<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
EVEREN CAPITAL 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] No fee required
[_] 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>
EVEREN CAPITAL CORPORATION
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601-1694
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 6, 1997
April 4, 1997
To the Holders of Common Stock of
EVEREN Capital Corporation:
The Annual Meeting of Holders of Common Stock of EVEREN Capital Corporation
("EVEREN") will be held in the 22nd floor conference room of EVEREN's
corporate headquarters at 77 West Wacker Drive, Chicago, Illinois 60601 on
Tuesday, May 6, 1997 at 8:00 a.m. Chicago time for the following purposes:
(1) To elect six (6) Directors, each to serve until the next annual meeting
of stockholders or until his successor is elected and qualified;
(2) To approve the EVEREN Capital Corporation Senior Management Incentive
Compensation Plan;
(3) To ratify the appointment of Deloitte & Touche LLP as EVEREN's
independent accountants for 1997;
(4) To consider and act upon such other matters as may properly come before
the meeting or any adjournments thereof.
The Board of Directors has determined that only stockholders of record of
EVEREN's Common Stock as of the close of business on March 14, 1997 will be
entitled to vote at the meeting.
By Order of the Board of Directors,
Janet L. Reali
Senior Executive Vice President,
General Counsel and Secretary
<PAGE>
EVEREN CAPITAL CORPORATION
77 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601-1694
PROXY STATEMENT DATED APRIL 4, 1997
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 6, 1997
GENERAL INFORMATION
This proxy statement is being used in connection with the solicitation of
proxies on behalf of the Board of Directors for use at the annual meeting of
stockholders of EVEREN Capital Corporation ("EVEREN") on May 6, 1997. Only the
holders of EVEREN's Common Stock, $.01 par value ("Common Stock"), are
entitled to vote at the annual meeting. This proxy statement and the
accompanying proxy card are first being mailed or delivered to stockholders on
or about April 4, 1997.
Proxy cards properly executed and received prior to the time of the annual
meeting will be voted as directed. If a properly executed proxy card is
received, but no direction is made, the proxy will be voted "FOR" any proposal
for which no direction is indicated. Although a stockholder may have submitted
a proxy, such stockholder may vote in person at the annual meeting if he or
she desires. A stockholder voting by means of the enclosed proxy card has the
power to revoke it at any time before it is exercised by delivering a written
notice of revocation or a duly executed proxy bearing a later date to the
corporate secretary of EVEREN at the address of EVEREN set forth above or by
attending the annual meeting and voting in person. Attendance at the annual
meeting will not in and of itself constitute revocation of a proxy.
Only holders of record as of the close of business on March 14, 1997, the
record date for the determination of stockholders entitled to vote at the
annual meeting, will be entitled to vote at the meeting. As of that record
date, there were 17,085,969 shares of EVEREN's Common Stock issued and
outstanding. Each share of Common Stock issued and outstanding on the record
date entitles the holder to one vote on each matter to be acted upon at the
annual meeting. The presence in person or by proxy of a majority of the
outstanding shares of Common Stock will constitute a quorum for the
transaction of business at the annual meeting.
The expenses in connection with the solicitation of proxies will be borne by
EVEREN. Solicitation will be made by mail, but may in some cases also be made
by telephone or personal call by officers, directors or regular employees of
EVEREN who will not be specially compensated for such solicitation. EVEREN may
request brokerage houses and other nominees or fiduciaries to forward copies
of EVEREN's proxy material and Annual Report to beneficial owners of stock
held in their names, and may reimburse them for reasonable out-of-pocket
expenses incurred in so doing. EVEREN has retained D.F. King & Co., Inc. to
assist in distributing proxy material and Annual Reports to such brokerage
houses and other nominees or fiduciaries for a fee not to exceed $750, plus
reasonable expenses.
PROPOSAL NO. 1:
ELECTION OF DIRECTORS
On February 7, 1997, the Board of Directors, at the recommendation of the
Nominating Committee, nominated James R. Boris, William T. Esrey, Jack Kemp,
Homer J. Livingston, Jr., Stephen G. McConahey and William C. Springer to
stand for re-election at the annual meeting and, if elected, they shall hold
office until the 1998 annual meeting of stockholders of EVEREN, or until their
respective successors have been elected and qualified. William M. Daley, who
had been a director since 1995, resigned in January 1997 in connection with
his appointment as U.S. Secretary of Commerce. Jack Kemp was appointed as a
director of EVEREN in February 1997 to fill the vacancy created by Mr. Daley's
resignation.
<PAGE>
The persons named on the enclosed proxy card (James R. Boris, Janet L. Reali
and Stanley R. Fallis) have agreed to represent stockholders submitting
properly executed proxy cards and to vote FOR the election of the six nominees
listed herein, unless otherwise directed by the authority granted or withheld
on the proxy cards. Although the Board of Directors has no reason to believe
that any of the nominees will be unable to serve as directors, if any one or
more of the nominees shall not be available for election, the persons named on
the proxy card have agreed to vote for the election of such other nominees as
may be proposed by the Board of Directors.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF EACH OF THE SIX
NOMINEES.
The names of the six nominees for election at this annual meeting and the
principal occupations of all such persons during the past five years are as
follows:
<TABLE>
<CAPTION>
DIRECTOR BIOGRAPHY
-------- ----------------------------------------------------
<C> <S>
JAMES R. BORIS........... James R. Boris has been Chairman of the Board and
Age 52 Chief Executive Officer of EVEREN since its
Director since 1995 inception in May 1995. Mr. Boris is Chairman of the
Board and Chief Executive Officer of EVEREN
Securities, Inc. (a wholly-owned subsidiary of
EVEREN) and has held such positions since January
1990. From January 1994 until September 1995, he
was also an Executive Vice President of Kemper
Corporation. From January 1990 until September
1995, he served on the board of directors of Kemper
Financial Companies, Inc. and the boards of its
major subsidiaries.
WILLIAM T. ESREY......... William T. Esrey has been Chief Executive Officer of
Age 57 Sprint Corporation since 1985 and Chairman since
Director since 1995 1990. He was also President of Sprint from 1985
until February 1996. He serves on the boards of
Sprint, The Equitable Life Assurance Society of the
United States, PanEnergy Corporation and General
Mills, Inc.
JACK KEMP................ Since 1993, Jack Kemp has been a co-director of
Age 61 Empower America, a public policy and advocacy
Director since 1997 organization he co-founded in 1993. Prior to
founding Empower America, Mr. Kemp served for four
years as Secretary of the U.S. Department of
Housing and Urban Development. He received the
Republican Party's nomination for Vice President in
August 1996. In 1995 he was named chairman of the
National Commission on Economic Growth and Tax
Reform. Mr. Kemp also serves on the boards of
American Bankers Insurance Group, Inc., Carson
Products Co., Oracle Corp. and Proxicom, Inc.
HOMER J. LIVINGSTON, JR.. Homer J. Livingston, Jr. was Chief Executive Officer
Age 61 of The Chicago Stock Exchange from January 1993
Director since 1995 until he retired in May 1995, following a 30-year
career in the commercial and investment banking
fields. Mr. Livingston previously served as
Chairman and Chief Executive Officer of The
Livingston Financial Group, a firm he started in
1988, that specialized in commercial bank
restructuring. Mr. Livingston serves as a board
member of the Peoples Energy Corporation and
American National Can Company.
STEPHEN G. MCCONAHEY..... Stephen G. McConahey has been President and Chief
Age 53 Operating Officer of EVEREN since its inception in
Director since 1995 May 1995. Mr. McConahey is President and Chief
Operating Officer of EVEREN Securities, Inc. and
has held such positions since January 1994. He was
Senior Vice President for Corporate and
International Development of Kemper Corporation
from 1990 through December 1993. He was also
Executive Vice President (Corporate and
International Development) of Kemper Financial
Services, Inc. from 1988 through December 1993 and
Senior Vice President of Kemper Financial
Companies, Inc. from 1990 through 1993. Mr.
