. Cornett 11,000 1.25%
All Officers and Directors 503,514 57.20%
(1) The address of each of the officers and directors is c/o Acap
Corporation, 10555 Richmond Avenue, Houston, Texas 77042.
(2) Except as otherwise indicated, the beneficial owner of the shares
exercises sole voting and investment powers.
(3) Percentages are calculated on the basis of the amount of outstanding
securities plus, for each person or group, any securities that person
or group has the right to acquire within 60 days pursuant to option,
conversion privileges or other rights. An asterisk signifies less
than 1%.
(4) The Company Common Stock shown as owned by Mr. Guest includes 92
shares he owns directly, 127 shares owned indirectly by him through a
-4-
<PAGE>
trust for which he acts as trustee, 34 shares attributed to him by
virtue of options granted to him to purchase same, and 3,317 shares
owned indirectly by him through InsCap, the Company's parent, of
which company Mr. Guest is the controlling stockholder. The Series A
Preferred Stock of the Company shown as owned by Mr. Guest includes
7,300 shares owned directly by him, 900 shares indirectly owned by
him through a trust for which Mr. Guest acts as trustee, and 3,800
shares owned indirectly by him through InsCap. Mr. Guest has pledged
certain of his InsCap shares as security for loans which, in the
event of default, could result in a change of control in InsCap, and
therefore the Company.
(5) Of the shares of Company Common Stock shown as owned by Mr. Cornett,
34 shares are attributed to him by virtue of options granted to him
to purchase same.
(6) The shares of Company Common Stock shown as owned by all officers and
directors of the Company include 68 shares the beneficial ownership
of which is attributed to officers of the Company by virtue of
options granted to such officers to purchase such shares.
(7) The 2,000 shares of the Company's Series A Preferred Stock shown as
owned by Mr. Daniels are owned by Mr. Daniels' wife.
(8) All such shares of Company Common Stock are owned by Dr. Hill's
children.
BENEFICIAL OWNERSHIP REPORTING
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors and beneficial owners of more than 10% of
a registered class of the Company's equity securities to file reports of
ownership and changes in ownership with the Securities and Exchange
Commission ("SEC") and the National Association of Securities Dealers,
Inc. Officers, directors and greater than 10% stockholders are required
by SEC regulation to furnish the Company with copies of all Section 16(a)
forms they file.
Based solely upon a review of such forms furnished to the Company during
or with respect to its fiscal year ended December 31, 1996 by the persons
and entities filing same, the Company believes that during its fiscal year
ended December 31, 1996 all beneficial ownership reports required to be
filed pursuant to Section 16(a) by directors and officers of the Company
and by beneficial owners of more than 10% of the Company's outstanding
Common Stock have been filed on a timely basis.
EXECUTIVE COMPENSATION
The compensation paid by the Company and its affiliates for each of the
last three completed fiscal years to (i) the Chief Executive Officer
("CEO") and (ii) each of the four most highly compensated executive
officers, other than the CEO, whose total annual salary and bonus exceeded
$100,000, was as follows:
-5-
<PAGE>
--------------------------------------------------------------------------
Name and Principal Position Year Salary Bonus All Other
--------------------------------------------------------------------------
William F. Guest, 1996 $180,000 $ -0- $ -0-
CEO 1995 $180,000 18,000 -0-
1994 $180,000 18,000 -0-
John D. Cornett, 1996 $100,000 $ - $17,643*
Treasurer 1995 $100,000 10,000 17,658*
1994 $100,000 10,000 -0-
*The Company advanced Mr. Cornett $17,643 and $17,658 during 1996 and
1995, respectively, toward the payment of the premium on life insurance on
Mr. Cornett's life and for which the Company is not the beneficiary. The
advance will be repaid to the Company out of the cash value of such policy
or the death proceeds from such policy. The advance is not compensation
to Mr. Cornett to the extent that it is subject to repayment to the
Company.
The preceding table excludes club memberships and certain other benefits
in an aggregate amount of less than 10% of the officer's annual salary.
At December 31, 1996, Mr. Guest held unexpired options to purchase 34
shares of the Company's Common Stock and Mr. Cornett held unexpired
options to purchase 34 shares of the Company's Common Stock. At December
31, 1996, the value of the unexpired options held by Mr. Guest was $1,785
and the value of the unexpired options held by Mr. Cornett was $1,785.
In May 1990 American Capitol entered into a supplemental disability income
agreement with Mr. Guest which provides for supplemental cash payments to
Mr. Guest or for his benefit in the event that he becomes disabled while
employed by American Capitol. The amount of such supplemental cash
payments equals the amount of premium with respect to a "key man" life
insurance policy held by American Capitol covering Mr. Guest which would
be waived under the terms of the policy in the event of Mr. Guest's
disability.
In April 1994, American Capitol renewed for a period of three years an
employment agreement with Mr. Cornett pursuant to which Mr. Cornett serves
as President and Chief Operating Officer of American Capitol. The
agreement provides for an annual compensation of $100,000. In the event
Mr. Cornett's employment is terminated during the term of the agreement
other than for cause, the salary payable thereunder, under specified
conditions and subject to certain limitations, will continue for up to 18
months, less any amounts earned by Mr. Cornett from other employment
during such period. In addition, in April 1994, American Capitol renewed
a stock purchase agreement with Mr. Cornett which provides that in the
event of a change of control of American Capitol, Mr. Cornett shall have
the right to sell certain shares of Company Common Stock owned by him to
American Capitol at a price per share determined by reference to the
consideration involved in the change of control.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
InsCap is the immediate parent of the Company. See "Security Ownership of
Certain Owners" for the basis of control and the percentage of voting
securities owned.
-6-
<PAGE>
INDEPENDENT AUDITORS
Financial statements of the Company and its consolidated subsidiaries are
included in the Company's Annual Report to Stockholders for 1996. KPMG
Peat Marwick has served as the independent auditors for the Company for
the fiscal year ended December 31, 1996. The Company anticipates that
KPMG Peat Marwick will be selected to serve in such capacity for the
fiscal year ending December 31, 1997, subject to formal approval of such
engagement by the Company's Audit Committee. Representatives of KPMG Peat
Marwick are expected to be present at the Annual Meeting and will have the
opportunity to make a statement if they desire to do so and are also
expected to be available to respond to appropriate questions.
QUORUM FOR MEETING
The By-Laws of the Company require, for a quorum, the presence at the
meeting, in person or by proxy, of the holders of a majority of the shares
of capital stock of the Company entitled to vote.
SUBMISSION OF STOCKHOLDER PROPOSALS
Any proposal intended to be presented by a stockholder at the Company's
1998 Annual Meeting of Stockholders must be received in writing at the
Company's principal executive offices by December 8, 1997 so that it may
be considered by the Company for inclusion in the proxy statement and form
of proxy or in the information statement relating to that meeting.
By Order of the Board of Directors
H. Kathleen Musselwhite
Secretary
April 7, 1997
