<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 Section240.14a-11(c) or
Section240.14a-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)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
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(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 11, 1998
March 31, 1998
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 Monday, May 11,
1998 at 8:30 a.m. Chicago time for the following purposes:
(1) To elect nine (9) Directors, each to serve until the next annual meeting
of stockholders or until his successor is elected and qualified;
(2) To ratify the appointment of Deloitte & Touche LLP as EVEREN's
independent accountants for 1998;
(3) 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 16, 1998 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 MARCH 31, 1998
FOR ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 11, 1998
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 11, 1998. 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 March 31,
1998.
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. Stockholders can
also revoke a proxy 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 16, 1998, 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 17,411,900 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 March 4, 1998, the Board of Directors increased the number of directors
of EVEREN from six to nine. All six of the incumbent directors have been
nominated to stand for re-election. In addition, the Board of Directors, at the
recommendation of the Nominating Committee, nominated Donald P. Jacobs, Samuel
K. Skinner and Donna F. Tuttle to stand for election to fill the newly-created
directorships. If elected, all nine shall hold office until the 1999 annual
meeting of stockholders of EVEREN, or until their respective successors have
been elected and qualified.
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 nine 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
<PAGE>
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
NINE NOMINEES.
The names of the nine 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
- --------------------------------- ------------------------------------------------------------------------------
<S> <C>
JAMES R. BORIS................... James R. Boris has been Chairman of the Board and Chief Executive Officer of
Age 53 EVEREN since its inception in May 1995. Mr. Boris is Chairman of the Board
Director since 1995 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 Sprint Corporation since
Age 58 1985 and Chairman since 1990. He was also President of Sprint from 1985 until
Director since 1995 February 1996. He serves on the boards of Sprint, The Equitable Life
Assurance Society of the United States, Duke Energy Corporation and General
Mills, Inc.
DONALD P. JACOBS................. Donald P. Jacobs has been the Dean of the J. L. Kellogg Graduate School of
Age 70 Management since 1975 and was named the Gaylord Freeman Distinguished
Director Nominee Professor of Finance at Northwestern University in 1979. He is also a
director of Unicom Corporation and its subsidiary, Commonwealth Edison
Company, The First National Bank of Chicago, a subsidiary of First Chicago
NBD Corporation, Hartmarx Corporation, Security Capital Industrial Trust,
Unocal Corporation and Whitman Corporation.
JACK KEMP........................ Since 1993, Jack Kemp has been a co-director of Empower America, a public
Age 62 policy and advocacy organization he co-founded in 1993. Prior to founding
Director since 1997 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 of The Chicago Stock
Age 62 Exchange from January 1993 until he retired in May 1995, following a 30-year
Director since 1995 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.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR BIOGRAPHY
- --------------------------------- ------------------------------------------------------------------------------
<S> <C>
STEPHEN G. MCCONAHEY............. Stephen G. McConahey has been President and Chief Operating Officer of EVEREN
Age 54 since its inception in May 1995. Mr. McConahey is President and Chief
Director since 1995 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.
SAMUEL K. SKINNER................ Samuel K. Skinner is retiring March 31, 1998 after serving since February 1993
Age 59 as President of Commonwealth Edison Company (one of the nation's largest
Director Nominee electrical utilities) and since 1994 as President of its holding company,
Unicom Corporation. He is also retiring as a director of both corporations.
He was General Chairman of the Republican National Committee from August 1992
to January 1993, and Chief of Staff to the President of the United States
from December 1991 to August 1992. Mr. Skinner is also a director of ANTEC
Corporation, The LTV Corporation, Midwest Express Holdings, Inc. and Union
Pacific Resources Group, Inc. He also serves as a member of The Broken Hill
Propriety Corporation (BHP) Advisory Council.
WILLIAM C. SPRINGER.............. William C. Springer is Executive Vice President of H.J. Heinz Company. He has
Age 58 also held the title of President and Chief Executive Officer for Heinz U.S.A.
