As filed with the Securities and Exchange Commission on June 20, 2000
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
KANSAS CITY LIFE INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Missouri 44-0308260
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Kansas City Life Insurance Company
3520 Broadway
Kansas City, Missouri 64111-2565
(816) 753-7000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Mr. John Showalter
Kansas City Life Insurance Company
3520 Broadway
Kansas City, Missouri 64111-2565
(816) 753-7000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this registration statement in accordance
with the terms of the Stock Bonus Plan for Kansas City Life Agents and General
Agents and Contributory Deferred Compensation Plan for Kansas City Life General
Agents (hereinafter to be referred to as the "Kansas City Life Stock Bonus And
Deferred Compensation Plan").
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Title Of Each Class Of Security To Be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered Registered(2) Offering Price Per Unit Aggregate Offering Price Registration Fee(5)
<S> <C> <C> <C> <C>
Kansas City Life Insurance Company Common
Stock (par value $1.25 per share) (1) 33,477 $28.03125 (3) $ 938,403 (3) $248
Deferred Compensation Obligations (1) 3,039,463 1.00 (4) 3,039,463 (4) 803
<FN>
(1) To be issued in accordance with the terms of the Kansas City Life Stock
Bonus and Deferred Compensation Plan.
(2) Estimated maximum number of shares of common stock and dollar amount of
deferred compensation obligations of Kansas City Life Insurance Company
issuable during the next two years of operation of the Plan.
(3) The price stated above is estimated solely for the purpose of determining
the registration fee and is calculated in accordance with Rule 457(c) under
the Securities Act of 1933 based upon $28.03125, which is the average of
the high and low market prices per share of the stock as reported by the
Nasdaq SmallCap Stock Market on June 13, 2000.
(4) The price stated above is estimated solely for the purpose of determining
the registration fee and is based upon the amount of deferred compensation
obligations issuable by Kansas City Life Insurance Company during the next
two years of operation of the Plan.
(5) The total registration fee being paid is $1,051.
</FN>
</TABLE>
The Registrants hereby amend this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrants shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
PROSPECTUS
Kansas City Life Insurance Company
Securities Offered Under the Kansas City Life Stock Bonus and Deferred
Compensation Plan
Under the Kansas City Life Stock Bonus and Deferred Compensation Plan,
participants may elect to defer a portion of their compensation until a later
date. Such deferrals create obligations owed by Kansas City Life to each such
participant. These obligations are the securities referred to herein as deferred
compensation obligations. Kansas City Life Insurance Company may offer up to
33,477 shares of common stock, $1.25 par value per share, and $3,039,463 in
deferred compensation obligations from time to time in accordance with the terms
of the Kansas City Life Stock Bonus and Deferred Compensation Plan. This
Prospectus contains general information about these securities and the terms of
participation in the plan. The full text of the plan is attached as Appendix A.
Kansas City Life's principal executive offices are located at 3520
Broadway, Kansas City, Missouri 64111-2565 and its telephone number is (816)
753-7000. Kansas City Life's Common Stock is listed on the Nasdaq Smallcap Stock
Market under the trading symbol "KCLI".
YOU SHOULD READ THIS PROSPECTUS AND THE PLAN DOCUMENT CAREFULLY BEFORE YOU
INVEST. INVESTING IN THESE SECURITIES INVOLVES RISKS. CONSIDER CAREFULLY THE
RISK FACTORS BEGINNING ON PAGE 4 OF THIS PROSPECTUS.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED THESE SECURITIES OR DETERMINED THAT THIS PROSPECTUS IS
ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is _________________, 2000
WHAT YOU SHOULD KNOW ABOUT THE PROSPECTUS
You should rely only on the information contained or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information in this prospectus is accurate as of
the date of the prospectus. Our business, financial condition, results of
operations and prospects may have changed since that date.
TABLE OF CONTENTS
Prospectus
Where You Can Find More Information............................................4
Incorporation of Information We File With the SEC..............................4
Forward-Looking Statements.....................................................4
Risk Factors...................................................................5
Kansas City Life Insurance Company.............................................7
The Plan.......................................................................8
Description of Capital Stock of Kansas City Life..............................11
Description of Common Stock of Kansas City Life...............................12
Description of Deferred Compensation Obligations of Kansas City Life .........15
Plan of Distribution..........................................................15
Legal Matters.................................................................15
Independent Accountants.......................................................16
Kansas City Life Stock Bonus and Deferred Compensation Plan..................A-1
WHERE YOU CAN FIND MORE INFORMATION
Kansas City Life files reports, proxy statements and other information with
the Securities and Exchange Commission. Our SEC filings are available over the
Internet at the SEC's website at http://www.sec.gov. You may also read and copy
any document we file at the SEC's public reference rooms in Washington, DC, New
York, New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
more information on the public reference rooms and their copy charges. You may
also inspect our SEC reports and other information at the Nasdaq Stock Market,
9513 Key West Avenue, Rockville, Maryland 20850-3389.
Kansas City Life has filed a registration statement on Form S-3 with the
SEC covering these securities. For more information on Kansas City Life and the
securities, you should refer to our registration statement which includes this
prospectus and its exhibits. This prospectus summarizes material provisions of
the plan and other documents that we refer you to. Because the prospectus may
not contain all the information that you may find important, you should review
the full text of these documents. We have included or incorporated by reference
copies of these documents as exhibits to our registration statement.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows Kansas City Life to "incorporate by reference" the information we
file with them, which means:
o incorporated documents are considered part of the prospectus;
o we can disclose important information to you by referring you to these
documents; and
o information that we file with the SEC will automatically update and
supersede the prospectus and any previously incorporated information.
We incorporate by reference the documents or portions of documents listed below
which were filed with the SEC under the Securities Exchange Act of 1934 (the
"Exchange Act"):
o annual report on Form 10-K for the fiscal year ended December 31,
1999.
o quarterly report on Form 10-Q, for the quarterly period ended March
31, 2000.
We also incorporate by reference each of the following documents or portions of
documents that we will file with the SEC after the date of the prospectus until
the offering is completed or after the date of the initial registration
statement and prior to the effectiveness of the registration statement:
o reports filed under Sections 13(a) and (c) of the Exchange Act;
o definitive proxy or information statements filed under Section 14 of
the Exchange Act in connection with any subsequent shareholders'
meeting; and
o reports filed under Section 15(d) of the Exchange Act.
You may also request a copy of any filings referred to above, excluding
exhibits, at no cost by contacting Cheryl A. Keefer at Kansas City Life
Insurance Company, 3520 Broadway, Kansas City, Missouri 64111-2565; telephone:
(816) 753-7000 ext. 8426; facsimile (816) 753-3018.
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated in it by reference include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that reflect
Kansas City Life's current view with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties, including those identified in "Risk Factors," as well as those
noted in the documents incorporated by reference which could cause actual
results to differ materially from historical results or those anticipated.
Forward-looking statements can be identified by use of words such as "expect,"
"estimate," "project," "budget," "forecast," "anticipated," "plan," and similar
expressions. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates. Kansas City Life
undertakes no obligation to update or revise forward-looking statements to
reflect changed assumptions, the occurrence of unanticipated events, or changes
to projections over time.
In this prospectus, "we", "us", "our" and "Kansas City Life " refer to Kansas
City Life Insurance Company.
RISK FACTORS
Investing in securities offered by this prospectus involves certain risks.
Any of the following risks could materially adversely affect our business
operating results and financial condition and could result in a loss of your
investment.
We operate in a mature, highly competitive industry, which could limit our
ability to gain or maintain our position in the industry.
Life insurance is a mature industry. In recent years, the industry has
experienced virtually no growth in life insurance sales, though the aging
population has increased the demand for retirement savings products. Insurance
is a highly competitive industry and Kansas City Life encounters significant
competition in all lines of business from other insurance companies, many of
which have greater financial resources than Kansas City Life, as well as
competition from other providers of financial services.
The life insurance industry is consolidating, with larger, more efficient
organizations emerging from consolidation. Also, mutual insurance companies are
converting to stock ownership which will give them greater access to capital
markets. Additionally, the United States Congress recently passed legislation
permitting commercial banks, insurance companies and investment banks to
combine.
