SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-K/A
AMENDMENT NO. 1
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995
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COMMISSION FILE NUMBER 0-10306
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INDEPENDENCE HOLDING COMPANY
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(Exact name of Registrant as specified in its charter)
DELAWARE 58-1407235
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(State of Incorporation) (I.R.S. Employer Identification No.)
96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT 06902
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(Address of Principal Executive Offices) (Zip Code)
(203) 358-8000
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(Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
NONE
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Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $1.00 PAR VALUE
SHARE PURCHASE WARRANTS
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports) and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
-- --
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of the Registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
14,864,549 shares of Common Stock were outstanding as of
March 15, 1996 not including 4,377,900 shares held by wholly-owned
subsidiaries of the Registrant.
The aggregate market value of the common stock held by non-
affiliates of the Registrant computed by reference to the average
bid and asked prices of such stock, as of March 15, 1996 was
$25,663,290.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
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DIRECTORS
Set forth below are each director's name, age, all positions
and offices held with the Company, principal occupations,
directorships and business experience during the past five years.
HAROLD E. JOHNSON, age 77
Director
Since November 1987, director of the Company; for more than
five years prior to retirement in 1983, Executive Vice President
of The Continental Corporation, a diversified insurance and
financial holding company with principal offices in New York, New
York; since November 1993, director of Queens County Bancorp,
Inc., a banking holding company with principal offices in Queens
County, New York.
ALLAN C. KIRKMAN, age 52
Director
Since December 1980, director of the Company; for more than
the past five years, Executive Vice President of Mellon Bank,
N.A., a national bank with principal offices in Pittsburgh,
Pennsylvania.
STEVEN B. LAPIN, age 50
President and Chief Operating Officer
Director
Since July 1991, director of the Company; since November
1993, President and Chief Operating Officer of the Company; for
more than two years prior to November 1993, Executive Vice
President - Operations of the Company; since October 1993,
President and Chief Operating Officer of Geneve Corporation, a
private diversified holding company with principal offices in
Stamford, Connecticut, which is an affiliate of the Company
("Geneve"); for more than two years prior to October 1993,
Executive Vice President and Chief Operating Officer of Geneve;
for more than the past five years, director of Geneve.
DONALD T. NETTER, age 34
Senior Vice President - Investments
Director
Since November 1993, director of the Company; since January
1995, Senior Vice President - Investments of the Company; since
February 1994, Senior Vice President - Investments of Geneve; from
February 1992 to August 1993, Senior Vice President and Treasurer
of Damon Corp., a clinical laboratory testing company with
principal offices in Needham Heights, Massachusetts ("Damon"); for
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more than one year prior to February 1992, Vice President of
Damon; for more than three years prior to August 1993, a director
of Damon. Mr. Donald T. Netter is the son of Mr. Edward Netter.
EDWARD NETTER, age 63
Chairman and Chief Executive Officer
Director
Since December 1980, director of the Company; for more than
the past five years, Chairman and Chief Executive Officer of the
Company; from December 1990 to November 1993, President of the
Company; for more than the past five years, Chairman, Chief
Executive Officer and director of Geneve.
EDWARD J. SCHEIDER, age 79
Director
Since November 1987, director of the Company and Chairman of
the Audit Committee; for more than five years prior to retirement
in March 1995, Vice President of Kidder, Peabody & Co., Inc., an
investment banking and brokerage firm with principal offices in
New York, New York.
ROY T.K. THUNG, age 52
Executive Vice President,
Chief Financial Officer and
Treasurer
Director
Since December 1990, director of the Company; since November
1993, Executive Vice President, Chief Financial Officer and
Treasurer of the Company; from May 1990 to November 1993, Senior
Vice President, Chief Financial Officer and Treasurer of the
Company; from June 1983 to December 1986, director of the Company;
since November 1993, Executive Vice President and Chief Financial
Officer of Geneve, for more than three years prior to November
1993, Senior Vice President and Chief Financial Officer of Geneve.
F. PETER ZOCH, III, age 53
Director
Since December 1980, director of the Company; from December
1990 to June 1993, Vice Chairman of the Board of the Company; for
more than the past five years, Chairman of the Executive Committee
of the Company; for more than two years prior to July 1992,
President and director of Geneve.
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EXECUTIVE OFFICERS
In addition to Messrs. Lapin, Donald T. Netter, Edward Netter
and Thung, listed above, who also serve as directors of the
Company, set forth below are each executive officer's name, age,
all positions and offices held with the Company, principal
occupations and business experience during the past five years.
