UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Standard Management Corporation
(Name of Issuer)
Common Stock, without par value
(Title of Class of Securities)
853612109
_______________________________________________________________
(CUSIP Number)
Stephen M. Coons
Standard Management Corporation
9100 Keystone Crossing
Indianapolis, Indiana 46240
(317) 574-6221
______________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
November 8, 1996
_______________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box <square>.
(Continued on Following Pages)
Page 1 of 7 Pages
<PAGE>
SCHEDULE 13D
CUSIP No. 853612109 Page 2 of 7 Pages
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Ronald D. Hunter
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) / /
(b)/x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S. Citizen
7 SOLE VOTING POWER 585,085 (including options to
NUMBER OF purchase 380,345 shares of
SHARES Common Stock)
BENEFICIALLY 8 SHARED VOTING POWER 250,000
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER 585,085 (including options to
REPORTING purchase 380,345 shares of
PERSON Common Stock)
WITH
10 SHARED DISPOSITIVE POWER 250,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
835,085
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
16.6%
14 TYPE OF REPORTING PERSON
IN
Item 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, without par value ("Common
Stock") of Standard Management Corporation, an Indiana Corporation (the
"Issuer"). The principal executive office of the Issuer is located at
9100 Keystone Crossing, Indianapolis, Indiana 46240.
Item 2. IDENTITY AND BACKGROUND.
The principal business and office address of Ronald D. Hunter is 9100
Keystone Crossing, Indianapolis, Indiana 46240. Mr. Hunter is the Chairman of
the Board, Chief Executive Officer and President of the Issuer, an insurance
holding company. Mr. Hunter is a citizen of the United States of America.
During the last five years Mr. Hunter has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
During the last five years Mr. Hunter has not been a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction, as a
result of which he was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Mr. Hunter used personal funds to purchase currently outstanding shares
of Common Stock for which he has sole voting and dispositive power. Certain of
those purchases have been pursuant to the Standard Management Corporation
Savings Plan (the "Savings Plan").
Mr. Hunter expects to deliver personal funds or shares of Common Stock
then held by him to pay the purchase price for shares of Common Stock which he
might aquire upon exercise of any option to purchase Common Stock held by him.
He will use personal funds (in the form of salary deductions) for any future
purchases made pursuant to the Savings Plan.
On November 8, 1996, a subsidiary of the Issuer acquired all the
outstanding common stock of Shelby Life Insurance Company, a Tennessee
corporation ("Shelby"), from Delta Life and Annuity Company, a Tennessee
corporation ("Delta"). The consummation of such acquisition was subject, among
other things, to the execution and delivery of the Voting Trust Agreement dated
as of November 8, 1996 (the "Voting Trust Agreement") among Delta, Mr. Hunter
and Allen O. Jones, Jr., as voting trustees (the "Voting Trustees"), and the
Issuer. The 250,000 shares of Common Stock for which Mr. Hunter is reporting
shared voting power are subject to the Voting Trust Agreement and were
transferred to the Voting Trustees on November 8, 1996 in accordance therewith.
The Voting Trust Agreement is described in Item 6. The Voting Trustees are
required to issue trust certificates in accordance with the Voting Trust
Agreement for the shares of Common Stock subject thereto. Except as otherwise
described in this paragraph, no consideration was or will be paid in connection
with the transfer of shares of Common Stock to the Voting Trustees pursuant to
the Voting Trust Agreement.
Item 4. PURPOSE OF TRANSACTION.
As described in Item 3, on November 8, 1996, a subsidiary of the Issuer
acquired all the outstanding common stock of Shelby from Delta. The
consummation of such acquisition was subject, among other things, to the
execution and delivery of the Voting Trust Agreement. The parties thereto
entered into the Voting Trust Agrement in order to insure continuity and
stability of policy and management of the Issuer and for the benefit of future
stockholders of the Issuer. The Voting Trust Agreement is described in Item
6.
In the past, Mr. Hunter has purchased Common Stock for investment
purposes. Depending upon various factors including, but not limited to, the
market price of the Common Stock, Mr. Hunter may from time to time determine to
sell shares of Common Stock or purchase additional shares of Common Stock,
including, potentially, upon the exercise of options to purchase Common Stock
then held by him or through the Issuer's Amended and Restated 1992 Stock
Option Plan. As of the date hereof, Mr. Hunter has no definitive plan or
proposal for any such acquisition or sale. Although Mr. Hunter is not
presently entitled to receive additional stock options pursuant to the
Issuer's Amended and Restated 1992 Stock Option Plan, he may be granted
additional stock options pursuant thereto (or any successor stock option
plan of the Issuer) in the future.
