UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported): August 8, 2006
UTG, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-16867 20-2907892
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer Identification No.)
incorporation or organization)
5250 South Sixth Street
Springfield, Illinois 62703
(Address of principal executive offices and zip code)
(217) 241-6300
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2):
Written communications pursuant to Rule 425 under the Securities Act
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
Section 1 - Registrant's Business and Operations
Item 1.01. Entry into a Material Definitive Agreement
On August 7, 2006, UTG, Inc. (the Company) entered into a definitive Stock
Purchase Agreement (the "Agreement") with William F. Guest and John D. Cornett
pursuant to which the Company has agreed to purchase a majority of the issued
and outstanding common stock of Acap Corporation ("Acap"). Acap is a Delaware
corporation which owns 100% of the issued and outstanding stock of American
Capitol Insurance Company, a Texas life insurance company, which in turn owns
100% of the issued and outstanding stock of Texas Imperial Life Insurance
Company and Imperial Plan, Inc.
At the closing of the Agreement, the Company will purchase from Messrs. Guest
and Cornett a total of 1,492 shares of common stock of Acap for an aggregate
purchase price of $14,535,064, and may purchase as many as an additional 352
shares from certain other shareholders, on the same terms (including price).
In addition, at the closing, the Company will enter into stock put option
agreements under which certain individuals, who currently hold options to
purchase Acap shares, will have the opportunity to sell to UTG up to 266 shares
of common stock of Acap during the period ending December 16, 2007. The purchase
price for shares under the stock put option agreements will be the same as under
the Agreement, except that it will be increased up to the time such shares are
purchased upon exercise of the options at the rate of 5% per annum, compounded
daily.
The Company has also agreed to loan Acap the funds required to retire certain
indebtedness of Acap and to redeem all of Acap's outstanding preferred stock at
the closing of the Agreement.
Assuming the Company purchases all of the shares of Acap common stock that may
be purchased under the Agreement and the stock put option agreements, the
Company will acquire up to 72.8% of the outstanding shares of common stock of
Acap, and the total cost of the transaction to the Company (including the loan
to Acap for the payment of Acap indebtedness and redemption of Acap preferred
stock) will be approximately $24 million, to be paid in cash.
The Company will have four weeks to conduct a due diligence investigation of
Acap and its subsidiaries, and during that four week period will be able to
terminate the Agreement if it discovers material adverse changes, provided it
provides notice within five business days of discovery. The closing of the
Agreement will occur on December 8, 2006, subject to certain conditions,
including
• the receipt of required regulatory approvals and consents,
• the absence of legal proceedings attacking the transaction,
• the performance of certain covenants and obligations,
• the accuracy of certain representations and warranties,
• the resignation of certain Acap directors,
• the receipt of releases from sellers and individuals who enter into stock put option agreements,
• the absence of material adverse changes and
• the conduct of Acap's business in the ordinary course pending closing.
The transaction will require regulatory approval under the Texas insurance code.
The Company has made a $200,000 earnest money payment to Mr. Guest, which the
sellers may retain if they terminate the Agreement because the closing of the
Agreement does not occur on December 8, 2006 as a result of the Company's
breach.
Section 9 - Financial Statements and Exhibits
Item 9.01. Financial Statements and Exibits.
(c) Exhibits.
Exhibit 2(a) - Stock Purchase Agreement, dated August 7, 2006,between UTG, Inc.
and William F. Guest and John D. Cornett
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.
UTG, INC.
Date: August 8, 2006 By: /s/ Theodore C. Miller
Theodore C. Miller
Senior Vice President and Chief Financial Officer
Exhibit Index
Exhibit No. Description
- ---------------- -------------------------------------------------------------------------------------
Exhibit 2(a) Stock Purchase Agreement, dated August 7, 2006,between UTG, Inc. and William F. Guest
and John D. Cornett
