SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report(Date of earliest event reported): January 31, 1996
FOREMOST CORPORATION OF AMERICA
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
Delaware 0-6478 38-1863522
(Address of principal executive offices)
5600 Beech Tree Lane, Caledonia, Michigan 49316
Mailing Address: P.O. Box 2450, Grand Rapids, Michigan 49501
(Registrant's telephone number, including area code)
(616) 942-3000
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Item 5. Other Events.
On January 31, 1996, Foremost Corporation of America ("Foremost")
announced that it had signed a letter of intent to sell its subsidiary Foremost
Life Insurance Company ("Foremost Life") to Woodmen Accident and Life Company of
Lincoln, Nebraska ("Woodmen"). Under the terms of the proposed transaction,
Woodmen would acquire all of the outstanding common stock of Foremost Life.
Foremost anticipates that the sale price, which is subject to adjustment, would
yield approximately $17 million in cash available to Foremost after taxes and
that Foremost would incur an after tax loss on the sale of approximately $1.3
million. Foremost and Woodmen will participate in a joint election under Section
338(h)(10) of the Internal Revenue Code to treat the proposed transaction as a
purchase of assets for tax purposes.
The amount of the anticipated sale price was determined through
arms-length negotiation between the parties. There is no relationship between
Woodmen and Foremost or any of its subsidiaries, any director or officer of
Foremost, or any associate of any such director or officer.
Item 7. Financial Statements and Exhibits.
Exhibit No. Document
99 Press Release of Foremost dated January 31, 1996
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.
FOREMOST CORPORATION OF AMERICA
By:____________F. Robert Woudstra________________
F. Robert Woudstra
Executive Vice President and Treasurer
Date: February 1, 1996
EXHIBIT INDEX
Exhibit Document
99 Press Release of Foremost Corporation of America
dated January 31, 1996
<PAGE>
Exhibit 99
FOR: IMMEDIATE RELEASE CONTACT: F. Robert Woudstra
January 31, 1996 (616) 956-8218
FOREMOST CORPORATION OF AMERICA ANNOUNCES
LETTER OF INTENT REGARDING SALE OF
FOREMOST LIFE INSURANCE COMPANY
GRAND RAPIDS, MICHIGAN - Foremost Corporation of America (NASDAQ-FCOA)
("Foremost") today announced that it has signed a letter of intent providing for
the sale of its subsidiary Foremost Life Insurance Company ("Foremost Life") to
Woodmen Accident and Life Company, based in Lincoln, Nebraska ("Woodmen").
The sale is subject to certain conditions, including the negotiation and
execution of a definitive purchase agreement, completion of Woodmen's due
diligence review, and the receipt of regulatory approvals and authorizations.
The parties stated that although they are hopeful that a definitive formal
agreement setting forth their understanding can be reached next month and that
the sale would be consummated at the end of March, it is not possible at this
stage to determine when the closing of the sale would occur.
Foremost Chief Financial Officer F. Robert Woudstra stated that it is
anticipated that the sale price, which is subject to adjustment, would yield
approximately $17 million in cash available to Foremost after taxes and that
Foremost would incur an after tax loss on the sale of approximately $1.3
million.
Mr. Woudstra indicated that Foremost expects to use a significant portion of the
proceeds from the sale to further implement Foremost's previously announced
stock repurchase program. In February 1994, the Foremost Board of Directors
approved a stock buy program of up to one million shares of the Company's
outstanding Common Stock, of which 699,607 shares were purchased as of December
31, 1995 at an average price of $36.72 a share. Later this quarter, Foremost's
Board is expected to consider extending the share repurchase program and
authorizing additional shares for repurchase. Mr. Woudstra stated that he does
not expect the divestiture to dilute earnings per share.
Foremost is the parent corporation for a group of companies principally engaged
in providing property and casualty insurance for manufactured homes and
recreational vehicles. The Foremost Life business represents approximately 5% of
the parent company's annual premiums. The sale of Foremost Life would enable
Foremost to concentrate on its core business.
A Woodmen representative said the Foremost Life business was a good fit with
their core operations and strategic plan. While the name of the acquired company
would be changed, Woodmen plans to expand the Foremost Life business and to
maintain Foremost Life's current customer and service relationships.
Now in its 106th year, Woodmen describes itself as a financially conservative
company with distribution primarily throughout the midwest and west. Woodmen
offers a variety of products and services, including individual and group life
and health insurance, annuities, and qualified plan services for the individual,
family and business markets. Woodmen holds an A rating from A.M. Best, a
national insurance rating organization.