Item 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of May 31, 1997, Ronald D. Hunter may be deemed to beneficially
own, pursuant to Rule 13d-3(d)(1)(i) of the Securities Exchange Act of
1934, as amended (the "Act"), an aggregate of 835,085 shares of Common
Stock representing 16.7% of such shares, including (i) options to
purchase 380,345 shares of Common Stock, (ii) 336 shares of Common Stock
held by Mr. Hunter's spouse as custodian for Mr. Hunter's minor child
pursuant to the Uniform Gifts to Minors Act and (iii) 250,000 shares of
Common Stock held by Mr. Hunter in his capacity as a Voting Trustee. In
accordance with Rule 13d-4 of the Act, Mr. Hunter hereby declares that
the filing of this Schedule 13D shall not be construed as an admission
that he is the beneficial owner for purposes of Section 13(d) or 13(g)
of the Act of the Common Stock held by his spouse as custodian for
their minor child and the Common Stock held by him pursuant to the Voting
Trust Agreement.
(b) (i) SOLE POWER TO VOTE OR DIRECT THE VOTE:
Mr. Hunter has sole voting power with respect to 585,085 shares of
Common Stock representing 11.7% of the voting power of the Common
Stock outstanding.
(ii) SHARED POWER TO VOTE OR DIRECT THE VOTE:
Mr. Hunter has shared voting power with respect to 250,000 shares
of Common Stock, representing 4.99% of the voting power of the
Common Stock outstanding. Pursuant to the Voting Trust Agreement,
Mr. Hunter shares voting power with respect to these shares of
Common Stock with Allen O. Jones, Jr. Mr. Jones is President of
Delta and his principal business and office address is 530 Oak
Street, Memphis, Tennessee 38117. Mr. Jones is a United States
Citizen. To the knowledge of Mr. Hunter, during the last five
years, Mr. Jones has not been (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors)
or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction, as a result of which
Mr. Jones was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding
any violations with respect to such laws.
(iii) SOLE POWER TO DISPOSE OR DIRECT THE DISPOSITION:
Mr. Hunter has sole power to dispose of 585,085 shares of Common
Stock, representing 11.7% of the Common Stock outstanding.
(iv) SHARED POWER TO DISPOSE OR DIRECT THE DISPOSITION:
Mr. Hunter has shared power to direct the dispositon of 250,000
shares of Common Stock, representing 4.99% of the Common Stock
outstanding. Pursuant to the Voting Trust Agreement, Mr. Hunter
shares this power with Mr. Jones.
(c) On May 30, 1997, Mr. Hunter purchased 181 shares of Common Stock
through the Savings Plan at a price per share of $6.
(d) To the knowledge of the undersigned, no other person is known to have the
right to receive or the power to direct the receipt of dividends from, or
the proceeds from the sale of, Common Stock reported hereby, except that
Delta has the right to receive dividends from, or proceeds from the sale
of, the 250,000 shares of Common Stock with respect to which Mr. Hunter
shares voting and disposition power pursuant to the Voting Trust
Agreement.
(e) Not Applicable.
Item 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
VOTING TRUST AGREEMENT. The following description of certain terms of
the Voting Trust Agreement does not purport to be complete and is qualified in
its entirety by reference to the Voting Trust Agreement, a conformed copy of
which is included herewith as Exhibit 99.1 and incorporated herein by
reference.
The Voting Trust Agreement has a term of 10 years and is renewable for
additonal periods of not more than ten years upon the affirmative vote of the
holders of a majority in amount of the Trust Certificates (as defined below).
Pursuant to the Voting Trust Agreement, a certificate or certificates (the
"Stock Certificates") representing 250,000 shares of Common Stock issued in the
name of the Voting Trustees has been deposited with the Depositary (as defined
in the Voting Trust Agreement) as agent for the Voting Trustees. In exchange
for such certificate or certificates, the Voting Trustees have caused to be
issued to Delta trust certificates (the "Trust Certificates") evidencing
Delta's rights with respect to the Common Stock deposited in the Voting Trust.
Upon the earlier of the expiration of the term of the Voting Trust Agreement or
whenever the Voting Trustees decide to deliver the Stock Certificates, the
Voting Trustees will cause the Depositary to deliver the Stock Certificates to
the holders of the Trust Certificates in exchange therefore.
