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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13E-3
Rule 13e-3 Transaction Statement
(Pursuant to Section 13(e) of the Securities Exchange Act of 1934)
INVESTORS HERITAGE LIFE INSURANCE COMPANY
(Name of the Issuer)
KENTUCKY INVESTORS, INC.
(Name of the Person(s) Filing Statement)
Common Stock $1.00 Par Value Per Share
(Title of Class of Securities)
461560104
(Cusip Number of Class of Securities)
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Robert M. Hardy, Jr.
200 Capital Avenue
Frankfort, Kentucky 40601
Telephone: (502) 223-2361
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of Person(s) Filing Statement)
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Copy To:
Alex P. Herrington, Jr.
Stites & Harbison
400 West Market Street, Suite 1800
Louisville, Kentucky 40202-3352
Telephone: (502) 587-3400
This statement is filed in connection with (check the appropriate
box):
(a) [ ] The filing of solicitation materials or an information
statement subject to Regulation 14A, Regulation 14C, or Rule 13e-3(c)
under the Securities Exchange Act of 1934.
(b) [X] The filing of a registration statement under the
Securities Act of 1933.
(c) [ ] A tender offer.
(d) [ ] None of the above.
Check the following box if the soliciting materials or information
statement referred to in checking box (a) are preliminary copies.
[ ]
CALCULATION OF FILING FEE:
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TRANSACTION VALUATION* AMOUNT OF FILING FEE**
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$5,821,943 $1,164
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* For purposes of calculating the fee only. The amount assumes the
exchange of 235,230 shares of Common Stock, par value $1.00 per
share, of Investors Heritage Life Insurance Company for 291,685
shares of Common Stock, par value $1.00 per share, of Kentucky
Investors, Inc. at $24.75 per share, as computed based upon the
average of the bid and asked per share prices of Investors
Heritage common stock as reported on the OTC Bulletin Board on
September 22, 1999, for shares not owned by the persons filing
this statement.
**The amount of the filing fee calculated in accordance with
Regulation 240.0-11 of the Securities Exchange Act of 1934 equals
1/50th of 1% of the value of the shares to be exchanged.
[X] Check box if any part of the fee is offset as provided by
Rule 0-11(a)(2) and identify the filing with which the offsetting
fee was previously paid. Identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
Amount previously paid: $1,619 Filing party: Kentucky Investors, Inc.
Form or registration no.: Form S-4 Date filed: September 28, 1999
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INTRODUCTION
This Rule 13E-3 Transaction Statement (the "Schedule 13E-3")
relates to a Share Exchange Agreement, dated as of September 24,
1999 (as amended from time to time, the "Share Exchange
Agreement"), between Investors Heritage Life Insurance Company, a
Kentucky corporation ("Investors Heritage"), and Kentucky
Investors, Inc., a Kentucky corporation ("Kentucky Investors"),
pursuant to which Kentucky Investors will exchange 1.24 shares of
its common stock for one share of Investors Heritage common stock
(the "Share Exchange"). A copy of the Share Exchange Agreement is
filed as Annex A to the Proxy Statement/Prospectus (the "Proxy
Statement") filed as part of Form S-4 Registration Statement by
Kentucky Investors with the Securities and Exchange Commission (the
"Commission") on the date hereof. This Schedule 13E-3 is being
filed by Kentucky Investors.
The following responses and cross-references are being
supplied pursuant to General Instruction F to Schedule 13E-3 and
show the locations in (1) the Proxy Statement (including all
annexes thereto); (2) the 1998 Investors Heritage Life Insurance
Company and Kentucky Investors, Inc. Annual Report (the "1998
Annual Report"); (3) the Kentucky Investors, Inc. Annual Report on
Form 10-K for the year ended December 31, 1998 (the "1998 Kentucky
Investors Form 10-K"); (4) the Proxy Statement for the Investors
Heritage Life Insurance Company Meeting of Stockholders on May 13,
1999 (the "1999 Investors Heritage Proxy Statement"); (5) the Proxy
Statement for the Annual Meeting of Stockholders of Kentucky
Investors, Inc. on May 13, 1999 (the "1999 Kentucky Investors Proxy
Statement"); and (6) the Investors Heritage Life Insurance Company
Quarterly Report on Form 10-Q for the quarter ended June 30, 1999
(the "Investors Heritage June 30, 1999 Form 10-Q") (collectively,
the "Disclosure Documents"), of the information required to be
included in response to the items of this Schedule 13E-3. The
information set forth in the Disclosure Documents is hereby
expressly incorporated herein by reference and the responses to
each item of this Schedule 13E-3 are qualified in their entirety by
reference to the information contained in the Disclosure Documents.
