CHICAGO -- Not many shareholders showed up for Kemper Corp.'s annual meeting last week, but several who did grilled officials about the company's failed attempts to sell itself during 1994.

Chairman of the board David Mathis tried to focus attention ahead to 1995, when he said the company would continue efforts to sell itself -- as a whole or in parts -- with the help of advisers from Goldman, Sachs & Co. But shareholders who made the trip to Chicago on the eve of Christmas Eve were not assuaged.

Kemper originally scheduled the meeting for the spring, but postponed it repeatedly during a hectic 10-month period after the company was forced to put itself up for sale. General Electric Capital Corp. put the reluctant company into play last March, with a $55 cash per share offer.

GE raised its offer to $60 in the face of Kemper opposition, but dropped out of the bidding in June, when Carmel, Ind.-based Conseco Inc. said it would buy the securities and insurance company for a highly leveraged $67 per share. The Conseco offer collapsed in November after interest rates rose and the value of money management companies dropped accordingly.

Mathis defended Kemper's strategy at the annual meeting last Friday. He said General Electric's $60 per share offer was contingent on a due diligence review that was never completed.

"And within hours of Conseco's announcement of its $67 per share offer, GECC withdrew completely. Therefore at the time our board approved the Conseco merger, it was the only deal on the table," Mathis said.

He went on to assure shareholders the board is trying to recoup its losses. "The 'For Sale' sign is up and an active process of soliciting buyers for the company -- as well as its parts -- is underway," he said.

Mathis' reassuring words did little to soothe some holders of Kemper stock.

"As far as I'm concerned you had a cash bid ... and you went to bat with a dwarf against a giant," said shareholder Hans Mueller of Milwaukee. "I don't consider that great management."

Mueller also grilled Mathis about "obscene compensation plans and golden umbrellas [the board] voted itself after General Electric made its first offer."

Mathis defended the board, saying directors devised the compensation plans to retain top executives who might defect from the company while it is on the block.

He also stood firm against an assault from Jordan Eskin, president of the group Democracy for Shareholders. Eskin noted that the company has suffered "a loss of some 40% of market value" in the past 10 months. And he pressed Kemper executives to acknowledge that they spent "approximately $10 million" on the two failed deals, not counting time the executives spent on the process.

Eskin complained that a "unique financial plan" submitted to the board by the Penfield Group, with which he is affiliated, was ignored. He claimed the plan could lift Kemper stock prices to $75 a share, but he refused to explain how it would do so.

Mathis responded that the Kemper board already had an agreement with investment bankers to work on a financial plan and had "no interest" in pursuing a relationship with the Penfield Group.

Eskin also said the board compounded its offenses by scheduling the meeting on a day most shareholders were busy with holiday plans.

"What was the purpose of scheduling this meeting in the shadow of Christmas?" he asked. "Were you hoping as few shareholders as possible would show up to complain?"

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