Holders of Trust Certificates are entitled to receive from time to time
payments equal to the dividends, if any, collected by the Voting Trustees upon
the shares of Common Stock represented by such Trust Certificates. In the
event that a dividend is paid in the form of shares of Common Stock, such
shares will be held by the Voting Trustees and the holders of Trust
Certificates will receive additional Trust Certificates representing such
shares. To the extent practicable, the Voting Trustees will give the holders
of Trust Certificates the opportunity to exercise, or to dispose of, any rights
of subscription to stock or other securities of the Issuer wheich at any time
durign the term of the Voting Trust Agreement accrue to the shares registered
in the name of the Voting Trustees.
The Voting Trust Agreement provides that the Voting Trustees have all of
the power of an absolute owner of the Common Stock deposited in the Voting
Trust. The Voting Trust Agreement also specifies how the Voting Trustees will
vote the shares of Common Stock subject thereto on all matters submitted to the
vote of holders of shares of Common Stock.
EMPLOYMENT AGREEMENT. Mr. Hunter has entered into an employment
agreement with the Issuer that terminates on January 1, 1998. Pursuant to the
employment agreement, following a termination of his employment with the Issuer
in the event of a change-in-control, Mr. Hunter will be entitled to receive a
lump sum payment equal to the amount determined by multiplying the number of
shares of Common Stock subject to unexercised stock options previously
granted by the Issuer and held by Mr. Hunter on the date of termination,
whether or not such options are then exercisable, and the highest per
share fair market value of the Common Stock on any day during the six month
period ending on the date of termination. Upon payment of such amount, such
unexercised stock options will be deemed to be surrendered and canceled.
Reference is made to Exhibit 10.45 to the Issuer's Quarterly Report on Form 10-Q
for the Quarterly Period Ended June 30, 1995, which is incorporated herein
by reference, for a complete copy of Mr. Hunter's Employment Agreement.
Item 7. MATERIAL TO BE FILED AS EXHIBITS.
99.1 Voting Trust Agreement, dated as of November 8, 1996.
* * * * * *
<PAGE>
CUSIP No. 853612109 SCHEDULE 13D Page 3 of 7 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of June 23, 1997.
Ronald D. Hunter
Signature Page to Schedule 13D relating to the
direct and indirect beneficial ownership of the Common Stock
of Standard Management Corporation, by
Ronald D. Hunter.
329909.3
VOTING TRUST AGREEMENT
This Agreement, dated as of the 8th day of November, 1996, among Delta
Life and Annuity Company, a Tennessee corporation (the "Shareholder"),
Ronald D. Hunter and Allen O. Jones, Jr. (the "Voting Trustees"), and
Standard Management Corporation (the "Company"):
W I T N E S S E T H:
WHEREAS, Company is a corporation organized and existing under the
laws of the State of Indiana, with an authorized capital stock divided into
21,000,000 shares, consisting of 1,000,000 shares of Preferred Stock, and
20,000,000 shares of Common Stock, without par value ("Common Stock");
WHEREAS, the Shareholder owns 250,000 shares of Common Stock; and
WHEREAS, the parties hereto desire the Boatmen's Trust Company, a
Missouri trust company (the "Depositary") to act as the Depositary
hereunder pursuant to a Depositary Agreement attached hereto as Annex II,
and
WHEREAS, in order to insure continuity and stability of policy and
management and for the benefit and protection of the present and future
holders of Common Stock, pursuant to the terms of the Stock Purchase
Agreement dated as of July 18, 1996 by and between the Company and the
Shareholder (the "Stock Purchase Agreement"), the Company, as a condition
to the purchase of all of the issued and outstanding shares of the common
capital stock of Shelby Life Insurance Company from the Shareholder
required the deposit hereunder with the Depositary as agent of the Voting
Trustees, of the 250,000 shares of Common Stock being so deposited, and the
Shareholder deems the deposit of its stock hereunder to be to its interest:
NOW, THEREFORE, in consideration of the premises the parties hereby
agree as follows:
1. The Shareholder, simultaneously with the execution hereof, is
causing to be issued by the Company in the name of the Voting Trustees and
to be deposited with the Depositary as agent for the Voting Trustees, a
certificate for 250,000 shares of Common Stock which the Shareholder is
delivering to the Depositary as agent for the Voting Trustees, properly
stamped for transfer and duly endorsed in blank or accompanied by proper
instruments of assignment and transfer thereof in blank duly executed, and
in either case accepting in respect thereof, a certificate for 250,000
shares of Common Stock issued under this agreement.