McConahey is also a member of the Board of Trustees
of AMLI Residential Properties Trust, a publicly-
traded real estate investment trust that invests in
multi-family properties, and is an individual
general partner of Boettcher Venture Capital
Partners, L.P.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR BIOGRAPHY
-------- --------------------------------------------------------
<C> <S>
WILLIAM C. SPRINGER. William C. Springer has held the title of President and
Age 57 Chief Executive Officer for Heinz U.S.A. since 1989. In
Director since 1995 1992, he was appointed President of Heinz North
America, responsible for Heinz Canada and Heinz U.S.A.
Additionally, in September of 1993, he was elected to
the board of directors of H. J. Heinz Company. In 1997,
he assumed responsibility for the Weight Watchers
International operations of Heinz.
</TABLE>
BOARD OF DIRECTORS COMMITTEES
Composition. There are presently four standing committees of the Board of
Directors: an Executive Committee, an Audit Committee, a Compensation Committee
and a Nominating Committee, although the Board of Directors may, from time to
time, establish other committees. During 1996, seven Board meetings, and no
Executive Committee, three Audit Committee, three Compensation Committee and
two Nominating Committee meetings were held.
Executive Committee. The Executive Committee has the authority, in the
intervals between meetings of the Board of Directors, to exercise all of the
authority of the Board of Directors (including the power to declare dividends
and approve mergers and consolidations pursuant to Section 253 of the Delaware
General Corporation Law ("DGCL")), except for those matters that the DGCL or
EVEREN's Restated Certificate of Incorporation reserves to the full Board of
Directors. The Executive Committee is comprised of Mr. Boris (Chairman) and
Messrs. McConahey and Livingston.
Audit Committee. The Audit Committee reports to the Board of Directors in
discharging its responsibilities relating to the accounting, reporting and
financial control practices of EVEREN and its subsidiaries (together the
"Company"). The Audit Committee has general responsibility for oversight of
financial controls, as well as the Company's accounting and audit activities.
The Audit Committee annually reviews the qualifications of the independent
auditors. The Audit Committee is composed entirely of outside directors who are
not now, and have never been, officers of the Company. The Audit Committee
consists of Mr. Livingston (Chairman) and Messrs. Esrey, Kemp and Springer.
Compensation Committee. The Compensation Committee is responsible for
administering all of the Company's employee benefit and compensation plans. The
Compensation Committee establishes corporate policy and programs with respect
to the compensation of officers and employees of the Company, including
establishing compensation programs, policies and practices, such as salary,
cash incentives, long-term incentive compensation, stock purchase and other
programs and making grants under such plans. No member of this committee will
receive an award or payment under any employee plan, other than as described
below. See "Compensation of Directors." The Compensation Committee is composed
entirely of outside directors who are not now, and have never been, officers of
the Company. The members of the Compensation Committee are Mr. Esrey (Chairman)
and Messrs. Kemp, Livingston and Springer.
Nominating Committee. The Nominating Committee considers and makes
recommendations to EVEREN's Board of Directors with respect to the size and
composition of the Board of Directors and Board committees and with respect to
potential candidates for membership on the Board of Directors. Members of the
Nominating Committee must be non-employee directors, and this committee is
currently comprised of Mr. Springer (Chairman) and Messrs. Esrey, Kemp and
Livingston.
The Nominating Committee will consider nominees for director recommended by
stockholders who (i) are entitled to vote at a meeting of stockholders; (ii)
comply with EVEREN's By-laws provisions summarized below; and (iii) are
stockholders of record at the time the required notice is delivered to the
Secretary of EVEREN. EVEREN's By-laws require that notice of a nominee to be
proposed by a stockholder for election at an annual meeting must be delivered
to the Secretary of EVEREN at EVEREN's principal executive offices not less
than sixty nor more than ninety days prior to the first anniversary of the
preceding year's annual meeting. The notice must include all information
relating to the stockholder's nominee that is required to be disclosed in
solicitations
3
<PAGE>
of proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such nominee's written
consent to be named in the proxy statement as a nominee and to serve as a
director if elected). The notice must also include the name and address of the
stockholder submitting the proposed nominee as such information appears on
EVEREN's stock records, and the class and number of shares of EVEREN stock
owned by such person.
COMPENSATION OF DIRECTORS
Directors who do not receive compensation as officers or employees of EVEREN
are paid an annual retainer of $17,500, a fee of $2,500 paid in Common Stock
for each meeting of the Board of Directors attended, and a cash fee of $1,000
for each committee meeting attended. The Compensation Committee is authorized
to determine the amount of the annual retainer to be paid in Common Stock.
Such directors are also reimbursed for reasonable travel and related expenses.
EVEREN's 1995 Non-employee Directors Plan provides non-employee directors
with incentives to improve EVEREN's performance by increasing their level of
stock ownership and provides additional means of attracting and retaining non-
employee directors through the issuance of Common Stock and the granting of
non-qualified stock options. The 1995 Non-employee Directors Plan provides
that, immediately following the date of each meeting of the Board of
Directors, each non-employee director will receive a portion of his/her annual
retainer in Common Stock. In addition, the 1995 Non-employee Directors Plan
provides for an automatic grant of non-qualified stock options to purchase a
designated number of shares of Common Stock following each annual meeting of
stockholders. Participation in the 1995 Non-employee Directors Plan by non-
employee directors is mandatory.
The number of shares of Common Stock to be issued to each non-employee
director for each board meeting is determined by dividing the per share fair
market value of the Common Stock (as determined in good faith by the Board of
Directors) into $2,500.
A Non-Employee Directors' Voluntary Deferred Compensation Plan has been
adopted which allows non-employee directors to voluntarily defer the receipt
of any cash payment of fees for the then-current fiscal year by authorizing an
irrevocable election prior to the beginning of each calendar year. Fees
deferred under this nonqualified deferred compensation plan are deferred over
a stated period and are credited with interest at the end of each calendar
year at a rate as determined by the Board of Directors.
COMPENSATION OF EXECUTIVE OFFICERS
Prior to the purchase on September 13, 1995 by the EVEREN Capital
Corporation 401(k) and Employee Stock Ownership Plan (the "KSOP") of 96.6% of
the then outstanding Common Stock from Kemper Corporation (the "Buy-Out"),
certain officers and employees of EVEREN participated in various compensation
plans of Kemper Corporation ("Kemper"). The following tables set forth certain
information regarding the compensation paid or accrued by EVEREN and Kemper to
or for the account of the Chief Executive Officer and each of the four most
highly compensated executive officers of EVEREN for services rendered in all
capacities during EVEREN's fiscal years ended December 31, 1996, 1995 and
1994.
4
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
---------------------------------- -----------------------
AWARDS
-----------------------
STOCK
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
NAME AND PRINCIPAL COMPENSATION STOCK AWARDS OPTIONS COMPENSATION
POSITION YEAR SALARY($) BONUS($)(1) ($)(2) ($)(3)(4)(5) (#)(6)(7) ($)(8)
- ------------------ ---- --------- ----------- ------------ ------------ ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Boris.......... 1996 $500,000 $1,027,500 $ 72,355 $ 484,452 92,312 $2,621,554
Chairman of the Board
and 1995 500,000 1,300,000 507,767 1,500,000 30,000 156,542
Chief Executive Officer 1994 440,000 300,000 367,418 220,400 11,000 369,671
Stephen G. McConahey.... 1996 385,000 735,000 56,385 385,725 52,836 2,096,179
President and 1995 385,000 900,000 743,832 1,000,000 22,500 30,036
Chief Operating Officer 1994 350,000 175,000 335,498 261,000 14,000 206,777
David M. Greene......... 1996 250,000 431,250 52,576 183,439 32,316 32,491
Senior Executive 1995 250,000 450,000 233,677 0 17,000 27,526
Vice President 1994 200,000 85,000 21,468 0 4,350 118,340
Thomas R. Reedy......... 1996 250,000 375,000 37,994 167,239 31,230 32,151
Senior Executive 1995 250,000 400,000 194,379 0 17,000 41,662
Vice President 1994 200,000 85,000 0 0 4,350 87,357
Stanley R. Fallis....... 1996 250,000 281,250 50,231 152,927 29,000 30,285
Senior Executive 1995 168,750 300,000 457,953 0 15,000 20,793
Vice President (9) 1994 53,750 0 0 0 0 35,307
</TABLE>
- --------
(1) For 1996, the amounts shown in this column reflect the annual incentive
bonus paid after 25% of such bonus was mandatorily deferred under the 1996
Restricted Stock Incentive Plan as well as mandatorily paid in the form of
nonqualified stock options. The 1996 Restricted Stock Incentive Plan is a
broad-based equity compensation plan in which salaried employees with base
salaries over $50,000 and all commissioned employees may participate.
