UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: January 27, 1998
FARM FAMILY HOLDINGS, INC.
A Delaware Corporation Commission File No. 1-11941 IRS No. 14-1789227
344 Route 9W, Glenmont, New York 12077-2910
Registrant's telephone number: (518) 431-5000
<PAGE>
Item 5. Other Events
On January 27, 1998, Farm Family Holdings, Inc. issued a press release
announcing that a committee of its independent directors and a committee
representing the shareholders of Farm Family Life Insurance Company have
negotiated a revision of the form of consideration to be paid, under the Option
Purchase Agreement pursuant to which Farm Family Holdings, Inc. has an option to
acquire Farm Family Life Insurance Company.
Item 7. Financial Statements and Exhibits
The following exhibits are filed as part of this report:
Exhibit Index
Exhibit 99 - Press Release
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FARM FAMILY HOLDINGS, INC.
(Registrant)
January 27, 1998 /s/ Philip P. Weber
- -------------------------------- ---------------------------------------------
(Date) Philip P. Weber
President and CEO
<PAGE>
News Release
FOR IMMEDIATE RELEASE
CONTACT: Timothy A. Walsh
Executive Vice President - Finance & Treasurer
(518) 431-5410
Glenmont, NY - January 27, 1998 -- Farm Family Holdings, Inc. ("Farm Family")
announced today that a committee of its independent directors and a committee
representing the shareholders of Farm Family Life Insurance Company (the "Life
Company") have negotiated a revision of the form of consideration to be paid
under the Option Purchase Agreement pursuant to which Farm Family has an option
to acquire the Life Company. Under the proposed new terms, Farm Family would pay
an exercise price of $37.5 million to acquire the Life Company, consisting of
$31.5 million of common stock of Farm Family and $6 million stated value of
6-1/8% voting preferred stock of Farm Family. The preferred stock will be
subject to mandatory redemption by Farm Family, on the date following the
twentieth anniversary of the issuance date, and optional redemption by Farm
Family on and after the tenth anniversary of the issuance date, at its stated
value plus accrued and unpaid dividends. These terms are subject to the approval
of the shareholders of the Life Company and the Board of Directors of Farm
Family.
On December 16, 1997, Farm Family announced that the proposed exercise price and
the form of consideration had been agreed to by the committees, but was subject
to approval of the shareholders of the Life Company and the Board of Directors
of Farm Family. However, after further evaluation of tax and structural matters,
this change in the form of consideration was negotiated.
Philip P. Weber, President & CEO, said "Although there has been a change in the
form of consideration, under the proposed terms and based on our current stock
price and earnings expectations, we continue to expect the acquisition to be
slightly accretive to earnings in 1998."
The Life Company was established in 1953 by certain Farm Bureaus(R) to provide
life insurance products for Farm Bureau members principally in the Northeast.
The Life Company principally sells term, traditional whole life and universal
life products, in addition to single and flexible premium deferred annuities,
single premium immediate annuities and disability income insurance products and
operates in the same ten states as and through a common distribution system with
Farm Family Casualty Insurance Company, the wholly owned subsidiary of Farm
Family.
*** MORE ***
<PAGE>
Farm Family has not made a final determination as to whether it will exercise
its option to acquire the Life Company. Farm Family's decision to exercise the
option will depend on, among other things, whether the shareholders of the Life
Company approve the proposed new terms of the Option Purchase Agreement. There
can be no assurance at this time that Farm Family will exercise the option.
Farm Family Holdings, Inc. is the parent of Farm Family Casualty Insurance
Company, a specialized, regional property and casualty insurer of farms,
agricultural related businesses and residents and businesses of rural and
suburban communities.