2. The Voting Trustees hereby agree with the Shareholder that, from
time to time, upon request, they will cause to be duly issued to the
Shareholder, or upon their order, in respect of all Common Stock caused by
the Shareholder to be issued in the name of the Voting Trustees as
aforesaid, or in exchange for all certificates of shares received from the
Shareholder by the Depositary as agent of the Voting Trustees as aforesaid,
trust certificates in substantially the form attached hereto as Annex I, to
all the terms, conditions and provisions of which the Shareholder hereby
assents.
The Voting Trustees shall have full power to appoint and remove from
time to time, agents to sign in their behalf and transfer agents and
registrars to register the trust certificates. Such agents and registrars
shall at all times be banks or trust companies.
The trust certificates issued hereunder shall be transferable at the
agency of the Voting Trustees, on surrender thereof, by the registered
holder in person or by attorney duly authorized, in accordance with such
rules as may be reasonably established for that purpose by the Voting
Trustees. Until so transferred the Voting Trustees and the Depositary may
treat the registered holders as owners thereof for all purposes whatsoever,
but the Depositary shall not be required to deliver stock certificates
hereunder without the surrender of trust certificates calling therefor.
Every transferee of a certificate or certificates issued hereunder, shall,
by the acceptance of such certificate or certificates, become a party
hereto with like effect as though an original party hereto, and shall be
embraced within the meaning of the term Shareholders whenever used herein.
In connection with, and as a condition of, making or permitting any
transfer or delivery of stock certificates or trust certificates under any
provision of this agreement, the Voting Trustees may require the payment of
a sum sufficient to pay or reimburse them, or the Depositary for any stamp
tax or other governmental charge in connection therewith. The transfer
books for trust certificates may be closed by the Voting Trustees, at any
time prior to the payment or distribution of dividends, or for any other
purpose.
3. The Voting Trustees hereby designate the Depositary their agent
for the custody of the certificates of Common Stock now or hereafter
delivered to them hereunder. The certificates of Common Stock delivered to
the Depositary duly endorsed in blank or accompanied by proper instruments
of assignment of transfer in blank as aforesaid shall be surrendered by the
Depositary to the Company and cancelled, and certificates for an equal
amount of said Common Stock shall be issued in the name of the Voting
Trustees as trustees and delivered to the Depositary. Duplicates of this
Agreement shall be filed in the office of the Company in the City of
Indianapolis, State of Indiana, and in the office of the Depositary in the
City of St. Louis, State of Missouri.
4. Upon the termination of this Agreement as provided in Section 13
hereof, or whenever earlier the Voting Trustees shall decide to make such
delivery, the Voting Trustees in exchange for, and upon surrender of, any
trust certificate then outstanding, will, in accordance with the terms
thereof and subject to Section 6 hereof, deliver, at the office or agency
of the Depositary in the City of St. Louis, Missouri, certificates of
Common Stock in the amounts called for by the respective trust
certificates, and may require the holders of the trust certificates to
exchange them for certificates of such Common Stock.
Whenever, pursuant to the foregoing provisions of Section 4,
certificates for Common Stock shall become deliverable and the Voting
Trustees shall file with the Depositary an order in writing directing the
Depositary to make delivery thereof in exchange for trust certificates, the
Depositary shall thereupon have authority as agent to endorse the names of
the Voting Trustees upon such share certificates as may be necessary to
effectuate such order of the Voting Trustees and to deliver the appropriate
certificate or certificates to the holders of Trustees' certificates upon
the surrender of such Trustees' certificates. When the Voting Trustees
shall have filed their written order with the Depositary directing the
Depositary to make such delivery of share certificates in exchange for
Trustees' certificates, all further obligation or duty of the Voting
Trustees under this Agreement to the holders of trust certificates shall
terminate.
5. Prior to the delivery, or the filing of an order with the
Depositary for delivery, of certificates of Common Stock in exchange for
trust certificates pursuant to Section 4 hereof, the holder of each trust
certificate shall be entitled to receive from time to time payments equal
to the dividends, if any, collected by the Voting Trustees upon a like
number of shares of Common Stock as is called for by such trust
certificate; provided, however, that if any dividend on the Common Stock
which may have been deposited hereunder shall be declared and paid or
distributed in fully paid Common Stock, the respective holders of trust
certificates hereunder shall be entitled to the delivery of trust
certificates with respect to the amount of the Common Stock received by the
Voting Trustees as such dividend upon the number of such shares of Common
Stock called for by their respective trust certificates. The Voting
Trustees, through the Depositary, shall, so far as practicable and in such
manner and upon such terms, as they, in their discretion, deem reasonable
and fair, accord to the holders of trust certificates, in proportion to the
number of shares of Common Stock called for therein, the opportunity to
exercise, or to dispose of, any rights of subscription to stock or other
securities of the Company which at any time during the continuance of this
Agreement may accrue in respect of the shares registered in the name of the
Voting Trustees.