(2) For 1996, the amounts disclosed in this column include (i) compensation
amounts paid as non-preferential dividend equivalents on restricted shares
of Common Stock, (ii) the taxable benefits of various incentive trips the
named executives participated in during 1996, and (iii) the taxable value
of automobile allowances provided to each named executive. For 1994 and
1995, amounts in this column include the value on the vesting date of
restricted stock and phantom restricted stock units awarded by Kemper.
(3) Amounts shown include awards granted for performance in 1996 from
mandatory deferral of 25% of 1996 annual incentive award under the
provisions of the 1996 Restricted Stock Incentive Plan. Under this plan,
25% of any incentive award is mandatorily deferred in restricted shares of
Common Stock priced at 80% of the average of the last ten trading days'
closing price for the year. Participants may voluntarily elect to exchange
up to one-third of the restricted shares for the grant of a non-qualified
stock option. Awards have been valued for this table using closing prices
of Common Stock on the dates of such awards, with the exception of awards
granted for 1996 performance for which the December 31, 1996 closing price
of $22.375 was used. Shares granted in 1996 vest five years following
grant. Shares granted for 1996 performance vest after two years and in
accordance with the 1996 Restricted Stock Incentive Plan.
(4) Dividends are paid on unvested restricted shares at equivalent rates paid
on shares of Common Stock.
(5) The aggregate number and value of restricted shares of Common Stock held
by persons named in this table as of December 31, 1996 (inclusive of
shares awarded for 1996 performance) are as follows: Mr. Boris, 30,728
shares, $687,539; Mr. McConahey, 23,074 shares, $516,281; Mr. Greene,
11,051 shares, $247,266; Mr. Reedy, 10,327 shares, $231,067 and Mr.
Fallis, 9,428 shares, $210,952.
(6) Stock options displayed for 1996 relate to options granted under the
EVEREN Capital Corporation 1995 Stock Plan and options issued to each
named executive as a result of their voluntary election to exchange
restricted stock received from the mandatory deferral of 25% of their 1996
annual incentive bonus under
5
<PAGE>
the 1996 Restricted Stock Incentive Plan. Stock options were also awarded to
each named executive in February, 1997 as a result of the Compensation
Committee's decision to pay a portion of the annual incentive bonus for 1996
performance in nonqualified stock options. Stock options displayed for 1994
were granted under Kemper's stock option plans and relate to Kemper common
stock. The options were out of the money at the time of the completion of
the merger transaction among Kemper and Zurich Insurance Company and its
affiliates; therefore they were not exercised or cashed out and expired as
worthless.
(7) The nonqualified stock options granted to each named executive in May, 1996
under the 1995 Stock Plan are subject to a five-year cliff vesting
schedule. The nonqualified stock options granted to each named executive in
February, 1997 for 1996 performance will become fully exercisable after
three years. If a participant terminates service prior to the end of these
vesting periods for reasons other than death, permanent disability or
retirement, the options and all associated rights are forfeited and
returned to EVEREN. Certain provisions exist for acceleration of vesting
for various change of control scenarios.
(8) The amounts in this column for 1996 include: (i) for Messrs. Boris and
McConahey, compensation of $2,500,000 and $2,000,000 as a result of the
KSOP loan payoff bonus provisions of their 1995 Employment Agreements, and
(ii) the amounts of employer contributions allocated to the accounts of the
named executives under profit sharing plans (including the supplemental
plan) maintained by EVEREN. In addition, the amounts reported include the
second portion of EVEREN's contribution to the KSOP in connection with the
Founders' Offering in 1995. In the Founders' Offering, EVEREN contributed
to the KSOP an amount equal to one-half of the amount invested by each
participant, with the amount of any investment by a participant limited to
the lesser of 40% of the participant's 1995 compensation or $60,000. This
contribution was made in two parts: half of the contribution was made
December 31, 1995 and the other half made on March 31, 1996.
(9) For 1994, the amounts shown relate to the period January through March. For
1995, the amounts shown relate to the period April through December. During
the other months of 1994 and 1995, Mr. Fallis was employed by Kemper but
did no work on behalf of EVEREN. As a result, compensation paid to Mr.
Fallis by Kemper during the time periods he was employed by Kemper is not
included in his information.
OPTION GRANTS IN 1996
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------
% OF TOTAL
NUMBER OF OPTIONS
SHARES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR GRANT DATE
GRANT OPTIONS IN FISCAL BASE PRICE EXPIRATION PRESENT
NAME DATE(1) GRANTED (#)(2) YEAR(3) ($/SH)(4) DATE VALUE(5)
---- ------- -------------- ---------- ----------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
James R. Boris.......... 5/8/96 52,500 28.6% $10.7700 5/8/06 $295,920
2/19/97 20,000 26.8% 23.8125 2/19/07 225,360
2/19/97 19,812 8.2% 21.5875 2/19/07 236,972
Stephen G. McConahey.... 5/8/96 33,750 18.4% 10.7700 5/8/06 190,234
2/19/97 12,000 16.1% 23.8125 2/19/07 135,216
2/19/97 7,086 2.9% 21.5875 2/19/07 84,756
David M. Greene......... 5/8/96 16,500 9.0% 10.7700 5/8/06 93,003
2/19/97 7,500 10.1% 23.8125 2/19/07 84,510
2/19/97 8,316 3.4% 21.5875 2/19/07 99,468
Thomas R. Reedy......... 5/8/96 16,500 9.0% 10.7700 5/8/06 93,003
2/19/97 7,500 10.1% 23.8125 2/19/07 84,510
2/19/97 7,230 3.0% 21.5875 2/19/07 86,478
Stanley R. Fallis....... 5/8/96 15,000 8.2% 10.7700 5/8/06 84,549
2/19/97 11,000 14.8% 23.8125 2/19/07 123,948
2/19/97 3,000 1.2% 21.5875 2/19/07 35,883
</TABLE>
6
<PAGE>
- --------
(1) Options granted February 19, 1997 at $23.8125 were made in accordance with
the Compensation Committee's decision to pay a portion of each executive's
1996 annual incentive award in the form of a nonqualified stock option.
Options granted on February 19, 1997 at $21.5875 were made in accordance
with the voluntary option exchange provision of the 1996 Restricted Stock
Incentive Plan.
(2) Options granted on May 8, 1996 were subject to cliff vesting provisions
whereby the underlying stock would become eligible for exercise after the
fifth anniversary of the date of the grant. Options granted on February
19, 1997 were subject to certain service-based, scheduled vesting
provisions whereby one-third of the shares become eligible for vesting on
each anniversary of the date of the grant.
The options disclosed in this table do not contain a "reload" feature which
would otherwise entitle an optionee who, within a stated period of time
after the date the option was granted, pays all or any portion of the
exercise price of an option with shares of Common Stock to receive a new
nonqualified stock option to purchase a number of shares equal to the number
of shares of Common Stock tendered in payment.
The options disclosed in this table, if not fully exercised, automatically
become fully exercisable upon a "change of control" of EVEREN, as defined
in the award document and provisions of the 1995 Stock Plan and 1996
Restricted Stock Incentive Plan.
(3) For May 8, 1996, based on 183,750 shares. For February 19, 1997
($23.8125), based on 74,500 shares. For February 19, 1997 ($21.5875),
based on 241,314 shares.
