<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 27, 2000
-------------
UICI
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
Delaware 0-14320 75-2044750
----------------------------------------------- ----------------------- ------------------
(State or other jurisdiction of incorporation (Commission File (IRS Employer
or organization) Number) Identification No.)
4001 McEwen Drive, Suite 200, Dallas, Texas 75244
---------------------------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (972) 392-6700
--------------
Not Applicable
--------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
<PAGE> 2
Item 5. OTHER EVENTS
On August 2, 2000, UICI ("UICI" or the "Company") announced
that it had completed several recently-announced transactions,
including the funding of all cash and collateral requirements of the
United Credit National Bank Capital Plan, the sale of its National
Motor Club unit and a restructuring of $70.0 million of indebtedness
owing to a lender affiliated with Ronald L. Jensen (the Company's
Chairman).
FUNDING OF UCNB CAPITAL PLAN
On July 27, 2000, UICI completed the funding of all cash
contribution obligations and met all collateral deposit requirements of
the United Credit National Bank ("UCNB") Capital Plan, which was
previously approved by the OCC on June 29 and memorialized in separate
Consent Orders issued by the OCC against UICI, United CreditServ, Inc.
and UCNB. Since UICI first announced losses at its United CreditServ
unit in December 1999, UICI through United CreditServ has contributed
to UCNB as capital an aggregate of $176.6 million in cash, including
the additional cash in the amount of $50.0 million contributed as
contemplated by the Capital Plan. UICI has funded these cash
contributions with the proceeds of sale of investment securities, a
borrowing from a third party in the amount of $24.0 million funded in
July 2000, approved sales of assets to its regulated insurance company
subsidiaries completed in July 2000 generating cash proceeds in the
amount of approximately $43.0 million, a regular dividend from The
Chesapeake Life Insurance Company (one of its regulated insurance
company subsidiaries) paid in July 2000, the cash proceeds of the sale
of its National Motor Club unit completed in July 2000, and cash on
hand.
SALE OF NATIONAL MOTOR CLUB
On July 27, 2000 UICI completed the sale to an investor group
consisting of Jensen family members (including Mr. Jensen) of its 97%
interest in NMC Holdings, Inc. (the parent of National Motor Club of
America, Inc.) for a purchase price of $56.8 million, representing 97%
of the value of NMC as determined by independent appraisal.
The purchase price was paid at closing in cash in the amount
of $21.8 million and by delivery of a promissory note issued by the
investor group in the principal amount of $35.0 million. The promissory
note is an unsecured, full recourse obligation of the investor group
and is unconditionally guaranteed by Mr. Jensen. The note bears
interest at the per annum rate of prime fluctuating from time to time,
with three equal installments of principal in the amount of $11.667
million due on October 1, November 1 and December 1, 2000,
respectively. In accordance with the terms of the UCNB Capital Plan and
Consent Orders, the Company has pledged the promissory note to UCNB to
secure, in part, the Company's obligations under the Capital Plan.
During 1999 and 1998, UICI's National Motor Club unit
generated pre-tax operating income in the amount of $3.2 million and
$5.1 million, respectively.
DEBT RESTRUCTURING
On July 27, 2000, the Company and LM Finance, LLC (a company
controlled by Mr. Jensen) completed the restructuring of the terms of
$70.0 million of indebtedness owing by the Company to LM Finance.
Giving effect to the restructuring, LM Finance holds indebtedness in
the aggregate principal amount of $70.0 million owing by the Company,
which indebtedness consists of a $32.0 million unsecured tranche and a
$38.0 million tranche secured by a pledge of
2
<PAGE> 3
100% of the capital stock of Mid-West National Life Insurance Company
of Tennessee. The unsecured tranche of the loan is mandatorily
prepayable by the Company upon and to the extent of the Company's
receipt of a tax refund currently expected to be paid in February 2001
in the amount of approximately $22.0 million. The loan matures on
January 1, 2002, bears interest at the per annum rate of prime
fluctuating from time to time, with interest accruing but not payable
until the earlier to occur of full prepayment of the loan or January 1,
2002, and is mandatorily prepayable monthly to the extent of 1% of the
outstanding principal balance of the loan.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS
Exhibit
Number Description of Exhibit
------- ----------------------
99.1 Press release announcing completion of
previously announced transactions
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UICI
-----------------------
(Registrant)
Date August 3, 2000 By /s/ Gregory T. Mutz
------------------------- -----------------------
Gregory T. Mutz
President and Chief Executive Officer
3
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
------- ----------------------
<S> <C>
99.1 Press release announcing completion of
previously announced transactions
</TABLE>