Officers are elected by the Board of Directors, each to serve
until his successor is elected and has qualified, or until his
earlier resignation, removal from office or death.
TERESA A. HERBERT, age 34
Vice President and Controller
Since October 1991, Vice President and Controller of the
Company; for more than one year prior thereto, Assistant
Controller of the Company.
DAVID T. KETTIG, age 37
Vice President - Legal and Secretary
Since March 1992, Vice President - Legal and Secretary of the
Company; since March 1992, Vice President - Legal and Secretary of
Geneve; for more than one year prior thereto, associate attorney
practicing in the areas of corporate and securities law with
Battle Fowler, a law firm located in New York, New York.
BRIAN R. SCHLIER, age 41
Vice President - Taxation
Since May 1991, Vice President - Taxation of the Company; for
more than the past five years, Director of Taxation of Geneve.
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<TABLE>
ITEM 11. EXECUTIVE COMPENSATION
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SUMMARY COMPENSATION TABLE
The following table sets forth compensation paid by the Company and its subsidiaries to the five most highly compensated
executive officers of the Company during the year ended December 31, 1995 (the "Named Officers") for services rendered for the
last three fiscal years.
<CAPTION>
Long Term Compensation
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Annual Compensation Awards Payouts
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
Restricted Securities
Other Annual Stock Underlying LTIP All Other
Salary Bonus Compensation Awards Options Payouts Compensation (1)
Name and Principal Position Year ($) ($) ($) ($) (#) ($) ($)
- --------------------------- ---- ------- ------- ------------ ---------- ---------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edward Netter.............. 1995 251,159 - - - - - 2,584
Chairman and Chief 1994 251,040 50,000 - - - - 2,653
Executive Officer 1993 291,000 50,000 - - - - 2,538
Steven B. Lapin............ 1995 250,851 150,000 - - 236,000 - 36,826
President and Chief 1994 249,990 150,000 - - - - 113,108
Operating Officer 1993 225,000 150,000 - - - - 90,260
Roy T.K. Thung............. 1995 200,853 120,000 - - 189,000 - 32,410
Executive Vice President 1994 200,000 120,000 - - - - 98,953
Chief Financial Officer, 1993 180,000 120,000 - - - - 78,965
and Treasurer
Donald T. Netter........... 1995 142,021 91,338 - - - - 1,872
Senior Vice President -
Investments
David T. Kettig............ 1995 103,775 20,416 - - 25,000 22,250 1,051
Vice President - 1994 99,455 23,332 - - - - (7,095)
Legal and Secretary 1993 102,000 23,331 - - - - 10,152
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</TABLE>
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(1) Amounts shown for 1993, 1994 and 1995 for all of the Named
Officers include the dollar value of premiums paid for term
life insurance. In addition, amounts shown for Messrs. Lapin
and Thung include amounts accrued during 1993, 1994 and 1995
under Retirement Benefit Agreements with the Company
(described below under the heading "Retirement Benefit
Agreements"). Amounts shown for Mr. Kettig also include the
value of incentive units based on the increase or decrease in
book value per share of the Company's Common Stock for each
of calendar years 1993 and 1994; such units were paid in full
in 1995. The Named Officers also received compensation and
benefits during 1993, 1994 and 1995 from Geneve and/or its
affiliates (other than the Company) for services rendered to
such companies, which amounts are not included in this table.
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<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth certain information concerning
grants of stock options to the Named Officers who received grants
during 1995.
Grant Date
Individual Grants Value
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(a) (b) (c) (d) (e) (f)
% of
Number of Total
Securities Options Grant
Underlying Granted to Exercise Date
Options Employees or Base Present
Granted in Fiscal Price Expiration Value $
Name (#) Year ($/Sh) Date (1)
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Steven B. 137,500 23% 3.28 4/4/05 184,250
Lapin 98,500 17% 3.84 12/29/05 132,975
Roy T.K. 112,500 19% 3.28 4/4/05 150,750
Thung 76,500 13% 3.84 12/29/05 103,275
David T.