Kansas City Life's ability to compete is dependent upon, among other
things, its ability to attract and retain Agents and General Agents to market
its insurance and investment products, its ability to develop competitive and
profitable products, its ability to maintain low unit costs, and its maintenance
of strong financial strength ratings from rating agencies.
A ratings downgrade could adversely affect our ability to compete.
Ratings are an important factor in Kansas City Life's competitive position.
Rating organizations periodically review the financial performance and condition
of insurers, including Kansas City Life and its insurance affiliates. A
downgrade in the ratings of Kansas City Life or its insurance affiliates could
adversely affect its ability to sell its products and its ability to compete for
attractive acquisition opportunities.
Rating organizations assign ratings based upon several factors. While most
of the considered factors relate to the rated company, some of the factors
relate to general economic conditions and circumstances outside the rated
company's control.
For the past several years rating downgrades in the industry have exceeded
upgrades.
Our policy claims fluctuate from year to year.
Kansas City Life's results may fluctuate from year to year on account of
fluctuations in policy claims received by Kansas City Life.
We could be forced to sell illiquid investments at a loss to cover policyholder
withdrawals.
Many of the products offered by Kansas City Life and its insurance
affiliates allow policyholders and contract holders to withdraw their funds
under defined circumstances. Kansas City Life designs products and configures
investment portfolios to provide and maintain sufficient liquidity to support
anticipated withdrawal demands and contract benefits and maturities. Formal
asset/liability management programs and procedures are used to monitor the
relative duration of Kansas City Life and its assets and liabilities. While
Kansas City Life and its insurance affiliates own a significant amount of liquid
assets, many of their assets are relatively illiquid. Significant unanticipated
withdrawal or surrender activity could, under some circumstances, compel Kansas
City Life or its insurance affiliates to dispose of illiquid assets on
unfavorable terms, which could have a material adverse effect on Kansas City
Life. Interest-rate fluctuations could negatively affect our spread income.
Significant changes in interest rates expose insurance companies to the
risk of not earning anticipated spreads between the interest rate earned on
investments and the credited rates paid on outstanding policies. Both rising and
declining interest rates can negatively affect Kansas City Life's spread income.
For example, certain of Kansas City Life's insurance and investment products
guarantee a minimum credited interest rate. While Kansas City Life develops and
maintains asset/liability management programs and procedures designed to
preserve spread income in rising or falling interest rate environments, no
assurance can be given that significant changes in interest rates will not
materially affect such spreads.
Lower interest rates may result in lower sales of Kansas City Life's
insurance and investment products.
We are highly regulated.
Kansas City Life and its insurance affiliates are subject to government
regulation in each of the states in which they conduct business. Such regulation
is vested in state agencies having broad administrative power dealing with many
aspects of the insurance business, which may include premium rates, marketing
practices, advertising, policy forms, and capital adequacy, and is concerned
primarily with the protection of policyholders rather than share owners. Kansas
City Life cannot predict the form of any future regulatory initiatives.
A tax law change could adversely affect our ability to compete with
non-insurance products.
Under the Internal Revenue Code of 1986, as amended, income tax payable by
policyholders on investment earnings is deferred during the accumulation period
of certain life insurance and annuity products. This favorable tax treatment may
give certain of Kansas City Life's products a competitive advantage over other
non-insurance products. To the extent that the internal revenue code is revised
to reduce the tax-deferred status of life insurance and annuity products, or to
increase the tax-deferred status of competing products, all life insurance
companies, including Kansas City Life and its affiliates, would be adversely
affected with respect to their ability to sell such products, and, depending on
grandfathering provisions, the surrenders of existing annuity contracts and life
insurance policies. In addition, life insurance products are often used to fund
estate tax obligations. If the estate tax is eliminated, the demand for certain
life insurance products would be adversely affected. Kansas City Life cannot
predict what future tax initiatives may be proposed which may affect Kansas City
Life.
Industrywide litigation concerning sales practices, agent misconduct, failure to
supervise agents, and other matters could result in substantial judgments
against us.
A number of civil jury verdicts have been returned against insurers in the
jurisdictions in which Kansas City Life does business involving the insurers'
sales practices, alleged agent misconduct, failure to properly supervise agents,
and other matters. Increasingly these lawsuits have resulted in the award of
substantial judgments against the insurer that are disproportionate to the
actual damages, including material amounts of punitive damages. In some states,
including Alabama, juries have substantial discretion in awarding punitive
damages which creates the potential for unpredictable material adverse judgments
in any given punitive damages suit. Kansas City Life and its affiliates, like
other insurers, in the ordinary course of business, are involved in such
litigation or alternatively in arbitration. The outcome of any such litigation
or arbitration cannot be predicted with certainty. In addition, in some class
action and other lawsuits involving insurers' sales practices, insurers have
made material settlement payments.
Our investments are subject to risks.
Kansas City Life's invested assets are subject to customary risks of
defaults and changes in market values. Factors that may affect the overall
default rate on, and market value of, Kansas City Life's invested assets include
interest rate levels, financial market performance, and general economic
conditions.
Our acquisition strategy involves risks.
Kansas City Life has actively pursued a strategy of acquiring blocks of
insurance policies. This acquisition strategy has increased Kansas City Life's
earnings in part by allowing Kansas City Life to position itself to realize
certain operating efficiencies associated with economies of scale. There can be
no assurance, however, that suitable acquisitions, presenting opportunities for
continued growth and operating efficiencies, will continue to be available to
Kansas City Life, or that Kansas City Life will realize the anticipated
financial results from its acquisitions.
We are dependent on the performance of others.
Kansas City Life's results may be affected by the performance of others
because Kansas City Life has entered into various ventures involving other
parties. Examples include, but are not limited to: Kansas City Life's variable
annuity deposits are invested in funds managed by unaffiliated investment
managers; and a portion of the sales in the group department comes from
arrangements with unrelated marketing organizations.
Our reinsurance program involves risks.
Kansas City Life and its insurance affiliates cede insurance to other
insurance companies. However, Kansas City Life remains liable with respect to
ceded insurance should any reinsurer fail to meet the obligations assumed by it.
The cost of reinsurance is, in some cases, reflected in the premium rates
charged by Kansas City Life. Under certain reinsurance agreements, the reinsurer
may increase the rate it charges Kansas City Life for the reinsurance, though
Kansas City Life does not anticipate increases to occur. Therefore, if the cost
of reinsurance were to increase with respect to policies where the rates have
been guaranteed by Kansas City Life, Kansas City Life could be adversely
affected.
The plan is unfunded and participants are unsecured creditors of Kansas City
Life.
The plan is an unfunded plan. Accounts established for a participant
electing to defer compensation under the plan are not considered trusts. If
Kansas City Life establishes a grantor trust or purchases securities to assist
in meeting obligations under the plan, participants will have no interest in the
trust or other property. Participants' interests under the plan or in such
property are as unsecured general creditors of Kansas City Life, as plan
sponsor.
KANSAS CITY LIFE INSURANCE COMPANY
Kansas City Life was incorporated under the assessment laws of Missouri in
1895 as the Bankers Life Association. In 1900, its present corporate title was
adopted and it was reorganized as a legal reserve company in 1903. Kansas City
Life operates nationwide, being licensed in 48 states and the District of
Columbia.
Kansas City Life primarily operates in four business segments: Kansas City
Life Insurance Company, divided between its individual and group businesses, and
its two insurance affiliates, Sunset Life Insurance Company of America
("Sunset") and Old American Insurance Company ("Old American"). Kansas City Life
markets its individual products, principally interest sensitive and variable
products, through a career general agency sales force and these products
generate 42% of consolidated insurance revenues. Variable universal life and
annuities totaled 57% of new statutory premiums in 1999. The group products,
largely life, disability and administrative services only, are sold through the
general agency sales force and appointed group agents. Group revenues account
for 20% of insurance revenues. Sunset markets interest sensitive and traditional
products to individuals through a personal producing general agency system.
Sunset operates in 34 states and is in the process of filing for admission to
operate in most of the remaining states. This segment provides 10% of revenues.
The Old American segment markets whole life final expense products to seniors
through a general sales force. Old American operates in 46 states and the
District of Columbia and accounts for 28% of consolidated insurance revenues.
Kansas City Life's principal executive offices are located at 3520
Broadway, Kansas City, Missouri 64111-2565, and its telephone number is (816)
753-7000.