6. The term Company, for the purposes of this Agreement and for all
rights hereunder, including the issue and delivery of stock, shall be taken
to mean the above named Standard Management Corporation, or any
corporation(s) successor to it.
7. Any Voting Trustee may at any time resign, by delivering to the
other Voting Trustees or to the Depositary his resignation in writing, to
take effect 30 days thereafter, unless sooner accepted by the remaining
Voting Trustees. In every case of death, resignation or inability of any
Voting Trustee to act, the vacancy so occurring shall be filled by the
appointment of a successor(s), to be made by the Shareholder if the
resigning Voting Trustee was originally appointed by the Shareholder, or,
by the Company, if the resigning Voting Trustee was originally appointed by
the Company, by a written instrument. The term Voting Trustees as used
herein, and in said trust certificates, shall apply to the parties of the
second part and their successors hereunder. Notwithstanding any change in
the Voting Trustees, the Voting Trustees for the time being may adopt and
issue trust certificates in the names of the original Voting Trustees, the
parties hereto of the second part.
The Depositary may at any time be removed by a written instrument
signed by all of the then Voting Trustees and delivered to the Depositary.
In every case of the resignation, removal or inability of the Depositary to
act, the majority of the Voting Trustees may by writing signed by them and
delivered to a successor named therein, elect as successor to the
Depositary some other bank or trust company having power to act, and having
a capital and surplus of at least Fifty Million Dollars ($50,000,000),
which successor shall thereupon be entitled to all the rights, authority
and powers hereby conferred on the above-named Depositary. The Voting
Trustees shall direct the Depositary so resigning or so removed to
thereupon transfer and deliver to such successor the stock certificates
then held by it hereunder, together with all books, registers and other
papers pertaining or relating to said stock certificates or to the trust
certificates which may from time to time be issued hereunder. The term
Depositary as used in this Agreement and in said trust certificates shall
apply to the Depositary herein named and its successor(s) at any time
hereunder.
8. The action of a majority of the Voting Trustees, expressed from
time to time at a meeting or by writing without a meeting, shall, except as
otherwise herein stated, constitute the action of the Voting Trustees and
have the same effect as if assented to by all. Any Voting Trustee may vote
or may act in person or by proxy. Any meeting of the Voting Trustees may
be held by conference telephone. At any meeting of the Voting Trustees the
presence of all of the Voting Trustees in person or by proxy shall
constitute a quorum. The Voting Trustees may adopt their own rules of
procedure. Any Voting Trustee may act as a director of the Company or of
any controlled or subsidiary company; and he, or any firm of which he may
be member, or any corporation of which he may be a shareholder, director of
officer, may, to the extent permitted by law, contract with the Company or
with any controlled or subsidiary company, or be or become pecuniarily
interested in any matter or transaction to which the Company or any
controlled or subsidiary company may be a party, or in which the Company or
any controlled or subsidiary company may in any way be concerned, as fully
as though he were not a Voting Trustee.
9. Until delivery, or the filing of and order with the Depositary
for delivery, of all stock certificates in accordance with Section 4
hereof, the Voting Trustees shall possess, in respect of any and all stock
deposited hereunder, and shall be entitled, in their discretion, but
subject to the provisions of this Agreement, to exercise, all the powers of
absolute owners of said stock, and all rights of every name and nature in
respect of such stock, including the right to vote and consent for every
purpose. The Voting Trustees shall vote or consent or issue proxies to
vote or consent, at shareholders' meetings with respect to matters relating
to the election of directors of the Company, including setting the number
of such directors, in their discretion, except that they shall vote for up
to nine nominees for director designated in its discretion by the Company
in writing (and shall take such action as may be feasible to effect the
election of such nominees, including cumulating the votes of such shares).