(4) For May 8, 1996, the option exercise price assigned by the Compensation
Committee was the value of the Common Stock held by the KSOP on the grant
date. For February 19, 1997, the $23.8125 option exercise price assigned
by the Compensation Committee was the average of the high and low trading
price for one share of stock on the February 7, 1997 meeting date when the
Compensation Committee approved annual incentive awards for the 1996
calendar year. For February 19, 1997, the $21.5875 option price was
determined from the average closing price of the last ten trading days in
1996 in accordance with the 1996 Restricted Stock Incentive Plan.
(5) Reflects value of option grants using a modified Black-Scholes option
pricing model. The assumptions used for the variables in the model were:
27% volatility; 7.0% risk free rate of return; a 0.50% dividend yield
(which was the dividend yield as of the date of the grants); and a 10-year
option term (which is the term of the option when granted). The actual
gain executives may realize on the option grants will depend on the future
price of the Common Stock and cannot be accurately forecast by any option
pricing model.
AGGREGATED OPTION EXERCISES IN 1996
AND OPTION VALUES AT YEAR-END 1996
<TABLE>
<CAPTION>
VALUE OF
UNEXERCISED
NUMBER OF IN-THE-MONEY
UNEXERCISED OPTIONS OPTIONS AT
SHARES AT FY-END(#)(1) FY-END($)(2)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- ----------- ------------------- -------------
<S> <C> <C> <C> <C>
James R. Boris.......... -- -- 0/122,312 $0/$1,090,899
Stephen G. McConahey.... -- -- 0/ 75,336 0/ 746,775
David M. Greene......... -- -- 0/ 49,316 0/ 462,118
Thomas R. Reedy......... -- -- 0/ 48,230 0/ 461,263
Stanley R. Fallis....... -- -- 0/ 44,000 0/ 409,455
</TABLE>
- --------
(1) Includes options granted on February 19, 1997 under the 1995 Stock Plan
and the 1996 Restricted Stock Incentive Plan for 1996 performance.
(2) Based on the last sale price of Common Stock of $22.375 at December 31,
1996 if less, and the respective exercise price of these options.
7
<PAGE>
EMPLOYMENT AGREEMENTS
EVEREN has entered into employment agreements with nine of its current
senior executives (each a "Senior Executive"), including each of Messrs.
Boris, McConahey, Greene, Reedy and Fallis, that provide for them to be
employed as executive officers of EVEREN. The following is a summary of the
main features of the employment agreements.
The employment agreements provide for each Senior Executive to receive a
base salary and annual bonus (as a percentage of base salary) based
principally on EVEREN's achievement of such performance standards as the Board
of Directors may determine. The Board of Directors has the right to increase
such base salaries and annually reviews and re-establishes bonus levels for
the following year. Certain portions of such bonuses may be paid in restricted
stock or other securities of EVEREN subject to applicable vesting requirements
as the Board of Directors may determine. Under each of their employment
agreements, Messrs. Boris and McConahey received special KSOP loan payoff
bonuses of $2.5 million and $2.0 million, respectively, when the KSOP loans
were repaid in full in May 1996.
Pursuant to the employment agreements, the Senior Executives are employed at
will. However, if EVEREN were to terminate a Senior Executive other than for
Cause (as defined), or if a Senior Executive were to resign his or her
employment for Good Reason (as defined), the Senior Executive would be
entitled to receive a severance payment (in lieu of any benefits to which he
or she might otherwise be entitled under any severance or similar plan or
program of EVEREN) as follows:
Messrs. Boris and McConahey would be entitled to receive a severance payment
equal to the sum of (i) two times their annual base salary plus two times
their target bonus at the time of such termination; plus (ii) a pro rata
target bonus for the year in which such termination takes place; plus (iii)
any unpaid annual bonus attributable to any prior year, provided that for such
purposes Mr. Boris' target bonus will be not less than 200% of his base salary
and Mr. McConahey's target bonus will be not less than 150% of his base
salary.
Each of the other Senior Executives would be entitled to receive an amount
equal to the sum of (i) twelve months' base salary as of the date of the
Senior Executive's termination (or as of any date within the preceding twelve
months, if higher); provided, however, that if the Senior Executive has
completed more than twelve years of service with EVEREN, the Senior Executive
shall receive one additional month of base salary for each year of service in
excess of twelve years not to exceed a total of twenty-four months' base
salary; plus (ii) the Senior Executive's target bonus at the date of such
termination; plus (iii) a pro-rated target bonus for the year in which the
termination occurs; plus (iv) any unpaid bonus attributable to the preceding
year.
If any Senior Executive's employment is terminated by EVEREN other than for
Cause or is terminated by the Senior Executive for Good Reason or is
terminated due to the Senior Executive's death, any stock options, restricted
stock or other equity interests in EVEREN's stock previously granted to the
Senior Executive shall become fully vested on the Senior Executive's
termination date provided that such accelerated vesting is not prohibited by
law.
If Mr. Boris' or Mr. McConahey's employment is terminated by that Senior
Executive for Good Reason or by EVEREN other than for Cause within two years
following a Change of Control (as defined), or if Mr. Boris' or Mr.
McConahey's employment is terminated by EVEREN other than for Cause prior to a
Change of Control involving the acquisition of the Company and the termination
is made at the request of the buyer, EVEREN will pay an amount equal to the
sum of (i) three years' base salary as of the date of such termination (or as
of any date within the preceding twelve months, if higher); plus (ii) three
times their respective maximum bonus at the date of such termination, provided
that for such purposes, Mr. Boris' maximum bonus will be not less than 400% of
his base salary and Mr. McConahey's maximum bonus will be not less than 300%
of his base salary; plus (iii) a pro-rated target bonus for the year in which
the termination occurs; plus (iv) any unpaid annual bonus attributable to the
preceding year.
If any of the other Senior Executives' employment is terminated by that
Senior Executive for Good Reason or by EVEREN other than for Cause within two
years following a Change of Control, or if any of the other
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<PAGE>
Senior Executives' employment is terminated by EVEREN other than for Cause
prior to a Change of Control involving the acquisition of EVEREN and the
termination is made at the request of the buyer, EVEREN will pay to that Senior
Executive an amount equal to the sum of (i) two years' base salary as of the
date of that Senior Executive's termination (or as of any date within the
preceding twelve months, if higher); plus (ii) two times that Senior
Executive's maximum bonus at the date of such termination; plus (iii) a pro-
rated target bonus for the year in which the termination occurs; plus (iv) any
unpaid annual bonus attributable to the preceding year.
In the case of death, the Senior Executive's estate would receive payments
under the employment agreements of an amount equal to three months' base salary
(six months in the case of Messrs. Boris and McConahey) plus a pro-rated target
bonus through the date of death.
BOARD COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
The Compensation Committee is composed entirely of four outside directors who
are not now, and have never been, officers of the Company. (Mr. Kemp became a
member of the Compensation Committee in February 1997 and did not participate
in any of the activities discussed in this report.) The Compensation Committee
is responsible for administering all of the Company's employee benefit and
compensation plans. The Compensation Committee establishes corporate policies
and practices with respect to the compensation of senior management, officers
and other employees of the Company, including salary, cash incentives, long
term incentive compensation, stock purchase and other equity ownership plans
and makes grants under such plans. No member of this committee may receive an
award or payment under any employee plan. The following report summarizes the
Company's executive compensation philosophy and discusses the factors
considered by the Compensation Committee when determining the compensation of
EVEREN's Chief Executive Officer and other executive officers for its 1996
fiscal year.
EXECUTIVE COMPENSATION OVERVIEW
There is intense competition in the securities industry for client assets,
services and key executive talent. To ensure the Company's continued success,
the Company's executive compensation plans are designed to attract, retain,
motivate and appropriately reward individuals who are responsible for the
Company's short-term and long-term profitability, growth and return to
stockholders. Executive compensation is structured in a manner that is flexible
and reflects the mix of individual performance, operating unit performance and
overall Company performance. Finally, the Compensation Committee believes the
Company's various voluntary equity participation plans that are available to
all employees foster a culture that encourages strong individual performance
and provides all employees the opportunity to participate in the future
performance of the Company.