THE PLAN
The following is intended to be only a summary of the plan and is qualified
in its entirety by reference to the more detailed information provided in the
plan document, attached as Appendix A.
General
The Kansas City Life Stock Bonus and Deferred Compensation Plan or the
"Plan" is a non-funded deferred compensation plan, sponsored by Kansas City
Life. The Plan consists of two parts: Part A of the plan permits eligible agents
and general agents of Kansas City Life to voluntarily defer up to 15% of their
first year and renewal commissions into a deferral account and, provided certain
persistancy requirements are met, be eligible to receive matching bonus payments
in the form of Kansas City Life common stock. Part B of the plan provides
eligible general agents of Kansas City Life with the ability to defer up to 30%
of their first year and renewal commissions. There is no matching component to
Part B of the Plan.
The Plan is administered by an administrative committee appointed by Kansas
City Life. The administrative committee has full authority to interpret and make
all benefit determinations under the Plan.
Eligibility and Qualification Requirements
Part A: Deferral and Stock Bonus. Under Part A of the Plan (voluntary
deferral with potential match), an agent or general agent is eligible to defer
up to 15% of his or her first year and renewal commissions if such individual
meets a qualification requirement known in the Plan as the "minimum production"
requirement. In order to satisfy Part A's minimum production requirement, an
agent or general agent must have sold and put in force with Kansas City Life
twenty-five (25) or more policies by the end of the calendar year (the "Paid
Policy Requirement") and must have paid net annualized first year commissions of
$24,000.
Certain agents and general agents may be exempt from having to meet the
Paid Policy Requirement. An agent or general agent may be exempt in one of two
ways. First, if the combination of an agent or general agent's age plus the
number of years such individual has had an agent's or general agent's contract
with Kansas City Life equals or exceeds 65, the agent or general agent will be
exempt from the Paid Policy Requirement. And second, if the agent or general
agent's paid net annualized first year commission (pro-rated for a calendar
year) is equal to or greater than the amount necessary to place such individual
in the company's honorary performance-based sales club known as the "Top
Hatters" club, then such individual will be also exempt from the Paid Policy
Requirement. In both cases, however, an agent or general agent must have a net
annualized first year commission of $24,000 during the calendar year. The above
minimum commission production requirement and Paid Policy Requirement will not
be pro-rated for agents or general agents that sell for Kansas City Life for
less than a full calendar year.
If an agent or general agent is eligible to defer up to 15% of his or her
earned first year and renewal commissions under Part A, such agent or general
agent may be eligible to receive from Kansas City Life matching contributions in
the form of Kansas City Life common stock. In order to be eligible to receive
matching contributions, an agent or general agent must meet what is known under
the Plan as a "persistency requirement." The Plan's persistency requirement
measures the persistency of the business from the sold policies. To qualify for
the persistency requirement, an agent or general agent's bonus persistency must
at least be 82 percent.
Part B: General Agents' Deferral
Under Part B, general agents of Kansas City Life are eligible to contribute
up to 30% of their agency's first year and renewal override commissions in the
prior year to a deferral account. In order to be eligible to defer a portion of
their compensation under Part B of the Plan, a general agent must meet Part B's
applicable minimum production requirement for that year. Part B's minimum
production requirement requires that a general agent's agency have at least
$50,000 in paid net annualized first year commissions during each calendar year.
This minimum production requirement will not be pro-rated for general agent's
agency producing less than a full calendar year. Kansas City Life will not match
any deferrals made under Part B of the Plan.
Kansas City Life reserves the right to change the annual production and
persistency requirements of Part A and the minimum production requirements in
Part B. Any changes will be announced in advance to agents and general agents
and such changes will apply prospectively only.
Deferrals and Investments
Eligible agents and general agents may begin making deferrals into the Plan
by signing an agreement to reduce their compensation by the desired amount prior
to the year in which they are eligible to contribute. Changes in the deferral
percentage may be made as of the first day of any month, but no more than once
in any six month period, by giving written notice as may be required by the Plan
administrative committee. Kansas City Life will establish a separate deferral
account for each agent or general agent to record the amounts credited to
individual as a result of making deferrals under Parts A or B of the Plan.
Matching shares of Kansas City Life stock will also be contributed to the
individual accounts of eligible agents and general agents under Part A.
Agents and general agents will be eligible to direct the investment of all
or a part of the annual contributions made by such individual among multiple
investment funds selected by Kansas City Life. An agent or general agent's
contributions may be invested 100% in any of these investment choices, or, if
such individual desires to invest in more than one investment alternative, he or
she may specify the percentage (whole percentages only) of each contribution to
be invested in each investment. Changes in the allocation percentage among
different investments may be made on a monthly basis. Effective August 15, 2000,
an agent or general agent will transfer his or her current account balance to
one or more of the investment alternatives. Fund transfers must be completed in
whole percentages only and may be made only once a month. Changes in investment
percentages and transfers between funds will be governed by rules of the
administrative committee. There is no guarantee against loss of principal in any
of the funds.
The value of the funds in an individual's deferral account will be
determined on the last market business day of each month. Any Kansas City Life
stock in an individual's account will be valued at the average of its bid price
on the over-the-counter market for all business days following the previous
monthly valuation date. Eligible and participating agents and general agents
will be provided quarterly statements of their account that will reflect such
individual's contributions and any gains or losses on the funds.
Matching
Agents and general agents who are eligible to make deferral contributions
under Part A of the Plan and eligible to receive matching contributions will
receive from Kansas City Life an amount of Kansas City Life common stock equal
to 50% of the first 5% of the eligible agent's or general agent's first year and
renewal commissions that such agent or general agent has voluntarily deferred
under the Plan. Thus, for example, an agent contributing 2% of his or her first
year and renewal commissions will be eligible to receive from Kansas City Life
1% of such Participant's compensation in the form of Kansas City Life Stock. An
eligible participant contributing 10% of his or her first year and renewal
commissions would be entitled to receive from Kansas City Life 2.5 % of such
Participant's eligible compensation in the form of Kansas City Life Stock. The
shares of stock held for such an individual will be voted in accordance with the
agent or general agent's direction, which direction may be certified to the
trustee of the Plan by the administrative committee, or any agent designated by
such committee, provided such direction is received by the Trustees at least
five days before the date set for the meeting at which such shares are to be
voted.
Vesting
An agent or general agent's voluntary contributions under either Part A or
Part B of the Plan, and any gains or losses credited to them, will be 100%
vested at all times. Vesting in the matching contributions made by Kansas City
Life, however, occurs over a 10-year graded vesting period. An eligible agent or
general agent will become 30% vested in the matching Kansas City Life common
stock after such individual has accumulated three "qualifying years" with Kansas
City Life. After three qualifying years at Kansas City Life, such individual's
vesting percentage will increase in 10 percent increments for every additional
qualifying year. Thus, a Participant will become 100% vested after completing 10
qualifying years.
An agent or general agent will be credited with a qualifying year for each
year in which such individual satisfies the published production and persistency
requirements, and, prior to January 1, 1995, are not on one of the Company's
finance plans. Beginning January 1, 1998, individuals that have an account
balance and that are being compensated under an alternative bonus structure
arrangement known as the Kansas City Life Special Agent Compensation Amendment
and thus are ineligible to simultaneously participate in the Kansas City Life
Stock Bonus and Deferred Compensation Plan will also be credited with a
qualifying year of service for each year they meet the Plan's production and
persistency requirements. Agents or general agents successfully completing one
of Kansas City Life's finance programs will receive credit for one qualifying
year for each year such individual participated in the finance program prior to
January 1, 1995.
An agent or general agent's failure to earn a new qualifying year in two
consecutive years will be considered a "break" in service, unless such
individual is fully vested in his or her account. If a break-in-service is
deemed to have occurred, an agent or general agent will no longer be eligible to
participate in either Part A or Part B of the Plan. At such time, the agent or
general agent's account will be closed and such individual will be entitled to
receive the vested portion of their account within one year after the account is
closed. Kansas City Life may waive the break in service if an agent or general
agent has earned at least five qualifying years in the Plan and the break in
service occurs because the individual has become totally disabled. An agent or
general agent must submit sufficient evidence to the administrative committee
for its determination as to whether a total disability has occurred.
Dividends
Dividends paid (if any) on Kansas City Life stock will be used to purchase
additional shares under the Plan.
