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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-42937
PROSPECTUS
922,956 SHARES
UICI
COMMON STOCK
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The shares offered hereby (the "Shares") consist of 922,956 shares of
common stock, par value $0.01 per share (the "Common Stock"), of UICI, a
Delaware corporation (the "Company"). The Shares may be offered from time to
time by certain stockholders (the 'Selling Stockholders') identified herein.
See "Selling Stockholders and Plan of Distribution." The Company will not
receive any part of the proceeds from the sales of the Shares. All expenses of
registration incurred in connection herewith are being borne by the Company,
but all selling and other expenses incurred by the Selling Stockholders will be
borne by the Selling Stockholders.
The Selling Stockholders have not advised the Company of any specific
plans for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time in transactions
(which may include block transactions) on the National Association of
Securities Dealers Automated Quotation ("NASDAQ") System at the market price
then prevailing or at prices related to prevailing prices, in negotiated
transactions at negotiated prices or otherwise. See "Selling Stockholders and
Plan of Distribution".
The Company's Common Stock trades on the NASDAQ National Market tier
of The NASDAQ Stock Market under the symbol UICI. On December 31, 1997, the
closing sale price of the Common Stock was $34 7/8 per share.
THE PURCHASE OF THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The date of this Prospectus is December 31, 1997.
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No dealer, salesperson or other person has been authorized to give any
information or to make any representations, other than those contained or
incorporated by reference in this Prospectus, in connection with the offering
contained herein and, if given or made, such information must not be relied
upon as having been authorized by the Company or the Selling Stockholders.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful to make such offer in such jurisdiction. Neither
the delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page Page
<S> <C> <C> <C>
Selling Stockholders and Plan
Available Information..................... 2 of Distribution........................... 10
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Incorporation of Certain Documents
by Reference............................ 3 Description of Capital Stock............... 11
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The Company............................... 4 Experts.................................... 12
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Risk Factors.............................. 6 Legal Matters.............................. 12
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Use of Proceeds........................... 9
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</TABLE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
and information statements filed by the Company may be inspected and copied at
the Public Reference Section of the Commission at 450 Fifth Street, N.W.
Washington, D.C. 20549, and at the Commission's Regional Offices at Seven
World Trade Center, 13th Floor, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can also be obtained from the Public Reference Section
of the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street N.W.,
Washington D.C. 20549 at prescribed rates. The Company's securities are quoted
on the NASDAQ National Market. Reports and other information about the Company
may be inspected at the offices maintained by the National Association of
Securities Dealers, Inc., NASDAQ Reports Section, 1735 K Street, N.W.,
Washington, D.C. 20006. The Commission maintains a Web site that contains
reports, proxy and information statements and other information regarding the
Company; the address of such site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement"), under the Securities Act of 1933, as
amended (the "Act"), with respect to the Common Stock offered hereby. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. Any statements contained herein concerning the provisions of any
document are not necessarily complete and, in each
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instance, reference is made to the copy of such document filed as an exhibit to
the Registration Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference. Copies of the
Registration Statement, including all exhibits thereto, may be obtained from
the Commission's principal office in Washington D.C. upon payment of the fees
prescribed by the Commission or may be examined without charge at the offices
of the Commission as described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents filed by the Company
with the Commission are incorporated by reference in this Prospectus:
(a) The Company's Annual Report on Form 10-K/A for the year ended
December 31, 1996, filed on April 3, 1997.
(b) The Company's Quarterly Reports on Form 10-Q for quarters ended
March 31, 1997 filed on May 15, 1997, June 30, 1997 filed on August 13, 1997,
and September 30, 1997 filed on November 13, 1997.
(c) The registration statement on Form 8-A filed on March 17, 1986,
which discusses the terms of the Common Stock as updated by Quarterly Report on
10-Q for quarter ended June 30, 1996 filed on August 13, 1996.
Each document filed subsequent to the date of this Prospectus by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act,
prior to the filing of a post-effective amendment which indicates that all
securities offered hereby have been sold or which deregisters all securities
remaining unsold, shall be deemed to be incorporated by reference herein and to
be a part hereof from the date of the filing of such reports and documents.
