-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, FvFoiZCVF3pgzU9vmBferb5nbhhFYYydlEYgA6xy6mEHRwhd1J5wqyKKxKTB9T72 6E5eg6I+kpPo6FRqC7QFIw== 0000909518-94-000048.txt : 19940325 0000909518-94-000048.hdr.sgml : 19940325 ACCESSION NUMBER: 0000909518-94-000048 CONFORMED SUBMISSION TYPE: PREC14A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19940324 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: KEMPER CORP CENTRAL INDEX KEY: 0000055195 STANDARD INDUSTRIAL CLASSIFICATION: 6311 IRS NUMBER: 366169781 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PREC14A SEC ACT: 34 SEC FILE NUMBER: 001-10242 FILM NUMBER: 94517708 BUSINESS ADDRESS: STREET 1: ONE KEMPER DR CITY: LONG GROVE STATE: IL ZIP: 60049 BUSINESS PHONE: 7085402000 MAIL ADDRESS: STREET 1: ONE KEMPER DRIVE CITY: LONG GROVE STATE: IL ZIP: 60049 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: GENERAL ELECTRIC CAPITAL CORP CENTRAL INDEX KEY: 0000040554 STANDARD INDUSTRIAL CLASSIFICATION: 6172 IRS NUMBER: 131500700 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: PREC14A BUSINESS ADDRESS: STREET 1: 260 LONG RIDGE RD CITY: STAMFORD STATE: CT ZIP: 06927 BUSINESS PHONE: 2033574000 FORMER COMPANY: FORMER CONFORMED NAME: GENERAL ELECTRIC CREDIT CORP DATE OF NAME CHANGE: 19871216 PREC14A 1 PRELIMINARY PROXY STATEMENT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------- SCHEDULE 14A (Rule 14a-101) INFORMATION REQUIRED IN PROXY STATEMENT SCHEDULE 14A INFORMATION PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934 ------------- [_] Filed by the Registrant [x] Filed by a Party other than the Registrant Check the appropriate box: [x] Preliminary Proxy Statement [_] Definitive Proxy Statement [_] Definitive Additional Materials [_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12 Kemper Corporation - --------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) General Electric Capital Corporation - --------------------------------------------------------------------------- (Name of Person(s) Filing Proxy Statement) PAYMENT OF FILING FEE (Check the appropriate box): [_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2). [x] $500 per each party to the controversy pursuant to Exchange Act Rule 14a-6(i)(3). [_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. 1) Title of each class of securities to which transaction applies: 2) Aggregate number of securities to which transaction applies: 3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11: * 4) Proposed maximum aggregate value of transaction: * Set forth the amount on which the filing fee is calculated and state how it was determined. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. 1) Amount Previously Paid: $ 2) Form, Schedule or Registration Statement No.: 3) Filing Party: 4) Date Filed: [_] Filing Fee of $__________________ was previously paid on ____________ __, 199_, the date the Preliminary Proxy Statement was filed. PRELIMINARY COPIES 1994 ANNUAL MEETING OF STOCKHOLDERS OF KEMPER CORPORATION _________________________ PROXY STATEMENT OF GENERAL ELECTRIC CAPITAL CORPORATION This Proxy Statement and the accompanying letter to stockholders and BLUE Annual Meeting proxy card are furnished in connection with the solicitation of proxies by General Electric Capital Corporation ("GECC"), a wholly owned subsidiary of General Electric Company ("GE"), to be used at the 1994 Annual Meeting of Stockholders of Kemper Corporation ("Kemper") to be held at _____ on May 11, 1994 at ______________________________, and at any adjournments or postponements thereof (the "Annual Meeting"). At the Annual Meeting, four Class II Directors of Kemper will be elected for a three-year term expiring at the 1997 Annual Meeting of Stockholders. GECC is soliciting your proxy in support of the election of GECC's four nominees for Class II Directors of Kemper named below (the "GECC Class II Nominees"). ALL GECC CLASS II NOMINEES ARE COMMITTED TO A SALE OR MERGER OF KEMPER FOR A PRICE OF AT LEAST $55 PER SHARE OF KEMPER COMMON STOCK, PAR VALUE $5.00 PER SHARE (THE "SHARES"). The record date for determining stockholders entitled to notice of and to vote at the Annual Meeting is March 17, 1994 (the "Record Date"). Stockholders of record at the close of business on the Record Date will be entitled to one vote at the Annual Meeting for each Share held on the Record Date. As of the close of business on the Record Date, there were ____ Shares issued and outstanding. _________________________ This Proxy Statement, the accompanying letter to stockholders and BLUE Annual Meeting proxy card are first being furnished to Kemper stockholders on or about April __, 1994. The principal executive offices of Kemper are located at One Kemper Drive, Long Grove, Illinois 60049. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B IMPORTANT At the Annual Meeting, GECC seeks to elect the four GECC Class II Nominees as the Class II Directors of Kemper. The election of the four GECC Class II Nominees requires the affirmative vote of a plurality of the votes cast on the matter, assuming a quorum is present or otherwise represented at the Annual Meeting. Consequently, only Shares that are voted in favor of a particular nominee will be counted toward such nominee's attaining a plurality of votes. Shares present at the meeting that are not voted for a particular nominee (including broker non-votes) and Shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward such nominee's attainment of a plurality. GECC URGES YOU TO SIGN, DATE AND RETURN THE ENCLOSED BLUE ANNUAL MEETING PROXY CARD TO VOTE FOR ELECTION OF THE GECC CLASS II NOMINEES. A VOTE FOR THE GECC CLASS II NOMINEES WILL PROVIDE YOU--AS THE OWNERS OF KEMPER--WITH REPRESENTATIVES ON THE KEMPER BOARD WHO ARE COMMITTED TO A SALE OR MERGER OF KEMPER FOR A PRICE OF AT LEAST $55 PER SHARE. GECC URGES YOU NOT TO SIGN ANY PROXY CARD SENT TO YOU BY KEMPER. IF YOU HAVE ALREADY DONE SO, YOU MAY REVOKE YOUR PROXY BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR THE ANNUAL MEETING TO GECC, C/O D.F. KING & CO., INC., CORPORATE ELECTION SERVICES, P.O. BOX 1150, PITTSBURGH, PENNSYLVANIA 15230-9954 (THE "AGENT"), OR TO THE SECRETARY OF KEMPER, OR BY VOTING IN PERSON AT THE ANNUAL MEETING. SEE "PROXY PROCEDURES" BELOW. THE GECC CLASS II NOMINEES SUPPORT THE SALE OF KEMPER All GECC Class II Nominees are committed to a sale or merger of Kemper for a price of at least $55 per Share. If elected, the GECC Class II Nominees will, subject to their fiduciary duties, seek to cause the full Kemper Board of Directors to consummate a sale or merger of Kemper for at least $55 per Share after satisfying all governmental and regulatory requirements. As indicated under "Background of Proposed Acquisition" below, the incumbent Kemper Directors have repeatedly rejected GECC's acquisition proposals but have not presented you with any alternative other than Kemper remaining independent. If, like us, you believe that you should have the opportunity to decide the future of your company and that you should have the chance to receive not less than $55 per Share for all of your Shares, GECC urges you to vote your BLUE Annual Meeting proxy card FOR each of the GECC Class II Nominees. All of the GECC Class II Nominees will, sub- ject to their fiduciary duties, seek to give all stockholders the opportunity to sell their Shares to GECC or another purchaser at a price of not less than $55 per Share. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B ELECTION OF CLASS II DIRECTORS According to publicly available information, Kemper currently has thirteen Directors divided into three classes having staggered terms of three years each. The terms of the four incumbent Class II Directors, John T. Chain, Jr., George D. Kennedy, David B. Mathis and Kenneth A. Randall, will expire at the Annual Meeting. GECC proposes that the Kemper stockholders elect the GECC Class II Nominees as the Class II Directors of Kemper at the Annual Meeting. The four GECC Class II Nominees are listed below and have furnished the following information concerning their principal occupations or employment and certain other matters. Each GECC Class II Nominee, if elected, would hold office until the 1997 Annual Meeting of Stockholders and until a successor has been elected and qualified or until their earlier death, resignation or removal. GECC CLASS II NOMINEES FOR CLASS II DIRECTORS: PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE NAME, AGE AND DURING LAST FIVE YEARS; CURRENT PRINCIPAL BUSINESS ADDRESS DIRECTORSHIPS -------------------------- -------------- John C. Deterding (62) From July 1993 through March 107 N. Waterview Drive 23, 1994, Mr. Deterding was a Richardson, Texas 75080 consultant to GECC. From May 1981 through July 1, 1993, Mr. Deterding was Senior Vice President, General Manager of GECC's Commercial Real Estate Business. Jack O. Peiffer (60) Retired; From 1984 through 4348 Sunbury Road December 31, 1993, Mr. Galena, Ohio 43021 Peiffer was Senior Vice President, Human Resources of GE. Mr. Peiffer is a Director of Dreyer's Grand Ice Cream. John W. Stanger (71) From October 1991 to present, Mr. 18305 Southeast Village Stanger has been a business Circle consultant to various companies. Tequesta, Florida 33469 From 1985 through October 1991, Mr. Stanger was Chairman and Chief Executive Officer of Stanger, Miller, Inc. (investment banking). Mr. Stanger served as President of GECC from January 1975 to March 1984. Paul W. Van Orden (66) From January 1991 to present, Mr. 214 Uris Hall Van Orden has been Executive-in- Columbia University Resident, Executive Director of Graduate Chazen Institute of International School of Business Business at Columbia University New York, New York 10027 Graduate School of Business. During 1989 and through June 1991, Mr. Van Orden was Executive Vice President of GE. Election of the GECC Class II Nominees as the Class II Directors of Kemper requires the affirmative vote of a plurality of the votes cast on the matter at the Annual Meeting, assuming a quorum is present or otherwise represented at the Annual Meeting. Consequently, only Shares that are voted in favor of a particular nominee will be counted toward such nominee's attaining a plurality of votes. Shares present at the meeting that are not voted for a particular nominee (including broker non-votes) and Shares present by proxy where the stockholder properly withheld authority to vote for such nominee will not be counted toward such nominee's attainment of a plurality. The accompanying BLUE Annual Meeting proxy card will be voted at the Annual Meeting in accordance with your instructions on such card. You may vote FOR the election of the GECC Class II Nominees as the Class II Directors of Kemper or withhold authority to vote for the election of the GECC Class II Nominees by marking the proper box on the BLUE Annual Meeting proxy card. You may also withhold your vote from any of NYFS08...:\60\47660\0801\2081\PRX32294.Z3B the GECC Class II Nominees by writing the name of such nominee in the space provided on the BLUE Annual Meeting proxy card. IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO VOTE THE SHARES REPRESENTED BY THE BLUE ANNUAL MEETING PROXY CARD FOR THE ELECTION OF ALL OF THE GECC CLASS II NOMINEES PROVIDED THAT YOU HAVE SIGNED AND DATED THE PROXY CARD. GECC believes that it is in your best interest to elect the GECC Class II Nominees at the Annual Meeting. ALL GECC CLASS II NOMINEES ARE COMMITTED TO GIVING EACH KEMPER STOCKHOLDER THE OPPORTUNITY TO RECEIVE NOT LESS THAN $55 PER SHARE FOR ALL OF THEIR SHARES. GECC STRONGLY RECOMMENDS A VOTE FOR THE ELECTION OF THE GECC CLASS II NOMINEES. OTHER MATTERS TO BE CONSIDERED AT THE ANNUAL MEETING APPOINTMENT OF ACCOUNTANTS GECC anticipates that at the Annual Meeting the stockholders will again be asked to appoint KPMG Peat Marwick as Kemper's independent accountants for the year 1994. GECC is not making any recommendation on this proposal. The appointment of KPMG Peat Marwick requires the affirmative vote of a majority of the votes cast on the matter at the Annual Meeting, assuming a quorum is present or otherwise represented at the Annual Meeting. The accompanying BLUE Annual Meeting proxy card will be voted in accordance with your instructions on such card. You may vote for the appointment of KPMG Peat Marwick or vote against, or abstain from voting on, the appointment of KPMG Peat Marwick by marking the proper box on the BLUE Annual Meeting proxy card. IF NO MARKING IS MADE, YOU WILL BE DEEMED TO HAVE GIVEN A DIRECTION TO ABSTAIN FROM VOTING THE SHARES REPRESENTED BY THE BLUE ANNUAL MEETING PROXY CARD WITH RESPECT TO THE APPOINTMENT OF KPMG PEAT MARWICK. OTHER PROPOSALS Except as set forth above, GECC is not aware of any proposals to be brought before the Annual Meeting. Should other proposals be brought before the Annual Meeting, the persons named on the BLUE Annual Meeting proxy card will abstain from voting on such proposals unless such proposals adversely affect GECC, in which event such persons will vote on such proposals at their discretion. PROXY PROCEDURES IN ORDER FOR YOUR VIEWS ON THE ABOVE-DESCRIBED PROPOSALS TO BE REPRESENTED AT THE ANNUAL MEETING, PLEASE MARK, SIGN AND DATE THE ENCLOSED BLUE ANNUAL MEETING PROXY CARD AND RETURN IT TO GECC, C/O D.F. KING & CO., INC., CORPORATE ELECTION SERVICES, P.O. BOX 1150, PITTSBURGH, PENNSYLVANIA 15230-9954 IN THE ENCLOSED ENVELOPE IN TIME TO BE VOTED AT THE ANNUAL MEETING. Execution of the BLUE Annual Meeting proxy card will not affect your right to attend the Annual Meeting and to vote in person. Any proxy may be revoked at any time prior to the Annual Meeting by delivering a written notice of revocation or a later dated proxy for the Annual Meeting to GECC or to the Secretary of Kemper, or by voting in person at the particular meeting. ONLY YOUR LATEST DATED PROXY FOR THE ANNUAL MEETING WILL COUNT. Only holders of record as of the close of business on the Record Date will be entitled to vote. If you were a stockholder of record on the Record Date, you will retain your voting rights for the Annual Meeting even if you sell such Shares after the Record Date. ACCORDINGLY, IT IS IMPORTANT THAT YOU VOTE THE SHARES HELD BY YOU ON THE RECORD DATE, OR GRANT A PROXY TO VOTE SUCH SHARES ON THE BLUE ANNUAL MEETING PROXY CARD, EVEN IF YOU SELL SUCH SHARES AFTER THE RECORD DATE. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B If any of your Shares are held in the name of a brokerage firm, bank, bank nominee or other institution on the Record Date, only it can vote such Shares and only upon receipt of your specific instructions. Accordingly, please contact the person responsible for your account and instruct that person to execute on your behalf the BLUE Annual Meeting proxy card. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B BACKGROUND OF PROPOSED ACQUISITION On January 26, 1994, Gary Wendt, President and Chief Executive Officer of GECC, Silas Cathcart, a GE director, and Paul Street, Senior Vice President of GECC, met with David B. Mathis, Chairman of the Board and Chief Executive Officer of Kemper, and Stephen B. Timbers, President and Chief Operating Officer of Kemper, to discuss a possible merger transaction. Following the meeting, Mr. Wendt communicated with Mr. Mathis and also spoke with representatives of Kemper's financial advisors, in an effort to arrange for further meetings with representatives of Kemper to discuss a possible merger between Kemper and GECC or another GE affiliate. Similar calls were placed by other GE and GECC representatives with Kemper representatives in an effort to arrange for such meetings. On February 25, 1994, John F. Welch, Chairman of the Board and Chief Executive Officer of GE, called Mr. Mathis reiterating GE's desire for further discussions. On March 2, 1994, Mr. Welch sent the following letter on behalf of GE to Mr. Mathis: "Dear Mr. Mathis: I appreciate all your good words about our Company and the opportunity you have afforded Gary Wendt and me to give you our views concerning the potential benefits of a business combination between Kemper Corporation and GE Capital Services, Inc. I also understand your personal desire to remain independent and your wish not to continue discussions at this time. Nevertheless, I want you to know that we are fully committed, as an institution, to proceeding with a transaction that could create maximum value for Kemper's employees, customers, and shareholders. Although you have previously indicated that Kemper is not for sale at any price, we are certain that, upon reflection, you and your Board of Directors will recognize the extraordinary opportunity that a combination with GE represents for all of the Kemper constituencies. Consequently, I am by this letter making a firm proposal to Kemper to pay $55.00 per share in cash for 100% of Kemper's outstanding common stock. This price is almost 45% over the market price of Kemper's common stock on January 26th, when Gary met with you in Chicago. Obviously, financing the transaction is not a condition to proceed to closing. We also believe that a higher price may be achieved if we could conduct limited due diligence of your activities, with particular attention to the real estate portfolio. We believe this can be accomplished in a matter of days. While we briefly review your real estate holdings, the details of the proposed transaction can be negotiated in a mutually satisfactory merger agreement, subject to regulatory approvals and the approval of your Board and the Boards of the Kemper funds. As we discussed, the advantages gained from the combination of our two companies are clear and compelling: Our financial strength (AAA credit rating), management reputation, and long record of success in financial services would be attractive to your organization as you contemplate the more intense and complex competition of a rapidly changing technical and global marketplace. Kemper would be the flagship of our major thrust in the asset management business. This would probably permit the consolidation of other GE/GE Capital asset management activities (which currently exceed $75 billion) with Kemper's existing operations. We are able and prepared to commit substantial new capital to growing asset management under the Kemper banner. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B We could further strengthen Kemper and its life insurance operations by transferring certain problem real estate assets to parts of GE Capital which are experienced in managing and maximizing the value of such assets. This would free the Kemper organization to concentrate its full attention to growing its insurance, brokerage, and asset management businesses nationally and internationally. GE/GE Capital's existing international network of relationships with financial institutions and our substantial foreign operations will facilitate the global expansion of your existing activities. We would plan to maintain Kemper's top management and to provide attractive performance-based incentives and benefits for employees. We offer a culture with values, atmosphere, and a commitment to excellence which I believe your people would find attractive. We would very much like the opportunity to meet again with you and, if you feel it is appropriate, with the members of your Board of Directors. We feel certain that all of you will agree that your shareholders should have the opportunity to consider our firm proposal of $55.00 per share - a substantial premium over the market. I will call you to arrange a mutually satisfactory place and time for us to discuss the specifics of the transaction, the management arrangements, and a possible timetable for the review of your real estate assets. In closing, I believe the combination of your strengths and ours would create a more competitive global participant in the asset management arena while, at the same time, you and your team can be proud of the great returns you have created for your shareholders. Once again, let me reiterate our sincere intention to accomplish this transaction directly with you and Kemper's Board of Directors. I look forward to our discussions in the near future. Sincerely, /s/ J.F. Welch Chairman of the Board General Electric" NYFS08...:\60\47660\0801\2081\PRX32294.Z3B On March 4, 1994, Mr. Mathis sent the following letter (the "Kemper March 4 Letter") to Mr. Welch: "Dear Mr. Welch: I have received your letter dated March 2, 1994 outlining your