<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reportable):
May 28, 1998
Investors Insurance Group, Inc.
(Exact name of registrant as specified in its charter)
Florida 1-8069 13-2574130
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
7200 West Camino Real
Boca Raton, Florida 33433
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (407) 391-5043
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
A Settlement Agreement and Release ("Agreement") was entered into in April,
1998 between Donna Lee Williams, Insurance Commissioner of the State of
Delaware, in her capacity as Liquidator of National Heritage Life Insurance
Company in Liquidation ("NHLIC") and Investors Insurance Group, Inc.
("IIG"), IIC, Inc. ("IIC"), and Investors Insurance Corporation
("Investors"). The Agreement was entered into as settlement of the legal
proceeding which was pending in the United States District Court for the
Middle District of Florida whereby NHLIC sought to foreclose on an eight
million dollar secured subordinated debenture payable on March 31, 1997 with
interest at eight percent payable quarterly (the "Debenture") for which IIG
disputed and filed counterclaims as to the ownership of the Debenture and the
amount due under the Debenture.
The Agreement was subject to a verified petition of the Court of Chancery of
the State of Delaware having jurisdiction over NHLIC, which was granted and
the Agreement was approved in all respects on May 1, 1998.
Pursuant to the terms of the Agreement, NHLIC is the sole owner of the
Debenture and has the right to transfer the stock of IIC and Investors as
satisfaction for the Debenture. All shares of stock of IIC and Investors
were transferred to NHLIC for t he sum of $637,711.00 payable to IIG.
The final closing of the Agreement occurred on May 28, 1998 at which time the
following occurred pursuant to the Agreement:
1. IIG sold transferred and assigned unto NHLIC pursuant to a Stock
Transfer all of its right title and interest in all its shares of
stock of its subsidiary, IIC, Inc., an Oregon corporation, and IIC's
subsidiary, Investors Insurance Corporation, a Delaware domiciled
stock life insurance company.
2. IIG assigned and transferred to NHLIC pursuant to an Assignment any
and all rights it has in and arising from that certain Stock Option
Agreement dated September 13, 1991, and from a prior Stock Option
Agreement dated March 28, 1991, concerning 188,971 shares of stock
of Adage, Inc. (now Relm Wireless Corp.)
3. Investors assigned to IIG pursuant to an Assignment all of its right
title and interest to a certain federal tax return appearing on page
2, line 14, columns 2, 3, and 4 of the Annual Statement of Investors
Insurance Company for the year ended December 31, 1997 filed with
the Department of Insurance of the State of Delaware.
<PAGE> 3
Item 7. Financial Statements and Exhibits.
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
See presentation in Form 10QSB for June 30, 1998.
(c) Exhibits.
Settlement Agreement and Release between National Heritage
Life Insurance Company in Liquidation and Investors
Insurance Group, Inc.
Stock Transfer
Assignment of Stock Option Agreement concerning Adage, Inc.
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 hereunto duly authorized.
INVESTORS INSURANCE GROUP, INC.
Date: June 5, 1998 By: /s/ Melvin C. Parker
--------------------
Melvin C. Parker
President
<PAGE> 1
SETTLEMENT AGREEMENT AND RELEASE
BETWEEN
NATIONAL HERITAGE LIFE INSURANCE COMPANY IN LIQUIDATION
AND
INVESTORS INSURANCE GROUP, INC.