Any statement contained in a document, all or a portion of which is
incorporated by reference herein, shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained or
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, upon the written or oral
request of any such person, a copy of any or all such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents
that this Prospectus incorporates). Written or oral requests for copies should
be directed to: Investor Relations, UICI, 4001 McEwen Drive, Suite 200, Dallas,
Texas 75244-5082, (telephone number (972) 392-6700).
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THE COMPANY
UICI and subsidiaries (the "Company"), provides health, life and other
financial products to selected niche markets. The Company issues health
insurance policies to the self-employed and student markets. For the
self-employed market, which includes self-employed individuals and individuals
who work for small businesses with five or fewer employees, the Company offers
a range of health insurance products. Catastrophic hospital and basic
hospital-medical expense plans are tailored to an insured's individual needs
and include managed care options such as a Preferred Provider Organization
("PPO") plan as well as other coverage modifications. The Company markets
these products through "dedicated" agency sales forces, consisting of over
5,000 independent contractors who primarily sell the Company's products. For
the student market, the Company offers tailored insurance programs which
generally provide single school year coverage to individual students primarily
at universities but also at public and private schools for kindergarten through
grade 12. In this market, the Company sells its products through in-house
account executives who focus on colleges and universities on a national basis.
Health insurance premiums were $501.2 million in 1996, or 69% of the Company's
total revenues.
The Company issues life insurance products to selected niche markets
and acquires blocks of life insurance and annuity policies from other insurers
on an opportunistic basis. The life insurance policies issued by the Company
are marketed through a dedicated agency sales force. In addition, the Company
assists individuals with no, or troubled, credit experience in obtaining a
nationally recognized credit card by providing financial support for the card.
This product is marketed through a sales force of independent contractors. The
Company also offers advanced paperless technologies, value added administrative
and outsourcing services, and underwriting, risk management and consulting
services to clients in the health care market. In 1996, the Company acquired
an interest in a real estate organization that is focused on the development,
acquisition and management of institutional quality multifamily communities in
the Southeast, Southwest and Midwest areas of the United States. In 1997, the
Company made several acquisitions whereby it acquired a controlling interest in
a company that develops, markets, and services innovative programs that allow
students and families to finance the costs associated with obtaining a
post-secondary education. The programs provide access to an array of student
loan products and services, including federally guaranteed loans originated
according to the Higher Education Act of 1965. Also in 1997, the Company
acquired a provider of motor club services to motorists. The Company markets
and provides over 450,000 members with benefits such as road and towing
assistance, trip routing, emergency travel assistance, and accident related
indemnity benefits.
At its inception in 1984, the Company's business consisted solely of
coinsurance of health and term life insurance policies sold by United Group
Association, Inc. ("UGA") agents to the self-employed market and issued by
subsidiaries of AEGON USA, Inc. (together with its subsidiaries, "AEGON").
Principally through acquisitions of insurance companies and blocks of life
insurance and annuity policies, and the development of the underwriting and
administrative capabilities to issue insurance policies directly, the
percentage of the Company's total revenues in 1996 relating to the coinsurance
business decreased to 32% from 72% in 1986 (although in absolute terms such
revenues continued to increase over prior years).
On April 1, 1996 the Company acquired AEGON's underwriting, claims
management and administrative capabilities related to products coinsured by the
Company. In connection with this
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transaction, UGA agents began to market health insurance products of the
Company rather than the coinsured product. Effective January 1, 1997, the
Company acquired the agency force and certain assets of UGA for a price equal
to the net book value of the tangible assets acquired and assumed certain agent
commitments which are estimated not to exceed $5.0 million. UGA was owned 100%
by the Company's Chairman at December 31, 1996. The tangible assets acquired
consist primarily of agent debit balances, a building, and related furniture
and fixtures having a net book value of $13.1 million, which approximates
market value of the tangible assets. The elimination of the sharing of
business with AEGON and the acquisition of the agency force are expected to
have a positive impact on the long term future of the Company.
The Company's principal subsidiaries through which the business of the
Self-Employed Health Insurance Division, Student Health Insurance Division and
the Life Insurance and Annuity Division are conducted are The MEGA Life and
Health Insurance Company ("MEGA"), which is wholly-owned by the Company,
Mid-West National Life Insurance Company of Tennessee ("Mid-West"), in which
the Company owns 99% of the outstanding stock, and The Chesapeake Life
Insurance Company ("Chesapeake"), in which the Company owns 78% of the
outstanding stock. MEGA is an insurance company domiciled in Oklahoma and is
licensed to issue health and life insurance policies in all states except New
York. Mid-West is an insurance company domiciled in Tennessee and is licensed
to issue health and life insurance policies in Puerto Rico and all states
except Maine, New Hampshire, New York, and Vermont. Chesapeake is an insurance
company domiciled in Oklahoma and is licensed to issue health and life
insurance policies in all states except New Jersey, New York and Vermont.