In the Fall of each year, the Compensation Committee conducts a review of the
Company's executive compensation programs to ensure that such plans are
consistent with the Company's short and long term business plans as well as any
changes in laws and regulations which may impact compensation plans. In this
analysis, the Compensation Committee reviews executive compensation information
available from commercially-available surveys and peer company proxy statements
to ensure that total compensation levels are competitive with other companies
that compete with the Company for key executive talent.
Finally, the Company's executive compensation programs are designed in a
manner to be cost effective and tax effective, while maintaining the
flexibility needed to approve compensation arrangements which may not always
qualify for full tax deductibility.
ELEMENTS OF EXECUTIVE COMPENSATION
The Company's executive compensation program consists of four elements: base
salary, annual incentive awards, long term incentive awards and
benefits/perquisites.
9
<PAGE>
Base Salaries.
To verify that total compensation levels are appropriate and competitive, the
Company reviews commercially available compensation surveys and proxy
statements of other securities brokerage companies. Since the Compensation
Committee reviews total cash compensation levels of its executives to determine
the Company's competitive position, the Compensation Committee does not believe
that it is appropriate compensation philosophy to establish a formal policy for
executive officers' base salaries at this time.
The base salaries of the Company's executive officers are reviewed every
twenty four months, with any adjustments becoming effective January 1.
Adjustments to base salaries are determined by the Compensation Committee after
considering the Company's and the executive's performance, relevant labor
market adjustments, as well as the Company's ability to adjust base salaries.
No adjustments to base salaries for the named executives occurred in 1996.
Annual Incentive Compensation.
The annual incentive compensation opportunity established for each executive
is designed to improve the Company's annual financial performance by rewarding
the achievement of progressively more challenging annual performance
objectives. Annual bonuses are awarded in accordance with the Company's Senior
Management Incentive Compensation Plan (the "SMICP"). See discussion under
"APPROVAL OF EVEREN CAPITAL CORPORATION SENIOR MANAGEMENT INCENTIVE
COMPENSATION PLAN" later in this proxy statement.
Under the SMICP, various strategic goals are established at the beginning of
the year for EVEREN and for each operating unit, as a basis for achieving bonus
awards. The annual bonus opportunity for each executive officer is stated as a
"minimum", "target" and "maximum" percent of his/her base salary, with a
maximum bonus payment of $5,000,000 to any one participant. To determine the
amount of any annual bonus opportunity the executive shall be eligible to
receive, the Compensation Committee will (a) assign the relative importance of
each objective to the achievement of such bonus opportunity, (b) certify
performance achieved against each performance objective, and (c) consider (a)
and (b) to determine what portion, if any, of the executive's maximum bonus
opportunity to pay.
Certain portions of such annual bonuses may be paid in restricted stock or
other securities of EVEREN, subject to applicable vesting requirements, as the
Compensation Committee may determine.
Long Term Incentives.
Subject to the general eligibility and vesting provisions of the 1995 Stock
Plan and the 1996 Restricted Stock Incentive Plan, and the availability of
shares of Common Sock reserved under those plans, each executive may receive a
periodic award of Common Stock to more closely align management's interests
with stockholders, as well as pay a meaningful portion of annual incentive
compensation in the form of EVEREN Common Stock.
1995 Stock Plan. Under this plan, the executive may receive a long term
incentive award in the form of restricted stock, stock options, stock
appreciation rights, phantom stock or performance units. The size and
eligibility of any such award will reflect the Compensation Committee's
judgment as to the level of contribution the executive may make to creating
long term stockholder value.
1996 Restricted Stock Incentive Plan. Under the provisions of the Restricted
Stock Incentive Plan (the "Restricted Stock Plan"), twenty five percent (25%)
of each executive's annual incentive compensation is automatically paid in the
form of restricted Common Stock. The restricted stock is awarded at eighty
percent (80%) of the average closing price of the last ten consecutive trading
days in the calendar year to which the bonus relates. Vesting in the restricted
stock occurs following the completion of the second anniversary of the award
for executives with five or more years of service with the Company, and
following the third anniversary of the award for executives with less than five
years of service with the Company. Any executive receiving an
10
<PAGE>
award of restricted stock under this plan may voluntarily exchange up to 33
1/3 percent of the shares to which he or she was entitled for a non-qualified
stock option on a three for one basis. The exercise price for the non-
qualified stock option is the average closing price of the last ten
consecutive trading days in the calendar year to which the bonus relates.
Vesting occurs on a graded basis, with one third of the shares becoming
exercisable on each of the first three anniversaries for executives with five
or more years of service with the Company, and twenty percent of the shares
becoming exercisable on each of the first five anniversaries for executives
with less than five years of service with the Company. Regardless of which
vesting schedule applies, the non-qualified stock options have a ten year
life, with plan provisions for accelerated vesting upon change in control,
death, disability or retirement.
Benefits/Perquisites.
The Compensation Committee reviews, from time to time, the appropriateness
of providing certain benefits and perquisites to executive officers.
Executives currently participate in the EVEREN 401(k) and Employee Stock
Ownership Plan, its Supplemental Deferred Compensation Plan and are provided
with certain automobile allowances and other special liability insurances.
401(k) and Employee Stock Ownership Plan. EVEREN maintains the 401(k) and
Employee Stock Ownership Plan (the "KSOP"), which is qualified under Section
401 of the Internal Revenue Code of 1986 (the "Code"). For 1996, executives
elected to participate in the KSOP by deferring up to 10% (limited to $9,500)
of the first $150,000 of eligible compensation. For 1996, EVEREN matched 50%
on the first five percent (5%) of employee contributions in the form of EVEREN
Common Stock priced at the original KSOP purchase price of $6.8405 per share.
In addition, executives who participated in the Founders' Offering during 1995
received the second installment of the initial Company match on any investment
made in 1995. This Company contribution was made on March 31, 1996. For 1996,
the maximum total Company and employee contribution under the KSOP was
$30,000; however, because of the Company's actual contribution rate and other
limitations placed on the KSOP by the Code, the actual Company contribution to
any employee was less than that amount.
Supplemental Deferred Compensation Plan. The Company established the
Supplemental Deferred Compensation Plan (the "Supplemental Plan") to provide
compensation deferral opportunities to certain participants in the KSOP whose
benefit in the KSOP is subject to limitations imposed by the Code. Employee
and employer-matching contributions to the Supplemental Plan are the same as
the KSOP, but without regard to limitations placed on certain highly
compensated employees under the Code. Employer matching contributions are
credited to a deferred compensation account maintained on the books of the
Company. As an unfunded and unsecured promise to pay certain benefits in the
future, the payments to participants (or his/her designated beneficiary or any
other beneficiary) under the Supplemental Plan are made from the general
assets of the Company.
PROCEDURES FOR THE CHIEF EXECUTIVE OFFICER'S 1996 COMPENSATION
Base Salary. The Compensation Committee considered Mr. Boris' compensation
at the beginning of the fiscal year and determined not to make any adjustments
to Mr. Boris' base salary.
Objective Performance Goals Established for 1996. Prior to the beginning of
the 1996 fiscal year, the Compensation Committee established six performance
objectives (consolidated net income, return on broker/dealer equity, increase
in stock value, compensation and benefit expenses as a percent of net revenue,
relative increase in fee revenues as a percent of fixed expense and relative
increases in net fee revenues per employee) for Mr. Boris in order to reward
achievements which would increase Company performance in 1996 as well as
reward achievements to be completed in 1996 which would benefit the Company in
the future.
KSOP Loan Payoff Bonus. In accordance with Mr. Boris' employment agreement
with EVEREN, the Compensation Committee authorized the payment of a KSOP loan
payoff bonus of $2,500,000 when the KSOP loans were repaid in full in May,
1996.
11
<PAGE>
Annual Incentive Award. Based on the results achieved on the six performance
objectives established by the Compensation Committee at the beginning of the
fiscal year, the relative importance of each objective to Mr. Boris' annual
incentive opportunity, as well as the strategic events which occurred in 1996
under Mr. Boris' leadership, the Compensation Committee determined that Mr.