Kettig 25,000 4% 3.28 4/4/05 33,500
(1) Present value determinations were made using the Black-
Scholes model of theoretical options pricing, and were based
on the following assumptions: (A) expected volatility is
based on the three year period, calculated weekly, preceding
the date of grant; (B) the risk-free rate of return is based
on the close of the 10 year U.S. Treasury Note yield to
maturity as at the date of grant; (C) dividend yield assumes
that the current dividend rate paid on the Common Stock
continues unchanged until the expiration date of the options
and (D) a three-year phased-in vesting period that averages
two years. The actual value an executive officer receives is
dependent on future stock market conditions, and there can be
no assurance that the amounts reflected in column (f) of the
Option Grants Table will actually be realized. No gain would
be realized by an executive officer without appreciation in
the market value of the Common Stock, which would benefit all
stockholders commensurately.
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AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR -
END OPTION VALUES
The following table sets forth certain information concerning
stock options of the Named Officers who had options at December
31, 1995. No options were exercised in 1995 by the Named
Officers.
(a) (b) (c) (d) (e)
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
FY-End(#) FY-End($)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
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Steven B. Lapin 0 0 0/236,000 0/$64,625
Roy T.K. Thung 0 0 0/189,000 0/$52,875
David T. Kettig 0 0 0/25,000 0/$11,750
DIRECTORS' COMPENSATION
Directors of the Company who are not also officers of the
Company receive a monthly fee of $500 plus $400 for each Board or
Committee meeting attended. Directors who are officers of the
Company do not receive compensation for serving as directors of
the Company.
Pursuant to the Company's 1988 Stock Incentive Plan,
directors of the Company who are not also employees of the Company
or a subsidiary ("Independent Directors") are each granted non-
qualified stock options with respect to 1,000 shares of Common
Stock at the first meeting of the Board of Directors following
each Annual Meeting of Stockholders of the Company, which stock
options vest six months after date of grant. Outstanding options
granted at such 1995 Board meeting fully vested on December 23,
1995, and have an exercise price of $3.156 per share.
RETIREMENT BENEFIT AGREEMENTS
In 1991, the Company entered into retirement benefit
agreements with Messrs. Lapin and Thung pursuant to which they are
entitled to receive cash payments, based upon their salaries, at
such time as they retire or otherwise terminate their employment
with the Company. Such payments are fully vested. Assuming that
such individuals' employment with the Company had terminated on
December 31, 1995, Messrs. Lapin and Thung would have been
entitled to receive approximately $430,196 and $394,226,
respectively, which amounts increase each year they remain
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employed by the Company until they attain age 62. Of such
amounts, $34,486 and $30,070, respectively, were accrued in 1995
for Messrs. Lapin and Thung.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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Listed below are the number of shares of Common Stock
beneficially owned as of April 1, 1996 by the holders of more than
5% of the Common Stock of the Company.
Common Stock
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Geneve Holdings, Inc.(1).......... 8,185,815
96 Cummings Point Road (55.1%)
Stamford, Connecticut 06902
(1) According to (i) information disclosed in Amendment No. 33 to
Schedule 13D dated May 13, 1993 of Geneve Holdings, Inc.
(together with its affiliates also referred to herein as
"Geneve") supplemented by (ii) information provided to the
Company by Geneve in response to a Company questionnaire, a
group consisting of Geneve and certain of its affiliates are
the beneficial owners of 8,185,815 shares of Common Stock. As
of December 31, 1995, Geneve did not own any of the Company's
share purchase warrants (the "Warrants"). Edward Netter,
Chairman and Chief Executive Officer and a director of the
Company, is an executive officer and a director of Geneve.
Donald T. Netter, an executive officer and a director of the
Company, is an executive officer of Geneve. Edward Netter and
members of his family (including Donald T. Netter) own more
than 50% of the voting stock of Geneve. Edward Netter and
Donald T. Netter disclaim beneficial ownership as to the
shares of Common Stock owned by Geneve.
_____________________________
To the best knowledge of the Company, Geneve has sole
investment and voting power with respect to the shares listed
above, and no other person or persons acting in concert own
beneficially more than 5% of the Common Stock.
The following table sets forth for each director of the
Company, the Named Officers, and all directors and executive
officers of the Company as a group, information regarding
beneficial ownership of Common Stock as of April 1, 1996. None of
the directors, Named Officers or directors and executive officers
as a group owns beneficially any Warrants.
