KENTUCKY INVESTORS, INC.
200 CAPITAL AVENUE
FRANKFORT, KENTUCKY 40601
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 9, 1996
TO THE SHAREHOLDERS OF
KENTUCKY INVESTORS, INC.
Notice is hereby given that the annual meeting of shareholders of Kentucky
Investors, Inc., a Kentucky corporation, (the "Company") will be held at the
Investors Heritage Life Insurance Company auditorium, Second and Shelby
Streets, Frankfort, Kentucky 40601, on Thursday, May 9, 1996, at 11:00 A.M.
(Eastern Daylight Time), for the following purposes:
(1) To elect three Directors to hold office for a term of three years
each or until their successors are duly elected and qualified;
(2) To transact such other business as may properly come before the
meeting, or any adjournment thereof.
The Board of Directors, in accordance with the By-laws, has fixed the
close of business on March 29, 1996, as the record date for determining the
shareholders entitled to notice of and to vote at the meeting and any
adjournments thereof. The stock transfer books will not be closed.
It is hoped that you will attend the meeting, but if it is not your
intention to be present, you are respectfully requested to sign, date and
return the enclosed proxy immediately in the accompanying postage-prepaid
envelope. The proxy is being solicited by and on behalf of the Board of
Directors of the Company.
Your attention is directed to the Company's 1995 annual report and to the
proxy statement, both of which accompany this notice.
By Order of the Board of Directors
/s/
Wilma Yeary, CPS, Secretary
P.O. Box 717
Frankfort, Kentucky 40602
April 19, 1996
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 9, 1996
The following information is furnished in connection with the
solicitation of the enclosed proxy by and on behalf of the Board of Directors
of Kentucky Investors, Inc. (the "Company" or "KII"), for use at the annual
meeting of shareholders of the Company to be held at the Investors Heritage
Life Insurance Company auditorium, Second and Shelby Streets, Frankfort,
Kentucky 40601, on Thursday, May 9, 1996, at 11:00 A.M.(Eastern Daylight Time),
and at any adjournment thereof, for the purposes set forth in the Notice of
annual meeting.
PROXY MAY BE REVOKED
A shareholder executing and returning the enclosed proxy may revoke such
proxy at any time prior to exercise of the authority thereby given by giving
written notice to the Secretary of the Company as provided by Kentucky Revised
Statutes 271B.7-220(6).
COST AND METHOD OF SOLICITATION
The Board of Directors intends to solicit proxies by use of the mails, and
all costs of soliciting proxies for this annual meeting will be borne by the
Company. The proxy statement and form of proxy will be mailed to the
shareholders on April 19, 1996.
VOTING SECURITIES
The Company has issued one class of capital stock. There are 1,160,000
shares outstanding of which 811,128 are entitled to one vote each, except that
in election of Directors, cumulative voting rights apply as provided by
Kentucky Revised Statutes 271B.7-280. Each shareholder shall have the right to
cast as many votes in the aggregate as he is entitled to vote, multiplied by
the number of Directors to be elected, and may cast the whole number for one
candidate or distribute such votes among two or more candidates. Investors
Heritage Life Insurance Company ("IHLIC"), 200 Capital Avenue, Frankfort,
Kentucky 40601 holds directly 254,687 shares or 22% of the stock of the
Company. Investors Underwriters, Inc. ("IUI"), 200 Capital Avenue, Frankfort,
Kentucky 40601 owns 94,185 shares or 8% of the stock of the Company. IHLIC
owns 603 shares or 96% of the stock of Investors Underwriters, Inc. HLW
Investment Corp., 200 Capital Avenue, Frankfort, Kentucky 40601, owns 130,824
shares or 11% of the Company. No other person is known by the Company to own
of record, or beneficially, more than 5% of the Company's capital stock except
as shown on the table below. The Board of Directors has fixed March 29, 1996,
as the record date for determining those eligible to vote, and only such
persons as are shareholders of record at the close of business on that day will
be entitled to vote at such meeting, and at any adjournment thereof.
THE PURPOSE OF THE MEETING SHALL BE:
(1) To elect three Directors to hold office for a term of three years
each or until their successors are duly elected and qualified;
(2) To transact such other business as may properly come before the
meeting, or any adjournment thereof.
ELECTION OF DIRECTORS
The Articles of Incorporation provide that three Directors shall be
elected at each annual meeting for a term of three years.
The persons named in the proxy shall vote the shares represented by the
proxies returned and duly executed in favor of the election of the three
Directors named below, unless the authority is withheld, to hold office for
terms of three years each or until their successors are duly elected and
qualified. All nominees have consented to serve. In the event any of the
persons named below shall not be available, proxies will be voted for such
substitute nominee, or nominees, as the persons named in the proxy shall
designate.