Boris should receive the maximum annual incentive award of $1,500,000. After
further discussions regarding the portion of cash compensation which was to be
deferred in shares of restricted stock under EVEREN's Restricted Stock Plan,
the Compensation Committee determined that $130,000 of Mr. Boris' 1996 annual
incentive award should be paid in the form of a non-qualified stock option to
acquire 20,000 shares of Common Stock. Finally, and in accordance with the
Restricted Stock Plan, twenty five percent of the remaining cash bonus
($342,500) was paid in 19,832 shares of restricted Common Stock. Mr. Boris
voluntarily elected to trigger the option exchange provision of the Restricted
Stock Plan and exchanged one third of the shares of restricted stock to which
he was entitled (6,604) for a grant of a non-qualified stock option to acquire
19,812 shares of Company Stock.
Long Term Incentive Awards. In order to more closely align Mr. Boris'
interests with the long term interests of EVEREN's stockholders, the
Compensation Committee granted Mr. Boris 17,500 shares of restricted Common
Stock and issued an option grant to acquire 52,500 shares of Common Stock at
its May 8, 1996 meeting. Such awards vest and become fully exercisable
following completion of the fifth anniversary of the award.
COMPLIANCE WITH SECTION 162(M)
Section 162(m) of the Code establishes a limit on corporate deductions of
$1,000,000 for compensation paid to any executive. This limit is eliminated if
certain conditions are met. Because EVEREN's 1995 Stock Plan and 1996
Restricted Stock Incentive Plan satisfy, and the proposed Senior Management
Incentive Compensation Plan, if approved by EVEREN's stockholders at the 1997
Annual Meeting of Stockholders, will satisfy these conditions, EVEREN
anticipates that the compensation to be paid to any executive during calendar
year 1997 will meet the criteria for deductibility pursuant to Section 162(m)
of the Code.
THE COMPENSATION COMMITTEE
William T. Esrey, Chairman
Homer J. Livingston, Jr.
William C. Springer
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<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the change in the cumulative total
stockholder return on EVEREN's Common Stock against the cumulative total
return of the S&P Composite-500 Stock Index and an index prepared by EVEREN
using firms included in the Financial Services Analytics' Composite Brokerage
Stock Index. The graph is marked in intervals of an approximately equal number
of trading days and assumes a $100 investment made on October 8, 1996 and
reinvestment of all dividends.
[LINE GRAPH APPEARS HERE]
Index Calculations
10/8/96 10/25/96 11/15/96 12/9/96 12/31/96
------- -------- -------- ------- --------
Other Brokerage Firms $100 $ 97 $104 $109 $113
S&P 500 $100 $100 $105 $107 $105
EVEREN Capital $100 $102 $117 $124 $121
13
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COMPENSATION COMMITTEE INTERLOCKS
AND INSIDER PARTICIPATION
None of the members of the Compensation Committee was an officer or employee
of EVEREN or any of its subsidiaries, and no "compensation committee
interlocks" (as defined by the Securities and Exchange Commission) existed
during the last fiscal year.
PRINCIPAL STOCKHOLDERS
The following table sets forth certain information with respect to
beneficial ownership of EVEREN's Common Stock as of March 14, 1997 by (i) each
named executive officer, (ii) each holder of more than five percent of
EVEREN's Common Stock and (iii) all current directors and executive officers
as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF
NUMBER OF SHARES OF SHARES OF COMMON
NAME AND ADDRESS OF BENEFICIAL COMMON STOCK STOCK
OWNER(1) BENEFICIALLY OWNED(2) BENEFICIALLY OWNED
------------------------------ --------------------- ------------------
<S> <C> <C>
James R. Boris.................. 307,590(3) 1.8%
Stephen G. McConahey............ 216,036(4) 1.3%
William T. Esrey................ 3,587 *
Jack Kemp....................... 0 *
Homer J. Livingston, Jr......... 7,900 *
William C. Springer............. 3,328 *
David M. Greene................. 54,897(5) *
Thomas R. Reedy................. 45,445 *
Stanley R. Fallis............... 37,629 *
Chase Manhattan Bank, not in its
individual or corporate
capacity but solely as trustee
of the KSOP
770 Broadway--10th Floor
New York, NY 10003............. 10,688,606 62.6%
All directors and executive
officers as a group (14
persons, including the above).. 806,869 4.7%
</TABLE>
- --------
*Less than 1% of the shares outstanding.
(1) Except as otherwise indicated, the address of each of the persons in this
table is as follows: c/o EVEREN Capital Corporation, 77 West Wacker Drive,
Chicago, Illinois 60601
(2) Included in the shares noted above as being beneficially owned by EVEREN's
executive officers are the following shares that are owned of record by
Chase Manhattan Bank as trustee of the KSOP: Mr. Boris, 37,364 shares; Mr.
McConahey, 35,262 shares; Mr. Greene, 34,491 shares; Mr. Reedy, 28,263
shares; Mr. Fallis, 21,346 shares; and all executive officers as a group,
212,467 shares. These shares are also included in the number of shares
shown above as being beneficially owned by Chase Manhattan Bank and are
subject to the voting arrangement described below.
(3) Includes 1,400 shares held by Mr. Boris' wife and 1,000 shares held for
the benefit of two children.
(4) Includes 750 shares held for the benefit of Mr. McConahey's children.
(5) Includes 2,500 shares held by Mr. Greene's wife.
The shares of Common Stock referenced above as being beneficially owned by
Chase Manhattan Bank are specifically allocated to participants' accounts in
the EVEREN Capital Corporation 401(k) and Employee Stock Ownership Plan (the
"KSOP"). Participants in the KSOP who receive this Proxy Statement in their
capacity as participants in the KSOP will receive a voting instruction form in
lieu of a proxy, which will allow them to direct the voting of the shares of
Common Stock allocated to their KSOP accounts. If a participant fails to
direct Chase Manhattan Bank (the "KSOP Trustee") as to how to vote the shares
allocated to the participant's KSOP
14
<PAGE>
account, then the KSOP Trustee will vote those shares, together with
unallocated shares, in the same proportion as the KSOP Trustee was directed by
the other participants who gave voting directions. Notwithstanding the
foregoing, however, the KSOP Trustee will in all cases exercise its
independent judgment in voting shares of Common Stock if doing so is necessary
to satisfy its ERISA fiduciary obligations.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires EVEREN's
directors and executive officers and persons who own more than 10% of a
registered class of EVEREN's equity security, to file with the Securities and
Exchange Commission and the New York Stock Exchange reports of ownership and
changes in ownership of Common Stock. Based solely on review of the copies of
such reports furnished to EVEREN or written representations that no other
reports were required, EVEREN believes that, during the 1996 fiscal year, all
filing requirements applicable to its officers, directors and greater than 10%
beneficial owners were complied with except that (i) one report, covering an
aggregate of five transactions, was filed two days late by Mr. Boris; (ii) one
report, covering an aggregate of two transactions, was filed two days late by
Mr. McConahey; (iii) the initial ownership report and one additional report
covering one transaction were filed late by Mr. McGivern; and (iv) the initial
report and one additional report covering one transaction were filed late by
Mr. Sullivan.
PROPOSAL NO. 2:
APPROVAL OF EVEREN CAPITAL CORPORATION SENIOR MANAGEMENT
INCENTIVE COMPENSATION PLAN
Under section 162(m), which was added to the Internal Revenue Code of 1986
in 1993, in order for compensation in excess of $1,000,000 for any taxable
year paid to a person employed by EVEREN on the last day of the taxable year
to be deductible by EVEREN, such compensation must qualify as "performance-
based." The Compensation Committee of the Board of Directors has adopted the
EVEREN Capital Corporation Senior Management Incentive Compensation Plan
("SMICP"), subject to stockholder approval, under which annual incentive
compensation to be paid to named executive officers subject to section 162(m)
would be performance-based for purposes of exemption from the limitations of
section 162(m). The terms adopted by the Compensation Committee are as
follows:
. The class of persons covered consists of those key members of senior
management designated by the Compensation Committee at the first meeting
of the Board of Directors of each calendar year.