Director since 1995 since 1989. In 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.
DONNA F. TUTTLE.................. Donna F. Tuttle has been President of Korn Tuttle Capital Group, a Los
Age 50 Angeles, California investment consulting firm, since March 1992. From
Director Nominee January 1990 to March 1992, Ms. Tuttle was Chairman and Chief Executive
Officer of Ayer Tuttle, a division of an international advertising agency.
From January 1988 to January 1989, Ms. Tuttle served as U.S. Deputy Secretary
of Commerce. Ms. Tuttle is also a director of Hilton Hotels Corp. and Phoenix
Duff & Phelps Corporation.
</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 1997, six Board meetings, and no
Executive Committee, four Audit Committee, four Compensation Committee and two
Nominating Committee meetings were held.
3
<PAGE>
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. Livingston and McConahey.
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 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.
4
<PAGE>
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 1,500 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 making 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.
To foster the role of the EVEREN Foundation, non-employee directors may
request the Foundation to make matching contributions of no more than $5,000 per
calendar year to qualified charitable organizations.
COMPENSATION OF EXECUTIVE OFFICERS
Prior to the purchase on September 13, 1995 by the EVEREN Capital
Corporation 401(k) and Employee Stock Ownership Plan (the "KSOP") of 96.6% of
the then outstanding Common Stock from Kemper Corporation (the "Buy-Out"),
certain officers and employees of EVEREN participated in various compensation
plans of Kemper Corporation ("Kemper"). The following tables set forth certain
information regarding the compensation paid or accrued by EVEREN and Kemper to
or for the account of the Chief Executive Officer and each of the four most
highly compensated executive officers of EVEREN for services rendered in all
capacities during EVEREN's fiscal years ended December 31, 1997, 1996 and 1995.
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
-------------------------
AWARDS
ANNUAL COMPENSATION -------------------------
--------------------------------------- STOCK
OTHER ANNUAL RESTRICTED UNDERLYING ALL OTHER
COMPENSATION STOCK AWARDS OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) ($)(2) ($)(3)(4)(5) (#)(6)(7) ($)(8)
- --------------------------------- --------- ---------- ------------ ------------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
James R. Boris................... 1997 $ 500,000 $ 1,000,000 $ 65,989 $ 598,683 356,675 $ 38,187
Chairman of the Board and 1996 500,000 1,027,500 72,355 484,452 92,312 2,621,554
Chief Executive Officer 1995 500,000 1,300,000 507,767 1,500,000 30,000 156,542
Stephen G. McConahey............. 1997 385,000 525,000 62,116 314,298 229,755 28,000
President and 1996 385,000 735,000 56,385 385,725 52,836 2,096,179
Chief Operating Officer 1995 385,000 900,000 743,832 1,000,000 22,500 30,036
David M. Greene.................. 1997 250,000 468,750 67,396 93,542 33,855 17,031
Senior Executive 1996 250,000 431,250 52,576 183,439 32,316 32,491
Vice President 1995 250,000 450,000 233,677 0 17,000 27,526
Thomas R. Reedy.................. 1997 250,000 431,250 63,298 129,074 29,070 15,625
Senior Executive 1996 250,000 375,000 37,994 167,239 31,230 32,151
Vice President 1995 250,000 400,000 194,379 0 17,000 41,662
Stanley R. Fallis................ 1997 250,000 300,000 0 119,737 0 13,281
Senior Executive 1996 250,000 281,250 50,231 152,927 29,000 30,285
Vice President 1995 168,750 300,000 457,953 0 15,000 20,793
</TABLE>
- ----------
(1) For 1997, the amounts shown in this column reflect the annual incentive
bonus paid after 25% of such bonus was mandatorily deferred, as well as any
additional amount voluntarily deferred, under the 1996 Restricted Stock
Incentive Plan. The 1996 Restricted Stock Incentive Plan is a broad-based
equity compensation plan in which all bonus-eligible and commissioned
employees may participate.