This SETTLEMENT AGREEMENT AND RELEASE ("Agreement") is made on this
_____________ day of April, 1998, by the parties, Donna Lee H. Williams,
Insurance Commissioner of the State of Delaware, in her capacity as
Liquidator (together with her Deputy Receiver(s)) of NATIONAL HERITAGE LIFE
INSURANCE COMPANY IN LIQUIDATION ("NHLIC"), for and on behalf of the Estate
of NHLIC ("Statutory Liquidator of NHLIC") and NHLIC itself, and INVESTORS
INSURANCE GROUP, INC. ("IIG") a Florida Corporation, IIC, INC., an Oregon
Corporation ("IIC"), and INVESTORS INSURANCE CORPORATION, a Delaware stock
life insurance company ("Investors")
RECITALS
WHEREAS, NHLIC is a Delaware life insurance company duly organized under the
laws of the State of Delaware, previously doing business under the auspices,
regulation and control of the Delaware Department of Insurance and now in
liquidation;
WHEREAS, IIG is a Florida Corporation, and the recorded owner of all the
issued and outstanding shares of IIC, which is the recorded owner of all the
issued and outstanding shares of Investors;
WHEREAS, IIG was formerly known as Gemco National, Inc. ("Gemco") and is the
successor to all obligations and liabilities of Gemco, including a certain
Debenture in the principal amount of Eight Million Dollars ($8,000,000.00)
(the "Debenture") issued to Corporate Life Insurance Company ("CLIC");
WHEREAS, on or about October 22, 1993 CLIC assigned and otherwise transferred
to NHLIC all right, title and interest to the Debenture and to the collateral
for the Debenture, including but not limited to the issued and outstanding
stock of IIC and Investors (the stock of IIC and Investors hereinafter
collectively referred to as the "Collateral");
WHEREAS, subsequent to the aforesaid assignment of the Debenture and
Collateral from CLIC to NHLIC, IIG refused to make payment of the quarterly
interest payments to the Statutory Liquidator of NHLIC under the Debenture,
claiming inter alia: that the assignment of the Debenture and Collateral from
CLIC to NHLIC was not valid; that the amount due under the Debenture was
subject to certain offsets, defenses, claims, and counterclaims arising from
the preassignment conduct of CLIC; that the amount due under the Debenture
was subject to certain offsets, defenses, claims and counterclaims arising
from the conduct of NHLIC; that the amount due under the Debenture was
subject to certain offsets, defenses, claims and counterclaims arising from
the conduct of the Delaware Department of Insurance and its representatives
and; that the Collateral was not pledged for the Debenture;
<PAGE> 2
WHEREAS, the disputes between the parties are and have been the subject of
ongoing litigation between the parties including: Investors Insurance Group.
Inc. v. Insurance Commissioner of the Pennsylvania Department of Insurance as
Statutory Liquidator of Corporate Life Insurance Company and Insurance
Commissioner of the State of Delaware as Statutory Receiver and/or
Rehabilitator and/or Liquidator of National Heritage Life Insurance Company,
Commw. Ct., No. 518 MD, 1995 (the "Pennsylvania Litigation"); in the Matter
of the Liquidation of National Heritage Life Insurance Company, Delaware
Court of Chancery C.A. No. 13530 (the "Delaware Litigation"); and The
Honorable Donna Lee H. Williams. Commissioner of Insurance of the State of
Delaware as Receiver of National Heritage Life Insurance Company v. Investors
Insurance Group. Inc., successor to Gemco National Inc. United States
District Court, Middle District of Florida, Orlando Division, No. 97-773-CV-
ORL-19 (the "Florida Litigation");
WHEREAS, Statutory Liquidator of NHLIC and IIG desire to amicably resolve
their disputes as to ownership of the Debenture; the amount due on the
Debenture; the right to dispose of the Collateral for the Debenture; and the
right to the proceeds of the Collateral;
WHEREAS, Statutory Liquidator of NHLIC and IIG further desire to resolve
amicably and settle all claims that they have or could ever have against the
other so that all claims between the Statutory Liquidator of NHLIC and IIG
are fully and finally resolved;
NOW, THEREFORE, in consideration of the promises, covenants and agreements
set forth below, and for such other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound, the parties hereby agree as follows:
TERMS AND CONDITIONS
1. OWNERSHIP OF DEBENTURE AND COLLATERAL. IIG, by this representation
contained in this Agreement and by such additional representations
contained in documents as NHLIC shall in its sole discretion require,
agrees that: (a) NHLIC is the sole legal, equitable, and beneficial
transferee and owner of the Debenture; (b) the transfer of the ownership
of the aforesaid Debenture to NHLIC occurred and was effective on October
22, 1993; (c) NHLIC has the exclusive right, power and authority to
transfer the Stock of IIC and Investors as satisfaction for the Debenture
under such terms and conditions, and for such consideration, as NHLIC in
its sole discretion deems appropriate; (d) in satisfaction of the amount
due on the Debenture, NHLIC is entitled to the entire proceeds from the
disposition of the Collateral.