proposal with respect to Kemper Corporation, and I have discussed your letter with members of our Board. As I have previously told you, we strongly believe that a sale of the company at this time is not in the best interests of our stockholders. We do, however, plan to review your proposal more formally at our regularly scheduled Board meeting later this month. Sincerely, /s/ David B. Mathis Chairman and CEO Kemper Corporation" Following receipt of the Kemper March 4 Letter from Mr. Mathis, representatives of GECC communicated with representatives of Kemper and repeated their desire for further discussions. On March 14, 1994, after being told that Mr. Mathis was not available, Mr. Wendt sent the following letter to Mr. Mathis: "Dear Mr. Mathis: As Jack Welch indicated in his letter to you of March 2, we believe that there are clear and compelling advantages from the combination of our two companies and that such a transaction would create maximum value for your employees, customers and shareholders. We were, thus, disappointed to receive your letter of March 4 and learn that you are not interested in pursuing our proposal for a cash merger transaction in which your shareholders would receive a price of at least $55 per share in cash for 100 percent of Kemper's outstanding common stock. We hope that, when the Kemper Board does meet to consider our proposal "more formally," you and your colleagues will reconsider the decision not to accept our proposal at this time and would be willing to meet with us to discuss the proposal. As you reconsider the decision, we believe it would be helpful for all of us to hear the views of your shareholders. Accordingly, we are immediately making our proposal and prior correspondence public. Let me reiterate our sincere intention to accomplish this transaction with you, your colleagues in management and Kemper's Board of Directors. To that end, Jack and I look forward to meeting you at your earliest convenience to conclude this transaction in a professional and constructive manner. Yours truly, /s/ Gary C. Wendt Chairman and CEO GE Capital Services" NYFS08...:\60\47660\0801\2081\PRX32294.Z3B On March 17, 1994, Mr. Mathis sent the following letter to Mr. Welch: "Dear Mr. Welch: At its meeting today, Kemper Corporation's Board of Directors requested that I write to you and state clearly once again that Kemper Corporation is not for sale at this time. The Board also asked that I send you Kemper's press release issued today, which cites the Board's unanimous vote to reject General Electric Company's unsolicited proposal. A copy is attached. The Board's action reflects its conviction that value for our stockholders can be created best by pursuing the effective strategic plans of an independent Kemper. The Kemper directors are not concerned about entrenching their or management's positions. Instead, the Board's action signals its confidence that Kemper's stockholders are best served by providing current management with the opportunity to realize Kemper's tremendous upside potential on behalf of its stockholders. You and Mr. Wendt have asserted that your approach would benefit Kemper stockholders. However, neither we nor our stockholders are so easily fooled. You are trying to do what you are paid to do -- create value for General Electric's shareholders, this time by stealing Kemper with a "low ball" proposal. We have been surprised by your public, hostile and unsolicited proposal to acquire Kemper. In the past, when most people thought of corporate raiders, General Electric did not come to mind. I would hope now that you would attend your own business and its independent interests, and allow us the same courtesy. Sincerely, /s/ David B. Mathis Chairman and CEO Kemper Corporation" On March 20, 1994, Mr. Wendt sent the following letter to Mr. Mathis: "Mr. David B. Mathis Chairman & Chief Executive Officer Kemper Corporation One Kemper Drive Building 3 - 3rd Floor Long Grove, Illinois 60049 Dear David: At Jack Welch's request, I am responding to your letter of March 17. We were disappointed at your continued refusal even to discuss our $55 per share cash merger proposal. Our proposal is both fair and reasonable to Kemper's shareholders and most beneficial to the other constituencies with which a dedicated Board and management would concern itself. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B You emphasize in your letter that your Board and management will do what is in the best interest of its shareholders. At this point, we are all best served in letting the shareholders decide what that interest is. We have repeatedly attempted to begin serious discussions with you that would result in the delivery to your shareholders of a full and fair price of $55 per share. By your refusal, you leave us no choice but to proceed unilaterally and communicate directly with our fellow shareholders who surely will feel the time-sensitive urgency to consummate this transaction as promptly as possible or risk seeing their values decline. Therefore, we are requesting a Kemper shareholder list so that we may communicate directly with them and let them make the determination regarding our proposal. We trust this list will be given to us promptly. Very truly yours, /s/ Gary C. Wendt" GECC intends to continue to seek to negotiate with Kemper with respect to its proposal to acquire Kemper. If such negotiations result in a definitive merger or other agreement between Kemper and GECC, the consideration to be received by holders of Shares could include or consist of common stock of GE, other securities, cash or any combination thereof. Accordingly, such negotiations could result in, among other things, termination of this proxy solicitation and submission of a different acquisition proposal to Kemper's stockholders for their approval. As indicated elsewhere in this Proxy Statement, the GECC Class II Nominees, if elected, will, subject to their fiduciary duties, seek to cause the full Board of Directors to consummate a sale or merger of Kemper for at least $55 per Share after satisfying all governmental and regulatory requirements. Although GECC does not presently intend, in the event the GECC Class II Nominees are elected, to alter the terms of the proposed acquisition to provide for the issuance of GE common stock or other consideration in exchange for Shares, it is possible that, depending on the facts and circumstances existing at the time, the terms might be altered in this or other respects. SOLICITATION OF PROXIES Proxies may be solicited by mail, advertisement, telephone or telecopier and in person. Solicitations may be made by Directors, officers, investor relations personnel and other employees of GECC, none of whom will receive additional compensation for such solicitations. GECC has requested banks, brokerage houses