Forfeiture
An agent or general agent will forfeit any amount owed under Part A (except
the agent or general agent's voluntary deferrals) if such individual replaces or
assists in replacing a policy issued by Kansas City Life (or an affiliated
company) with a policy of another insurer, or if the agent or general agent
induces or attempts to induce an agent to leave the service of Kansas City Life
(or an affiliated company). An agent or general agent will also forfeit any
amounts due under Part A (except voluntary deferrals) if he or she violates
either the terms of his or her agent's contract, the rules or regulations of
Kansas City Life, or insurance laws or regulations in the states in which the
agent may solicit applications for insurance.
Distribution
Except for the early distribution exceptions provided below, agents and
general agents (or their beneficiaries) are eligible to receive payment of the
vested portion of their account upon the first to occur of the following events:
1) the agent or general agent's retirement on or after his or her 70th birthday;
2) the agent or general agent's death; or 3) the termination of the agent or
general agent's contract. These events collectively shall be referred to as the
Payment Events. When one of the Payment Events occurs, Kansas City Life will pay
the agent, the general agent, or their respective beneficiaries the vested
portion of the agent or general agent's account within one year. Kansas City
Life will, however, pay the portion of an agent or general agent's voluntary
deferral account within 60 days of the occurrence of a Payment Event.
There are two exceptions to the general payment rules discussed immediately
above. First, for agents and general agents that are 100% vested in their
accounts, such individuals may receive their account on the date they become age
55, 60, 62, 65 or 68 provided that they provide at least 60 days prior notice to
Kansas City Life that such eligible individuals wish to receive their accounts.
And second, agents and general agents may receive distributions from their
accounts for the purchase of a principal home or for educational expenses.
To be eligible to qualify for a distribution for a principal home an agent
or general agent is required to submit a written request to the administrative
committee providing an explanation for the need for such withdrawal. The
specific contents of the request and the need for any specific documentation
will be determined by the administrative committee. The administrative committee
may accept or reject your request, and its decision shall be final.
To qualify for a distribution for an educational expense, an agent or
general agent must have a child or children between the ages of 18 and 25 who
are enrolled in an accredited institution of higher learning. Agents and general
agents must submit a request for a distribution on account of an educational
reason to the administrative committee and establish to the satisfaction of such
committee that the requested funds are needed to provide for the advanced
education of the individual's child or children.
Amendment and Termination of Plan
Kansas City Life may, at any time, amend or terminate the plan, however no
such action may impair the rights of a participant with respect to amounts then
credited to his or her accounts under the plan.
Unfunded Plan
Because the plan is unfunded, participants will not have a claim against
Kansas City Life, or any trust or property purchased by the company to assist in
meeting obligations under the plan. Distributions under the plan will be made
from the general funds of Kansas City Life and the rights of participants will
be as an unsecured general creditor of Kansas City Life.
Assignment of Interest in Plan
An agent or general agent may not transfer, commute or assign for the
security of debts any of such individual's rights, privileges, proceeds or other
interests in the Kansas City Life Stock Bonus and Deferred Compensation Plan,
except that if an agent or general agent owes money to Kansas City Life, or any
of its subsidiaries or affiliated companies, such company shall have the right
to offset and apply any such accumulated funds to the reduction of the
individual's indebtedness to said company. No payment of accumulated funds will
be made to an agent or general agent until such individual's indebtedness to the
company is fully paid.
Tax Implications of Plan Distribution
Under present law, regulations, rulings and case law, if certain
requirements are met, deferrals under the plan will not be subject to Federal
income taxes at the time the deferred amounts are credited to the agent or
general agent's account. The plan has been designed to comply with these
requirements, although there can be no guarantee that the Internal Revenue
Service will not challenge the status of deferrals. If these requirements are
not deemed to have been met, a participant may be subject to penalties and may
be required to pay interest on taxes that would otherwise be payable. If any
amounts deferred pursuant to the plan are found to have been includible in the
taxable income of an agent or general agent prior to payment of such amounts,
such amounts shall be immediately paid to such individual, notwithstanding his
or her elections under the plan.
An agent or general agent will be subject to Federal income and self
employment taxes on his or her deferred amounts and any earnings or appreciation
thereon, at the time the funds are received (actually or constructively) by the
agent or general agent. Other income taxes, state taxes, estate and inheritance
taxes may be applicable depending upon a participant's particular circumstances.
An agent or general agent should consult a qualified tax advisor with respect to
the plan's impact on such individual's personal income tax situation.
Kansas City Life is not entitled to a tax deduction for any agent or
general agent's deferral contributions until such individual's contributions and
appreciation of the contributions are taxable to individual.
DESCRIPTION OF CAPITAL STOCK OF KANSAS CITY LIFE
Authorized and Outstanding Capital Stock
The authorized capital stock of Kansas City Life consists of 36,000,000
shares of common stock, par value $1.25 per share, of which 12,043,211 shares
were outstanding as of June 13, 2000. No other classes of capital stock are
authorized by the Restated Articles of Incorporation of Kansas City Life.
The descriptions set forth below do not purport to be complete and are
qualified in their entirety by reference to:
o the 1986 Restated Articles of Incorporation of Kansas City Life; and
o the By-laws of Kansas City Life, as amended.
Copies of each of these documents are incorporated by reference as exhibits to
the registration statement which includes this prospectus.
DESCRIPTION OF COMMON STOCK OF KANSAS CITY LIFE
General
Each share of our common stock entitles the holder thereof to one vote on
all matters submitted to a vote of the shareholders, except the election of
directors. At all elections of directors, each shareholder is entitled to as
many votes as shall equal the number of shares held by such shareholder
multiplied by the number of directors to be elected, and such shareholder may
cast all such votes for a single director or may distribute them among the
number of directors to be voted for as such shareholder may see fit. Our common
stock is not subject to redemption or future calls or assessment by Kansas City
Life. Holders of common stock do not have preemptive rights, or rights to
convert their common stock into other securities. The holders of common stock
are entitled to receive ratably such dividends as may be declared by the board
of directors out of funds legally available therefore. In the event of a
liquidation, dissolution or winding up of the affairs of Kansas City Life,
holders of our common stock have the right to a ratable portion of the assets
remaining after the payment of all liabilities. All outstanding shares of our
common stock are, and any shares of common stock sold hereunder will be, fully
paid and nonassessable. Cheryl A. Keefer with Kansas City Life is the registrar
and transfer agent for the common stock. The common stock is listed on the
Nasdaq SmallCap Stock Market under the symbol "KCLI."
Potential Anti-takeover Effect of Kansas City Life's Restated Articles of
Incorporation and Bylaws
The provisions of Kansas City Life's articles of incorporation and bylaws
that are summarized below may have an anti-takeover effect and may delay, defer
or prevent a tender offer or takeover attempt that a shareholder might consider
to be in such shareholder's best interests, including those attempts that might
result in a premium over the market price for the shares held by shareholders.
Classification of Board of Directors. Our board of directors is divided
into three classes, and our directors are elected by classes to three-year
terms, so that members of one of the three classes of our directors will be
elected at each annual meeting of the shareholders. While this provision
promotes stability and continuity of the board of directors, classification of
the board of directors may also have the effect of decreasing the number of
directors that could otherwise be elected at each annual meeting of shareholders
by a person who obtains a controlling interest in our common stock and thereby
could impede a change in control of Kansas City Life.