MEGA is currently rated "A (Excellent)," Mid-West is currently rated "A-
(Excellent)," and Chesapeake is currently rated "B++ (Very Good)" by A.M. Best.
A.M. Best's ratings currently range from "A++ (Superior)" to "F (Liquidation)."
A.M. Best's ratings are based upon factors relevant to policyholders, agents,
insurance brokers and intermediaries and are not directed to the protection of
investors.
The business of the Credit Services Division is conducted primarily
through United Credit National Bank and Specialized Card Services, Inc., both
wholly-owned subsidiaries, and United Membership Marketing Group, LLC, in which
the Company owns 85% of the outstanding equity. The student loan business is
conducted primarily through Education Finance Group, LLP in which the Company
owns a 63.6% interest. The motor club business is conducted through National
Motor Club of America, Inc. which is licensed to do business in 47 states.
The Institutional Technology and Outsourcing Division operates through
a number of wholly-owned and partially owned subsidiaries, as well as companies
in which the Company does not hold a majority interest. Effective January 1,
1997, the Company acquired the remaining interest of its subsidiaries Insurdata
Incorporated ("Insurdata") and UICI Insurance Administrators, Incorporated
("UAI"), based on a predetermined formula price of $15.1 million. The Company
acquired a majority interest in Insurdata and UAI in October 1995.
In November 1996, the Company acquired through a privately negotiated
stock exchange agreement 100% of Amli Realty Co. ("ARC"). ARC is a
full-service real estate organization whose principal investment is a 11%
equity interest in Amli Residential Properties Trust, a publicly traded real
estate investment trust. The Company, including ARC, has a 14% equity interest
in Amli Residential Properties Trust.
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In December 1997, the Company acquired through a privately negotiated
merger agreement 100% of ELA Corp. ("ELA"). ELA provides marketing and
pre-disbursement servicing of college student loans made under the Federal
Family Education Loan Program.
The Company's principal executive offices are located at 4001 McEwen
Drive, Suite 200, Dallas, Texas 75244. Its telephone number is (972) 392-6700.
RISK FACTORS
The following information, in addition to the other information
contained in this Prospectus, should be considered carefully by prospective
purchasers of the Common Stock in evaluating the Company, its business and an
investment in the shares of Common Stock offered hereby. Certain statements
set forth herein or incorporated by reference herein from the Company's filings
that are not historical facts are forward-looking statements within the meaning
of the Private Securities Litigation Reform Act. Actual results may differ
materially from those included in the forward-looking statements. These
forward-looking statements involve risks and uncertainties including, but not
limited to, the following:
HEALTH CARE REFORM
Many proposals have been introduced in Congress and various state
legislatures to reform the present health care system. Some of these proposals
are specifically directed at the small group health care market, which could
affect the Company's principal business. At the state level, a number of
states have passed or are considering legislation that would limit the
differentials in rates that carriers could charge between new business and
renewal business and with respect to similar demographic groups. Legislation
also has been adopted or is being considered that would make health insurance
available to all small groups by requiring coverage of all employees and their
dependents, by limiting the applicability of pre-existing conditions
exclusions, by requiring carriers to offer a basic plan exempt from certain
mandated benefits as well as a standard plan and by establishing a mechanism to
spread the risk of high risk employees to all small group carriers.
At the federal level, several competing proposals have been introduced
or passed in Congress. One law which was introduced by Senators Nancy
Kassebaum and Edward Kennedy (the "Kassebaum-Kennedy legislation") was passed
in 1996. The Kassebaum-Kennedy legislation builds upon state initiatives by
guaranteeing "group-to-individual" portability. Under the legislation, any
person governed by a group insurance plan for at least eighteen months will, on
leaving the group plan, have the right to buy an individual policy from any
insurance company selling individual health insurance policies in that person's
state regardless of whether that person has a preexisting condition. This
provision could result in the Company insuring individuals who under the
Company's current underwriting standards would not be insured by the Company,
which could have a material adverse effect on the Company.