and other custodians, nominees and fiduciaries to forward all of its solicitation materials to the beneficial owners of the Shares they hold of record. GECC will reimburse these record holders for customary clerical and mailing expenses incurred by them in forwarding these materials to their customers. GECC has retained the Agent for solicitation and advisory services in connection with the solicitation, for which the Agent is to receive an initial fee of $75,000 plus up to an additional $225,000 after completion of the solicitation of proxies for the Annual Meeting, together with reimbursement for its reasonable out-of-pocket expenses. GECC has also agreed to indemnify the Agent against certain liabilities and expenses, including liabilities and expenses under the federal securities laws. The Agent will solicit proxies for the Annual Meeting from individuals, brokers, banks, bank nominees and other institutional holders. It is anticipated that the Agent will employ approximately 50 persons to solicit stockholders for the Annual Meeting. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B Lazard Freres & Co. ("Lazard") is acting as GECC's financial advisor in connection with the proposed acquisition of, or a business combination with, Kemper. GECC has agreed to pay Lazard for its services a cash fee of four-tenths of one percent (0.40%) of the aggregate consideration paid or payable by GECC to Kemper and its stockholders in connection with the acquisition of Kemper through, among other things, the purchase of a majority of its capital stock or a merger. Such fee will be payable upon the consummation of an acquisition of Kemper by GECC. GECC has also agreed to reimburse Lazard for all out-of-pocket expenses incurred by Lazard, including the fees of its counsel, and to indemnify Lazard against certain liabilities and expenses in connection with the proposed acquisition, including certain liabilities under the federal securities laws. Lazard has from time to time rendered, and continues to render, various investment banking services to GECC and its affiliates for which it is paid its customary fees. In connection with Lazard's engagement as financial advisor, GECC anticipates that employees of Lazard may communicate in person, by telephone or otherwise with a limited number of institutions, brokers or other persons who are Kemper stockholders for the purpose of assisting in the solicitation of proxies for the Annual Meeting. Lazard will not receive any fee for or in connection with such solicitation activities apart from the fees which it is otherwise entitled to receive as described above. Lazard was financial advisor, and rendered a fairness opinion, to Lumbermens Mutual Casualty Company ("Lumbermens") in connection with the exchange by Lumbermens of its holdings of Kemper common stock to Kemper for certain assets of Kemper, consisting of the Kemper Reinsurance Company and its subsidiaries and National Loss Control Service Corporation. As a result of this transaction, which was completed in August 1993, Lumbermens' holdings of Kemper common stock were reduced from approximately 37% to 4% of the outstanding Kemper common stock. Lazard, through its real estate group, advises and assists Lumbermens in the review of certain of its real estate investments. Kemper has a financial interest in a substantial majority of the real properties in which Lumbermens has its investments. The entire expense of soliciting proxies for the Annual Meeting is being borne by GECC. GECC will not seek reimbursement for such expenses from Kemper. Costs incidental to these solicitations of proxies include expenditures for printing, postage, legal, accounting, public relations, soliciting, advertising and related expenses and are expected to be approximately $_____. Total costs incurred to date in furtherance of or in connection with these solicitations of proxies are approximately $_____. If GECC should withdraw, or materially amend the terms of, this solicitation of proxies prior to the Annual Meeting, GECC will disseminate such information regarding such changes to Kemper stockholders and, in appropriate circumstances, will provide stockholders with a reasonable opportunity to revoke their proxies prior to the Annual Meeting. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B OTHER INFORMATION The principal business of GECC is providing financial services, including a full range of leasing, loan, equipment management services and annuities, and specialty insurance services which include private mortgage insurance, financial (primarily municipal) guarantee insurance, creditor insurance, reinsurance and, for financing customers, credit life and property and casualty insurance. The principal business of GE is the development, manufacture and marketing of a wide variety of products for the generation, transmission, distribution, control and utilization of electricity. In addition, GE manufactures commercial and military aircraft jet engines and through a subsidiary is engaged in television broadcasting. GE also offers a broad variety of services including product support services; electrical product supply houses; electrical apparatus installation, engineering, repair and rebuilding services; and computer-related information services. Certain information about certain Directors, executive officers, employees and other representatives of GECC and GE who, in each case, may also assist the Agent in soliciting proxies is set forth in the attached Schedule I. Schedule II sets forth certain information relating to Shares owned by GE, GECC, such individuals and the GECC Class II Nominees and certain transactions between any of them and Kemper. Schedule III sets forth information regarding certain proceedings affecting GE. Schedule IV sets forth certain information, as made available in public documents, regarding Shares held by Kemper's management and 5% shareholders. PLEASE INDICATE YOUR SUPPORT OF THE GECC CLASS II NOMINEES BY COMPLETING, SIGNING AND DATING THE ENCLOSED BLUE ANNUAL MEETING PROXY CARD AND RETURN IT PROMPTLY TO GECC, C/O D.F. KING & CO., INC., CORPORATE ELECTION SERVICES, P.O. BOX 1150, PITTSBURGH, PENNSYLVANIA 15230-9954 IN THE ENCLOSED ENVELOPE. NO POSTAGE IS NECESSARY IF THE ENVELOPE IS MAILED IN THE UNITED STATES. GENERAL ELECTRIC CAPITAL CORPORATION April __, 1994 NYFS08...:\60\47660\0801\2081\PRX32294.Z3B SCHEDULE I ---------- INFORMATION CONCERNING CERTAIN DIRECTORS, EXECUTIVE OFFICERS, EMPLOYEES AND OTHER REPRESENTATIVES OF GE AND GECC The following table sets forth the name and the present principal occupation or employment, and the name, principal business and address of any corporation or other organization in which such employment is carried on, of certain Directors, executive officers, employees and other representatives of GE and