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