The following information is given with respect to the nominees for
election as Directors and for each of the other Directors whose terms will
continue after the meeting except as noted. Each Director was elected to his
present term of office by vote of the shareholders at an annual meeting. Each
of the Directors has had the business experience indicated for more than five
years except for Gordon Duke and David Reed. From 1987 to 1991, Mr. Duke was a
business consultant. In 1991 Mr. Duke served as the Budget Director for the
Commonwealth of Kentucky. During 1992, Mr. Duke became President of Court Key
Inc. In February 1994, Mr. Duke became Executive Vice President, Asset
Management Division, for Webb Companies, Lexington, Kentucky. For 17 years
prior to 1992, Mr. Reed was the President of Reed Crushed Stone, Gilbertsville,
Kentucky. Since that time Mr. Reed has been an independent businessman.
Number of Shares of Capital Stock of the Company
and Its Subsidiaries Beneficially Owned, Directly
or Indirectly, by Nominees and Other Directors as
of December 31, 1995.
IHLIC
Name,Position Kentucky (74% Owned Percentage
With the Company Director Investors, Subsi- of Stock
&Business Experience Since Inc. (1) diary) Owned
NOMINEES:
Helen S. Wagner 1986 30,000(2) 2,500(3) 3%
Director. Real
Estate Broker,
Secretary/
Treasurer,Wagner-
Shuck Builders,
Inc. Director,
IHLIC.
Age 59.
+ Gordon Duke 1991 110 55 (-)
Director. Executive
Vice President,
Asset
Management Division,
Webb Companies.
Age 50.
*+Robert M. Hardy,Jr. 1988 12,247(4) 20(5) 1%
aDirector & General
Counsel. Director &
General Counsel, IHLIC.
Age 38.
Other Directors Whose Terms Will Continue
After Meeting:
*+Harry Lee 1963 752,488(6) 737,351(7) 65%
Waterfield II (8) (9) (10)(11)
aChairman of (12) (13) (14)(15)
the Board (16) (17) (18)
& President. Chairman (19) (20)
of the Board, (21) (22)
President
&Chief Executive
Officer, IHLIC.
Age 52.
+H. Glenn Doran 1963 20,000 783 2%
*Director. Chairman of
the Board, Peoples
Bank of Murray.
Director, IHLIC.
Age 70.
aJerry F. Howell 1963 6,000 346 (-)
Director. Independent
Investor.
Director, IHLIC.
Age 82.
*Dr. Jerry F.
Howell,Jr. 1983 35,610 1,124 3%
Director. Head, Dept.
of Biological and
Environmental Science,
Morehead State
University.
Director, IHLIC.
Age 54.
aDavid W. Reed 1982 25,950 1,214 2%
Director.
Independent
Businessman.
Age 41.
+Warner Hines 1963 10,000 55 (-)
Director. Realtor.
Age 68.
All Directors and Officers as a Group: 910,471
* Member of Executive Committee
+ Member of Finance Committee
a Member of Nominating Committee
(-) Indicates less than 1%
(1) At December 31, 1995, 811,128 shares were outstanding and entitled to
vote.
(2) Includes 3,200 shares of KII held in an irrevocable trust for the benefit
of the children of Helen S. Wagner.
(3) Includes 1,538 shares of IHLIC held in an irrevocable trust for the
benefit of the children of Helen S. Wagner.
(4) Includes 4,049 shares of KII purchased under Kentucky Investors, Inc., and
Affiliated Companies 401(k) Savings Plan and Trust Agreement ("401(k) Plan")
held in Trust by Farmers Bank and Capital Trust Company, Frankfort, Kentucky
("Farmers Bank").
(5) Includes 9 shares of IHLIC held under the ESOP held in trust by Farmers
Bank.
(6) Mr. Waterfield II is part of a group which includes HLW Investment Corp.,
HLW Corporation, RoseGayle Waterfield Hardy, Nancy Waterfield Walton, Harry Lee
Waterfield II Irrevocable Trust Funds 1,2,3 and 4, RoseGayle Waterfield Hardy,
Nancy Waterfield Walton and Harry Lee Waterfield II Trust dated 12/22/76,
IHLIC, IUI, TAP & CO. and KII Employee Retirement Plan.
(7) Includes 7,900 shares of IHLIC owned by HLW Investment Corp. of which Mr.
Waterfield II is an officer.
(8) Includes 130,824 shares of KII owned by HLW Investment Corp. of which Mr.
Waterfield II is an officer.
(9) Includes 41,836 shares of KII owned by HLW Corporation of which Mr.
Waterfield II is an officer.
(10) Includes 642 shares of IHLIC owned by HLW Corporation of which Mr.