CROSS REFERENCE SHEET
Item in Schedule 13E-3 Disclosure Documents
- ---------------------- --------------------
Item 1(a)............. Proxy Statement: Summary--The
Companies
Item 1(b)............. Not contained in the Proxy Statement
Item 1(c)-(d)......... Proxy Statement: Comparative Per
Share Market Price and Dividend
Information
Item 1(e)............. Not applicable
Item 1(f)............. Not contained in the Proxy Statement
Item 2(a)-(g)......... Proxy Statement: Share Exchange
Proposed--Your Vote is Very Important;
Summary--The Companies; 1998 Kentucky
Investors Form 10-K: Directors and
Executive Officers; 1999 Kentucky
Investors Proxy Statement: Election of
Directors
1
Item 3(a)(1).......... Not applicable
Item 3(a)(2).......... Proxy Statement: The Share Exchange-
-Background of the Share Exchange
Item 3(b)............. Proxy Statement: The Share Exchange-
-Background of the Share Exchange
Item 4(a)-(b)......... Proxy Statement: Share Exchange
Proposed--Your Vote is Very Important;
Questions and Answers about the Kentucky
Investors/Investors Heritage Share
Exchange; Summary--The Share Exchange; The
Share Exchange--General; Annex A--Share
Exchange Agreement
Item 5(a)-(e) and (g). Not applicable
Item 5(f)............. Proxy Statement: Effect of Share
Exchange on OTC Bulletin Board Listings
Item 6(a)............. Proxy Statement: Share Exchange
Proposed-Your Vote is Very Important;
Questions and Answers about the Kentucky
Investors/Investors Heritage Share
Exchange; Summary--The Share Exchange; The
Share Exchange Agreement--General; Opinion
of Financial Advisor
Item 6(b)............. Not contained in Proxy Statement
Item 6(c)-(d)......... Not applicable
Item 7(a)-(c)......... Proxy Statement: Questions and
Answers about the Kentucky
Investors/Investors Heritage Share
Exchange; The Share Exchange--Background
of the Share Exchange; The Share Exchange-
-Kentucky Investors' Reasons for the Share
Exchange; The Share Exchange--Investor
Heritage's Reasons for the Share Exchange;
Recommendation of the Investors Heritage
Board
Item 7(d)............. Proxy Statement: Share Exchange
Proposed--Your Vote is Very Important;
Questions and Answers about the Kentucky
Investors/Investors Heritage Share
Exchange; Summary--Ownership of Kentucky
Investors Following the Share Exchange;
Summary--The Share Exchange; Comparative
Historical and Pro Forma Per Share Data;
The Share Exchange--United States Federal
Tax Considerations; Opinion of Financial
Advisor
2
Item 8(a)............. Proxy Statement: Summary--The Share
Exchange; The Share Exchange--Background
of the Share Exchange; Opinion of
Financial Advisor
Item 8(b)............. Proxy Statement: The Share Exchange-
-Kentucky Investors' Reasons for the Share
Exchange; The Share Exchange--Investors
Heritage's Reasons for the Share Exchange;
Recommendation of the Investors Heritage
Board; Opinion of Financial Advisor
Item 8(c)............. Proxy Statement: Summary--Vote
Required to Approve the Share Exchange;
The Special Meeting--Voting Rights; Votes
Required for Approval
Item 8(d)............. Proxy Statement: Summary--The Share
Exchange; The Share Exchange--Background
of the Share Exchange; Opinion of
Financial Advisor
Item 8(e)............. Proxy Statement: The Share Exchange-
-Background of the Share Exchange
Item 8(f)............. Not applicable
Item 9(a)............. Proxy Statement: Summary--The Share
Exchange; The Share Exchange--Background
of the Share Exchange; Opinion of
Financial Advisor
Item 9(b)(1)-(5)...... Proxy Statement: Summary--The Share
Exchange; The Share Exchange--Background
of the Share Exchange; Opinion of
Financial Advisor
Item 9(b)(6).......... Proxy Statement: Opinion of
Financial Advisor
Item 9(c)............. Proxy Statement: Where You Can Find
More Information
Item 10(a)............ 1999 Investors Heritage Proxy
Statement: Voting Securities; Election of
Directors
Item 10(b)............ Not applicable
Item 11............... Proxy Statement: The Share Exchange
Agreement--Investors Heritage Board and
Stockholders Meeting; Annex A--Share
Exchange Agreement
Item 12(a)............ Proxy Statement: Summary--The Share
Exchange; The Share Exchange--Background
of the Share Exchange; The Share Exchange-
-Kentucky Investors' Reasons for the Share
Exchange; Interests of Certain Persons in
the Share Exchange
3
Item 12(b)............ Not contained in the Proxy Statement
Item 13(a)............ Proxy Statement: Summary--The Share
Exchange; The Share Exchange--Dissenters'
Rights of Investors Heritage Stockholders;
and Annex C--Subtitle 13 of Chapter 271B
of the Kentucky Revised Statutes
Item 13(b)-(c)........ Not applicable
Item 14(a)(1)......... 1998 Annual Report: Consolidated
Financial Statements and Notes appearing
on pages 30 to 47
Item 14(a)(2)......... Investors Heritage June 30, 1999 Form
10-Q: Part I, Item 1, Unaudited
Consolidated Financial Statements
Item 14(a)(3)......... Not applicable
Item 14(a)(4)......... Proxy Statement: Comparative
Historical and Pro Forma Per Share Data
Item 14(b)(1)-(2)..... Proxy Statement: Comparative
Historical and Pro Forma Per Share Data;
Unaudited Pro Forma Financial Data
Item 14(b)(3)......... Proxy Statement: Comparative
Historical and Pro Forma Per Share Data
Item 15(a)............ Proxy Statement: Questions and
Answers about the Kentucky
Investors/Investors Heritage Share
Exchange; The Special Meeting--Voting of
Proxies
Item 15(b)............ Not applicable
Item 16............... Proxy Statement
Item 17............... Separately included herewith
ITEM 1. ISSUER AND CLASS OF SECURITY SUBJECT TO THE TRANSACTION.