(2) For 1997, the amounts disclosed in this column include the taxable benefits
of various incentive trips the named executive participated in during 1997.
For 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 1997 from mandatory
deferral of 25% of 1997 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 ten consecutive trading days ending January 15 of
the year following the year to which the annual bonus relates. In lieu of
the restricted Common Stock, participants in this plan may elect to purchase
a calculated number of shares under a non-qualified stock option. Awards for
1997 have been valued for this table using closing prices of Common Stock on
the dates of such awards. Shares granted for 1997 performance vest three
years following grant and in accordance with the 1996 Restricted Stock
Incentive Plan.
(4) The aggregate number and value of restricted shares of Common Stock held by
persons named in this table as of December 31, 1997 (inclusive of shares
awarded for 1997 performance) are as follows: Mr. Boris, 44,898 shares,
$2,132,655; Mr. McConahey, 30,513 shares, $1,449,368; Mr. Greene, 13,265
shares, $630,088; Mr. Reedy, 13,382 shares, $635,645 and Mr. Fallis, 12,262
shares, $582,445.
(5) Dividends are paid on unvested restricted shares at the same rate as
dividends paid on shares of Common Stock.
(6) Stock options displayed for 1997 relate to options granted under the EVEREN
Capital Corporation 1995 Stock Plan, as well as options issued to each named
executive from the mandatory, or additional
6
<PAGE>
voluntary, deferral of their 1997 annual incentive bonus under the 1996
Restricted Stock Incentive Plan. This table includes additional stock
options that were awarded to Messrs. Boris and McConahey in February, 1997
as the result of the Compensation Committee's decision that the level of
their beneficial ownership in EVEREN was below the level of ownership of
other executives at competitor organizations. Stock options were awarded to
Messrs. Greene and Reedy (under the 1995 Stock Plan) as a result of the
Compensation Committee's decision to recognize operating results of 1997 and
provide additional long-term performance incentives to these individuals.
(7) The non-qualified stock options granted to each named executive in January,
1998 for 1997 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 reported in this column for 1997 include the amounts of employer
contributions allocated to the accounts of the named executives under
EVEREN's KSOP and Supplemental Deferred Compensation Plans. For 1996,
amounts reported in this column reflected the one-time payment of the
special KSOP loan payoff bonus provisions of Messrs. Boris and McConahey's
1995 Employment Agreements.
OPTION GRANTS IN 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------------------
% OF TOTAL
OPTIONS
NUMBER OF SHARES GRANTED TO
UNDERLYING EMPLOYEES EXERCISE OR GRANT DATE
GRANT OPTIONS IN FISCAL BASE PRICE EXPIRATION PRESENT
NAME DATE GRANTED(#)(1)(2) YEAR(3) ($/SH)(4) DATE VALUE(5)
- ---------------------------------- --------- ---------------- ----------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
James R. Boris.................... 2/7/97 300,000 28.6% $ 23.8125 2/7/07 $ 3,896,831
1/20/98 56,675 5.4% 44.1100 1/20/08 1,363,685
Stephen G. McConahey.............. 2/7/97 200,000 19.1% $ 23.8125 2/7/07 2,597,887
1/20/98 29,755 2.8% 44.1100 1/20/08 715,949
David M. Greene................... 1/20/98 25,000 2.4% $ 44.1100 1/20/08 601,537
1/20/98 8,855 0.8% 44.1100 1/20/08 213,064
Thomas R. Reedy................... 1/20/98 25,000 2.4% $ 44.1100 1/20/08 601,537
1/20/98 4,070 0.4% 44.1100 1/20/08 97,930
</TABLE>
- ---------
(1) Options granted January 20, 1998 at $44.11 were made in accordance with the
voluntary option purchase provision and excess bonus provision of the 1996
Restricted Stock Incentive Plan. Options granted to Messrs. Greene and Reedy
were made in accordance with the Compensation Committee's decision to
recognize 1997 operating results of these two individuals as well as provide
additional long-term incentives to these executives.