Business Combinations. Kansas City Life's articles of incorporation contain
a "fair price" provision which generally requires that certain "business
combinations" with a "related person" (generally the beneficial owner of at
least 5 percent of Kansas City Life's voting stock) be approved by the holders
of at least 66 2/3 percent of Kansas City Life's voting stock, with the 66 2/3
percent vote requirement being calculated by excluding from the voted shares and
the number of shares of voting stock outstanding, the voting stock held by such
related person, except in the following circumstances:
(1) If more than two thirds of all members of the board of directors of
Kansas City Life then in office expressly approve such business
combination by resolution; or
(2) If in the proposed business combination, more than two-thirds of all
members of the board of directors of Kansas City Life then in office
determine that all of the following conditions are met:
o The ratio of (i) the aggregate amount of the cash and the fair market
value of other consideration to be received per share of securities of
Kansas City Life in such business combination by holders of those
securities, other than a related person involved in such business
combination, over (ii) the market price per share of those securities
immediately prior to the announcement of the proposed business
combination, is at least as great as the ratio of (x) the highest per
share price (including brokerage commissions, transfer taxes, and
soliciting dealers' fees) that such related person has paid in
acquiring any such securities prior to such business combination, over
(y) the market price per share of those securities immediately prior
to the initial acquisition by such related person of any of those
securities (in the event of a business combination upon the
consummation of which Kansas City Life would be the surviving
corporation or would continue to exist (unless it is provided,
contemplated, or intended that as a part of such business combination
or within one (1) year after consummation thereof a plan of
liquidation or dissolution of Kansas City Life will be effected), the
term "other consideration to be received" shall include without
limitation, any shares of voting stock retained by shareholders of
Kansas City Life other than the related persons who are parties to
such business combination);
o Except to the extent that a shareholder agrees otherwise as to all or
part of the securities that the shareholder owns, the consideration to
be received in such business combination by holders of the securities
of Kansas City Life to be acquired, other than the related person
involved, shall be in the same form and of the same kind as the
consideration paid by the related person in acquiring such securities
already owned by it;
o After such related person became a related person and prior to the
consummation of such business combination:
(i) Kansas City Life shall have not failed to pay full dividends
pursuant to the terms of any preferred stock then issued by
Kansas City Life and shall not have reduced the rate of dividends
previously paid on its common stock, unless such failure or
reduction was approved in advance by more than two-thirds of the
members of the board of directors then in office;
(ii) Such related person shall not have acquired from Kansas City
Life, directly or indirectly, any securities of Kansas City Life,
except upon (x) a conversion of convertible securities acquired
by it prior to becoming a related person, or (y) as a result of a
pro rata stock dividend, stock split or division of shares, or
(z) a transaction consummated in compliance with the provisions
of Article 9 of Kansas City Life's articles of incorporation;
(iii)Such related person shall not have acquired any additional
securities of Kansas City Life or securities convertible into or
exchangeable for such securities, except as a part of the
transaction that resulted in such related person's becoming a
related person;
(iv) Such related person shall not have (x) received the benefit,
directly or indirectly (except pro rata as a shareholder of
Kansas City Life), of any loans, advances, guarantees, pledges,
or other financial assistance or tax credits provided by Kansas
City Life, or (y) made any major change in Kansas City Life's
business or equity capital structure or entered into any
contract, arrangement, or understanding with Kansas City Life,
except as were approved in advance by more than two-thirds of the
members of the board of directors of Kansas City Life then in
office; and
(v) The payment of the purchase price for the securities proposed to
be acquired by the related person in the business combination
shall not, directly or indirectly, be financed or proposed to be
financed by sale of all or part of the assets of Kansas City Life
or by use of Kansas City Life's assets, directly or indirectly,
as security for that financing; and
o A proxy statement complying with the requirements of rules relating
thereto that are applicable to Kansas City Life shall have been mailed
to all holders of shares of voting stock for the purpose of soliciting
shareholder approval of such business combination. Such proxy
statement shall contain at the front, in a prominent place, any
recommendations as to the advisability or inadvisability of the
business combination which the board of directors may have furnished
in writing, and if deemed advisable by a majority of the directors, an
opinion of a reputable investment banking firm as to the fairness or
lack of fairness of the terms of such business combination from the
point of view of the holders of the shares of voting stock other than
the related person, such investment and banking firm to be selected by
a majority of the directors and to be furnished with all information
it reasonably requests, and to be paid by Kansas City Life a
reasonable fee for its services upon receipt by Kansas City Life of
such opinion.
Kansas City Life's article of incorporation contain the following definitions:
"Business combination" means:
o any merger or consolidation of Kansas City Life or a subsidiary of
Kansas City Life with or into a related person;
o any merger or consolidation of a related person with or into Kansas
City Life or a subsidiary of Kansas City Life;
o any sale, lease, exchange, transfer or other disposition in a single
transaction or a series of transactions, of all or any "substantial
part" of the assets either of Kansas City Life or of a subsidiary of
Kansas City Life, or both, to a related person;
o any sale, lease, exchange, transfer or other disposition in a single
transaction or a series of transactions, of all or any substantial
part of the assets of a related person to Kansas City Life or a
subsidiary of Kansas City Life;
o the issuance of any securities of Kansas City Life or any subsidiary
of Kansas City Life to a related person;
o any reclassification of Kansas City Life's securities,
recapitalization of Kansas City Life or any subsidiary of Kansas City
Life, or other transaction other than a redemption in accordance with
the security redeemed, that would have the effect, directly or
indirectly, of increasing the voting power of a related person, in
relation to the voting power of the other shareholders of Kansas City
Life;
o any partial or complete liquidation, spinoff, or splitup of Kansas
City Life or any subsidiary of Kansas City Life or other transaction
with a similar purpose or effect, directly or indirectly involving any
related person;
o any transaction or event that is intended by any party thereto to
have, or that is likely to have, a similar effect as any of the
transactions or events described in the definition of business
combination; or
o any agreement, contract, plan or other arrangement providing for any
of the transactions described in the definition of business
combination.
"Substantial part" means assets with a fair market value that is equal to
or exceeds 5% of the fair market value of the total assets of Kansas City Life
or the person in question as of the end of its most recent previous fiscal year.
Missouri Control Share Acquisition Statute. The Missouri control share
acquisition statute (Mo. Rev. Stat. Section 351.407 (Supp. 1991)), is designed
to assist a corporation in defending itself against a hostile takeover attempt.
Because Kansas City Life has over 100 shareholders, has its principal place of
business in Missouri and more than 10% of its shareholders are Missouri
residents, it will be subject to the statute, unless its articles of
incorporation provide otherwise. Because of the protection afforded by the
statute, Kansas City Life has not included such an "op-out" provision in its
articles.
The statute provides that a person holding 20% or more of the outstanding
shares of Kansas City Life common stock may not vote any additional stock
acquired unless the acquisition is approved by the shareholders. The statute
specifically applies to newly-acquired shares which, when added to all other
shares of Kansas City Life owned or controlled by the acquiring person, would
enable the acquiring person to exercise voting control within any one of three
ranges: (a) one-fifth to one-third; (b) one-third to a majority; or (c) a
majority or more. The statute is triggered each time a person acquires ownership
or voting control of shares which would result in such person's voting power
reaching one of the specified levels.
The newly-acquired shares would have voting rights only to the extent
approved by a resolution of Kansas City Life shareholders. The voting rights
must be approved by both (a) a majority of the outstanding voting stock, and (b)
the affirmative vote of a majority of the outstanding voting stock after
excluding shares owned by the acquiring person, shares owned by directors who
are also employees of Kansas City Life and shares owned by officers of Kansas
City Life. Shareholders are given dissenters' rights if they vote against a
share acquisition, and may receive the fair value of their shares if voting
rights are approved for the acquired shares.
Missouri Business Combination Statute. Because Kansas City Life's common
stock has been registered with the Securities and Exchange Commission pursuant
to the Securities Exchange Act of 1934, the Missouri Business Combination
statute (Mo. Rev. Stat. Section 351.459 (Supp. 1999)) also will apply to Kansas
City Life, unless the articles of incorporation provide otherwise. This statute
acts as a further deterrent to a hostile take-over by requiring certain mergers,
sales of assets and similar business combinations involving Kansas City Life to
be approved by its board of directors. Kansas City life has not included an "op
out" provision in its articles of incorporation.
The statute prohibits Kansas City Life from engaging in any business
combination with any "interested shareholder" for a period of five years
following the date upon which the shareholder first became an "interested
shareholder" unless the business combination is approved by the board of
directors. An "interested shareholder" is defined as any person who is the
beneficial owner of 20% or more of Kansas City Life's outstanding voting stock.
Amendment of Articles. The amendment of the articles of incorporation of
Kansas City Life requires the affirmative vote of the holders of more than 66
2/3 percent of the shares of capital stock of Kansas City Life voting on such
question but in no event may the articles be amended by a vote of less than a
majority of all of the shares of capital stock of Kansas City Life entitled to
vote on said question.
