SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NUMBER 1 to
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996Commission File Number 0-18540
UNITED INCOME, INC.
(Exact name of registrant as specified in its charter)
2500 CORPORATE EXCHANGE DRIVE
COLUMBUS, OH 43231
(Address of principal executive offices, including zip code)
OHIO 37-1224044
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Registrant's telephone number, including area code: (614) 899-6773
Amendment No. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits, or other portions of its December 31, 1996 filing of
Form 10-K as set forth in the pages attached hereto:
Each amendment as shown on the index page is amended to
replace the existing item, statement or exhibit
reflected in the December 31, 1996 Form 10-K filing.
Changes to the original filing have been shaded for
easy identification.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant duly caused this amendment to be signed on its behalf by the
undersigned , thereunto duly authorized.
UNITED INCOME, INC.
(Registrant)
By: /s/ James E. Melville
James E. Melville
President and Chief
Operating Officer
By: /s/ Theodore C. Miller
Senior Vice President and
Chief Financial Officer
Date: October 9, 1998
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UNITED INCOME, INC,
FORM 10-K/A
INDEX
PART III
AMENDED IN ITS ENTIRETY 3-11
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
THE BOARD OF DIRECTORS
In the fiscal year ended December 31, 1996, the Board of Directors of the
Company met four times. All nominees for director attended at least 75% of
all meetings of the Board and any committee of which he is a member except
Mr. John Cantrell.
The Board of Directors has an Audit Committee consisting of Messrs.
Berschet, Cantrell and Donahey. The Audit Committee reviews and acts or
reports to the Board with respect to various auditing and accounting
matters, the scope of the audit procedures and the results thereof, the
internal accounting and control systems of the Company, the nature of
services performed for the Company and the fees to be paid to the
independent auditors, the performance of the Company's independent and
internal auditors and the accounting practices of the Company. The Audit
Committee also recommends to the full Board of Directors the auditors to be
appointed by the Board. The Audit Committee met once in 1996.
The Board of Directors has an Executive Committee consisting of Messrs.
Morrow and Ryherd. The Executive Committee has all the powers and
authority of the Board of Directors in the management of the business and
affairs of the Company, except those powers which, by law, cannot be
delegated by the Board of Directors. The Committee must report to the
Board of Directors regarding all actions taken by the Committee. The
Committee did not meet in 1996.
The Board of Directors has a Nominating Committee consisting of Messrs.
Aveni, Nash and Teater. The Nominating Committee reviews, evaluates and
recommends directors, officers and nominees for the Board of Directors.
There is no formal mechanism by which shareholders of the Company can
recommend nominees for the Board of Directors, although any recommendations
by shareholders of the Company will be considered. Shareholders desiring
to make nominations to the Board of Directors should submit their
nominations in writing to the Chairman of the Board no later than February
1st of the year in which the nomination is to be made. The Committee did
not meet in 1996.
The Stock Option Committee is composed of Messrs. Berschet, Morrow and
Ryherd. The Committee recommends to the Board of Directors the granting of
options to purchase shares of the Company's Common Stock to those persons
found to be eligible pursuant to the Stock Option criteria. The Committee
did not meet in 1996.
The compensation of the Company's executive officers is determined by the
full Board of Directors (see report on Executive Compensation).
DIRECTORS
Name, Age Position with the Company, Business Experience and Other
Directorships
Vincent T. Aveni, 70
Director of the Company since 1984; Chairman
Emeritus of Realty One, Inc. and co-developer of the
Three Village Condominium; currently serving the Ohio
Association of Realtors as a trustee; past President of
Ohio Association of Realtors; past Regional Vice
President of the Ohio and Michigan National Association
Marketing Institute, and Farm and Land Institute.
Marvin W. Berschet, 67
Director of the Company since 1984; self-employed
since 1956; charter member of National Cattlemen's
Association; Board member of Meat Export Federation for
seven years and Chairman of Beef Council for three years;
served on the National Livestock and Meat Board for 16
years; past President of Ohio Cattlemen's Association.
John K. Cantrell, 72
Director of the Company since 1992; Chairman of the
Board of Directors of certain affiliate companies since
1984; Chief Executive Officer of certain affiliate
companies from 1984 until 1992; Officer and Director of
certain affiliate companies for more than the past five
years.