(2) Options awarded on February 7, 1997 to Messrs. Boris and McConahey were
subject to five-year cliff vesting in accordance with the Compensation
Committee's desire to provide long-term incentive opportunities to these
executives. These options also contained accelerated vesting if certain
performance thresholds were met. The remaining options reported in this
table are subject to certain service-based, scheduled vesting 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, if not fully exercised, automatically
become fully exercisable upon a "change of control" of EVEREN, as defined in
the award documents and provisions of the 1995 Stock Plan and 1996
Restricted Stock Incentive Plan.
7
<PAGE>
(3) For 1997, based on 1,048,770 shares.
(4) For February 7, 1997, the $23.8125 option price assigned by the Compensation
Committee was the average of the high and low trading price for one share of
stock on February 7, 1997, the meeting date when the Compensation Committee
approved the grant. For January 20, 1998, the $44.11 option price was
determined from the average closing price of the ten consecutive trading
days ending January 15, 1998 in accordance with the 1996 Restricted Stock
Incentive Plan.
(5) Reflects the value of option grants using a modified Black-Scholes option
pricing model. The assumptions used for the variables in the model were: 27%
volatility; 7.0% risk free rate of return; a 0.23% dividend yield (which was
the dividend yield as of the date of the grants); and a 10-year option term
(which is the term of the option when granted). The actual gain executives
may realize on the option grants will depend on the future price of the
Common Stock and cannot be accurately forecast by any option pricing model.
AGGREGATED OPTION EXERCISES IN 1997
AND OPTION VALUES AT YEAR-END 1997
<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS THE-MONEY OPTIONS AT
AT FY-END(#)(1) FY-END($)(2)
SHARES ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------------- ----------------- --------------- ------------------- ------------------------
<S> <C> <C> <C> <C>
James R. Boris........................... -- -- 300,000/178,987 $ 7,106,250/$4,327,367
Stephen G. McConahey..................... -- -- 200,000/105,091 4,737,500/2,723,212
David M. Greene.......................... -- -- 0/ 83,171 0/1,805,170
Thomas R. Reedy.......................... -- -- 0/ 77,300 0/1,760,807
Stanley R. Fallis........................ -- -- 0/ 44,000 0/1,499,143
</TABLE>
- ---------
(1) Includes options granted on January 20, 1998 under the 1995 Stock Plan and
the 1996 Restricted Stock Incentive Plan for 1997 performance.
(2) Based on the last sale price of Common Stock of $47.50 at December 31, 1997
if less, and the respective exercise price of these options.
8
<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, Fallis, Greene and Reedy, 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.
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. In
addition, Mr. Boris and Mr. McConahey are to be made whole on an after-tax basis
with respect to excise taxes payable under Section 4999 of the Internal Revenue
Code of 1986 (the "Code") if any of the payments
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<PAGE>
listed in this paragraph are classified as an "excess parachute payment" as
defined in Section 280G of the Code.
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 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 addition, the other Senior Executives are to be made
whole on an after-tax basis with respect to excise taxes payable under Section
4999 of the Code if any of the payments listed in this paragraph are classified
as an "excess parachute payment" as defined in Section 280G of the Code.
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. 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 1997 fiscal year.
EXECUTIVE COMPENSATION OVERVIEW
As the Company continues to grow, it is important that the Company's
employee and executive compensation be 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. To
support the Company's long-term plans, it is also important that the executive
compensation programs are 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 broad-based employee stock ownership plans are critical to foster a
culture that encourages long-term performance.
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
responsive to any changes in laws and regulations which may impact compensation
plans. In this analysis, the Compensation Committee reviews
commercially-available surveys and peer company proxy statements assembled and
summarized by Company staff and, when necessary, third-party compensation
consultants. The ongoing review of compensation data ensures that total
compensation levels are appropriate, competitive and performance based.
10
<PAGE>
Finally, the Company's executive compensation programs are reviewed to
ensure they contain the appropriate balance between cost and tax effectiveness
to the Company and the individual executive.