At or prior to each meeting of shareholders, the Voting Trustees shall
deliver to Ronald D. Hunter or his designed a proxy entitling Hunter or
such designed to vote all of the shares held by the Voting Trustees with
respect to all other matters. The Voting Trustee appointed by the
Shareholder shall vote as directed by the Voting Trustee appointed by the
Company except in the following circumstances: (a) upon the sale or merger
of the Company; (b) upon the book value of the Company, not adjusted by
FASB 115 being less than $6.00 per share of Common Stock; (c) upon the sale
of significant assets of the Company constituting either twenty-five
percent (25%) of assets or revenues; (d) upon three (3) consecutive
calendar quarterly losses at the Company consolidated level; or (e) if
total adjusted capital is less than one hundred percent (100%) of the Risk-
Based Capital ("RBC") authorized capital level in Standard Life Insurance
Company of Indiana.
The Voting Trustees shall in every such case, within 10 days after
receipt of notice of any shareholders' meeting called to authorize or
consider any such action, cause the Company to mail copies of the notice of
such meeting received by them to the holders of the trust certificates
hereunder, addressed to them at the address furnished by them to the
Depositary. After delivery of all of the stock certificates to the
Depositary, any proxy signed by the Depositary as agent of the Voting
Trustees shall be sufficient for every purpose, but any proxy issued by the
Depositary shall not be recognized if the Voting Trustee shall, either
before or after the issuance of a proxy by the Depositary, issue their
proxy for the same purpose. Except as set forth above, no voting or other
right or power passes to holders of trust certificates or to others by or
under the trust certificates, or by or under this Agreement, or by or under
any agreement, whether by implication or otherwise.
In voting or giving directions for voting the stock represented by the
Stock Certificates deposited hereunder, the Voting Trustees, subject to the
provisions of this Agreement, shall exercise their best judgment from time
to time to select suitable directors, to the end that the affairs of the
Company shall be properly managed, and, in voting or giving directions for
voting and acting on other matters for shareholders' action, the Voting
Trustees shall exercise like judgment; but they assume no responsibility
with respect to such management or with respect to any action taken by them
or taken in pursuance of the issuance of a proxy by their agent, the
Depositary, and no Voting Trustee incurs any responsibility as shareholder,
trustee, or otherwise, by reason of any error of law or of any matter or
thing done or omitted under this Agreement, except for his own individual
malfeasance. The Voting Trustees and their successors, as Trustees'
hereunder, shall receive to the maximum extent permitted by law from the
Company indemnity for and against any and all claims and expenses and
liabilities by them incurred in connection with, or growing out of, this
Agreement, or the bona fide discharge of their duties hereunder.
10. All notices to be given to the holders of trust certificates
shall be given by mail addressed to the registered holders of such trust
certificates at the addresses furnished by such holders to the Voting
Trustees or to the Depositary. Any call or notice whatsoever, when mailed
by the Voting Trustees as herein provided, shall be taken and considered as
though personally served on all parties hereto, including the holders of
said trust certificates, and upon all parties becoming bound hereby, and
such mailing shall be the only notice required to be given under any
provision of this Agreement.
11. No agent or registrar appointed by the Voting Trustees shall be
liable or responsible for any action taken or suffered by it in good faith
or for anything other than its own individual willful default, and no such
agent or registrar shall incur any liability by reason of anything done or
permitted to be done at the request or by the permission of the Voting
Trustees, and any such agent or registrar shall be fully protected and
relieved in all cases in acting upon the written directions or with the
written approval of a majority of the Voting Trustees.
Any agent or registrar appointed by the Voting Trustees may resign
upon 90 days' written notice to the Voting Trustees or on such shorter
notice as the Voting Trustees may accept as sufficient.
12. This Agreement may be executed in several counterparts, each of
which, so executed, shall be deemed to be an original; and such
counterparts shall together constitute but one and the same instrument.
13. Subject to the provisions set forth below, this Agreement shall
be irrevocable for a period of ten (10) years from its effective date.
This Agreement shall be renewable for additional periods of not more than
ten (10) years each on the affirmative vote of the holders of a majority in
amount of the trust certificates, by written ballots after notice given
pursuant to Section 10 hereof, under rules adopted by the Voting Trustees.
<PAGE>
The Agreement may be terminated by the Shareholder by notice given to
the Voting Trustees and the Depositary at any time after November 8,
1998.
Voting Trustees
Ronald D. Hunter
- -------------------------
Ronald D. Hunter
Allen O. Jones, Jr. DELTA LIFE AND ANNUITY COMPANY
- -------------------------
Allen O. Jones, Jr.