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Gertrude W. Donahey, 88
Director of the Company since 1984; Treasurer
of the Company since 1987; in 1970, the first woman
elected to a constitutional office in the State of Ohio;
elected Treasurer of Ohio and served in that capacity
until she retired in 1983.
Thomas F. Morrow, 52
Vice Chairman and Chief Operating Officer of the
Company since 1992, and a Director since 1987; President
and COO of UTI since 1991, Treasurer since 1993 and a
Director since 1984; President, Chief Operating Officer,
Treasurer and Director of UTG since 1992; Vice Chairman,
Chief Operating Officer and Director of certain affiliate
companies since 1992 and Treasurer since 1993. Mr.
Morrow has served as Vice Chairman and Director of
certain affiliate life insurance companies since 1992 as
well as having held similar positions with other
affiliate life insurance companies from 1987 to 1992.
Charlie E. Nash, 69
Director of the Company since 1984; Executive
Director and State President of the Ohio Farmers Union;
serves on the Board of Directors for National Farmers
Union Uniform Pension Committee and as a member of its
Investment Committee for pension funds; Chairman of the
Putnam County Board of Elections; serves on the Board of
Directors of Farmers Union Ventures, Inc., Green Thumb,
Inc. and Farmers Education Foundation; he is a farm
owner.
Larry E. Ryherd, 57
Chairman of the Board of Directors of the Company
since 1987, CEO since 1992, President since 1993 and a
Director since 1987; UTI Chairman of the Board of
Directors and a Director since 1984, CEO since 1991;
Chairman, CEO and Director of UTG since 1992; President,
CEO and Director of certain affiliate companies since
1992. Mr. Ryherd has served as Chairman of the Board,
CEO, President and COO of certain affiliate life
insurance companies since 1992 and 1993. He has also
been a Director of the National Alliance of Life
Companies since 1992 and is the 1994 Membership Committee
Chairman; he is a member of the American Council of Life
Companies and Advisory Board Member of its Forum 500
since 1992.
Robert W. Teater, 70
Director of the Company since 1984; Director of UTG
and certain affiliate companies since 1992; member of
Columbus School Board since 1991, President of Columbus
School Board since 1992; President of Robert W. Teater
and Associates, a comprehensive consulting firm in
natural resources development and organization management
since 1983.
EXECUTIVE OFFICERS OF THE COMPANY
More detailed information on the following officers of the Company appears
under "Election of Directors":
Larry E. Ryherd Chairman of the Board of Directors,
Chief Executive Officer and President
Thomas F. Morrow Vice Chairman and Chief Operating
Officer
Other officers of the company are set forth below:
Name, Age Position with the Company, Business Experience and Other
Directorships
James E. Melville, 51
Chief Financial Officer since March 1993; Senior
Executive Vice President of the Company since September
1992; President and Chief Operating Officer of certain
affiliate life insurance companies and Senior Executive
Vice President of non-insurance affiliate companies since
September 1992; President of certain affiliate companies
from May 1989 until September 1991; Chief Operating
Officer of FCC from 1989 until September 1991; Chief
Operating Officer of certain affiliate companies from
1984 until September 1991; Senior Executive Vice
President of certain affiliate companies from 1984 until
September 1989; Consultant to UTI and UTG from March 1992
through September 1992.
George E. Francis, 53
Secretary of the Company since March 1993; Senior
Vice President and Chief Administrative Officer of
certain affiliate companies since 1989; Secretary of
certain affiliate companies since March 1993; Director of
certain affiliate companies since October 1992; Treasurer
and Chief Financial Officer of certain affiliate
companies from 1984 until September 1992.
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ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation Table
The following table sets forth certain information regarding compensation
paid to or earned by the Company's Chief Executive Officer and each of the
three other most highly compensated Executive Officers of the Company
during each of the Company's last three fiscal years. Compensation for
services provided by the named executive officers to the Company and its
affiliates is paid by FCC as set forth in their employment agreements.