Waterfield II is an officer.
(11) Includes 3,038 shares of IHLIC held in the name of CEDE & Co., nominee
for the three separate Irrevocable Trusts for Harry Lee Waterfield II,
RoseGayle Waterfield Hardy and Nancy Waterfield Walton.
(12) Includes 15,222 shares of KII held in trust for the benefit of the
children of Harry Lee Waterfield.
(13) Includes 13,344 shares of KII purchased under the 401(k) Plan held in
Trust by Farmers Bank.
(14) Includes 200 shares of IHLIC held by Nancy Waterfield Walton - see
Footnote (5).
(15) Includes 241 shares of IHLIC held by RoseGayle Waterfield Hardy - see
Footnote (5).
(16) Includes 12,063 shares of KII held by Nancy Waterfield Walton - see
Footnote (5).
(17) Includes 9,502 shares of KII held by RoseGayle Waterfield Hardy - see
footnote(5).
(18) Includes 59,248 or 6% of the shares of IHLIC held in the name of TAP &
CO. for the benefit of employees who participate in the 401(k) Plan. Mr.
Waterfield II is a member of the Administrative Committee which directs the
voting of these shares.
(19) Includes 254,687 shares of KII held by IHLIC and 94,185 shares of KII
held by IUI. Mr. Waterfield II is Chairman of both companies. The
corporations have the power to dispose of these shares.
(20) Includes 103,668 or 12% of the shares of KII, held in the name of TAP &
CO. for the benefit of employees who participate in the 401(k) Plan. Mr.
Waterfield II is a member of the Administrative Committee which directs the
voting of these shares.
(21) Includes 32,559 shares of KII held in the name of CEDE & Co., nominee for
the twelve separate Irrevocable Trusts, three each (Funds 1, 2, 3 and 4) for
Harry Lee Waterfield II, RoseGayle Waterfield Hardy and Nancy Waterfield
Walton, respectively.
(22) Includes 23,926 shares of KII owned by the Kentucky Investors, Inc.,
Employee Retirement Plan of which Mr. Waterfield II is a member of the
Retirement Plan Committee.
Meetings of the Board of Directors are held on call and there is an
organizational meeting following the annual meeting of shareholders. The Board
had 8 meetings in 1995.
The Board has an Executive Committee that exercises the power of the Board
of Directors in management of the business affairs during intervals between
meetings of the Board. The Board considers the action of the Executive
Committee and has approval and veto power over its actions. The Executive
Committee met 3 times in 1995.
The Board of Directors has provided for a Finance Committee that meets on
call and reviews and makes recommendations concerning investments to the Board
of Directors. The Finance Committee did not meet in 1995.
The Board of Directors has provided for a Nominating Committee that meets
on call and submits recommendations to the Board of Directors for members of
the Board to be submitted to the shareholders for election. The Nominating
Committee met 1 time in 1995.
No one attended fewer than 75% of the aggregate of the total number of
Board and Committee meetings. The Directors were paid $100 for each Board
Meeting.
SHAREHOLDER PROPOSALS FOR THE 1997 MEETING
Shareholders who wish to suggest nominees or offer proposals intended to
be presented at the 1997 annual meeting must forward this information to the
Secretary of the Company no later than December 20, 1996.
COMPENSATION OF EXECUTIVE OFFICERS PAID BY THE CORPORATION AND ITS SUBSIDIARIES
The Company does not pay any of its executive officers a regular salary;
therefore, the Company does not have a Compensation Committee. The expense of
the retirement plan to Kentucky Investors, Inc., for its executive officers is
none. Seven executive officers of the Company, who also serve as Directors
and/or officers of IHLIC were compensated by IHLIC. The following table sets
forth each executive officer whose aggregate direct compensation from IHLIC
exceeded $100,000.
NAME AND PRINCIPAL YEAR SALARY($) BONUS($)
POSITION
Harry Lee
Waterfield II 1995 $142,684.00(1) $21,330.00
President,Chairman
of the Board, & 1994 $136,924.00(1) $20,858.00
Chief Executive
Officer 1993 $131,449.24(1) $20,411.01
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to the Company's shareholders during the
five year period ended December 31, 1995, as well as an overall stock market
index (Russell 2000) and the Company's peer group index selected on an industry
basis. The component companies utilized in the peer group are identical to
those used last year and include The Liberty Corp., Realiastar Financial Corp.,
Pioneer Financial Services Inc., Provident Companies, Inc., Torchmark Corp.,
UNUM corp., USLife Corp., and Washington national Corp. The peer group utilized
this year is identical to last year's peer group. NWNL Cos., Inc. which
appeared in last year's peer group merged with USLICO Corp. and the surviving
company changed its name to Realiastar Financial Corp. The market
capitalization of each peer group company is weighted in the performance graph
presented below.