DESCRIPTION OF DEFERRED COMPENSATION OBLIGATIONS OF KANSAS CITY LIFE
Under the Kansas City Life Stock Bonus and Deferred Compensation Plan,
participants may elect to defer the receipt of a portion of their compensation
until a later date. Such deferrals create obligations owed by Kansas City Life
to each such participant (collectively, the "Deferred Compensation
Obligations"). The Deferred Compensation Obligations are held by the
participants subject to the terms and conditions of the plan and are repayable
by Kansas City Life as set forth under the plan. The Deferred Compensation
Obligations are unsecured obligations of Kansas City Life and are subject to the
claims of Kansas City Life's general creditors. As of May 31, 2000, Kansas City
Life had approximately $2,298,964 in Deferred Compensation Obligations
outstanding. Kansas City Life is registering $3,039,463 in Deferred Compensation
Obligations pursuant to a registration statement on Form S-3. Kansas City Life
intends on issuing such Deferred Compensation Obligations over the next two
years. For more information about the Deferred Compensation Obligations, you
should refer to the section in this prospectus entitled "The Plan" and our
registration statement on Form S-3, which includes this prospectus and its
exhibits.
PLAN OF DISTRIBUTION
Kansas City Life will offer the Kansas City Life common stock and the
deferred compensation obligations from time to time pursuant to the terms of the
plan. See "The Plan."
LEGAL MATTERS
The validity of any securities offered hereby will be passed upon for
Kansas City Life by C. John Malacarne, Vice President, General Counsel and
Secretary of Kansas City Life.
INDEPENDENT ACCOUNTANTS
The financial statements incorporated in this Prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 1999, have been
so incorporated in reliance on the report of Ernst & Young LLP, independent
accountants, given on the authority of said firm as experts in auditing and
accounting.
APPENDIX A
STOCK BONUS PLAN FOR
KANSAS CITY LIFE
AGENTS AND GENERAL AGENTS
AND
CONTRIBUTORY DEFERRED COMPENSATION PLAN
FOR KANSAS CITY LIFE GENERAL AGENTS
Kansas City Life Insurance Company's Stock Bonus Plan provides a convenient way
for you to save up to l5% of your earned first year and renewal commissions.
And, Kansas City Life will give you a bonus in Company stock to help your
savings grow. The Contributory Deferred Compensation Plan permits additional
contributions to be made for retirement. The features of the Plans are described
in this booklet.
Eligibility
As an agent or general agent of Kansas City Life, you are eligible to
participate in the Stock Bonus Plan. Any agent who is compensated under the
special agent compensation amendment at any time during a calendar year will not
be eligible to participate in this Plan.
A general agent may also participate in the Contributory Deferred Compensation
Plan.
PART A
STOCK BONUS PLAN
Plan Benefits
An eligible agent or general agent meeting the qualification requirements may
voluntarily defer the receipt of a portion of your compensation and may receive
matching bonus payments in stock of the Company, with dividends being used to
purchase additional shares. You will not be taxed on these amounts until you
actually receive them.
Qualification Requirements
You may make a contribution to your account for each calendar year in which you
meet the minimum production and persistency requirements.
MINIMUM ANNUAL PRODUCTION REQUIREMENTS
Paid Agent's Paid Net Annualized
Policies* First Year Commission
25 $24,000
* Paid policy requirement will not apply to you if the combination of
your age and years with an agent's and/or general agent's contract
with the Company equals or exceeds 65, or your paid net annualized
first year commission is equal to or greater than the current Top
Hatters net annualized first year commission production level prorated
for a calendar year.
THE QUALIFYING PERIOD IS FOR EACH CALENDAR YEAR
(Production Requirements will not be Pro-Rated)
Persistency Requirement
To qualify for the persistency requirement, your "bonus" persistency must be at
least 82%.
Voluntary Compensation Deferral
For each year you meet the production and persistency requirements, you may
contribute up to 15% of your earned first year and renewal commissions to your
voluntary account.
Stock Bonus Account
As long as you meet the qualification requirements, the Company will contribute
to your bonus account Company stock equal in amount to 50% of the first 5% of
your earned first year and renewal commissions you have voluntarily deferred
under this Plan. For example:
If You The Company
Contribute Will Contribute
2% 1%
3% 1.5%
4% 2%
5-15% 2.5%
The amount you may contribute voluntarily by monthly compensation reduction is
determined by your earned first year and renewal commissions in the prior year.
Your contributions will be at the rate of 2% to 15% in whole percentages. For
example, you may contribute 2%, 9% or 14%. See the section titled "Investment
Options" later in the Plan for your investment choices.
If you meet the production requirements, but do not meet the persistency
requirements, you may contribute up to 15% of your earned first year and renewal
commissions. However, the Company will not make a bonus contribution in this
event.
Vesting
Your voluntary contributions, and any gains or losses credited to them, are
immediately 100% vested.
After you have accumulated three qualifying years, 30% of the Company's stock
bonus contributions are vested in you. Each additional year of qualification
adds another 10% to your vesting until all Company contributions are vested at
the end of ten qualifying years.
You will be credited with a qualifying year for each year you meet the published
production and persistency requirements, and, prior to January 1, 1995, are not
on one of the Company's finance plans. If you have an account balance and you
are being compensated under the special agent compensation amendment, then
beginning January 1, 1998 you will also be credited with a qualifying year for
each year you meet the published production and persistency requirements.
VESTING SCHEDULE
# Qualifying
Years % Vested
1 0
2 0
3 30
4 40
5 50
6 60
7 70
8 80
9 90
10 100
PART B
CONTRIBUTORY DEFERRED
COMPENSATION PLAN
Qualification Requirements
If you are a general agent, you may make a contribution to your account for each
calendar year in which you meet the minimum production requirement for this
Plan.
MINIMUM ANNUAL PRODUCTION REQUIREMENT
Total Agency Calendar Year NAFYC
$50,000
THE QUALIFYING PERIOD IS FOR EACH CALENDAR YEAR
(Production Requirement will not be Pro-Rated)
Compensation Deferral
For each year you meet the production requirement, you may contribute up to 30%
of your agency's earned first year and renewal override commissions in the prior
year to your account. The amount you contribute will be by monthly compensation
reduction and may be at a rate from 1% to 30% in whole percentages. For example,
you may contribute 1%, 17% or 29%. The Company will not match your contribution.
For investment choices, see the section "Investment Options" later in the Plan.
Vesting
Your contributions, and any gains or losses credited to your account, will be
100% vested.
GENERAL PROVISIONS
Investment Options
You may direct the investment of all or a part of the annual contribution made
by you to funds 1, 2, 3, 4, 5 or 6. Fund 7 shall contain only amounts
contributed by the Company to the Stock Bonus Account in Part A. You may not
direct any of your contributions to this fund. Your contribution may be invested
100% in any of these funds, or, if you wish to invest in more than one fund, you
can specify the percentage of each contribution to be invested in each fund. The
percentage must be a whole percentage, that is, no fractional percentages will
be permitted. You may request changes in the investment percentages each month.
Beginning August 15, 2000 in Part A, you will transfer your current account
balance to one or more of the funds. Thereafter, in both Parts, you may require
that the value of any one or more of your account(s) in the funds be transferred
to any other fund or funds. The transfers must be done in whole percentages, and
may be made only once a month. Changes in investment percentages and transfers
between funds will be governed by rules of the Administrative Committee.
You may elect to change your compensation percentage in either Plan as of the
first day of any month, but no more than once in any six month period, by giving
such written notice as may be required by the Administrative Committee.
You may also suspend your contributions as of the first day of any month. You
may later resume your contributions, but only after at least six months have
passed since your contributions were suspended. You must give such written
notice as the Administrative Committee may require to suspend or resume your
contributions.
Withdrawals
If you become 100% vested you may, subject to Administrative Committee approval,
elect to receive your vested account at either age 55, 60, 62, 65 or 68,
provided you are 100% vested before the age at which you elect to receive the
proceeds. Notice of your desire to receive your vested account must be received
by the Administrative Committee at least 60 days before your birthday at the
appropriate age of 55, 60, 62, 65 or 68.
You will receive payment - of your vested account upon your retirement on or
after your 70th birthday, or by reason of death, total and permanent disability,
or termination of your contract. Payment of your vested account will be made to
you within one year of such event. However, payment of your voluntary deferrals
will be made to you within 60 days of such event. For either amount, earlier
payment may be made at the sole discretion of the Administrative Committee.
There will be no distribution of your account except upon the occurrence of one
of the aforementioned causes, or for educational withdrawals or withdrawals for
the purchase of your principal home as described later in this Plan.