(See Employment Contracts)
SUMMARY COMPENSATION TABLE
Annual Compensation (1)
Other Annual
Name and Compensation (2)
Principal Position Salary ($) ($)
Larry E. Ryherd 1996 400,000 17,681
Chairman of the 1995 400,000 13,324
Board, Chief 1994 400,000 7,909
Executive Officer
Thomas F. Morrow 1996 300,000 21,405
Vice Chairman, Chief 1995 300,000 16,654
Operating Officer 1994 300,000 9,886
James E. Melville 1996 237,000 27,537
Sr. Executive Vice 1995 237,000 38,206(3)
President, Chief 1994 237,000 13,181
Financial Officer
George E. Francis 1996 119,000 7,348
Sr. Vice President, 1995 119,000 4,441
Secretary 1994 119,000 2,636
(1) Compensation deferred at the election of named officers is included
in this section.
(2) Other annual compensation consists of interest earned on deferred
compensation amounts pursuant to their employment agreements and the
Company's matching contribution to the First Commonwealth Corporation
Employee Savings Trust 401(k) Plan.
(3) Includes $16,000 for the value of personal perquisites owing Mr.
Melville.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values
The following table summarizes for fiscal year ending, December 31, 1996,
the number of shares subject to unexercised options and the value of
unexercised options of the Common Stock of UTI held by the named executive
officers. The values shown were determined by multiplying the applicable
number of unexercised share options by the difference between the per
share market price on December 31, 1996 and the applicable per share
exercise price. There were no options granted to the named executive
officers during 1996.
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Number Number of Value of
Of Shares Securities Unexercised
Acquired on Value Underlying in the Money
Exercise (#) Realized ($) Unexercised Options/SAR's
Options/SAR's at FY-End ($)
at FY-End (#)
Name Exer Unexer Exer Unexer
Larry E. Ryherd - - 13,800 - 0 -
Thomas F. Morrow - - 17,200 - 0 -
James E. Melville 2,500 13,563 30,000 - 0 -
George E. Francis - - 4,600 - 0 -
Compensation of Directors
The Company's standard arrangement for the compensation of directors
provide that each director shall receive an annual retainer of $2,400, plus
$300 for each meeting attended and reimbursement for reasonable travel
expenses. The Company's director compensation policy also provides that
directors who are employees or past employees of the Company do not receive
any compensation for their services as directors except for reimbursement
for reasonable travel expenses for attending each meeting. Mr. Cantrell
receives compensation pursuant to an agreement which is described in the
following section.
Employment Contracts
On April 15, 1993, Larry E. Ryherd entered into an employment agreement
with FCC and UTI. Formerly, Mr. Ryherd had served as Chairman of the Board
and Chief Executive Officer of UTI and its affiliates. Pursuant to the
agreement, Mr. Ryherd agreed to serve as President and Chief Executive
Officer of the Company and in addition, to serve in other positions of the
affiliated companies if appointed or elected. The agreement provides for
an annual salary of $400,000 as determined by the Board of Directors. The
term of the agreement has been continuous. Mr. Ryherd has deferred
portions of his income under a plan entitling him to a deferred
compensation payment on January 2, 2000 in the amount of $240,000 which
includes interest at the rate of approximately 8.5% per year.
Additionally, Mr. Ryherd was granted an option to purchase up to 13,800 of
UTI Common Stock at $17.50 per share. The option is immediately
exercisable and transferable. The option will expire December 31, 2000.
On April 15, 1993, Thomas F. Morrow entered into an employment agreement
with FCC and UTI. Formerly, Mr. Morrow had served as President and Chief
Operating Officer of UTI and its affiliates. Pursuant to the agreement,
Mr. Morrow agreed to serve as Chief Operating Officer of the Company and in
addition, to serve in other positions of the affiliated companies if
appointed or elected. The agreement provides for an annual salary of
$300,000 as determined by the Board of Directors. The term of the
agreement has been continuous. Mr. Morrow has deferred portions of his
income under a plan entitling him to a deferred compensation payment on
January 2, 2000 in the amount of $300,000 which includes interest at the
rate of approximately 8.5% per year. Additionally, Mr. Morrow was granted
an option to purchase up to 17,200 of UTI Common Stock at $17.50 per share.
The option is immediately exercisable and transferable. The option will
expire December 31, 2000.
