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, 1996
-------------------------------------------
COMMISSION FILE NUMBER 0-10306
------------------------------
INDEPENDENCE HOLDING COMPANY
-------------------------------------------------------
(Exact name of Registrant as specified in its charter)
DELAWARE 58-1407235
------------------------ ----------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
96 CUMMINGS POINT ROAD, STAMFORD, CONNECTICUT 06902
--------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(203) 358-8000
------------------
(Telephone Number)
Securities registered pursuant to Section 12(b) of the Act:
NONE
- ------------------------------------------------------------
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $1.00 PAR VALUE
SHARE PURCHASE WARRANTS
- ------------------------------------------------------------
(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]
7,431,769 shares of Common Stock were outstanding as of March
14, 1997 (adjusted for the one-for-two reverse stock split of the
Company's shares of Common Stock effective June 28, 1996).
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 14, 1997 was
$24,026,474.
Portions of the Proxy Statement for the Annual Meeting of
Stockholders scheduled for June 16, 1997 are incorporated by
reference into Part III of this filing.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
--------------------------------------------------
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 78
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 53
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 51
President and Chief Operating Officer
Director
Since July 1991, director of the Company; since November
1993, President and Chief Operating Officer of the Company; 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"); prior to October 1993, Executive Vice
President and Chief Operating Officer of Geneve; for more than the
past five years, director of Geneve; since August 1992, director
of Zimmerman Sign Company ("Zimmerman"), a provider of site
identification products and services, which became a publicly held
company in December 1996.
DONALD T. NETTER, age 35
Director
Since November 1993, director of the Company; from January
1995 to December 31, 1996, Senior Vice President - Investments of
the Company; since February 1994, Senior Vice President -
Investments of Geneve; since March 1996, Chairman and Chief
Executive Officer of the managing member of the general partner of
2
<PAGE>
Dolphin Limited Partnership, an investment partnership which
ceased to be an affiliate of the Company in January 1997; 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");
prior to August 1993, a director of Damon. Mr. Donald T. Netter is
the son of Mr. Edward Netter.
EDWARD NETTER, age 64
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 80
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 53
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, prior to November 1993, Senior Vice President
and Chief Financial Officer of Geneve; since December 1996,
director of Zimmerman.
F. PETER ZOCH, III, age 54
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; prior to July 1992, President and director of
Geneve.
3
<PAGE>
EXECUTIVE OFFICERS
In addition to Messrs. Lapin, 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 35
Vice President and Controller
Since October 1991, Vice President and Controller of the
Company.
DAVID T. KETTIG, age 38
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.
BRIAN R. SCHLIER, age 42
Vice President - Taxation
Since May 1991, Vice President - Taxation of the Company; for
more than the past five years, Director of Taxation of Geneve.
4
<PAGE>
<TABLE>
ITEM 11. EXECUTIVE COMPENSATION
----------------------
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, 1996 (the "Named Officers") for services rendered for the
last three fiscal years.
<CAPTION>
Long Term Compensation
-------------------------------------
Annual Compensation Awards Payouts
------------------------------------------- ------------------------- ---------
(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(2)
Name and Principal Position Year ($) ($) ($) ($) (#)(1) ($) ($)
- --------------------------- ---- ------- ------- ------------ ---------- ---------- ------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Edward Netter.............. 1996 251,177 50,000 - - - - 2,577
Chairman and Chief 1995 251,159 - - - - - 2,584
Executive Officer 1994 251,040 50,000 - - - - 2,653
Steven B. Lapin............ 1996 250,940 210,000 - - - - 39,906
President and Chief 1995 250,851 150,000 - - 118,000 - 36,826
Operating Officer 1994 249,990 150,000 - - - - 113,108
Roy T.K. Thung............. 1996 200,932 168,000 - - - - 35,092
Executive Vice President 1995 200,853 120,000 - - 94,500 - 32,410
Chief Financial Officer, 1994 200,000 120,000 - - - - 98,953
and Treasurer
David T. Kettig............ 1996 105,604 29,165 - - - - 1,040
Vice President - 1995 103,775 20,416 - - 12,500 22,250 1,051
Legal and Secretary 1994 99,455 23,332 - - - - (7,095)
Teresa A. Herbert.......... 1996 93,956 28,250 - - - - 1,306
Vice President 1995 92,301 17,425 - - 12,500 22,250 1,291
and Controller 1994 88,259 20,500 - - - - (6,848)
</TABLE>
5
<PAGE>
(1) Adjusted for the Company's 1-for-2 reverse common stock split
in June 1996.
