UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 2)* 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, Inc., 30 W Superior St, Duluth, MN 55802-2093, (218) 723-3964 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 19, 1999 ------------------------------------------------------ (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(e), 13d-1(f) or 13d-1(g), check the following box / /. 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 disclosures provided in a prior cover page. The information required 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 be subject to all other provisions of the Act (however, see the Notes). Page 1 of 3 CUSIP NO. 140432 10 5 - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. or I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Minnesota Power, Inc. 4100418150 - -------------------------------------------------------------------------------- 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 7,091,480 NUMBER OF SHARES ------------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED -0- BY EACH REPORTING ------------------------------------------------------- PERSON 9 SOLE DISPOSITIVE POWER WITH 7,091,480 ------------------------------------------------------- 10 SHARED DISPOSITIVE POWER -0- - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 7,091,480 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11 / / EXCLUDES CERTAIN SHARES * - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 22.2% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON * CO This Schedule 13D consists of 3 pages and 1 exhibit. Page 2 of 3 Item 2. Identity and Background The attached Exhibit A amends the Exhibit A to the Amendment No. 1 of the original Schedule 13D filed by Minnesota Power, Inc. (Minnesota Power) with respect to purchase of the common stock of Capital Re Corporation (Common Stock) by adding information related to new executive officers and directors. Each director and executive officer is a citizen of the United States of America (with the exception of James P. Hallett who is a foreign executive working in this country under an I-485 visa which allows permanent residence and employment in the United States) and, in the last five years, has not 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. Minnesota Power is purchasing Common Stock on behalf of and in the name of its wholly owned subsidiary, MP Investments, Inc., a Delaware corporation formed to manage certain investments. No person, other than Minnesota Power as its sole shareholder, has the power to affect the policies of MP Investments, Inc. Item 3. Source and Amount of Funds or Other Consideration $9,572,250.50 has been expended from Minnesota Power's working capital to purchase the Common Stock as described under Item 5(c) below. Item 5. Interest in Securities of the Issuer (a) Aggregate number of shares of Common Stock owned indirectly by Minnesota Power and directly by MP Investments, Inc. 7,091,480 Percent of Common Stock outstanding 22.2% (b) Sole power to vote 7,091,480 Shared power to vote -0- Sole power to dispose 7,091,480 Shared power to dispose -0- (c) Transactions in the 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: Number of Date of Transaction Shares Purchased Price Per Share ----------------------- ------------------ ----------------- February 26, 1999 20,000 $16.2500 March 1, 1999 2,000 $16.7500 March 1, 1999 35,000 $17.3036 March 2, 1999 5,000 $18.0840 March 3, 1999 10,000 $18.1250 March 4, 1999 10,000 $18.5813 March 5, 1999 10,000 $18.6250 March 8, 1999 9,300 $18.6250 March 9, 1999 50,000 $19.0000 March 10, 1999 12,200 $19.0000 March 12, 1999 24,700 $15.7500 March 18, 1999 105,000 $16.6101 March 19, 1999 47,800 $16.6695 March 22, 1999 4,500 $16.4097 March 23, 1999 214,500 $16.6875 Page 3 of 3 (d) Not applicable. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships to Securities of the Issuer In December 1998 Minnesota Power transferred all shares of Common Stock to its newly formed wholly owned subsidiary MP Investments, Inc. MP Investments, Inc. was established to own and manage certain securities, including an equity ownership in Capital Re Corporation. Signature After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this statement is true, complete and correct. March 24, 1999 Minnesota Power, Inc. - ---------------------------------- Date By: Philip R. Halverson --------------------------------- Philip R. Halverson Vice President, General Counsel and Secretary March 24, 1999 MP Investments, Inc. - ---------------------------------- Date By: David G. Gartzke --------------------------------- David G. Gartzke Chairman and Chief Executive Officer Exhibit A Directors and Executive Officers of Minnesota Power
Name Title at Minnesota Power Principal Occupation/Business Address Kathleen A. Brekken Director President & CEO Midwest of Cannon Falls 32057 - 64th Avenue, POB 20 Cannon Falls, MN 55009-0020 George L. Mayer Director President Manhattan Realty Group 178 Myrtle Boulevard, Suite 103 Larchmont, NY 10538-2035 Nick Smith Director Chairman Fryberger, Buchanan, Smith & Frederick, PA 700 Lonsdale Building Duluth, MN 55802-1863 Bruce W. Stender Director President & CEO Labovitz Enterprises 880 Missabe Building 227 W First Street Duluth, MN 55805-1913 John Cirello Executive Vice President, and MP Water Resources Group, Inc. President and Chief Executive PO Box 609089 Officer -- MP Water Resources Orlando, FL 32860-9529 Group, Inc. Donnie R. Crandell Executive Vice President and Lehigh Corporation President -- MP Real Estate 226 East Joel Boulevard Holdings, Inc. Lehigh, FL 33972-5295 Robert D. Edwards Executive Vice President and Minnesota Power, Inc. President -- MP Electric 30 West Superior Street Duluth, MN 55802-2093 Brenda J. Flayton Vice President -- Human Minnesota Power, Inc. Resources 30 West Superior Street Duluth, MN 55802-2093 John E. Fuller Executive Vice President, and Automotive Finance Corporation President and Chief Executive Two Parkwood Crossing Officer -- AFC 310 East 96th Street, Suite 300 Indianapolis, IN 46240-3736 David G. Gartzke Senior Vice President -- Finance Minnesota Power, Inc. and Chief Financial Officer 30 West Superior Street Duluth, MN 55802-2093 Exhibit A (continued) Directors and Executive Officers of Minnesota Power Name Title at Minnesota Power Principal Occupation/Business Address James P. Hallett Executive Vice President, and ADESA Corporation President and Chief Executive Two Parkwood Crossing Officer -- ADESA 310 East 96th Street, Suite 400 Indianapolis, IN 46240-3736 Philip R. Halverson Vice President, General Counsel Minnesota Power, Inc. and Secretary 30 West Superior Street Duluth, MN 55802-2093 David P. Jeronimus Vice President -- Environmental Minnesota Power, Inc. Services 30 West Superior Street Duluth, MN 55802-2093 James A. Roberts Vice President -- Corporate Minnesota Power, Inc. Relations 30 West Superior Street Duluth, MN 55802-2093 Edwin L. Russell Chairman, President, Chief Minnesota Power, Inc. Executive Officer and Director 30 West Superior Street Duluth, MN 55802-2093 Mark A. Schober Controller Minnesota Power, Inc. 30 West Superior Street Duluth, MN 55802-2093 James K. Vizanko Treasurer Minnesota Power, Inc. 30 West Superior Street Duluth, MN 55802-2093 Claudia Scott Welty Vice President -- Information Minnesota Power, Inc. Technology 30 West Superior Street Duluth, MN 55802-2093 Exhibit A (continued) Directors and Executive Officers of MP Investments, Inc. Name Title at MP Investments, Inc. Business Address David G. Gartzke Director, Chairman and Minnesota Power, Inc. Chief Executive Officer 30 West Superior Street Duluth, MN 55802-2093 Philip R. Halverson Vice President, General Counsel Minnesota Power, Inc. and Secretary 30 West Superior Street Duluth, MN 55802-2093 Jeffrey F. Stuermer Vice President and Treasurer Minnesota Power, Inc. 30 West Superior Street Duluth, MN 55802-2093 James K. Vizanko Director and Minnesota Power, Inc. Chief Financial Officer 30 West Superior Street Duluth, MN 55802-2093