The Company and UTI entered into an employment agreement dated April 15,
1993 with James E. Melville pursuant to which Mr. Melville is employed as
Senior Executive Vice President and in addition, to serve in other
positions of the affiliated companies if appointed or elected at an annual
salary of $237,000. The term of the agreement expires December 31, 1997.
Mr. Melville has deferred portions of his income under a plan entitling him
to a deferred compensation payment on January 2, 2000 of $400,000 which
includes interest at the rate of approximately 8.5% per year.
Additionally, Mr. Melville was granted an option to purchase up to 32,500
shares of UTI Common Stock at $17.50 per share. The option is immediately
exercisable and transferable. The option will expire December 31, 2000.
FCC entered into an employment agreement with George E. Francis on June 16,
1992. Under the terms of the agreement, Mr. Francis is employed as Senior
Vice President of the Company at an annual salary of $119,000. Mr. Francis
also agreed to serve in other positions if appointed or elected to such
positions without additional compensation. The term of the contract has
been continuous. Mr. Francis has deferred portions of his income under a
plan entitling him to a deferred compensation payment on January 2, 2000 of
$80,000 which includes interest at the rate of approximately 8.5% per year.
Additionally, Mr. Francis was granted an option to purchase up to 4,600
shares of UTI Common Stock at $17.50 per share. The option is immediately
exercisable and transferable. This option will expire on December 31,
2000.
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On June 16, 1992, FCC entered into an employment agreement with John K.
Cantrell, Chairman of the Board of Directors of FCC and a Director of the
Company. Mr. Cantrell has agreed to continue as Chairman of the Board of
Directors of FCC and a Director of the Company until April 30, 2002. In
consideration for this commitment, FCC has agreed to pay Mr. Cantrell
$12,500 each month for the first sixty months of the term and $8,333.33
each month for the last sixty months of the term. After Mr. Cantrell's
retirement and until the death of the first to die of Mr. Cantrell or his
wife, the Company will pay Mr. Cantrell the sum of $6,250 per month.
From and after the death of the first to die of Mr. and Mrs. Cantrell, FCC
will pay $4,166.67 per month to the survivor until death of the survivor.
Mrs. Cantrell will receive the death benefit described above from and after
Mr. Cantrell's death regardless of whether he died while employed or after
retirement. If Mr. Cantrell becomes disabled prior to retirement, FCC will
continue to make payments described above while he is disabled until April
30, 2002. This agreement has been entered into for the purpose of securing
Mr. Cantrell's extremely valuable services over the ten years and to
relieve Mr. Cantrell of pressures to provide his wife and himself in the
event of his disability or death.
REPORT ON EXECUTIVE COMPENSATION
Introduction
The compensation of the Company's executive officers is determined by the
full Board of Directors. The Board of Directors strongly believes that the
Company's executive officers directly impact the short-term and long-term
performance of the Company. With this belief and the corresponding
objective of making decisions that are in the best interest of the
Company's shareholders, the Board of Directors places significant emphasis
on the design and administration of the Company's executive compensation
plans.
Executive Compensation Considerations
The purpose of the Company's executive compensation plans is to ensure that
the compensation levels provided to the Company's executive officers
integrate with the Company's annual and long-term performance objectives,
to align the financial interests of the executive officers with the
interests of the Company's shareholders, to reward for superior financial
performance, and to assist the Company in attracting, retaining and
motivating executives with exceptional leadership abilities. Consistent
with this purpose, the Board of Directors establishes appropriate
compensation elements in each of the executive officers compensation plan
to include a base salary, annual bonus, stock options and deferred
compensation alternatives. Compensation levels are reviewed annually by
the Board of Directors relative to other life insurance companies and
companies of similar size in the financial industry ("comparable
companies"). Based upon analysis of total compensation paid by comparable
companies, total compensation paid to the Company's executive officers were
found to be within the same ranges. Accordingly, the Board of Directors
feels that the Company is maintaining a competitive position to retain the
talent necessary to meet the challenges in the life insurance industry.
Executive Compensation Plan Elements
Base Salary. The Board of Directors establishes base salaries each year at
a level intended to be within the competitive market range of comparable
companies. In addition to the competitive market range, many factors are
considered in determining base salaries, including the responsibilities
assumed by the executive, the scope of the executive's position,
experience, length of service, individual performance and internal equity
considerations. During the last three fiscal years, there were no changes
in the base salaries of the named executive officers.