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.
BASE SALARIES.
To verify that total compensation levels are appropriate and competitive,
the Compensation Committee reviews commercially available compensation surveys
and proxy statements of other securities brokerage companies, many of which are
included in the performance graph. Since the Compensation Committee reviews
total compensation levels of its executives, the Compensation Committee does not
believe that it is appropriate compensation philosophy to establish a separate
policy for executive officers' base salaries. By design, however, base salaries
reflect the smallest component of the Company's executive compensation programs.
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 1997.
ANNUAL INCENTIVE COMPENSATION.
The annual incentive compensation opportunity established for each executive
is designed to improve the Company's annual operating 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"), which was approved by shareholders at
the May, 1997 annual meeting.
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. In 1997, the Compensation
Committee made an award of non-qualified stock options to Messrs. Boris,
McConahey, Greene and Reedy.
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
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<PAGE>
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, as Amended and Restated effective as of May 6,
1997 (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 ten consecutive trading days ending January
15 of the year following the calendar year to which the bonus relates. Vesting
in the restricted Common Stock occurs ratably over a three-year period. Any
executive receiving an award of restricted Common Stock under this plan may
voluntarily elect to purchase shares of Common Stock under a non-qualified stock
option grant. If the participant voluntarily elects to exchange restricted
shares for a non-qualified stock option, the executive receives an option on
$5.00 worth of stock for each $1.00 of bonus compensation deferred.
Executives may also elect to defer up to an additional 25% of their annual
incentive bonus under the "excess bonus" provision of the Restricted Stock Plan.
If an executive elects this provision, they automatically receive a grant of
non-qualified stock options at a rate of $5.00 worth of stock for each $1.00 of
bonus compensation deferred. The exercise price for the non-qualified stock
option is the average closing price of the ten consecutive trading days ending
January 15 of the year following the calendar year to which the bonus relates.
Vesting for all non-qualified stock options occurs on a scheduled basis,
with one third of the shares becoming exercisable on each of the first three
anniversaries of the award. The non-qualified stock options have a ten-year
term, with plan provisions for protection of rights under normal retirement and
accelerated vesting upon change in control, death, or disability.
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
expense account allowances, tax and financial planning services and other
special liability insurance.
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 1997, executives elected
to participate in the KSOP by deferring up to 10% (limited to $9,500) of the
first $160,000 of eligible compensation. For 1997, EVEREN matched 50% on the
first five percent (5%) of employee contributions in the form of EVEREN Common
Stock priced at fair market value.
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.
12
<PAGE>
PROCEDURES FOR THE CHIEF EXECUTIVE OFFICER'S 1997 COMPENSATION
BASE SALARY. The Compensation Committee considered Mr. Boris' total
compensation opportunities at the beginning of the fiscal year and determined
not to make any adjustments to Mr. Boris' base salary.
OBJECTIVE PERFORMANCE GOALS ESTABLISHED FOR 1997. In accordance with the
SMICP, and prior to the beginning of the 1997 fiscal year, the Compensation
Committee established seven performance objectives (consolidated net income,
return on equity, compensation and benefit expenses as a percent of net revenue,
relative increase in fee revenues as a percent of fixed expense, relative
performance to peer group companies' return on net revenue, non-money market
assets attributed to Mentor, Inc. Funds, and relative increase in client assets
under management) for Mr. Boris in order to reward achievements which would
increase the Company's strategic and operating performance.
DETERMINING MR. BORIS' 1997 ANNUAL INCENTIVE AWARD. Throughout the 1997
fiscal year, the seven objective performance goals allowed the Compensation
Committee to monitor the performance of Mr. Boris and the Company. At the end of
the 1997 fiscal year, the Compensation Committee reviewed the Company's
strategic and operating results and certified performance achieved on each
pre-established goal. Based on the results achieved, as well as the incentive
opportunities the Compensation Committee established under the SMICP for Mr.