By: David W. Rikard
Title: Senior Vice President
STANDARD MANAGEMENT CORPORATION
By: Edward T. Stahl
Title: Executive Vice President
<PAGE>
ANNEX I
VOTING TRUST CERTIFICATE
No. __________________ Common Stock
________ Shares
STANDARD MANAGEMENT CORPORATION
AN INDIANA CORPORATION
This is to certify that ___________________ will be entitled upon
surrender of this certificate after payment of a sum sufficient to
reimburse the undersigned for any stamp tax or other governmental charge
payable thereon, to receive a certificate for _______________ fully paid
and nonassessable shares of Common Stock, no par value, of Standard
Management Corporation, an Indiana corporation, deposited with the
undersigned pursuant to the terms of an agreement (the "Agreement") dated
as of November 8, 1996, among Delta Life and Annuity Company and the
undersigned Voting Trustees, the original of which is on file at the
principal office of Standard Management Corporation in Indianapolis,
Indiana. In the interval the holder hereof shall be entitled to receive
payments equal to dividends received by the Voting Trustees named in the
Agreement or their successors, upon a like number of shares of stock of
such class, less any expense chargeable to the holder hereof under the
Agreement; such dividends, if received by the Voting Trustees in stock of
Standard Management Corporation having general or other voting power,
however, to be payable in voting trust certificates in similar form.
This certificate is issued, subject to, and the holder by accepting
the same consents to, all the terms of the Agreement and the acceptance of
this certificate shall bind successive holders hereof to all the terms of
the Agreement as if the holder were a party to it. No voting right passes
by this certificate and until the actual delivery of the stock
certificates, the Voting Trustee shall, according to the provisions of the
Agreement, be entitled to exercise all rights of ownership with respect to
the stock.
No stock certificate shall be deliverable under this certificate until
the termination of the Agreement with respect to the shares represented by
such certificate.
In case of a vacancy in the position of Voting Trustee, caused by
death, resignation or incapacity to act, the vacancy shall be filled
according to the provisions of the Agreement.
This certificate is transferrable on the books of the Voting Trustees
at their office in Indianapolis, Indiana, or at any other place designated
by the Voting Trustees, by the holder of record, in person or by a duly
authorized attorney in accord with the rules established for that purpose
by the voting Trustees, and on surrender of the certificate properly
endorsed; but until so transferred, the voting Trustees may treat the
holder of record as the owner of the certificate for all purposes
whatsoever. In connection with any transfer or delivery of stock
certificates or voting trust certificates, the Voting Trustees may require
the payment of a sufficient sum to pay or reimburse them for any
governmental charge or any stamp tax in connection herewith.
This certificate shall not be valid until signed by the Voting
Trustees.
In witness whereof the Voting Trustees have signed this certificate.
Dated: November 8, 1996
Ronald D. Hunter
__________________________________
Ronald D. Hunter
Allen O. Jones, Jr.
__________________________________
Allen O. Jones, Jr.
For value received __________________ hereby sell, assign and transfer
unto _______________________ the within certificate and all rights
represented thereby and do hereby irrevocably constitute and appoint
________________ attorney to transfer such certificates on the books of the
Voting Trustees in the certificate with full power of substitution in the
premises.
___________________________________
Signed in the presence of
_____________________________
<PAGE>
ANNEX II
DEPOSITARY AGREEMENT
This Agreement dated as of the 8th day of November, 1996, among
Ronald D. Hunter and Allen O. Jones, Jr. (the "Voting Trustees") and
Boatmen's Trust Company, a Missouri Trust Company (the "Depositary").
W I T N E S S E T H:
WHEREAS, the Voting Trustees, Delta Life and Annuity Company, a
Tennessee corporation (the "Shareholder") and Standard Management
Corporation (the "Company") have entered into a Voting Trust Agreement (the
"Voting Trust Agreement"), as of the 8th day of November, 1996; and
WHEREAS, the Voting Trustees desire to deposit with the Depositary a
certificate for 250,000 shares of Common Stock of the Company owned by the
Shareholder:
NOW THEREFORE, in consideration of the premises the parties hereby
agree as follows:
1. The Shareholder, simultaneously with the execution hereof, is
causing to be issued by the Company in the name of the Voting Trustees and
to be deposited with the Depositary as agent for the Voting Trustees, a
certificate for 250,000 shares of Common Stock, which the Voting Trustees
are delivering to the Depositary as agent, properly stamped for transfer
thereof in blank duly executed.
2. The Voting Trustees hereby designate the Depositary their agent
for the custody of the certificate for 250,000 shares of Common Stock, now
or hereafter delivered to the Depositary hereunder. Duplicates of this
Agreement shall be filed in the office of the Company in the City of
Indianapolis, State of Indiana, and in the office of the Depositary in the
City of St. Louis, in the State of Missouri.