. The performance criteria for annual incentive payments to participants
for performance years 1997 and thereafter will be limited to objective
tests based on one or more of the following: financial results (i.e.,
consolidated net income, return on equity, return on net income, stock
price appreciation, debt ratings, and consummation of various finance
transactions), employee productivity (i.e., compensation and benefits
expense as a percent of net revenue, fee revenue as a percent of fixed
costs, client assets under management) and stockholder value added
results, any of which may be measured either in absolute terms or as
compared to another company or companies. Use of any other criterion will
require ratification by stockholders if failure to obtain such approval
would jeopardize the tax deductibility of future incentive payments.
. In administering the SMICP and determining incentive awards, the
Compensation Committee will not have the flexibility to pay a participant
more than the "maximum" annual incentive compensation opportunity as
established by the Compensation Committee at the beginning of the
applicable calendar year. The Compensation Committee will have the
flexibility, based on its business judgment, to reduce this amount.
. There will be a maximum individual annual incentive amount limit of
$5,000,000 for any participant for any performance year. This annual
incentive payment maximum will be not increased without ratification by
stockholders if failure to obtain such approval could result in future
annual incentive payments not being tax deductible.
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<PAGE>
On February 7, 1997, the Compensation Committee adopted performance
objectives for the 1997 performance year and established directly related
payment schedules for each of the executive officers of EVEREN consisting of 9
persons.
It should be noted that while the Compensation Committee's intent is to
prevent section 162(m) from limiting the deductibility of annual incentive
compensation payments, no advance determinations will be obtained from the
Internal Revenue Service in this regard. For this reason, and because of
possible unforeseen future events, it is impossible to be certain that all
annual incentive compensation paid by EVEREN to named executive officers will
be tax deductible. The foregoing shall not preclude the Compensation Committee
from making other compensation payments under different terms even if they do
not qualify for tax deductibility under section 162(m).
HYPOTHETICAL PAYMENTS BASED ON 1996 RESULTS
As discussed above, awards under the terms adopted by the Compensation
Committee will be based upon performance goals established with respect to the
1997 performance year and to be established with respect to future years. No
incentive compensation under these terms has yet been earned by any
participant since the performance periods have not yet been completed.
Accordingly, the amount of annual incentive compensation to be paid in the
future to EVEREN's current or future named executive officers subject to
section 162(m) cannot be determined at this time since actual amounts will
depend on actual performance measured against the attainment of pre-
established performance goals and on the Compensation Committee's discretion
to reduce such amounts. Had this proposal been in effect for 1996, the Board
of Directors believes that the annual incentives that would have been paid to
the named executive officers and to all executive officers as a group would
have been substantially the same as is reported in the Summary Compensation
Table for the named executive officers and for the executive officers as a
group.
A copy of the SMICP is attached as Exhibit A. Stockholders are encouraged to
review the SMICP document carefully.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF
THE SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN.
PROPOSAL NO. 3:
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP as independent
accountants to examine the consolidated financial statements of EVEREN for the
year ending December 31, 1997 and to perform other appropriate accounting
services.
A proposal will be presented at the Annual Meeting to ratify the appointment
of Deloitte & Touche LLP as EVEREN's independent accountants. A representative
of Deloitte & Touche LLP is expected to be present at the meeting and will be
available to respond to appropriate questions and make statements if the
representative so desires. If the stockholders do not ratify this appointment,
the Board of Directors will reconsider its appointment.
On October 3, 1995, upon recommendation by the Board of Directors, EVEREN
appointed Deloitte & Touche LLP as its new independent accountants to replace
KPMG Peat Marwick LLP as the Company's certifying independent accountant.
During the 24 months preceding such replacement of KPMG Peat Marwick LLP as
the auditors, there existed no problems relating to any matter of accounting
principles or practices, financial statement disclosures, auditing scope or
procedures, or compliance with applicable rules of the Securities and Exchange
Commission, which problems, if not resolved to the satisfaction of KPMG Peat
Marwick LLP, would have caused them to make reference to such problems in
their reports. In addition, for each of the past two fiscal years, the reports
of KPMG Peat Marwick LLP on such financial statements did not include an
adverse opinion or a disclaimer of opinion, nor was it qualified as to
uncertainties, audit scope, or
16
<PAGE>
accounting principles. The opinion for the fiscal year ended December 31, 1993
was modified to reflect the change in accounting for adoption of the Financial
Accounting Standards Board's Statement of Financial Accounting Standards No.
109 "Accounting for Income Taxes."
During the fiscal year ended December 31, 1994 and through October 3, 1995,
EVEREN had not consulted with Deloitte & Touche LLP regarding either (1) the
application of accounting principles to a specified transaction, either
completed or proposed, or the type of audit opinion that might be rendered on
EVEREN's financial statements or (2) concerning the subject matter of a
disagreement with the former auditor, or a reportable event as described in
Regulation S-K Item 304(a)(2).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF DELOITTE & TOUCHE LLP AS INDEPENDENT ACCOUNTANTS.
OTHER BUSINESS
As of April 4, 1997, the Board of Directors does not know of any other
business to be acted upon at the meeting. However, if any matters other than
those referred to above properly come before the meeting, the persons named in
the proxy card intend to vote on such matters in accordance with their best
judgment.
VOTING PROCEDURES
It is intended that proxies solicited by the Board, unless otherwise
specified therein, will be voted in accordance with the recommendations of the
Board of Directors.
With regard to the election of directors, votes may be cast in favor of or
withheld from each nominee; votes that are withheld will be excluded entirely
from the vote and will have no effect. Abstentions may be specified on all
proposals except the election of directors and will be counted as present for
purposes of determining the existence of a quorum regarding the item on which
the abstention is noted.
With the exception of the election of directors, which requires a plurality
of the votes cast, EVEREN's By-laws provide that the affirmative vote of a
majority of the votes cast at the Annual Meeting is required for the approval
of each proposal presented in this proxy statement. Abstentions and withheld
votes will not be considered "votes cast" and will be excluded entirely from
the vote and will have no effect.
Under the rules of the New York Stock Exchange, brokers who hold shares in
street name for customers have the authority to vote on certain items when they
have not received instructions from beneficial owners, but are not permitted to
vote on certain other matters in the absence of such instructions. The
withholding of a vote on a matter by a broker who has not received instructions
and is not otherwise permitted to vote on such matter is known as a "broker
non-vote." Accordingly, broker non-votes will not be considered "votes cast"
with respect to any matter to be considered at the Annual Meeting and will have
no effect on the outcome of the vote on such matter.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next annual meeting in
1998 should be directed to the corporate secretary of EVEREN and, according to
EVEREN's By-laws, must be received by EVEREN no earlier than February 5, 1998
or later than March 7, 1998 for inclusion in the proxy statement and proxy card
relating to that meeting.
Janet L. Reali
Corporate Secretary
April 4, 1997
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EVEREN CAPITAL CORPORATION
SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
1. PURPOSE. The purpose of EVEREN Capital Corporation's (the "Company") 1997
Senior Management Incentive Compensation Plan (the "Plan") is to properly
reward and motivate key executive officers who achieve significant results
against annual operating goals and deliver increased stockholder value. The
Plan is an important element in the Company's performance-based, total
compensation philosophy which attracts talented executives and encourages such
executive officers to remain employed with the Company.
2. ADMINISTRATION. The committee appointed to administer the Plan (the
"Committee") shall be the Compensation Committee of the board of directors of
the Company (the "Board of Directors" or "Board") or another committee
consisting of not less than two nonemployee directors of the Company appointed
by the Board of Directors.
2.1 AUTHORITY OF COMMITTEE. The Committee is authorized, subject to the
provisions of the Plan, to establish such rules and regulations as it deems
necessary for the proper administration of the Plan and to make such
determinations and interpretations and to take such action in connection with
the Plan as it deems necessary or advisable. All determinations and
interpretations made by the Committee shall be binding and conclusive on all
participating employees and their legal representatives.
2.2 INDEMNIFICATION. No member of the Board, no member of the Committee and no
employee of the Company or any subsidiary shall be liable for any act or
failure to act hereunder by any other member or employee or by any agent to
whom duties in connection with the administration of this Plan have been
delegated or, except in circumstances involving his or her bad faith, gross
negligence or fraud, for any act or failure to act by the member or employee.