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<PAGE>
Number of Percent of Class
Name Shares Entitled to Vote
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Harold E. Johnson................ 21,000 (1) *
Allan C. Kirkman................. 8,000 (1) *
Steven B. Lapin.................. 237,000 (2) 1.6%
Donald T. Netter................. - 0 - (3) -
Edward Netter.................... - 0 - (3) -
Edward J. Scheider............... 151,473 (1) (4) 1.0%
Roy T.K. Thung................... 191,500 (5) 1.3%
F. Peter Zoch, III............... 2,000 (6) *
David T. Kettig.................. 25,000 (7) *
All directors and executive
officers as a group (11 persons) 687,073 (1)(2)(3)(4) 4.5%
(5)(6)(7)(8)
(1) Constitutes or includes 8,000 shares of Common Stock subject
to options granted to each such director of which, in each
case, all shares are presently exercisable.
(2) Includes 137,500 shares of Common Stock subject to options
granted to Mr. Lapin in April 1995, of which one-third are
presently exercisable and the balance will vest ratably in
April 1997 and April 1998, and 98,500 shares of Common Stock
subject to options granted to Mr. Lapin in December 1995
which will vest ratably in December 1996, 1997 and 1998.
(3) Edward Netter and Donald T. Netter disclaim beneficial
ownership of the shares of Common Stock shown as owned by
Geneve in the table relating to Principal Stockholders.
Reference is also made to footnote (1) to such table.
(4) Includes 67,000 shares of Common Stock owned by Mr.
Scheider's wife, as to which shares Mr. Scheider disclaims
beneficial ownership.
(5) Includes 112,500 shares of Common Stock subject to options
granted to Mr. Thung in April 1995, of which one-third are
presently exercisable and the balance will vest ratably in
April 1997 and April 1998, and 76,500 shares of Common Stock
subject to options granted to Mr. Thung in December 1995
which will vest ratably in December 1996, 1997 and 1998.
(6) Constitutes 2,000 shares of Common Stock subject to options
granted to Mr. Zoch, all of which shares are presently
exercisable.
(7) Includes 25,000 shares of Common Stock subject to options
granted to Mr. Kettig in April 1995, of which one-third are
presently exercisable and the balance will vest ratably in
April 1997 and April 1998.
(8) Includes 50,000 shares of Common Stock subject to options
granted to two executive officers, of which 20,000 are
presently excercisable and the balance will vest ratably in
April 1997 and April 1998.
* Represents less than 1% of the outstanding Common Stock.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
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The Company and Geneve operate under cost-sharing
arrangements pursuant to which certain items are allocated between
the companies. During 1995, the Company paid to Geneve or accrued
for payment thereto approximately $190,000 under such
arrangements, and paid or accrued an additional approximately
$48,000 for the first quarter of 1996. Geneve also provides the
Company the use of office space as its corporate headquarters for
annual consideration of $262,500. In addition, certain current or
former directors, officers and/or employees of the Company or its
subsidiaries, who are also current or former directors, officers
and/or employees of Geneve, received compensation and benefits
from Geneve for services rendered thereto since January 1, 1995.
The foregoing is subject to the approval of the Audit Committee of
the Board of Directors at least annually, and management of the
Company believes that the terms thereof are no less favorable than
could be obtained by the Company from unrelated parties on an
arm's length basis.
At various times since January 1, 1995, certain securities
transfers were made between the Company and/or certain of its
subsidiaries, on the one hand, and Geneve, on the other hand, at
fair market value. The Company has invested approximately $11.3
million as a limited partner in a partnership managed by
affiliates of Geneve. Consistent with the terms of the
partnership agreement applicable to all limited partners, the
Company will pay an annual management fee of 1.25% of its
beginning capital account for each quarter, commencing April 1,
1996. If the partnership earns more than a specified rate of
return, an incentive allocation will also be payable to such
affiliates at the end of each year; however, such amount cannot be
determined at this time. Amounts paid in connection with such
limited partnership investment will be offset (in whole or in
part) by a reduction in overhead and salaries in the Company's
cost-sharing arrangements with Geneve.
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SIGNATURE
The undersigned Registrant hereby amends the following items
of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 as set forth in the pages attached hereto:
Item 10. Directors and Executive Officers of the Registrant.
Item 11. Executive Compensation.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
Item 13. Certain Relationships and Related Transactions.
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this Amendment to be
signed on its behalf by the undersigned, thereunto duly
authorized, on April 25, 1996.
INDEPENDENCE HOLDING COMPANY
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(THE REGISTRANT)
By: /s/Roy T.K. Thung
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Roy T.K. Thung
Executive Vice President,
Chief Executive Officer
and Treasurer
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