3. Upon the joint written direction of the Voting Trustees, the
Voting Trustees may terminate this Depositary Agreement and file with the
Depositary an order in writing directing the Depositary to make delivery of
share certificates of the Company to the person or persons designated by
the Voting Trustees.
4. The General Terms and Conditions (the "General Terms and
Conditions") attached hereto as Exhibit "A" as incorporated and made a part
of this Depositary Agreement as if fully set out herein.
VOTING TRUSTEES DEPOSITARY
BOATMEN'S TRUST COMPANY
Ronald D. Hunter By: Jerry L. Rector
_______________________________ ____________________________
Ronald D. Hunter Jerry L. Rector, Vice
President
Allen O. Jones, Jr.
_______________________________
Allen O. Jones, Jr.
EXHIBIT A
GENERAL TERMS AND CONDITONS
* The duties of Boatmen's Trust Company (the "Trust Company") shall be
as expressed herein and the Trust Company shall have no implied duties
nor shall the permissive right or power to take any action be
construed as a duty to take such action under any circumstances and it
shall not be liable except in the event of its gross negligence or
willful misconduct.
* The Trust Company shall not be obligated to risk its own funds in the
administration of the account and shall have a lien against any funds,
securities or other property in its possession or control (the "Escrow
Account") for its fees, expenses and advancements. The Trust Company
need not take any action under the Agreement which may involve it in
any expense or liability until indemnified to its satisfaction for any
expense or liability it reasonably believes it may incur.
* Any recitals contained in the Agreement shall be deemed to be those of
the principal and not those of the Trust Company.
* Unless specifically required by the Agreement, the Trust Company shall
not be required to give any bond or surety or report to any Court
despite any statute, custom, or rule to the contrary.
* Any notice to or demand upon the Trust Company shall be given by being
deposited, certified mail, postage prepaid, in the United States mail,
addressed (until another address is filed in writing) to the Trust
Company as follows:
Boatmen's Trust Company
Attn.: Corporate Trust Company
510 Locust Street
P.O. Box 14737
St. Louis, MO 63178
* The Trust Company shall be protected in acting upon any notice,
request, consent, certificate, order, affidavit, letter, telegram, or
other paper or document believed by it to be genuine and correct and
to have been signed or sent by the proper person or persons.
* The Trust Company may execute any of the duties under the Agreement by
or through agents or receivers.
* The Trust Company shall not be required to take notice or be deemed to
have notice of any default or other fact or event under the Agreement
unless the Trust Company shall be specifically notified in writing of
such default, fact or event.
* The Trust Company may at any time resign from the position created in
the Agreement by giving thirty (30) days written notice by registered
or certified mail to the parties to the Agreement and such resignation
shall take effect at the end of such thirty days or upon earlier
appointment of a successor.
* In the event the Trust Company becomes involved in litigation by
reason hereof, it is hereby authorized to deposit with the Clerk of
the Court in which the litigation is pending any and all funds,
securities, or other property held by it pursuant hereto, less its
fees, expenses and advances, and thereupon shall stand fully relieved
and discharged of any further duties hereunder. Also, in the event
the Trust Company is threatened with litigation by reason hereof, it
is hereby authorized to implead all interested parties in any court of
competent jurisdiction and to deposit with the Clerk of such Court any
such funds, securities, or other property held by it pursuant hereto,
less its fees, expenses and advances, and thereupon shall stand fully
relieved and discharged of any further duties hereunder.
* The Trust Company may engage legal counsel, who may be counsel for any
party to the Agreement, and shall not be liable for any act or
omission taken or suffered pursuant to the opinion of such counsel.
The fees and expenses of such counsel shall be deemed to be a proper
expense for which the Trust Company will have a lien against the
Escrow Account.
* Unless specifically required by the terms of the Agreement, the Trust
Company need not take notice of or enforce any other document or
relationship, including, without limiting the generality of the
foregoing, any contract, settlement, arrangement, plan, assignment,
pledge, release, decree or the like, but its duties shall be solely as
set out in the Agreement.
* The Parties to the Agreement (other than the Trust Company) hereby
agree, jointly and severally, to indemnify and save harmless the Trust
Company from and against any loss, liability or expense reasonably
incurred, without negligence or bad faith on its part, arising out of
or in connection with the Agreement, including the expense of
defending itself against any claim or liability in the premises. This
indemnity agreement shall survive the termination of the Agreement.