3. ELIGIBILITY. The Committee will certify the names of key members of senior
management who will be eligible to participate in this Plan at the first Board
meeting of each calendar year (the "Participants").
4. OBJECTIVE PERFORMANCE GOALS. As soon as practicable following the
completion of the Company's annual business planning process, and within 90
days following the commencement of each calendar year, the Committee will
establish objective performance-based goals in writing for each Participant
while the outcome is substantially uncertain. Such objective performance goals
will be based on one or any combination of the following: financial results
(i.e., consolidated net income, return on equity, return on net income, stock
price appreciation, debt ratings, and consummation of various finance
transactions), employee productivity (i.e., compensation and benefits expense
as a percent of net revenue, fee revenue as a percent of fixed costs, client
assets under management) and stockholder value added results.
4.1 SPECIFIC PERFORMANCE TARGETS. Since the material terms of any objective
performance goal established by the Committee may involve confidential
information that, if disclosed, would adversely affect the Company, the
Committee retains discretion to establish specific targets with respect to the
more general performance goals set forth in this Plan.
4.2 MEASUREMENTS AND ADJUSTMENTS. Performance may be measured on a
consolidated basis or operating unit level and may be measured absolutely or
relative to the Company's peers. In addition, the Committee may adjust the
performance goals to account for the effects of any extraordinary items which
occurred during the calendar year as it deems appropriate.
4.3 SHAREHOLDER APPROVAL. Since the general business criteria on which any
specific performance target is based is subject to stockholder approval before
any compensation is paid to Participants under the Plan, no payments under
this Plan shall be made until shareholders of the Company approve the Plan.
5. INCENTIVE AWARDS.
5.1 INCENTIVE AWARD OPPORTUNITIES. Within 90 days following the commencement
of each calendar year, the Committee shall establish a "target" and "maximum"
annual incentive compensation opportunity (the
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"Award") for each Participant. The Award will be stated as a percent of
his/her then current base salary and will represent the maximum payment which
may be earned by the Participant. The sum of all Participants' Awards will
establish the maximum amount to be paid to all Participants under the Plan.
5.2 MAXIMUM COMPENSATION TO BE PAID. The maximum annual incentive compensation
which may be paid to any Participant under the Plan is $5,000,000.
5.3 PAYMENT OF AWARDS.
(1) Within 90 days of the completion of each calendar year, the Committee will
certify the performance achieved for each objective performance goal and
determine, in writing, the amount of any Award to be paid to each Participant.
The Committee will consider performance achieved against objective performance
goals and use its discretion to determine what portion, if any, of the
Participant's Award to be paid.
(2) Each Participant shall receive payment in cash of his/her Award as soon as
practicable following the determination made pursuant to Section 5.3. Certain
portions of any Award may be paid in shares of restricted stock or other
securities of the Company, subject to applicable vesting requirements, as the
Committee may determine.
(3) Partial payments may be made to Participants during the course of the
calendar year, in the sole discretion of the Committee, provided that the
aggregate of such partial payments may not exceed the amount of the Award that
a Participant may otherwise be entitled under Section 5.3.
(4) Payment of any Award under this Plan shall be made within 90 days of the
completion of the calendar year to which the bonus relates (the "Bonus Payment
Date").
(5) If a Participant is disabled (as defined in the Company's short or long
term disability plan) during any part of a calendar year, such Participant
shall be eligible for a prorata portion of any Award payable based on
performance for such calendar year. Such prorata payment shall be determined
by multiplying (a) the amount of the annual Award that the Committee
determines would have been payable to the Participant for the calendar year,
times (b) the number of full months of the Participant's employment with the
Company during the calendar year while not disabled, divided by 12.
(6) Upon termination of employment from the Company, for any reason, prior to
the Bonus Payment Date, the right to receive any payment from the Plan for
that calendar year shall be forfeited.
5.4 ADJUSTMENTS. The Committee is authorized at any time during the calendar
year, in its sole and absolute discretion, to reduce or eliminate the Award
established for any Participant for any reason, including changes in the
position or duties of a Participant with the Company.
6. EMPLOYMENT RIGHTS. Neither participation in the Plan, nor the exercise of
any right granted under the Plan, shall be made a condition of employment, or
of continued employment with the Company or any subsidiary. Participation in
the Plan does not limit the right of the Company or any subsidiary to
terminate a Participant's employment at any time or give any right to a
Participant to remain employed by the Company or any subsidiary in any
particular position or at any rate of remuneration.
7. TAX WITHHOLDING. The Company shall have the right to withhold with respect
to any payments made to a Participant under this Plan any taxes required by
law to be withheld with regard to such payment.
8. AMENDMENTS, SUSPENSION AND TERMINATION. The Board of Directors may amend,
suspend or terminate the Plan at any time, provided that no such amendment
shall be effective unless approved within 12 months after the date of adoption
of such amendment by the affirmative vote of stockholders holding the majority
of the outstanding shares of common stock entitled to vote if such stockholder
approval is necessary to maintain the Plan in compliance with the requirements
of Section 162(m) of the Code, its successor provisions or any other
applicable law or regulation. No Award may be granted during any suspension or
following termination of the Plan.
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9. APPLICABLE LAWS. The Plan, and any payments made pursuant to the Plan, are
intended to qualify as performance based compensation within the meaning of
Section 162(m) of the Internal Revenue Code, as from time to time amended, or
its successor provisions. To the extent that Federal laws do not otherwise
control, the Plan shall be governed by the laws of Illinois and construed
accordingly.
10. ARBITRATION OF DISPUTES. Any dispute between the Company or any of its
affiliates and any Participant relating to this Plan shall be submitted to
arbitration before the National Association of Securities Dealers, Inc. or the
New York Stock Exchange, Inc. in accordance with its rules and regulations.
11. EFFECTIVE DATE AND STOCKHOLDER APPROVAL. The Plan shall become effective
on January 2, 1997, provided it is approved by the stockholders of the
Company. The Plan shall remain in effect until it has been terminated pursuant
to Section 8.
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Proxy
EVEREN CAPITAL CORPORATION
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints James R. Boris, Janet L. Reali and Stanley
R. Fallis, and each of them, each with full power to act without the others, and
with full power of substitution, the attorneys and proxies of the undersigned
and hereby authorizes them to represent and to vote, all the shares of Common
Stock of EVEREN Capital Corporation (the "Company") that the undersigned would
be entitled to vote, if personally present, at the 1997 Annual Meeting of
Stockholders to be held on May 6, 1997 or any adjournment or postponement
thereof, upon such business as may properly come before the meeting, including
the items set forth on the reverse side. The proxies, in their discretion, may
vote for the election of a person to the Board of Directors if any nominee named
herein becomes unable to serve or for good cause will not serve, and on other
matters which may properly come before the 1997 Annual Meeting.
This proxy when properly executed will be voted in the manner directed
herein by the undersigned stockholder. If no direction is made, this proxy will
be voted "FOR" the proposals set forth below and as recommended by the Board of
Directors.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
USING THE ENCLOSED ENVELOPE.
(Continued and to be signed on reverse side.)
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Please mark vote in oval in the following manner using dark ink only.
The Board of Directors recommends a vote FOR all proposals.
For All
1. Election of Directors -- Except the
For Withhold following
Nominees: James R. Boris, William T. Esrey, All All nominee(s)
Jack Kemp, Homer J. Livingston, Jr., / / / / / /
Stephen G. McConahey and William C. Springer
________________________________
2. Approval of the EVEREN Capital Corporation For Against Abstain
Senior Management Incentive Compensation Plan / / / / / /
3. Ratification of appointment of Deloitte & For Against Abstain
Touche LLP as independent accountants for 1997 / / / / / /
4. To consider and act upon such other matters
as may properly come before the meeting or any
adjournments thereof
IMPORTANT--This Proxy must be signed and dated below
Dated: ___________________________________, 1997
Signature(s) ___________________________________
________________________________________________
Please sign exactly as name appears hereon. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation or partnership, please sign in full corporate or partnership name by
an authorized officer or person.
Number of shares_____________