Except for educational withdrawals or withdrawal for the purchase of your
principal home, when you receive your account it will be 100% of the vested
proceeds. Partial withdrawals are not otherwise permitted.
The payment of your vested account will be made either in the form of annuity
payments offered by the Company at the time such payments are to commence or if
you do not elect to receive such annuity payments within 60 days prior to the
date you are eligible, the entire amount will be paid in a lump sum. However,
all shares of Company stock in Part A will be part of the payment unless the
Trustees elect otherwise.
General Regulations
At the end of the calendar year, your production and persistency records will be
examined to determine qualification in both Parts, and the appropriate
contribution to your Stock Bonus Account.
You will not pay federal income tax on your voluntary contributions, the bonus
contributions to your account in Part A, or on any gains, losses and dividends
credited to your accounts, until the proceeds are paid to you.
You will have an individual account record of the value of your accumulated
voluntary and stock deposits paid by the Company to Part A, and your account
value in Part B. You will be advised quarterly of the balance of all of your
accounts.
A separate account for each Part will be kept for any voluntary contributions
you may have made when eligible. You will make these contributions by signing an
agreement to reduce your compensation by the amount you want to contribute prior
to the year in which you are eligible to contribute.
If you transfer to a noncommission, management or employee position at the
request of the Company, or as an employee of a general agent with the consent of
the Company, the vested amount will become the value of your account. Your
account will continue to be valued monthly until closed.
If you leave Kansas City Life you are eligible to return and participate in the
plan again with the vesting requirements beginning anew.
You have the right to designate a beneficiary in either Part at any time by
filing a written request with the Company. The designation of beneficiary, or
change of beneficiary, shall become effective only upon receipt of such request
by the Company. Upon receipt by the Company of your request, the beneficiary
designation will relate back to and take effect as of the date you signed the
request whether or not you are living at the time the Company receives it.
If there is no designated beneficiary living or in effect at the time of your
death when any payment hereunder shall be payable to a beneficiary, then the
payment shall be made as follows: to your wife or husband, if living; if not
living, to your lineal descendants, in equal shares, per stirpes; if none
survives, to your surviving parents, equally; if neither survives, to your
executors or administrators.
None of your rights, privileges, proceeds or other interests in either Part can
be transferred, commuted or assigned for the security of debts, except that if
you owe money to Kansas City Life, or any of its subsidiary or affiliated
companies, such company shall have the right to offset and apply any such
accumulated funds to the reduction of your indebtedness to said company. No
payment of accumulated funds will be made to you or your beneficiary until your
indebtedness to the company is fully paid.
You will forfeit any amounts due you under Part A (except your voluntary
deferrals) if you replace or assist in replacing a policy issued by Kansas City
Life Insurance Company (or an affiliated company) with a policy of another
insurer, or if you induce or attempt to induce an agent to leave the service of
Kansas City Life Insurance Company (or an affiliated company).
You will also forfeit any amounts due you under Part A (except your voluntary
deferrals) if you violate either the terms of your agent's contract, the rules
or regulations of the Company, or the insurance laws or regulations in the
states in which you may solicit applications for insurance.
The term "disability" as used in this Plan means a physical or mental condition
of an agent resulting from a bodily injury or disease or mental disorder, which,
in the opinion of the Administrative Committee, renders said agent incapable of
continuing under contract with the Company. The Administrative Committee may
require the opinion of a licensed physician or surgeon acceptable to the
Committee or such other evidence as it may require from time to time.
The bonus contribution made by the Company in Part A will be in shares of
Company stock. Your voluntary contributions in both Parts will be made in cash.
The Trustees shall vote the shares of stock of the Company held for your account
in Part A only in accordance with your direction, which direction may be
certified to the Trustees of the Stock Bonus Plan by the Committee, or any agent
designated thereby, provided such direction is received by the Trustees at least
five days before the date set for the meeting at which such shares are to be
voted. Shares with respect to which no such direction shall be received shall be
voted by the Trustees in the same proportions as are shares as to which voting
instructions have been received.
The value of the funds in both Parts will be determined on the last market
business day of each month. The Company stock in Part A will be valued at the
average of its bid price on the over-the-counter market for all business days
following the previous monthly valuation date. You will be provided a quarterly
statement of your account in both Plans which will reflect your contributions
and any gains or losses on the funds. There is no guarantee against loss of
principal in any of the funds.
The Company reserves the right to change the annual production and persistency
requirements of Part A and the production requirement in Part B. The
Administrative Committee will review these requirements annually. Any changes
will always be announced in advance and such changes will apply only to future
qualifying years.
The Company also reserves the right to amend or terminate this Plan at any time.
If a Plan is terminated, you will receive the vested amount credited to your
accounts as of the date of the Plan termination. All nonvested Company
contributions of any kind or type will revert to the Company.
Parts A and B are not qualified plans. The programs are funded entirely by the
Company and secured by its assets. All assets of the Plan and Trust are subject
to the claims of the Company's general creditors.
Break in Service
Failure to earn a new qualifying year in two consecutive years will be
considered a "break" in service, unless it occurs after you have a 100% vested
interest in your accounts.
For example, if you were to qualify for four years but then did not qualify for
the next two years, you would have a "break" in service.
A break in service will cancel your eligibility to participate in both Parts.
Your accounts may be closed at the sole discretion of the Administrative
Committee, and if so, your vested deposits will be paid to you within one year
after the account is closed.
The Company may waive the break in service if you have earned at least five
qualifying years in the plan and the "break" occurs because you are totally
disabled. Evidence of total disability must be submitted to the Administrative
Committee of the Plan and determination of the existence of total disability
will rest with the Committee.
Requirements for Educational and Home Purchase Withdrawal
You may be entitled to a withdrawal of a portion, or all, of your vested
deferred account in both Parts if you have a child or children between the ages
of 18 and 25 who are enrolled in an accredited institution of higher learning.
If you wish to request a withdrawal, you must do so in writing, setting forth
the basis for your request and establishing to the satisfaction of the Committee
that you have a need for the requested funds to provide for the advanced
education of your child or children. The Committee may accept or reject your
request, and its decision shall be final. The Committee may require specific
information and documentation to support your request.
If you are purchasing your principal residence, you may be entitled to a
withdrawal of a portion, or all, of your vested deferred account in both Parts
if you establish a need for such withdrawal to the satisfaction of the
Committee. Your request must be in writing, and must include such specific
information and documentation as shall be required by the Committee. The
Committee may accept or reject your request, and its decision shall be final.
Past Service
If you successfully complete one of the Company's finance programs, you will
receive credit for one "qualifying year" for vesting purposes for each year you
were in the finance program prior to January 1, 1995.
Administrative Committee
The Administrative Committee shall consist of three persons designated by the
Company, who shall serve until their successors are designated, and said
Committee shall have the responsibility for the general administration of the
Plan and for carrying out the provisions of the Plan in accordance with its
terms.
The action of a majority of the members expressed by a vote in a meeting or in
writing without a meeting shall constitute the action of the Committee and shall
have the same effect for all purposes as if assented to by all members of the
Committee at the time in office.
Subject to the limitations of this Plan, the Committee shall establish rules or
regulations for the administration of the Plan. The Committee shall interpret
the Plan and decide any and all matters arising hereunder, including the right
to remedy possible ambiguities, inconsistencies or omissions. All
interpretations, determinations and decisions of the Committee in respect of any
matter hereunder shall be final, conclusive and binding on all parties affected
thereby.
The Administrative Committee shall make all determinations as to the right of
any person to a benefit. Any denial by the Committee of a claim for benefits
under this plan shall be stated in writing by the Committee and delivered or
mailed to the participant or the beneficiary and such notice shall set forth the
specific reason for the denial. In addition, the Committee shall provide a
reasonable opportunity for any participant or beneficiary whose claim for
benefits has been denied for a review of the decision denying the claim.
The Executive Committee shall fill all vacancies on the Committee as soon as is
reasonably possible after a vacancy takes place, and until a new appointment
takes place, the remaining members of the Committee shall have authority to act
if approved by two members.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth those expenses to be incurred by Kansas City
Life in connection with the issuance and distribution of the securities being
registered. Except for the Securities and Exchange Commission filing fee, all
amounts shown are estimates.