The Company is unable to predict when or whether any federal or state
proposals, or some combination thereof, will be enacted or, if enacted, the
likely impact on the Company. It is possible, however, that the enactment of
such health care reform legislation could adversely affect the Company's
results of operations. The Company has ceased issuing or coinsuring insurance
in the self-employed market in several states as a result of legislative
developments.
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INCREASING HEALTH CARE COSTS
The Company's profitability from health insurance depends in large
part on its ability to predict and effectively manage claims related to health
care costs. The aging of the population and other demographic characteristics
and advances in medical technology continue to contribute to rising health care
costs. Government- imposed limitations on Medicare and Medicaid reimbursements
also have caused the private sector to bear a greater share of increasing
health care costs. Changes in health care practices, inflation, new
technologies, major epidemics, natural disasters and numerous other factors
affecting the delivery and cost of health care are beyond any company's control
and may limit the Company's ability to predict and control health care costs
and claims.
REGULATION
The Company's insurance subsidiaries, and the manner in which their
businesses are conducted, are subject to extensive regulation in their
domiciliary states and the other states in which they do business. Such
regulation is primarily intended to protect policyholders rather than
investors. Federal regulation, such as the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), also affects the manner in which the
Company's insurance subsidiaries conduct their business. Certain of the
Company's subsidiaries, and the manner in which their businesses are conducted,
are also subject to regulation not directly related to the business of
insurance, including regulation of student loans and the marketing of credit
cards.
Compliance with legal or regulatory restrictions limits the ability of
the Company's subsidiaries to conduct their operations. A failure to comply
may subject the affected subsidiary to a loss or suspension of a right to
engage in certain businesses or business practices, criminal or civil fines, an
obligation to make restitution or pay refunds or other sanctions, which could
adversely affect the manner in which the Company's subsidiaries conduct their
businesses and the Company's results of operations.
State and federal regulation is continually changing and the Company
is unable to predict whether or when any such changes will be adopted. It is
possible, however, that the adoption of such changes could adversely affect the
manner in which the Company's subsidiaries conduct their business and the
Company's results of operations.
RELIANCE ON KEY MANAGEMENT
The Company relies on its senior management, including Mr. Ronald L.
Jensen, Chairman of the Board, President and Chief Executive Officer, and the
executives who are responsible for the business of the Company's various
divisions. Such executives are given substantial responsibility for their
respective divisions. The loss of the services of any of these persons could
have a material adverse effect on the Company's results of operations.
CONFLICTS OF INTERESTS WITH MR. JENSEN AND JENSEN-OWNED COMPANIES
Mr. Jensen owns approximately 18% of the Common Stock as of the date
of this Prospectus. The Company depends on certain relationships with other
companies owned by Mr. Jensen. The interests of Mr. Jensen, and companies in
which Mr. Jensen owns an interest may conflict with the interests of the
Company, including with respect to the amount of compensation payable by the
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Company and the freedom of Mr. Jensen and such companies to engage in other
activities, and with respect to any negotiations of, disputes under, or
breaches of, any such agreements or arrangements. Certain officers and
employees of the Company, in addition to Mr. Jensen, also serve as officers or
directors of, or provide services to other companies in which Mr. Jensen owns
an interest.
Mr. Jensen, and other companies in which Mr. Jensen owns an interest
have engaged in a number of financial and other transactions with the Company.
The Board has adopted a policy that all material transactions in which there
may be a conflict of interest between the Company and Mr. Jensen are reviewed
and approved by a majority of the independent members of the Board.
CONTROL BY JENSEN FAMILY
Mr. Jensen beneficially owns approximately 18% of the outstanding
Common Stock and remains the Company's largest stockholder. In addition, his
adult children, directly and through Onward and Upward, Inc., own approximately
13% of the Common Stock. Accordingly, Mr. Jensen can be expected to have the
ability to control the direction of the Company.
COMPETITION
The Company operates in highly competitive industries. The Company's
insurance divisions compete with large national insurers, regional insurers and
specialty insurers, many of which are larger and have substantially greater
financial resources or higher A.M. Best ratings than the Company. In addition
to claims paying ratings, insurers compete on the basis of price, breadth and
flexibility of coverage, ability to attract and retain agents and the quality
and level of agent and policyholder services provided. The Company's other
divisions compete with financial services companies, managed care consultants,
and third party administrators, among others. Many of the competitors may have
greater financial resources, broader product lines or greater experience in
particular lines of business. The Institutional Technology and Outsourcing
Division has only recently been formed and therefore competes with other
companies with significantly greater experience in highly competitive markets.