Stock Options. One of the Company's priorities is for the executive
officers to be significant shareholders so that the interest of the
executives are closely aligned with the interests of the Company's other
shareholders. The Board of Directors believes that this strategy motivates
executives to remain focused on the overall long-term performance of the
Company. Stock options are granted at the discretion of the Board of
Directors and are intended to be granted at levels within the competitive
market range of comparable companies. During 1993, each of the named
executive officers were granted options under their employment agreements
for UTI Common Stock as described in the Employment Contract section.
There were no options granted to the named executive officers during the
last three fiscal years.
Deferred Compensation. A very significant component of overall Executive
Compensation Plans is found in the flexibility afforded to participating
officers in the receipt of their compensation. The availability, on a
voluntary basis, of the deferred compensation arrangements as described in
the Employment Contract section, may prove to be critical to certain
officers, depending upon their particular financial circumstance.
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Chief Executive Officer and President
During 1996, the Company's most highly compensated executive officers were
Larry E. Ryherd, Chief Executive Officer and President, and Thomas F.
Morrow, Vice Chairman and Chief Operating Officer. Indeciding Mr. Ryherd's
and Mr. Morrow's compensation, the Board of Directors did not affix
specific weights or values to the various factors considered in the
executive compensation plan elements. The Board of Directors considered
the significant progress made in 1994, 1995 and 1996 as it relates to the
Company's growth through acquisitions and marketing new business. The
Board of Directors also considered key decisions and actions taken to
ensure the Company's long term profitability such as the continued
restructuring of the Company in response to changes in the industry in
order to remain competitive, and the consolidation of operations to achieve
cost savings. Mr. Ryherd's cash compensation for 1996 was $400,000. Mr.
Morrow's cash compensation for 1996 was $300,000. No stock options were
granted to Mr. Ryherd or Mr. Morrow during 1996 and neither exercised any
stock options during the year.
Conclusion
The Board of Directors believes the mix of structured employment agreements
with certain key executives, conservative market based salaries,
competitive cash incentives for short-term performance and the potential
for equity-based rewards for long term performance represents an
appropriate balance. This balanced Executive Compensation Plan provides a
competitive and motivational compensation package to the executive officer
team necessary to continue to produce the results the Company strives to
achieve. The Board of Directors also believes the Executive Compensation
Plan addresses both the interests of the shareholders and the executive
team.
BOARD OF DIRECTORS
Vincent T. Aveni Thomas F. Morrow
Marvin W. Berschet Charlie E. Nash
John K. Cantrell Larry E. Ryherd
Gertrude W. Donahey Robert W. Teater
The foregoing Report on Executive Compensation shall not be deemed to be
incorporated by reference into any filing of the Company under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to
the extent that the Company specifically incorporates such information by
reference.
PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Company's Common Stock during the five fiscal years ended December 31,
1996, with the cumulative total return on the NASDAQ Composite Index
Performance and the NASDAQ Insurance Stock Index (1):
1991 1992 1993 1994 1995 1996
UII 100 100 100 92 92 40
NASDAQ 100 117 134 130 185 227
NASDAQ 100 136 145 136 194 221
Insurance
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(1) The Company selected the NASDAQ Composite Index Performance as an
appropriate comparison because the Company's Common Stock is not listed on
any exchange. Furthermore, the Company selected the NASDAQ Insurance Stock
Index as the second comparison because there is no similar single "peer
company" in the NASDAQ system with which to compare stock performance and
the closest additional line-of-business index which could be found was the
NASDAQ Insurance Stock Index. Trading activity in the Company's Common
Stock is limited, which may be a result in part of the Company's low
profile from not being listed on any exchange, and its reported operating
losses. The Company has experienced a tremendous growth rate over the
period shown in the Return Chart with assets growing from approximately $19
million in 1991 to approximately $355 million in 1996 through it's 47%
equity ownership of UTG. The growth rate has been the result of other
company acquisitions and new insurance writings. The Company has incurred
costs of conversions and administrative consolidations associated with the
acquisitions which has contributed to the operating losses. The Return
Chart is not intended to forecast or be indicative of possible future
performance of the Company's stock.