Securities and Exchange Commission filing fee........... $ 1,051
Blue Sky fees and expenses.............................. 14,575
Printing and engraving expenses......................... 2,500
Accountant's fees and expenses.......................... 5,000
Legal fees and expenses................................. 13,000
Miscellaneous expenses.................................. 5,000
Total................................................... $41,126
Item 15. Indemnification of Directors and Officers.
Kansas City Life is empowered by Article XII of its bylaws, subject to the
proceedings and limitations stated therein, to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of Kansas City Life) by
reason of the fact that such person is or was an officer, employee or director
of Kansas City Life, or is or was serving at the request of Kansas City Life as
a director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with such action, suit or proceeding if he or she acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of Kansas City Life, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he or she reasonably believed to be in or not opposed to the best
interests of Kansas City Life, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his or her conduct was
unlawful. Kansas City Life may indemnify any such person against expenses
(including attorneys' fees) in an action by or in the right of Kansas City Life
under the same conditions, except that no indemnification is permitted without
judicial approval if such person is adjudged to be liable to Kansas City Life.
To the extent such person is successful on the merits or otherwise in the
defense of any action referred to above, Kansas City Life must indemnify him
against the expenses which he actually and reasonably incurred in connection
therewith. To the extent that a director, officer or employee of Kansas City
Life has been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to above, or in defense of any claim, issue or
matter therein, he or she shall be indemnified against expenses, including
attorneys' fees, actually and reasonably incurred by him or her in connection
with the action, suit or proceeding. Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by Kansas City Life in advance
of the final disposition of the action, suit or proceeding as authorized by the
board of directors in the specific case upon receipt of an undertaking by or on
behalf of the director, officer or employee to repay such amount unless it shall
ultimately be determined that he or she is entitled to be indemnified by Kansas
City Life as authorized in its articles or bylaws. Unless ordered by a court,
the board of directors of Kansas City Life shall determine whether
indemnification under Kansas City Life's bylaws is proper by a majority vote of
a quorum consisting of directors who were not parties to the action, suit or
proceeding in question, or, if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or by the shareholders of Kansas City Life.
The indemnification provided by Article XII of the bylaws of Kansas City
Life is not exclusive of any other rights to which those seeking indemnification
may be entitled under the articles of incorporation or bylaws, or any agreement,
vote of shareholders or disinterested directors or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and will continue as to a person who has ceased to be a
director, officer or employee and will inure to the benefit of the heirs,
executors and administrators of such a person. Kansas City Life has the power to
give any further indemnity, in addition to the indemnity authorized or
contemplated under Article XII of its bylaws, to any person who is or was a
director, officer, employee or agent of Kansas City Life, or to any person who
is or was serving at the request of Kansas City Life as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, provided such further indemnity is either (i) authorized,
directed, or provided for in the articles of incorporation of Kansas City Life
or any duly adopted amendment thereof or (ii) is authorized, directed, or
provided for in any bylaw or agreement of Kansas City Life which has been
adopted by a vote of the shareholders of Kansas City Life, and provided further
that no such indemnity shall indemnify any person from or on account of such
person's conduct which was finally adjudged to have been knowingly fraudulent,
deliberately dishonest, or willful misconduct.
Article XII of the bylaws of Kansas City Life also provides that any
director, officer or employee of Kansas City Life be indemnified for any act
taken in good faith and upon reliance on the books and records of Kansas City
Life, on financial statements or other reports prepared by the officers of
Kansas City Life, or on financial statements prepared by Kansas City Life's
independent accountants, or on information or documents prepared or provided by
legal counsel to Kansas City Life. All rights to indemnification under Article
XII of the bylaws of Kansas City Life will be deemed to be provided by a
contract between Kansas City Life and the person who serves in such capacity at
any time while the bylaws of Kansas City Life and other relevant provisions of
the applicable law, if any, are in effect. Any repeal or modification of the
bylaws of Kansas City Life will not affect any rights or obligations then
existing.
Finally, Article XII of Kansas City Life's bylaws provides that to the
extent Missouri law provides for greater indemnification of officers, directors
or employees than that permitted by Article XII of the bylaws, Kansas City Life
shall indemnify its officers, directors and employees to the fullest extent
permitted by such law.
Policies of insurance are maintained by Kansas City Life under which
directors and officers of Kansas City Life are insured, within the limits and
subject to the limitations of the policies, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers.
Item 16. Exhibits.
Exhibit
Number Description
4(a) Articles of Incorporation (as Restated in 1986 and Amended in 1999)
(filed as Exhibit 3(a) to Kansas City Life's 10-Q Quarterly Report for
the quarter ended September 30, 1999 and incorporated herein by
reference).
4(b) Bylaws as amended October 26, 1986 (filed as Exhibit 3(b) to Kansas
City Life's 10-K Annual Report for 1986 and incorporated herein by
reference).
4(c) Specimen copy of Stock Certificate (filed as Exhibit 4(a) to Kansas
City Life's 10-Q Quarterly Report for the quarter ended September 30,
1999 and incorporated herein by reference).
10(a)Seventh Amendment, Kansas City Life Deferred Compensation Plan (filed
as Exhibit 10(a) to Kansas City Life's 10-K Annual Report for 1998 and
incorporated herein by reference).
10(b)Twenty-third Amendment, Kansas City Life Insurance Company Savings and
Profit Sharing Plan (filed as Exhibit 10(b) to Kansas City Life's 10-K
Annual Report for 1999 and incorporated herein by reference).
10(c)Eleventh Amendment, Kansas City Life Employee Stock Plan (filed as
Exhibit 10(c) to Kansas City Life's 10-K Annual Report for 1999 and
incorporated herein by reference).
10(d)Second Amendment, Kansas City Life Excess Benefit Plan (filed as
Exhibit 10(d) to Kansas City Life's 10-K Annual Report for 1999 and
incorporated herein by reference).
5 Opinion of C. John Malacarne, Vice President, General Counsel and
Secretary of Kansas City Life, with respect to the legality of the
common stock being registered hereby.*
23(a) Consent of Ernst & Young LLP.*
23(b)Consent of C. John Malacarne, Vice President, General Counsel and
Secretary of Kansas City Life (included in Exhibit 5).*
* Indicates document filed herewith.
Item 17. Undertakings.
(a)......Rule 415 Offering.
The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a) (3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume
of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum
offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate,
the changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement; and
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by Kansas City Life pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
Kansas City Life's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnifications for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons, if
any, of the registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a registrant of expenses
incurred or paid by a director, officer or controlling person, if any, of such
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, such registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Kansas City
Life Insurance Company certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Kansas City, State of Missouri, on June 20,
2000.
KANSAS CITY LIFE INSURANCE COMPANY
(Registrant)
By: /s/ R. Philip Bixby
Name: R. Philip Bixby
Title: President, Chief Executive Officer
and Vice Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities with Kansas City Life Insurance Company and on the dates indicated:
Signatures Title Date
/s/ R. Philip Bixby President, Chief Executive
R. Philip Bixby Officer, Vice Chairman of
the Board and Director
(Principal Executive Officer) June 20, 2000
/s/ Richard L. Finn Senior Vice President,
Richard L. Finn Finance and Director
(Principal Financial Officer) June 20, 2000
/s/ J.R. Bixby Director
J.R. Bixby June 20, 2000
/s/W.E.Bixby,III Director
W.E.Bixby,III June 20, 2000
/s/ Webb R. Gilmore Director
Webb R. Gilmore June 20, 2000
/s/ Jack D. Hayes Director
Jack D. Hayes June 20, 2000
Director
Nancy Bixby Hudson _______, 2000
Director
Warren J. Hunzicker,M.D. _______, 2000
/s/Daryl D. Jensen Director
Daryl D. Jensen June 20, 2000
/s/C. John Malacarne Director
C. John Malacarne June 20, 2000
Director
Michael J. Ross _______, 2000
Director
Elizabeth T. Solberg _______, 2000
Director
Larry Winn,Jr. _______, 2000
EXHIBIT INDEX
Exhibit
Number Description
5 Opinion of C. John Malacarne, Vice President, General Counsel and
Secretary of Kansas City Life
23(a)Consent of Ernst & Young LLP
23(b)Consent of C. John Malacarne, Vice President, General Counsel and
Secretary of Kansas City Life (included in Exhibit 5)