Comparison of Five-Year Cumulative Total Return*
Kentucky Investors, Russell 2000 Index, Peer Group
(Performance results through 12/31/95)
This performance graph appears here.
1990 1991 1992 1993 1994 1995
KINV $100.00 $102.77 $101.55 $108.54 $111.75 $117.45
RUSSELL 2000 $100.00 $146.05 $172.94 $205.64 $201.56 $258.89
PEER GROUP $100.00 $144.23 $204.11 $196.36 $158.38 $230.08
Assumes $100 invested at the close of trading 12/90 in Kentucky Investors
common stock, Russell 2000 Index, and Peer Group.
*Cumulative total return assumes reinvestment of dividends.
Source: Value Line, Inc.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
AUDITORS
Ernst & Young, LLP, Louisville, Kentucky, is the independent auditing firm
for the Company and has been since 1981, including the most recent year of
1995. A representative is expected to be present at the shareholders' meeting
with the opportunity to make a statement and will respond to appropriate
questions. The services provided by Ernst & Young, LLP during 1995 consisted
of the audit of the Company's financial statements and audit of the Company's
employee benefit plans. No member of the firm of Ernst & Young, LLP has any
relationship with the Company other than the usual relationship that exists
between independent auditors and clients.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no other transactions to which the Company was or is to be a
party, in which any officer or Director or nominee for election as Director had
any direct or indirect material interest.
At the date of this proxy statement, management knows of no other matters
to come before the meeting. However, if any other matter properly comes before
the meeting, it is the intention of the persons named in the proxy statement to
vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
KENTUCKY INVESTORS, INC.
Frankfort, Kentucky
April 19, 1996 /s/
Wilma Yeary, CPS, Secretary
Proxy KENTUCKY INVESTORS, INC. Proxy
200 CAPITAL AVENUE, FRANKFORT, KENTUCKY 40601
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harry Lee Waterfield II and Jerry F. Howell, or
either of them, attorneys with full power of substitution to vote as proxies
for the undersigned at the annual meeting of shareholders of Kentucky
Investors, Inc. to be held on May 9, 1996, or at any adjournment thereof, and
vote as designated below with all powers the undersigned would possess, if
present, upon matters described in the notice of annual meeting and proxy
statement dated April 19, 1996 as follows:
(1) Election of __FOR all nominees __WITHHOLD AUTHORITY
Directors listed below (except to vote for all nominees
as marked to the below
contrary below)
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE
A LINE THROUGH THE NOMINEE'S NAME:
Helen S. Wagner Gordon Duke Robert M. Hardy, Jr.
(2) On any other matter which may come before the meeting in accordance with
their best judgement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
This proxy when properly executed will be voted in accordance with instructions
specified but in the absence of any instructions will be voted "FOR".
Please sign exactly as name appears on address. If shares of stock are held
jointly, all joint owners should sign. If signing as attorney, administrator,
executor, guardian, trustee or corporate officer, please add your title as
such.
_____________________________
_____________________________
Shareholder's signature
Date_________________________, 1996
TO BE COUNTED, THIS PROXY MUST BE SIGNED, DATED AND RECEIVED BY THE CORPORATE
SECRETARY OF KENTUCKY INVESTORS, INC., 200 CAPITAL AVENUE, P.O. BOX 717,
FRANKFORT, KENTUCKY 40602, ON OR BEFORE MAY 9, 1996.
DIRECTORS
H. GLENN DORAN (1963) E, F
Chairman of the Board,
Peoples Bank of Murray
Director, IHLIC
GORDON DUKE (1991) F
Executive Vice President, Asset
Management Division, Webb Companies
ROBERT M. HARDY, JR. (1988) E, F, N
Director, General Counsel
Investors Heritage Life Insurance Company
Kentucky Investors, Inc.
WARNER HINES (1963) N
Realtor
JERRY F. HOWELL (1963) N
Independent Investor
Director, IHLIC
DR. JERRY F. HOWELL, JR. (1983) E
Head, Dept. of Biological &
Environmental Sciences
Morehead State University
Director, IHLIC
DAVID W. REED (1982) N
Independent Businessman
HELEN S. WAGNER (1986)
Real Estate Broker,
Secretary/Treasurer, Wagner-Shuck
Builders, Inc.
Director, IHLIC
HARRY LEE WATERFIELD II (1963) E, F, N
Chairman of the Board, President & CEO
Investors Heritage Life Insurance Company
Kentucky Investors, Inc.
E - Member of Executive Committee
F - Member of Finance Committee
N - Member of Nominating Committee