2. PAYMENTS TO IIG. Upon 45 days following the execution of this Agreement,
or upon Court approval as described in Paragraph 17 of this Agreement,
whichever is later, NHLIC shall pay or cause to be paid to IIG the sum of
$637,711.00.
3. TRANSFER OF COLLATERAL TO NHLIC. Contemporaneous with the payment set
forth in Paragraph 2 of this Agreement, IIG, IIC, and Investors cause all
shares of stock of IIG and Investors Insurance Corporation to be
transferred to NHLIC, together with such other documents as NHLIC shall
reasonably require confirming the transfer to NHLIC or its assignee all
right title and interest to IIC and Investors.
<PAGE> 3
4. DOCUMENTS TO BE PRESENTED BY IIG UPON EXECUTION. Contemporaneous with
execution of this Agreement IIG shall present to NHLIC a certified
resolution of its Board of Directors, authorizing IIG to execute this
Agreement and directing IIG to take all steps necessary to effectuate the
terms of this Agreement. IIG shall further provide NHLIC with such
evidence as NHLIC shall require, including but not limited to opinion(s)
of counsel, confirming IIG's authority to enter this Agreement and to
effectuate its terms
5. DISMISSAL OF FLORIDA LITIGATION. Upon the mutual execution of this
Agreement by the parties, they shall jointly inform the Court that a
settlement is pending and request that the Florida Litigation be stayed
pending Court Approval as described in Paragraph 17 of this Agreement.
Contemporaneous with Court approval as more particularly described in
Paragraph 17 of this Agreement, the parties will take whatever steps as
are necessary to dismiss, with prejudice, all claims and counterclaims
asserted by or against the parties in the Florida Litigation.
6. DISMISSAL OF DELAWARE LITIGATION. Contemporaneous with the Court Approval
as more particularly described in paragraph 17 of this Agreement, the
parties will take whatever steps as are necessary to dismiss, with
prejudice, all claims and counterclaims asserted by or against the parties
in the Delaware Litigation.
7. WARRANTIES OF TITLE. IIG covenants, warrants and represents, to NHLIC and
its successors and assigns, that it is the beneficial and record owner of
all the issued and outstanding shares of stock of IIC, and that IIC is the
record and beneficial owner of all issued and outstanding shares of
Investors, and that the transfer of the shares of stock contemplated by
this Agreement will vest ownership of the shares of stock of IIC and
Investors in NHLIC, its successors and assigns, free and clear of any
lien, pledge, charge, security interest, encumbrance, title retention
agreement, adverse claim, option, proxy or voting trust agreement, and
that 110 has all necessary rights and authority to transfer the shares of
stock hereunder. IIG agrees to indemnify and hold harmless NHLIC and its
successors and assigns from and against any and all claims, demands, or
suits from any person, including but not limited to IIG, its stockholders,
directors, officers, employees, agents, successors, assigns, receivers,
trustees, involving or arising from the transfer of the shares of stock
contemplated by this Agreement.
8. RELEASE BY NHLIC. Upon IIG's compliance with its obligations contained in
Paragraphs 1, 3, 4, 5 and 6, of this Agreement, The Receiver of NHLIC,
for and on behalf of the Estate of NHLIC and NHLIC itself, its successors,
appointees and assigns hereby agrees to release, acquit, and forever
discharge IIG, IIC, and Investors, their stockholders, directors,
officers, and representatives, from any and all causes of action, claims,
counterclaims, cross-claims, demands, damages, costs, expenses,
compensation, third party actions, suits at law or in equity, that NHLIC
has whether asserted or unasserted, against IIG, IIC, or Investors arising
out of the Debenture, including but not limited to all claims made or
which could have been made in the Pennsylvania Litigation, Delaware
Litigation, or Florida Litigation.