GECC who, in each case, may also assist the Agent in soliciting proxies from Kemper stockholders. Unless otherwise indicated, (i) the principal business address of each Director, executive officer or employee of GE named below is General Electric Company, 3135 Easton Turnpike, Fairfield, Connecticut 06431- 0001 and (ii) the principal business address of each Director, executive officer or employee of GECC named below is General Electric Capital Corporation, 260 Long Ridge Road, Stamford, Connecticut 06927. CERTAIN DIRECTORS, EXECUTIVE OFFICERS AND EMPLOYEES OF GE AND GECC Name and Principal Present Office or Other Business Address Principal Occupation or ------------------ Employment ----------------------- John F. Welch, Jr. Chairman of the Board, Chief Executive Officer and Director of GE Paolo Fresco Vice Chairman of the Board, Executive Officer and Director of GE Frank P. Doyle Executive Vice President of GE Dennis Dammerman Senior Vice President, Finance of GE Benjamin W. Heineman, Jr. Senior Vice President, General Counsel and Secretary of GE James W. Ireland Manager - Corporate Investor Communications of GE JoAnna H. Morris Manager-Investor Relations of GE Gary C. Wendt Chairman, President, Chief Executive Officer and Director of General Electric Capital Services, Inc. ("GECS") and GECC Burton J. Kloster, Jr. Senior Vice President, General Counsel and Secretary of GECS and GECC James A. Parke Senior Vice President, Finance of GECC Paul A. Street Senior Vice President of GECC NYFS08...:\60\47660\0801\2081\PRX32294.Z3B REPRESENTATIVES OF GE AND GECC Name and Principal Present Office or Other Business Address(F1) Principal Occupation or -------------------- Employment ----------------------- J. Ira Harris General Partner of Lazard Lazard Freres & Co. 200 West Madison Suite 2200 Chicago, Illinois 60606 Kendrick R. Wilson III General Partner of Lazard Norman R. Prouty, Jr. Limited Partner of Lazard Paolo M. Pellegrini Vice President of Lazard Gary S. Shedlin Vice President of Lazard (F1) Unless otherwise indicated, the principal business address of all representatives of GE and GECC named above is Lazard Freres & Co., One Rockefeller Plaza, New York, New York 10020. S-I- NYFS08...:\60\47660\0801\2081\PRX32294.Z3B SCHEDULE II ----------- SHARES HELD BY GE, GECC, CERTAIN OF THEIR RESPECTIVE DIRECTORS, EXECUTIVE OFFICERS, EMPLOYEES AND OTHER REPRESENTATIVES AND THE GECC CLASS II NOMINEES AND CERTAIN TRANSACTIONS BETWEEN ANY OF THEM AND KEMPER GECC is the beneficial and record holder of 100 Shares purchased in the open market on March 15, 1994 for $61.875 per Share. Burton J. Kloster, Jr., James A. Parke and Paul A. Street have agreed to serve as the proxies on the BLUE Annual Meeting proxy card. Except as disclosed in this Schedule, none of GE, GECC, any of their respective Directors, executive officers, employees or other representatives named in Schedule I or the GECC Class II Nominees owns any securities of Kemper or any subsidiary of Kemper, beneficially or of record, has purchased or sold any of such securities within the past two years or is or was within the past year a party to any contract, arrangement or understanding with any person with respect to any such securities. Except as disclosed in this Schedule, to the best knowledge of GE, GECC, such Directors, executive officers, employees and other representatives and the GECC Class II Nominees, none of their associates beneficially owns, directly or indirectly, any securities of Kemper. In the ordinary course of its business, Lazard engages in securities trading and brokerage activities and may trade or otherwise effect transactions in debt or equity securities of Kemper. Lazard, through its asset management group, has investment discretion over various client accounts that hold Shares of Kemper. Accordingly, Lazard may be deemed to be the beneficial owner, for Securities and Exchange Commission reporting purposes, of 637,000 Shares of Kemper as of March 23, 1994 which are held in such discretionary accounts. Information regarding purchases and sales of such Shares by Lazard's asset management group within the past two years is provided in Schedule __. In the ordinary course of business, certain affiliates of GECC engage in securities trading and brokerage activities for the benefit of third parties, and may trade or otherwise effect transactions in debt or equity securities of Kemper. Kidder, Peabody & Co. Incorporated ("Kidder, Peabody") received approximately $1.2 million in revenue in 1993 from sales of Kemper sponsored mutual funds. Kemper and related entities (including the Kemper funds) are also customers of Kidder, Peabody. Kidder, Peabody obtained approximately $8.1 million in revenues from Kemper funds. In 1984, Financial Guaranty Insurance Company, a subsidiary of GECC, backed a stand-by funding commitment issued by Kemper Investors Life Insurance Company. Exposure under such arrangement currently totals approximately $27.2 million. GECC's Vendor Financial Services currently has exposure of approximately $364,000 resulting from office equipment leases in the normal course of business in which Kemper affiliates are lessees. Employer's Reinsurance Corporation, a wholly owned subsidiary of GECS, currently cedes and assumes premiums from and to Kemper Reinsurance. The total amount of transactions with such entity in 1993 until its sale by Kemper was approximately $780,000. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B SCHEDULE III ------------ CERTAIN PROCEEDINGS AFFECTING GE 1. UNITED STATES EX REL. TAXPAYERS AGAINST FRAUD AND CHESTER L. ------------------------------------------------------------ WALSH V. GENERAL ELECTRIC COMPANY --------------------------------- On November 14, 1990, an action under the federal False Claims Act 31 U.S.C. Sections 3729-32, was filed under seal against GE in the United States District Court for the Southern District of Ohio. The qui tam action, brought by an organization called Taxpayers Against Fraud and an employee of GE's Aircraft Engines division ("GEAE"), alleged that GEAE, in connection with its sales of F110 aircraft engines and support equipment to Israel, made false statements to the Israeli Ministry of Defense (MoD), causing MoD to submit false claims to the United States Department of Defense under the Foreign Military Sales Program. Senior GE management became aware of possible misconduct in GEAE's Israeli F110 program in December 1990. Before learning of the sealed qui tam suit, GE immediately made a voluntary disclosure to the Departments of Defense and Justice, promised full cooperation and restitution, and began an internal investigation. In August 1991, the federal court action was unsealed, and the Department of Justice intervened and took over responsibility for the case. On July 22, 1992, after GE had