The foregoing graph shall not be deemed to be incorporated by reference
into any filing of the Company under the Securities Act of 1933 or the
Securities Exchange Act of 1934, except to the extent that the Company
specifically incorporates such information by reference.
Compensation Committee Interlocks and Insider Participation
The following persons served as directors of the Company during 1996 and
were officers or employees of the Company or its subsidiaries during 1996:
John K. Cantrell, Thomas F. Morrow and Larry E. Ryherd. Accordingly, these
individuals have participated in decisions related to compensation of
executive officers of the Company and its subsidiaries.
During 1996, the following executive officers of the Company were also
members of the Board of Directors of FCC, two of whose executive officers
served on the Board of Directors of the Company: Messrs. Morrow and Ryherd.
During 1996, the following executive officers of the Company were also
members of the Board of Directors of UTI, two of whose executive officers
served on the Board of Directors of the Company: Messrs. Morrow and
Ryherd.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL HOLDERS OF SECURITIES
The following tabulation sets forth the name and address of the entity
known to be the beneficial owner of more than 5% of the Company's Common
Stock and shows: (i) the total number of shares of Common Stock
beneficially owned by such person as of March 31, 1997 and the nature of
such ownership; and (ii) the percent of the issued and outstanding shares
of Common Stock so owned as of the same date.
Title Number of Shares Percent
of Name and Address and Nature of of
Class of Beneficial Owner Beneficial Ownership Class
Common United Trust, Inc. 416,185 29.9%
Stock, 5250 South 6th Street
no par Springfield, IL 62703
value
SECURITY OWNERSHIP OF MANAGEMENT
The following tabulation shows with respect to each of the directors and
nominees of the Company, with respect to the Company's chief executive
officer and each of the Company's executive officers whose salary plus
bonus exceeded $100,000 for fiscal 1996, and with respect to all executive
officers and directors of the Company as a group: (i) the total number of
shares of all classes of stock of the Company or any of its parents or
subsidiaries, beneficially owned as of March 31, 1997 and the nature of
such ownership; and (ii) the percent of the issued and outstanding shares
of stock so owned as of the same date.
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Title Directors, Named Executive Number of Shares Percent
of Officers, & All Directors & and Nature of of
Class Executive Officers as a Group Ownership Class
UTI's Vincent T. Aveni 0 *
Common Marvin W. Berschet 0 *
Stock, no John K. Cantrell 0 *
par value Gertrude W. Donahey 0 *
George E. Francis 4,600 (1) *
James E. Melville 52,500 (2) 2.6%
Thomas F. Morrow 159,060 (3) 8.0%
Charlie E. Nash 0 *
Larry E. Ryherd 617,236 (4) 31.0%
Robert W. Teater 0 *
All directors and 833,396 41.9%
executive officers as a
group (ten in number)
FCC's Vincent T. Aveni 0 *
Common Marvin W. Berschet 0 *
Stock, $1.00 John K. Cantrell 0 *
par value Gertrude W. Donahey 0 *
George E. Francis 0 *
James E. Melville 431 (5) *
Thomas F. Morrow 0 *
Charlie E. Nash 0 *
Larry E. Ryherd 0 *
Robert W. Teater 0 *
All directors and 431 *
executive officers as a
group (ten in number)
Title Directors, Named Executive Number of Shares Percent
of Officers, & All Directors & and Nature of of
Class Executive Officers as a Group Ownership Class
Company's Vincent T. Aveni 7,716 (6) *
Common Marvin W. Berschet 7,161 (7) *
Stock, no John K. Cantrell 0 *
par value Gertrude W. Donahey 7,000 *
George E. Francis 0 *
James E. Melville 0 *
Thomas F. Morrow 31,500 (8) (11) 2.3%
Charlie E. Nash 7,052 *
Larry E. Ryherd 47,250 (9) (11) 3.4%
Robert W. Teater 7,380 (10) *
All directors and executive
officers
as a group (ten in number) 115,059 8.3%
(1) Includes 4,600 shares which may be acquired upon the exercise of
outstanding stock options.