<PAGE> 4
9. RELEASE BY IIG. Upon the execution of this Agreement by the Parties
hereto, IIG, on behalf of itself, its stockholders, directors, officers,
representatives, agents, subsidiaries, affiliates, stockholders of
subsidiaries, directors of subsidiaries, officers of subsidiaries, agents
of subsidiaries, stockholders of affiliates, directors of affiliates,
officers of affiliates, agents of affiliates, successors and assigns of
itself, its subsidiaries and affiliates, hereby agrees to release, acquit,
and forever discharge the Receiver of NHLIC together with her Deputy
Receivers, the Estate of NHLIC and NHLIC itself, the Department of
Insurance of the State of Delaware, the Insurance Commissioner of the
State of Delaware, together? with their representatives and agents
(collectively referred to as the "Released Parties") from any and all
causes of action, claims, counterclaims, cross-claims, demands, damages,
costs, expenses, compensation, third party actions, suits at law or in
equity, that IIG or its subsidiaries, affiliates, stockholders,.
directors, officers, or agents have, whether asserted or unasserted,
against the released parties, arising out of the Debenture, the regulation
of Investors, including but not limited to all claims made or which could
have been made in the Pennsylvania Litigation, Delaware Litigation, or
Florida Litigation IIG, on behalf of itself, IIG, Investors, and each of
their stockholders, directors, officers, agents and employees, agrees to
indemnify and hold harmless NHLIC and the Released Parties from and
against any claim, damage, loss and expense, including but not limited to
attorneys' fees, arising from any claim, action or defense asserted
against the Released Parties by IIG, IIC, Investors, or any of their
stockholders, directors, officers, agents, employees or assigns.
IIG, on behalf of itself, IIC, Investors, and each of their stockholders,
directors, officers, agents and employees, agrees to indemnify and hold
harmless NHLIC and the Released Parties from and against any claim,
damage, loss and expense, including but not limited to attorneys' fees,
arising from any claim, action or defense asserted against the Released
Parties arising from any inaccuracy in the statements set forth in Exhibit
"A" of this Agreement.
10. ASSIGNMENT BY IIG OF OPTION RIGHTS. For the consideration stated herein,
Ira assigns and transfers to NHLIC any and all rights that it may have in
and arising from a certain Stock Option Agreement ("Option") dated
September 13, 1991, and from a prior Stock Option Agreement dated March
28, 1991, said Option(s) concerning 188,971 shares of stock of Adage,
Inc. IIG shall provide to NHLIC such documentation as NHLIC shall
require confirming and ratifying said assignment
11. IIG TO RETAIN TAX REFUND RIGHTS ON PRIOR FILED RETURNS. For the
consideration stated herein, NHLIC, agrees to cause Investors to assign
to IIG all Investors right title and interest to a certain federal tax
refund appearing on Page 2, Line 14, columns 2, 3, and 4 of the Annual
Statement of Investors Insurance Company for the Year Ended. December 31,
1997 filed with the Department of Insurance of the state of Delaware.
<PAGE> 5
12. NOTICE OF AGREEMENT. The Statutory Liquidator of NHLIC shall have the
sole discretion to determine who, if anyone, shall receive notice of this
Agreement. IIG agrees that it will not give notice of this Agreement to
any third party without the prior written consent of the Statutory
Liquidator of NHLIC, provided, however, that IIG shall not be restricted
from disclosing this Agreement to the extent required by law, in which
event, NHLIC shall receive reasonable advance notice of such disclosure;
provided further however, that IIG may disclose this Agreement in
response to a lawful order, legal requirement or subpoena, after first,
if reasonably possible, giving reasonable notice thereof to the Statutory
Liquidator of NHLIC of intent to do so with the understanding that the
Statutory Liquidator of NHLIC may seek. to take lawful efforts to prevent
disclosure.