completed its investigation and made a complete factual disclosure to the U.S. government as part of settlement discussions, the United States and GE executed a settlement agreement and filed a stipulation dismissing the civil action. Without admitting or denying the allegations in the complaint, GE agreed to pay $59.5 million in full settlement of the civil fraud claims. Also on July 22, 1992, in connection with the same matter, the United States filed a four count information charging GE with violations of 18 U.S.C. Section 287 (submitting false claims against the United States), 18 U.S.C. Section 1957 (engaging in monetary transactions in criminally derived property), and 15 U.S.C. Sections 78m(b)(2)(A) and 78ff(a) (inaccurate books and records), and 18 U.S.C. Section 371 (conspiracy to defraud the United States and to commit offenses against the United States). The same day, GE and the United States entered a plea agreement in which GE agreed to waive indictment, plead guilty to the information, and pay a fine of $9.5 million. GE was that day sentenced by the federal court in accordance with the plea agreement. 2. UNITED STATES OF AMERICA V. GENERAL ELECTRIC COMPANY D/B/A ---------------------------------------------------------- MANAGEMENT AND TECHNICAL SERVICES CO., GERALD A. LEO A/K/A "BUD" AND -------------------------------------------------------------------- JAMES BADOLATO -------------- On February 2, 1990, a jury sitting in the United States District Court for the Eastern District of Pennsylvania found GE "vicariously liable" for the 1983 acts of two contract employees of a separate corporate subsidiary ("MATSCO") of GE. GE was found guilty of mail fraud and of violating the False Claims Act. This action arose from 1983 negotiations by MATSCO of a single contract with the Army for production of battlefield computer systems. A MATSCO contract employee was found to have failed to notify the Army that they had negotiated lower subcontract prices with vendors than had originally been projected. Following an internal review, MATSCO promptly refunded $3.69 million to the Government. The Government did not allege that any director or officer of GE had any knowledge of any withholding of information from the Army. On July 26, 1990, pursuant to a joint sentencing memorandum, GE and the Department of Justice settled the MATSCO civil and criminal cases and resolved several other civil matters from the early 1980's which were not the subject of litigation. Under the settlement, GE paid the Government $13.9 million for unrelated contracting errors voluntarily disclosed to the Government by GE or agreed to by GE as a result of governmental and GE audits. GE also paid $16.1 million in fines for the MATSCO civil and criminal cases. S-II- NYFS08...:\60\47660\0801\2081\PRX32294.Z3B 3. UNITED STATES OF AMERICA V. RCA CORPORATION ------------------------------------------- On January 31, 1990 RCA agreed to plead guilty to two criminal counts of unauthorized conveyance of Government property (Pentagon budget documents). RCA agreed to pay a $20,000 criminal fine and $2.48 million to settle any civil claims that might arise out of the subject matter of the Government's investigation. The settlement did not involve any allegations of wrongdoing by GE. The charges arose from the activities of two former RCA employees who, in the mid-1980's before GE acquired RCA in 1986, obtained unauthorized copies of Pentagon budget documents. The two former RCA employees also pleaded guilty to criminal charges in connection with the unauthorized conveyance of Pentagon documents. 4. UNITED STATES OF AMERICA V. GENERAL ELECTRIC COMPANY ---------------------------------------------------- On March 26, 1985 an indictment was returned against GE by a grand jury in the United States District court for the Eastern District of Pennsylvania charging GE with four counts of making false claims and with 104 counts of making false statements in violation of the United States Criminal Code, in connection with work performed for the United States Air Force by GE's Re-Entry Systems Operation. On May 13, 1985, GE pleaded guilty to the various counts in the indictment and was fined a total of $1,040,000 and paid an additional $1,905,000 in civil fines and reimbursements. 5. Except for the foregoing, GE has not, during the last ten years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). In addition, to the best of GE's knowledge, none of the GE directors and executive officers has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). 6. Allegations of various federal law violations, including alleged antitrust violations involving GE and DeBeers Consolidated Mines, Ltd. in the industrial diamonds industry, were made in a wrongful termination action brought by a former vice president of GE. On February 16, 1994, the wrongful termination action was dismissed with prejudice and the former officer filed a sworn statement conceding that he had no personal knowledge of any wrongdoing by GE personnel and that he had become aware that GE had removed him based on its view of his performance, not because he was a "whistleblower." On February 17, 1994, an indictment was returned in the United States District Court in Columbus, Ohio, following the previously reported grand jury investigation by the United States Department of Justice, charging GE and one European employee of GE's superabrasives business, and other unrelated parties, with entering into an anti-competitive agreement in violation of federal antitrust laws. GE denies the charges and intends to vigorously contest them. S-II- NYFS08...:\60\47660\0801\2081\PRX32294.Z3B SCHEDULE IV ----------- SHARES HELD BY KEMPER'S MANAGEMENT As of February 1, 1993, the Directors and executive officers of Kemper beneficially owned (within the meaning of the rules under Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) 646,947 Shares (or approximately 2.0% of the Shares reported by the Company as outstanding on October 31, 1993). Such 646,947 Shares do not include 32,618 shares held in several trusts as to which a Kemper director shares voting and investment power, but as to which he disclaims beneficial ownership. Such Shares also exclude 19,181,119 Shares (the "Lumbermens' Shares") held by Lumbermens Mutual Casualty Company, a foundation ("Lumbermens"), American Manufacturers Mutual Insurance Company ("AMM") and various trusts established for the benefit of Lumbermens' employees, as of February 1, 1993, which certain Kemper Directors, to the extent they are also members of Lumbermens' or AMM's boards of directors, or are trustees of the foundation, could be deemed to control either through voting or dispositive power. Based on Kemper's quarterly report on Form 10-Q for the quarter ended September 30, 1993, as filed with the Securities