(2) James E. Melville owns 2,500 shares individually, and 14,000
shares jointly with his spouse. Includes; (i) 3,000 shares of the
UTI's Common Stock which are held beneficially in trust for his
daughter, namely Bonnie J. Melville; (ii) 3,000 shares of the UTI's
Common Stock, 750 shares of which are in the name of Matthew C.
Hartman, his nephew; 750 shares of which are in the name of Zachary
T. Hartman, his nephew; 750 shares of which are in the name of
Elizabeth A. Hartman, his niece; and 750 shares of which are in the
name of Margaret M. Hartman, his niece; and (iii) 30,000 shares which
may be acquired by James E. Melville upon exercise of outstanding
stock options.
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(3) Includes 17,200 shares which may be acquired upon the exercise
of outstanding stock options. Includes 1,000 shares as custodian for
grandsons.
(4) Larry E. Ryherd owns 271,086 shares of the UTI's Common Stock in
his own name. Includes; (i) 150,050 shares of the UTI's Common Stock
in the name of Dorothy LouVae Ryherd, his wife; (ii) 150,000 shares
of the UTI's Common Stock which are held beneficially in trust for
the three children of Larry E. Ryherd and Dorothy LouVae Ryherd,
namely Shari Lynette Serr, Derek Scott Ryherd and Jarad John Ryherd;
(iii) 29,300 shares of the UTI's Common Stock, 9,700 shares of which
are in the name of Shari Lynette Serr, 9,700 shares of which are held
in the name of Derek Scott Ryherd, and 9,900 shares of which are in
the name of Jarad John Ryherd; (iv) 500 shares of the UTI's Common
Stock held in the name of Larry E. Ryherd as custodian for Charity
Lynn Newby, his niece; (v) 500 shares held in the name of Larry E.
Ryherd as custodian for Lesley Carol Newby, his niece; (vi) 2,000
shares held by Dorothy LouVae Ryherd, his wife as custodian for
granddaughter; and (vii) 13,800 shares which may be acquired by Larry
E. Ryherd upon exercise of outstanding stock options.
(5) James E. Melville owns 55 shares individually and 376 shares
jointly with his spouse.
(6) Includes 272 shares owned directly by Mr. Aveni's brother and
210 shares owned directly by Mr. Aveni's son.
(7) Includes 42 shares owned directly by each of Mr. Berschet's two
sons and 77 shares owned directly by Mr. Berschet's daughter, a total
of 161 shares.
(8) Includes 31,500 shares beneficially in trust for the two
children of Thomas F. Morrow, namely Kristi J. Wilkerson and Amy
Suzanne Heath.
(9) Includes 47,250 shares beneficially in trust for the three
children of Larry E. Ryherd and Dorothy LouVae Ryherd, namely Shari
Lynette Serr, Derek Scott Ryherd and Jarad John Ryherd.
(10) Includes 210 shares owned directly by Mr. Teater's spouse.
(11) In addition, Mr. Morrow and Mr. Ryherd are directors and
officers of UTI, which owns 416,185 shares (29.9%) of the Company.
Mr. Morrow and Mr. Ryherd disclaim any beneficial interest in the
416,185 shares of the Company owned by UTI as the UTI board of
directors controls the voting and investment decisions regarding such
shares.
* Less than 1%.
Except as indicated above, the foregoing persons hold sole voting and
investment power.
Directors and officers of the Company file periodic reports regarding
ownership of Company securities with the Securities and Exchange Commission
pursuant to Section 16(a) of the Securities Exchange Act of 1934 as
amended, and the rules promulgated thereunder.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Kerber, Eck and Braeckel served as the Company's independent certified
public accounting firm for the fiscal year ended December 31, 1996 and
fiscal year ended December 31, 1995. In serving its primary function as
outside auditor for the Company, Kerber, Eck and Braeckel performed the
following audit services: examination of annual consolidated financial
statements; assistance and consultation on reports filed with the
Securities and Exchange Commission and; assistance and consultation on
separate financial reports filed with the State insurance regulatory
authorities pursuant to certain statutory requirements. The Company does
not expect that a representative of Kerber, Eck and Braeckel will be
present at the Annual Meeting of Shareholders of the Company. No
accountants have been selected for fiscal year 1997 because the Company
generally chooses accountants shortly before the commencement of the annual
audit work.
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