(2) Amounts shown for 1994, 1995 and 1996 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 1994, 1995 and 1996
under Retirement Benefit Agreements with the Company
(described below under the heading "Retirement Benefit
Agreements"). Amounts shown for Mr. Kettig and Ms. Herbert
also include the value of incentive units based on the
decrease in book value per share of the Company's Common
Stock for 1994; such units were paid in full in 1995.
Certain of the Named Officers also received compensation and
benefits during 1994, 1995 and 1996 from Geneve and/or its
affiliates (other than the Company) for services rendered to
such companies, which amounts are not included in this table.
6
<PAGE>
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, 1996. No options were exercised in 1996 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(#)(1) FY-End($)(2)
Shares
Acquired on Value Exercisable/ Exercisable/
Name Exercise(#) Realized($) Unexercisable Unexercisable
- -------------------------------------------------------------------------
Steven B. Lapin 0 0 39,334/78,666 $18,620/$37,239
Roy T.K. Thung 0 0 31,500/63,000 $15,234/$30,469
David T. Kettig 0 0 4,167/ 8,333 $ 3,386/$ 6,771
Teresa A. Herbert 0 0 6,667/ 8,333 $ 3,386/$ 6,771
(1) Adjusted for the Company's 1-for-2 reverse common stock split
in June 1996.
(2) Does not reflect adjustment in March 1997 to the exercise
price of the Company's stock options to reflect the
distribution of all of the Company's interest in Zimmerman.
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 500 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 1996 Board meeting fully vested on March 13, 1997, and
currently have an exercise price of $8.41 per share.
7
<PAGE>
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, 1996, Messrs. Lapin and Thung would have been
entitled to receive approximately $468,913 and $429,706,
respectively, which amounts increase each year they remain
employed by the Company until they attain age 62. Of such
amounts, $37,590 and $32,776, respectively, were accrued in 1996
for Messrs. Lapin and Thung.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
---------------------------------------------------
Listed below are the number of shares of Common Stock
beneficially owned as of April 1, 1997 by the holders of more than
5% of the Common Stock of the Company.
Common Stock
------------
Geneve Holdings, Inc.(1).......... 4,092,906
96 Cummings Point Road (55.1%)
Stamford, Connecticut 06902
(1) According to (i) information disclosed in Amendment No. 34 to
Schedule 13D dated January 7, 1997 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 4,092,906 shares of Common Stock. As
of December 31, 1996, Geneve did not own any of the Company's
share purchase warrants (the "Warrants"). Mr. Edward Netter,
Chairman and Chief Executive Officer and a director of the
Company, is an executive officer and a director of Geneve.
Mr. Donald T. Netter, a director of the Company, is an
executive officer of Geneve. Mr. Edward Netter and members of
his family (including Mr. Donald T. Netter) own more than 50%
of the voting stock of Geneve. Messrs. 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.
8
<PAGE>
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, 1997. None of
the directors, Named Officers or directors and executive officers
as a group owns beneficially any Warrants.
Number of Percent of Class
Name Shares Entitled to Vote
---- ----------- ----------------
Harold E. Johnson................ 11,000 (2) *
Allan C. Kirkman................. 4,500 (2) *
Steven B. Lapin.................. 118,500 (3) 1.6%
Donald T. Netter................. (4) -
Edward Netter.................... (4) -
Edward J. Scheider............... 76,236 (2) (5) 1.0%
Roy T.K. Thung................... 95,750 (6) 1.3%
F. Peter Zoch, III............... 1,500 (7) *
David T. Kettig.................. 13,000 (8) *
Teresa A. Herbert................ 15,550 (9) *
All directors and executive
officers as a group (11 persons) 346,036 (1)(2)(3)(4)(5) 4.5%
(6)(7)(8)(9)(10)
(1) Adjusted for the Company's 1-for-2 reverse common stock split
in June 1996.