There can be no assurance that the Institutional Technology and Outsourcing
Division will be successful competing in such markets.
ADEQUACY OF CLAIMS LIABILITIES
The liability for claims established by the Company are estimates of
amounts needed to pay reported and unreported claims based on facts and
circumstances known at the time the liabilities are established. Liabilities
are based on historical claims information, industry statistics and other
factors. The establishment of appropriate liabilities is an inherently
uncertain process, and there can be no assurance that the ultimate liability
will not materially exceed the Company's claims liability and have a material
adverse effect on the Company's results of operations and financial condition.
Due to the inherent uncertainty of estimating claims liabilities, it has been
necessary, and may in the future be necessary, to revise estimated future
liabilities as reflected in the Company's claims liability. When the Company
acquires blocks of insurance policies or insurers owning such blocks, the
Company's assessment of the adequacy of transferred policy liabilities is
subject to similar uncertainties. The Company has not had a revision in claims
liabilities in the last five years which resulted in recording an increase in
the liability for prior years.
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CERTAIN RISKS ASSOCIATED WITH CREDIT CARD BUSINESS
There are certain risks associated with the credit card business. The
primary risk involves the possibility of future economic downturns causing an
increase in credit losses. The Company currently targets the market of
individuals with no, or troubled, credit experience, for which market there is
generally limited historical loss information available. Accordingly, the
Company has experienced, and expects to continue to experience, higher credit
losses than industry averages. While the Company does not directly bear the
risk of credit losses on securitized credit card loans, certain risks are
associated with the securitized loans, including the risk of early amortization
upon the occurrence of certain events, which could accelerate the need for
funding. The Company's ability to sustain the recent rate of growth in its
credit card portfolio is dependent upon the success of its marketing programs.
RISKS ASSOCIATED WITH STUDENT LOAN BUSINESS
The Company has certain risks associated with the Student Loan
business. The changes in the Higher Education Act or other relevant federal or
state laws, rules and regulations and the programs implemented thereunder may
adversely impact the education credit market. In addition, existing
legislation and future measures to reduce the federal budget deficit may
adversely affect the amount and nature of federal financial assistance
available with respect to loans made through the U.S. Department of Education.
Finally, the level of competition currently in existence in the secondary
market for loans made under the Federal Loan Programs could be reduced,
resulting in fewer potential buyers of the Federal Loans and lower prices
available in the secondary market for those loans.
INVESTMENT PORTFOLIO
The Company's investment portfolio primarily consists of fixed
maturity securities such as investment grade publicly traded debt securities
and mortgage and asset backed securities, including collateralized mortgage
obligations. At September 30, 1997, approximately 75% and 13% of the Company's
invested assets were fixed maturity securities and short term investments,
respectively. Fixed maturity securities were approximately 62% fixed income
and 38% mortgage and asset backed securities. Certain risks are inherent in
connection with fixed income securities, including loss upon default and price
volatility in reaction to changes in interest rates and general market factors.
Certain additional risks are inherent with mortgage-backed securities,
including the risks associated with reinvestment of proceeds due to prepayments
of such obligations.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
by the Selling Stockholders.
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SELLING STOCKHOLDERS AND PLAN
OF DISTRIBUTION
In December 1997, the Company acquired through a negotiated merger
agreement 100% of ELA Corp. ("ELA"). The Company issued 922,956 shares of its
Common Stock for all of the outstanding Common Stock of ELA. ELA provides
marketing and pre-disbursement servicing of college student loans made under
the Federal Family Education Loan Program. The 922,956 shares offered hereby
consist of the Common Stock issued by the Company to the stockholders of ELA
pursuant to the merger agreement.