Safe Harbor Statement under The Private Securities Litigation Reform Act of
1995: This news release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995 that are based on
management's current knowledge, expectations, estimates, beliefs and
assumptions. The forward-looking statements in this news release include, but
are not limited to, statements with respect to the exercise price of Farm
Family's option to acquire the Life Company and the form of the consideration in
which such exercise price would be paid, the earnings expectations of Farm
Family and the Life Company, the impact of the acquisition of the Life Company
on the earnings of Farm Family, and any decision by Farm Family to exercise its
option to acquire the Life Company. The forward-looking statements in this news
release are not guarantees of future performance and are subject to a number of
important risks and uncertainties, many of which are outside Farm Family's
control, that could cause actual results to differ materially. These risks and
uncertainties include, but are not limited to, factors related to the approval
of the proposed new terms of the Option Purchase Agreement by the Life Company's
shareholders and by Farm Family's Board of Directors, the results of operations
of Farm Family and the Life Company, fluctuations in the market value of shares
of Farm Family's common stock, the exercise by Farm Family of its option to
acquire the Life Company, the satisfaction of the closing conditions set forth
in the Option Purchase Agreement (which conditions include but are not limited
to, the receipt of all required governmental approvals), and the other risks
disclosed in Farm Family's filings with the Securities and Exchange Commission,
specifically the Form 10-K filed for the fiscal year ended December 31, 1996 and
the Prospectus dated July 22, 1996.
***MORE***
<PAGE>
<TABLE>
Farm Family Life Insurance Company & Subsidiary
Selected Consolidated Financial Data(1)
($ in millions)
<CAPTION>
For the Nine For the Year Ended
Months Ended December 31,
-------------------- --------------------------
09/30/97 09/30/96 1996 1995 1994
-------- -------- ---- ---- ----
Income statement data:
Premiums and product charges:
<S> <C> <C> <C> <C> <C>
Traditional life insurance premiums $ 22.6 $ 23.4 $ 31.1 $ 29.9 $ 26.1
Universal life charges 3.8 3.6 5.0 4.5 4.2
Accident and health premiums (2) 2.1 1.6 2.2 2.5 12.9
Property-casualty premiums 6.6 7.0 9.4 9.3 9.8
----------------------------------------------------------
Total premiums and product charges $ 35.1 $ 35.6 $ 47.7 $ 46.2 $ 53.0
----------------------------------------------------------
Net investment income $ 39.6 $ 39.7 $ 55.5 $ 52.4 $ 49.5
Total revenues $ 74.7 $ 75.3 $ 103.2 $ 98.6 $ 102.5
Income before participating policyholders' interest $ 13.5 $ 11.5 $ 16.9 $ 17.0 $ 19.8
Participating policyholders' interest(3) 10.5 8.9 13.9 12.6 15.0
----------------------------------------------------------
Net income attributable to common stockholders $ 3.0 $ 2.6 $ 3.0 $ 4.4 $ 4.8
----------------------------------------------------------
Balance sheet data (at period end):
Total investments $764.4 $700.8 $726.5 $717.5 $599.8
Total assets 839.4 778.7 800.8 779.1 685.2
Liability for participating policyholders' interest(3) 109.4 88.8 96.8 100.7 69.9
Stockholders' equity 38.2 34.3 34.7 32.4 28.1
- ---------------------------------------------------------------
1) The consolidated statement of income data includes the accounts of Farm
Family Life Insurance Company and its wholly owned subsidiary, United Farm
Family Insurance Company.
(2) Premiums for life and health operations in 1994 include $10.6 million of
premium for group major medical insurance. The Company ceased writing this
line of business during 1994, accordingly premiums from group major medical
were zero in 1995 and 1996.
(3) The majority of the Company's insurance policies are written on a
"participating" basis, as defined in the New York State insurance law.
Profits earned on participating business are reserved for the payment of
dividends to policyholders except for the stockholders' share of profits on
participating policies, which is limited to the greater of 10% of the
statutory profit on participating business, or 50 cents per thousand
dollars of the face amount of participating life insurance in force.
Participating policyholders' interest includes the accumulated net income
from participating policies reserved for payment to such policyholders in
the form of dividends (less net income allocated to stockholders as
indicated above) as well as a pro rata portion of net unrealized investment
gains (losses). Dividends to policyholders are approved by the Board of
Directors based on the net income of the participating policies. In
addition to the greater of 10% of the statutory profit on participating
business or 50 cents per thousand dollars of the face amount of
participating life insurance in force, earnings available to stockholders
consists of earnings on non-participating business and a pro rata share of
net investment income and realized investment gains (losses).
</TABLE>
***END***