13. ASSIGNMENT. NHLIC may, without further consent or notice to any party to
this Agreement, assign its rights or delegate its duties under this
Agreement as NHLIC, in its sole discretion determines necessary to
effectuate this Agreement. However, such assignment or delegation by
NHLIC shall not relieve NHLIC of its responsibilities under this
Agreement. IIG, shall not assign or delegate its responsibilities or
duties under this Agreement without the express prior written consent of
NHLIC. Such assignment or delegation by IIG, shall, if consented to by
NHLIC, not relieve IIG or any other party to this Agreement of its
responsibilities under this Agreement.
14. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of NHLIC, its Receiver, Deputy Receivers, successors, appointees,
trustees, agents representatives, employees and assigns or any of their
heirs, executors, personal representatives and administrators; and IIG,
its stockholders, directors, officers, employees', agents and assigns,
and their respective heirs, executors, personal representatives and
administrators.
15. NON-WAIVER. Neither the failure nor any delay on the part of any party
hereto to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any
other or further exercise of the same or of any other right, remedy,
power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such
right, remedy, power or privilege with respect to any other occurrence.
16. GOVERNING LAW. It is agreed that this Agreement shall be governed by,
construed, and enforced in accordance with the laws of the State of
Delaware and that any actions, causes of action, suits, claims, cross-
claims, counterclaims, or third party actions related to or arising out
of this Agreement shall be brought before the Court of Chancery of the
State of Delaware in and for New Castle County ("Delaware Court") in the
liquidation proceedings of NHLIC.
<PAGE> 6
17. COURT APPROVAL. The parties expressly understand that this Agreement is
subject to the approval of the Delaware Court in the NHLIC liquidation
proceedings. Within five (5) business days of the full execution of this
Agreement, the Statutory Liquidator of NHLIC shall petition the. Delaware
Court, with notice to the National Association of Life and Health
Insurance Guaranty Associations, for an order approving this Settlement
Agreement and Release in its entirety and authorizing and directing the
Statutory Liquidator of NHLIC to render performance in accordance with
the terms and conditions of this Settlement Agreement and Release. IIG
shall assist the Statutory Liquidator of NHLIC and fully cooperate with
the filing of the motion. The Statutory Liquidator of NHLIC agrees to
seek expedited treatment of this petition by the Delaware Court.
18. MODIFICATION OF AGREEMENT. Any modification of this Agreement or
additional obligation assumed by the parties hereto in connection with
this Agreement shall be binding only if evidenced in writing signed by
each party hereto or an authorized representative of each party hereto
and approved by the Delaware Court.
19. NON-ADMISSION. Nothing contained. herein shall constitute an admission of
liability by any party as to any claim, cause of action, defense,
counterclaim or other statement made in the litigations, however; this
Agreement shall constitute an admission by IIG, its affiliates and
subsidiaries, and their respective stockholders, directors, officers,
employees and agents, of the truth of the statements contained in
paragraphs 1 and 7 of this Agreement.
20. SEVERABILITY. The provisions of this. Agreement are independent of, and
separable from, each other, and no provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any
reason any other or others of them may be invalid or unenforceable in
whole or in part unless the intent of the parties is significantly
altered without the invalid or unenforceable provision.
21. CAPTIONS The captions. used in this Agreement are inserted only as a
matter of convenience for reference, and they are not to be construed as
part of this Agreement. They in no way define, limit or describe the
scope or intent of this Agreement or any part hereof. Such captions
shall not affect this Agreement or any part hereof in any way.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected
hereon as the signatories.
<PAGE> 7
23. ENTIRE AGREEMENT. This Agreement shall constitute the entire agreement
between NHLIC, on the one part, and IIG, IIC and Investors, collectively,
on the second part. Any prior understanding or representation of any
kind preceding the date of this Agreement shall not be binding upon NHLIC
except to the extent incorporated in this Agreement. Each party to this
Agreement represents and warrants that sit has all requisite power and
authority to enter into this Agreement and to implement the transactions
contemplated herein, subject to the Court approval required by Paragraph
17 hereto, and that the signatories to this Agreement are duly authorized
to execute this Agreement on behalf of the respectively parties hereto.