Boris at the beginning of the fiscal year, the Compensation Committee determined
that Mr. Boris should receive the maximum incentive award of 400% of his 1997
base salary, or $2,000,000.
In accordance with the terms of the Restricted Stock Plan, Mr. Boris was
required to defer 25% of the 1997 annual incentive award in shares of restricted
Common Stock. In addition to the mandatory deferral of his 1997 cash bonus, Mr.
Boris made a voluntary election to defer an additional 25% of his annual cash
bonus under the "excess bonus" provisions of the Restricted Stock Plan to
replace current cash compensation with a grant of a non-qualified stock option.
As a result of his participation elections in the Restricted Stock Plan, Mr.
Boris voluntarily exchanged $1,000,000 of his 1997 bonus for 14,170 shares of
restricted Common Stock and a grant of a non-qualified stock option to acquire
56,675 shares of Common Stock. These shares are subject to the normal service-
based vesting and other provisions of the Restricted Stock Plan.
LONG TERM INCENTIVE AWARDS. In order to link Mr. Boris' interests with the
long-term performance of the Company, as well as to provide Mr. Boris with
beneficial ownership opportunities at a level closer to the beneficial ownership
of other executives at competitor organizations, the Compensation Committee
issued a non-qualified stock option to Mr. Boris to acquire 300,000 shares of
Common Stock. The terms of the grant provided for vesting following completion
of the fifth anniversary of the award and an acceleration of vesting should a
share of Common Stock trade for more than $40 for a 30 consecutive day period.
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 the annual incentive awards paid to EVEREN
executives were determined in accordance with the SMICP (approved by
stockholders at the 1997 Annual Meeting of Stockholders), the Compensation
Committee believes the compensation paid will meet the criteria for
deductibility pursuant to Section 162(m) of the Code.
THE COMPENSATION COMMITTEE
William T. Esrey, Chairman
Jack Kemp
Homer J. Livingston, Jr.
William C. Springer
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<PAGE>
PERFORMANCE GRAPH
Set forth below is a line graph comparing the percentage 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 assumes a $100 investment made on
October 8, 1996 (the date EVEREN's Common Stock was first publicly traded) and
reinvestment of all dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
EVEREN CAPITAL OTHER BROKERAGE FIRMS S&P 500
<S> <C> <C> <C>
10/8/96 $100.00 $100.00 $100.00
12/31/96 $121.46 $112.51 $105.86
3/31/97 $110.39 $114.91 $108.70
6/30/97 $170.52 $152.52 $127.67
9/30/97 $222.62 $195.19 $137.22
12/31/97 $260.86 $214.00 $141.16
</TABLE>
14
<PAGE>
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 16, 1998 by (i) each
named executive officer, (ii) each holder of more than five percent of EVEREN's
Common Stock and (iii) all director-nominees and all current directors and
executive officers as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK PERCENTAGE OF SHARES
BENEFICIALLY OWNED OF COMMON STOCK
NAME AND ADDRESS OF BENEFICIAL OWNER(1) (2)(3) BENEFICIALLY OWNED
- ------------------------------------------------- ----------------------- ---------------------
<S> <C> <C>
James R. Boris................................... 622,868(4)(5)(6) 3.5%
Stephen G. McConahey............................. 422,230(7)(8) 2.3%
William T. Esrey................................. 4,866 *
Donald P. Jacobs................................. 0 *
Jack Kemp........................................ 904 *
Homer J. Livingston, Jr.......................... 9,179 *
Samuel K. Skinner................................ 500 *
William C. Springer.............................. 4,531 *
Donna F. Tuttle.................................. 0 *
David M. Greene.................................. 63,862(9) *
Thomas R. Reedy.................................. 54,909 *
Stanley R. Fallis................................ 45,390 *
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.......................................... 10,118,155 56.3%
All director-nominees, directors and executive
officers as a group (17 persons, including the
above)......................................... 1,381,450 7.7%
</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, 37,610 shares; Mr.