(2) Constitutes or includes 4,500 shares of Common Stock subject
to options granted to each such director of which, in each
case, all shares are presently exercisable.
(3) Includes 68,750 shares of Common Stock subject to options
granted to Mr. Lapin in April 1995, of which two-thirds are
presently exercisable and the balance will vest in April
1998, and 49,250 shares of Common Stock subject to options
granted to Mr. Lapin in December 1995, of which one-third are
presently exercisable and the balance will vest ratably in
December 1997 and 1998.
(4) As described in the table relating to Principal Stockholders,
Geneve and certain of its affiliates are the beneficial
owners of 4,092,906 shares of Common Stock, which represents
55.1% of the outstanding Common Stock as of April 1, 1997.
Mr. Edward Netter, Chairman and Chief Executive Officer and
a director of the Company, is an executive officer and a
director of Geneve. Mr. Donald T. Netter, a director of the
Company, is an executive officer of Geneve. Mr. Edward Netter
and members of his family (including Mr. Donald T. Netter)
own more than 50% of the voting stock of Geneve. Messrs.
Edward Netter and Donald T. Netter disclaim beneficial
ownership as to the shares of Common Stock owned by Geneve.
9
<PAGE>
(5) Includes 33,500 shares of Common Stock owned by Mr.
Scheider's wife, as to which shares Mr. Scheider disclaims
beneficial ownership.
(6) Includes 56,250 shares of Common Stock subject to options
granted to Mr. Thung in April 1995, of which two-thirds are
presently exercisable and the balance will vest in April
1998, and 38,250 shares of Common Stock subject to options
granted to Mr. Thung in December 1995, of which one-third are
presently exercisable and the balance will vest ratably in
December 1997 and 1998.
(7) Constitutes 1,500 shares of Common Stock subject to options
granted to Mr. Zoch, all of which shares are presently
exercisable.
(8) Includes 12,500 shares of Common Stock subject to options
granted to Mr. Kettig in April 1995, of which two-thirds are
presently exercisable and the balance will vest in April
1998.
(9) Includes 2,500 shares of Common Stock subject to options
granted to Ms. Herbert in October 1988, all of which shares
are presently exercisable, and 12,500 shares of Common Stock
subject to options granted to Ms. Herbert in April 1995, of
which two-thirds are presently exercisable and the balance
will vest in April 1998.
(10) Includes 10,000 shares of Common Stock subject to options
granted to one executive officer, of which two-thirds are
presently exercisable and the balance will vest in April
1998.
* Represents less than 1% of the outstanding Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
----------------------------------------------
The Company and Geneve operate under cost-sharing
arrangements pursuant to which certain items are allocated between
the companies. During 1996, the Company paid to Geneve or accrued
for payment thereto approximately $165,000 under such
arrangements, and paid or accrued approximately an additional
$41,000 for the first quarter of 1997. Geneve also provides the
Company the use of office space as its corporate headquarters for
annual consideration of $236,000. 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, 1996.
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.
10
<PAGE>
At various times since January 1, 1996, 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 as a limited partner
in Dolphin Limited Partnership ("Dolphin"), an investment
partnership of which Mr. Donald Netter is the Chairman and Chief
Executive Officer of the managing member of the general partner
and, since January 1997, the principal shareholder. Consistent
with the terms of the partnership agreement, in addition to other
defined expenses, limited partners pay quarterly a management fee
based on their beginning capital accounts, and an annual
performance-based incentive allocation.
11
<PAGE>
SIGNATURE
The undersigned Registrant hereby amends the following items
of its Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 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 30, 1997.
INDEPENDENCE HOLDING COMPANY
----------------------------
(THE REGISTRANT)
By: /s/Roy T.K. Thung
--------------------------
Roy T.K. Thung
Executive Vice President,
Chief Executive Officer
and Treasurer
12