and Exchange Commission, GECC believes that the number of Lumbermens' Shares had been reduced to approximately 1,250,000 Shares as of August 12, 1993. Such 646,947 Shares also exclude Shares held by or for the benefit of the spouse or children of officers or Directors of Kemper, as to which such individuals disclaim beneficial ownership. Except as specifically noted, all of the foregoing information has been taken from Kemper's 1993 Annual Meeting Proxy Statement dated April 10, 1993. To the knowledge of GECC, based on a review of documents on file as of March 21, 1994 with the Securities and Exchange Commission under the Exchange Act, the following three persons beneficially own 5% or more of the outstanding Shares. Amount and Nature of Title of Name and Address of Beneficial Percent of Class Beneficial Owner Ownership Class(F1) --------- --------------------- ---------- --------- Common Stock Franklin Resources, Inc. 3,145,498(F2) 9.6% ($5 par 777 Mariner Island Blvd. value) P.O. Box 7777 San Mateo, CA 94404 Common Stock Southeastern Asset 2,635,700(F3) 8.1% ($5 par Management, Inc. value) 860 Ridgelake Blvd., Suite 301 Memphis, Tennessee 38120 Common Stock Neuberger & Berman 1,658,310(F4) 5.1% ($5 par 605 Third Avenue value) New York, New York 10158 --------------- (F1) Based on the number of Shares outstanding as of October 31, 1993 as reported by Kemper in its Quarterly Report on Form 10-Q for the quarter ended September 30, 1993. (F2) Franklin Resources, Inc. has sole voting power as to 2,797,998 Shares, shared voting power as to an additional 347,500 Shares and shared dispositive power as to 3,145,498 Shares. (F3) Southeastern Asset Management, Inc. has sole voting power as to 2,018,700 Shares, shared and no voting power as to 500,000 Shares and 117,000 Shares, respectively, sole dispositive power as to 2,135,700 Shares and shared dispositive power as to 500,000 Shares. (F4) Neuberger & Berman has sole voting power as to 402,025 Shares, shared voting power as to 325,000 Shares, and shared voting power as to 1,658,310 Shares. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B Although GECC does not have any information that would indicate that any information contained in this Proxy Statement that has been taken from Kemper's 1993 Annual Meeting Proxy Statement dated April 10, 1993 or any other document on file with the Securities and Exchange Commission is inaccurate or incomplete, GECC takes no responsibility for the accuracy or completeness of such information. NYFS08...:\60\47660\0801\2081\PRX32294.Z3B IMPORTANT Your proxy is important. No matter how many Shares you own, please give GECC your proxy FOR the election of the GECC Class II Nominees by: SIGNING the enclosed BLUE Annual Meeting proxy card, DATING the enclosed BLUE Annual Meeting proxy card and MAILING the enclosed BLUE Annual Meeting proxy card TODAY in the envelope provided (no postage is required if mailed in the United States). If you have already submitted a proxy to Kemper for the Annual Meeting, you may change your vote to a vote FOR the election of the GECC Class II Nominees by signing, dating and returning the enclosed BLUE proxy card for the Annual Meeting, which must be dated after any proxy you may have submitted to Kemper. Only your latest dated proxy for the Annual Meeting will count at such meeting. If you have any questions or require any additional information concerning this Proxy Statement or the proposal by GECC to acquire Kemper, please contact D.F. King & Co., Inc. at the address set forth below. IF ANY OF YOUR SHARES ARE HELD IN THE NAME OF A BROKERAGE FIRM, BANK, BANK NOMINEE OR OTHER INSTITUTION, ONLY IT CAN VOTE SUCH SHARES AND ONLY UPON RECEIPT OF YOUR SPECIFIC INSTRUCTIONS. ACCORDINGLY, PLEASE CONTACT THE PERSON RESPONSIBLE FOR YOUR ACCOUNT AND INSTRUCT THAT PERSON TO EXECUTE THE BLUE ANNUAL MEETING PROXY CARD. D.F. KING & CO., INC. 77 WATER STREET NEW YORK, NEW YORK 10005 1-800-859-8511 NYFS08...:\60\47660\0801\2081\PRX32294.Z3B PRELIMINARY COPIES KEMPER CORPORATION ANNUAL MEETING OF STOCKHOLDERS THIS PROXY IS SOLICITED BY GENERAL ELECTRIC CAPITAL CORPORATION The undersigned stockholder of Kemper Corporation hereby appoints each of Burton J. Kloster, Jr., James A. Parke and Paul A. Street, and each of them with full power of substitution, for and in the name of the undersigned, to represent and to vote, as designated below, all shares of common stock of Kemper Corporation that the undersigned is entitled to vote if personally present at the 1994 Annual Meeting of Stockholders of Kemper Corporation, and at any adjournment thereof. The undersigned hereby revokes any previous proxies with respect to the matters covered by this Proxy. GENERAL ELECTRIC CAPITAL CORPORATION RECOMMENDS A VOTE FOR PROPOSAL 1. (Please mark each proposal with an "X" in the appropriate box) 1. ELECTION OF CLASS II DIRECTORS: Election of John C. Deterding, Jack O. Peiffer, John W. Stanger and Paul W. Van Orden as Class II Directors whose terms expire in 1997. [_] FOR all nominees [_] WITHHOLD AUTHORITY for all except as marked below nominees (INSTRUCTION: To withhold authority to vote for one or more nominees, mark FOR above and print the name(s) of the person(s) with respect to whom you wish to withhold authority to vote in the space provided below.) ---------------------------------------------------------------------- 2. APPOINTMENT OF KPMG PEAT MARWICK AS 1994 INDEPENDENT AUDITORS. [_] FOR [_] AGAINST [_] ABSTAIN 3. IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF, IF SUCH OTHER BUSINESS ADVERSELY AFFECTS GENERAL ELECTRIC CAPITAL CORPORATION. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE PROVIDED (CONTINUED ON OTHER SIDE) NYFS08...:\60\47660\0801\2401\PRX32294.Y30 (CONTINUED FROM OTHER SIDE) This Proxy, when properly executed, will be voted in the manner marked herein by the undersigned stockholder. IF NO MARKING IS MADE, THIS PROXY WILL BE DEEMED TO BE A DIRECTION TO VOTE FOR PROPOSAL 1 AND TO ABSTAIN FROM VOTING ON PROPOSAL 2. Please date and sign this proxy exactly as your name appears hereon. ----------------------------- (Signature) ----------------------------- (Signature, if held jointly) ----------------------------- (Title) Dated: ----------------------- To vote in accordance with the When shares are held by joint General Electric Capital tenants, both should sign. Corporation's recommendation, When signing as attorney-in- just sign and date this proxy; fact, executor, no boxes need to be checked. administrator, trustee, guardian, corporate officer or partner, please give full title as such. If a corporation, please sign in corporate name by President or other authorized officer. If a partnership, please sign in partnership name by authorized person. NYFS08...:\60\47660\0801\2401\PRX32294.Y30 -----END PRIVACY-ENHANCED MESSAGE-----