Each party to this Agreement represents and warrants that this Agreement
has not been fraudulently induced either through active concealment of
material facts or nondisclosure of material facts.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on
the date set forth above.
DONNA LEE H. WILLIAMS, INSURANCE COMMISSIONER OF THE STATE OF DELAWARE, IN
HER CAPACITY AS THE STATUTORY LIQUIDATOR OF NATIONAL HERITAGE LIFE INSURANCE
COMPANY IN LIQUIDATION
BY:
---------------------------------------------------------
INVESTORS INSURANCE GROUP, INC.
ATTEST: BY:
-------------------------------- ------------------------------
IIC, INC.
ATTEST: BY:
-------------------------------- ------------------------------
IIC, INC.
ATTEST: BY:
-------------------------------- ------------------------------
INVESTORS INSURANCE CORPORATION
ATTEST: BY:
-------------------------------- ------------------------------
<PAGE> 1
STOCK TRANSFER
FOR VALUE, INVESTORS INSURANCE GROUP, INC., successor in interest to GEMCO
NATIONAL, INC. ("Transferor"), hereby sells, transfers and assigns unto DONNA
LEE H. WILLIAMS, INSURANCE COMMISSIONER OF THE STATE OF DELAWARE, IN HER
CAPACITY AS THE STATUTORY LIQUIDATION OF NATIONAL HERITAGE LIFE INSURANCE
COMPANY IN LIQUIDATION ("NHLIC"), all of Transferor's right, title and
interest in and to one hundred (100) shares (the "Stock?) represented by
Certificate Number 1 of IIC, Inc., an Oregon corporation (the "Corporation"),
and does irrevocably constitute and appoint ____________________________
attorney to transfer said shares on the books of the Corporation, with full
power of substitution.
Transferor does hereby represent and warrant to NHLIC, its successors and
assigns that: (i) Transferor is hereby transferring the Stock to NHLIC free
and clear of any lien, pledge, charge, security interest, encumbrance, title
retention agreement, ad verse claim, option, proxy or voting trust agreement;
(ii) Transferor has all necessary rights and authority to transfer the Stock
hereby; (iii) the Stock is all of the issued and outstanding shares of the
Corporation's capital stock; (iv) the Stock h as been duly authorized and
validly issued and is fully paid and non-assessable; (v) the Corporation is
the sole owner of all the issued and outstanding capital stock of Investors
Insurance Corporation, Inc.; (vi) Investors Insurance Corporation is the sole
owner of all the issued and outstanding capital stock of Investors Marketing
Group, Inc.; and (vii) no securities convertible into capital stock and no
subscriptions, options, warrants, calls or rights of any kind to purchase,
issue, or other wise acquire capital stock or securities convertible into
capital stock of the Corporation, Investors Insurance Corporation or
Investors Marketing Group, Inc. are outstanding and no authorization
therefore has been given. The representations and warranties set forth
herein shall survive the transfer of the Stock make hereby.
INVESTORS INSURANCE GROUP, INC.,
successor to interest to
GEMCO NATIONAL, INC.
Dated: May 20, 1998 By: /s/ Melvin Parker
Attest: Donald Goebert
<PAGE> 1
ASSIGNMENT
For value received, Investors Insurance Group, Inc. hereby assigns and
transfers to National Heritage Life Insurance Company in Liquidation any and
all rights it has in and arising from that certain Stock Option Agreement
dated September 13, 1991, and from a prior Stock Option Agreement dated March
28, 1991, concerning 188,971 shares of stock of Adage, Inc. (now Relm
Wireless Corp.).
INVESTORS INSURANCE GROUP, INC.
By: /s/ Melvin Parker
-----------------------
Melvin Parker
President