McConahey, 35,507 shares; Mr. Greene, 34,736 shares; Mr. Reedy, 28,508
shares; Mr. Fallis, 21,591 shares; and all executive officers as a group,
214,895 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 shares that may be acquired presently or within 60 days after March
16, 1998 by exercise of stock options as follows: Mr. Boris (313,270
shares), Mr. McConahey (206,362 shares), Mr. Esrey (375 shares), Mr.
Livingston (375 shares), Mr. Springer (375 shares), Mr. Greene (5,272
shares), Mr. Reedy
15
<PAGE>
(4,910 shares), Mr. Fallis (4,666 shares), and all directors and executive
officers as a group (545,768 shares).
(4) Includes 1,400 shares held by Mr. Boris' wife and 1,000 shares held for the
benefit of two children.
(5) Does not include 12,500 shares held by a private charitable foundation over
which Mr. Boris has voting and investment discretion. These shares are noted
pursuant to the requirements of Rule 13d-3(d)(1) under the Securities
Exchange Act of 1934 (the "Exchange Act"). Mr. Boris disclaims any
beneficial interest in these shares.
(6) Includes 219,281 shares held by a family limited partnership of which Mr.
Boris, his wife and an "S" corporation owned by Mr. Boris' four children are
general partners and of which Mr. Boris, his wife and Mr. Boris' four
children are limited partners. Mr. Boris disclaims beneficial ownership of
these shares except to the extent of his pecuniary interest in the limited
partnership.
(7) Includes 750 shares held for the benefit of Mr. McConahey's children.
(8) Does not include 9,108 shares held by a private charitable foundation over
which Mr. McConahey has voting and investment discretion. These shares are
noted pursuant to the requirements of Rule 13d-3(d)(1) under the Exchange
Act. Mr. McConahey disclaims any beneficial interest in these shares.
(9) Includes 10,589 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 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 1997 fiscal year, all filing requirements applicable to its
officers, directors and greater than 10% beneficial owners were complied with.
INTEREST OF MANAGEMENT IN CERTAIN TRANSACTIONS
EVEREN, through one of its subsidiaries, extends credit as margin loans in
the ordinary course of its business to certain directors, officers and employees
of EVEREN, as well as to members of their immediate families. During 1997, there
were outstanding balances for margin loans to some of these individuals. Such
extensions of credit have been made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for comparable
transactions with non-affiliated third parties, and did not involve more than
normal risk of collectibility or present other unfavorable features.
16
<PAGE>
PROPOSAL NO. 2:
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, 1998 and to perform other appropriate accounting
services. This firm has served as EVEREN's independent accountants since October
1995.
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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE APPOINTMENT
OF DELOITTE & TOUCHE LLP AS INDEPENDENT ACCOUNTANTS.
OTHER BUSINESS
As of March 31, 1998, 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.
17
<PAGE>
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be presented at the next annual meeting in
1999 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 10, 1999
or later than March 12, 1999 for inclusion in the proxy statement and proxy card
relating to that meeting.
Janet L. Reali
CORPORATE SECRETARY
March 31, 1998
18
<PAGE>
PROXY 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 1998 Annual Meeting
of Stockholders to be held on May 11, 1998 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 1998
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.)
<PAGE>
EVEREN CAPITAL CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
1. Election of Directors --
NOMINEES: James R. Boris, William T. Esrey, Donald
P. Jacobs, Jack Kemp, Homer J. Livingston, Jr.,
Stephen G. McConahey, Samuel K. Skinner, William C.
Springer and Donna F. Tuttle
For Withhold For All
All All Except the following nominee(s)
(Write name below)
/ / / / / /
-------------------------------------
2. Ratification of appointment of Deloitte & Touche LLP as independent
accountants for 1998
For Against Abstain
/ / / / / /
3. 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: , 1998
-------------------
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.
- ------------------------------------------------------------------------------
FOLD AND DETACH HERE
YOUR VOTE IS IMPORTANT.
PLEASE MARK, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY
USING THE ENCLOSED ENVELOPE.