The following table sets forth as of December 22, 1997, information
regarding the beneficial ownership of the Company's Common Stock held by each
Selling Stockholder who may sell the Shares pursuant to this Prospectus as of
such date, the number of Shares offered hereunder by each such Selling
Stockholder and the net ownership of shares of Common Stock, if all such Shares
so offered are sold by each Selling Stockholder.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Before Offering After Offering
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Shares
Name of Selling Offered Percentage
Stockholder Shares(1) Percentage Hereby Shares of UICI
------------------- ---------- ---------- -------- ------ -----------
<S> <C> <C> <C> <C> <C>
Marcus A. Katz 470,708 1% 470,708 -0- (3)
Cary S. Katz 378,412(2) (3) 378,412(2) -0- (3)
Ryan D. Katz 73,836 (3) 73,832 -0- (3)
RK Trust #2 147,673 (3) 147,673 -0- (3)
</TABLE>
(1) Except as otherwise noted, all shares are beneficially owned and sole
voting and investment power is held by party named.
(2) Includes 147,673 shares held by RK Trust #2. Cary S. Katz is the
trustee of RK Trust #2 .
(3) Less than 1%.
Except as described below, none of the selling stockholders have held
within the most three years any position, office or other material relationship
with the Company or its affiliates. Prior to the Company's acquisition of ELA,
the selling stockholders were stockholders of ELA and, in the case of Marcus A.
Katz, Cary S. Katz, and Ryan D. Katz, officers and directors of ELA and have
been employed by the Company.
The Selling Stockholders may sell some or all of the Shares in
transactions involving broker/dealers, who may act as agent or acquire the
Shares as principal. Any broker/dealer participating in such transactions as
agent may receive a commission from the Selling Stockholders (and, if they act
as agent for the purchaser of such Shares, from such purchaser). Usual and
customary brokerage fees will be paid by the Selling Stockholders.
Broker/dealers may agree with the Selling Stockholders to sell a specified
number of Shares at a stipulated price per Share and, to the extent such
broker/dealer is unable to do so acting as agent for the Selling Stockholders,
to purchase as principal any unsold Shares at the price required to fulfill the
respective broker/dealer's commitment to the Selling Stockholders.
Broker/dealers who acquire Shares as principals may
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thereafter resell such Shares from time to time in transactions (which may
involve cross and block transactions and which may involve sales to and through
other broker/dealers, including transactions of the nature described above) in
the over-the-counter market, in negotiated transactions or otherwise, at market
prices prevailing at the time of sale or at negotiated prices, and in
connection will such resales may pay to or receive commissions from the
purchasers of such Shares. The Selling Stockholders also may sell some or all
of the Shares directly to purchasers without the assistance of any
broker/dealer.
The Company is bearing all costs relating to the registration of the
Shares. Any commissions or other fees payable to broker/dealers in connection
with any sale of the Shares will be borne by the Selling Stockholders or other
party selling such Shares.
The Selling Stockholders must comply with the requirements of the Act
and the Exchange Act and the rules and regulations thereunder in the offer and
sale of the Shares. In particular, during such times as the Selling
Stockholders may be deemed to be engaged in a distribution of the Common Stock,
and therefore be deemed to be underwriters, under the Act, they must comply
with Rules l0b-6 and 10b-7 under the Exchange Act, and will, among other
things:
(a) not engage in any stabilization activities in connection with
the Company's securities;
(b) furnish each broker/dealer through which Shares may be offered
such copies of this Prospectus, as amended from time to time,
as may be required by such broker/dealer; and
(c) not bid for or purchase any securities of the Company or
attempt to induce any person to purchase any securities of the
Company other than as permitted under the Exchange Act.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of the Company consists of 50,000,000
shares of Common Stock, par value $0.01 per share and 10,000,000 shares of
Preferred Stock, par value $0.01 per share.
As of December 22, 1997, the Company had outstanding 46,214,507 shares
of Common Stock.
Common Stock
The Company has not paid cash dividends on its Common Stock to date.
The Company currently intends to retain all future earnings to finance
continued expansion and operation of its business and subsidiaries. Any
decision as to the payment of dividends to the stockholders of the Company will
be made by the Company's Board of Directors and will depend upon the Company's
future results of operations, financial condition, capital requirements and
such other factors as the Board of Directors considers appropriate.
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Transfer Agent
The Transfer Agent and registrar for the Common Stock is UICI.
EXPERTS
The consolidated financial statements of UICI appearing in UICI's
Annual Report (Form 10-K/A for the year ended December 31, 1996, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for
the Company by Robert B. Vlach, General Counsel of the Company. Mr. Vlach is
the beneficial owner of 27,149 shares of Common Stock.
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