(a) Investors Heritage is the issuer of the securities
subject to this Schedule 13E-3. The information set forth in the
section entitled "Summary--The Companies" in the Proxy Statement is
incorporated herein by reference.
(b) Investors Heritage has 904,784 shares of Common Stock,
$1.00 par value, outstanding as of September 24, 1999. The
approximate number of holders of record is 2,525 as of September
24, 1999.
4
(c)-(d) The information set forth in the section entitled
"Comparative Per Share Market Price and Dividend Information" in
the Proxy Statement is incorporated herein by reference.
(e) Not applicable.
(f)
NUMBER OF AVERAGE
SHARES RANGE OF PURCHASE
QUARTER ENDED PURCHASED PRICES PAID PRICE
------------- --------- ----------- -----
1997
First Quarter.............. 69 $26.00 - $26.00 $26.00
Second Quarter............. 7 $26.00 - $26.00 $26.00
Third Quarter.............. 60 $26.00 - $26.00 $26.00
Fourth Quarter............. 2 $26.00 - $26.00 $26.00
1998
First Quarter.............. 1,573 $26.00 - $26.00 $26.00
Second Quarter............. 6,298 $26.50 - $28.00 $27.724
Third Quarter.............. 4,659 $27.00 - $28.00 $27.635
Fourth Quarter............. 1,010 $25.00 - $26.00 $25.406
1999
First Quarter.............. 0 0 - 0 0
Second Quarter............. 33 $23.50 - $25.00 $23.773
Third Quarter (through
September 27, 1999)...... 162 $23.50 - $23.50 $23.50
ITEM 2. IDENTITY AND BACKGROUND.
(a)-(g) This Statement is being filed by Kentucky Investors.
The information set forth in the sections entitled "Share Exchange
Proposed-Your Vote is Very Important" and "Summary--The Companies"
in the Proxy Statement, in Item 10 Directors and Executive Officers
of the Registrant in the 1998 Kentucky Investors Form 10-K and in
the section entitled "Election of Directors" in the 1999 Kentucky
Investors Proxy Statement is incorporated herein by reference.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS.
(a)(1) Not applicable.
(2) The information set forth in the section entitled
"The Share Exchange--Background of the Share Exchange" in the Proxy
Statement is incorporated herein by reference.
(b) The information set forth in the section entitled "The
Share Exchange--Background of the Share Exchange" in the Proxy
Statement is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a)-(b) The information set forth in the sections entitled
"Share Exchange Proposed--Your Vote is Very Important," "Questions
and Answers about the Kentucky Investors/Investors Heritage Share
Exchange," "Summary--The Share Exchange," "The Share Exchange--
General" in the
5
Proxy Statement, and in Annex A--Share Exchange Agreement to the
Proxy Statement is incorporated herein by reference.
ITEM 5. PLANS OR PROPOSALS OF THE ISSUER OR AFFILIATE.
(a)-(e) and (g) Not applicable.
(f) The information set forth in "Effect of Share Exchange on
OTC Bulletin Board Listings" in the Proxy Statement is incorporated
herein by reference.
ITEM 6. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth in the sections entitled "Share
Exchange Proposed--Your Vote is Very Important," "Questions and
Answers about the Kentucky Investors/Investors Heritage Share
Exchange," "Summary--The Share Exchange," "The Share Exchange
Agreement--General" and "Opinion of Financial Advisor" in the Proxy
Statement, and in Annex A--Share Exchange Agreement to the Proxy
Statement is incorporated herein by reference.
(b) The following is an estimate of fees and expenses to be
incurred in connection with the share exchange:
Legal Fees and Expenses of Kentucky Investors Counsel... $ 80,000
Accountants' Fees and Expenses.......................... 200,000
Financial Advisor to Special Committee.................. 75,000
Printing................................................ 25,000
Filing Fees............................................. 3,000
Mailing................................................. 7,500
Miscellaneous........................................... 10,000
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Total......................................... $400,500
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(c)-(d) Not applicable.
ITEM 7. PURPOSE(S), ALTERNATIVES, REASONS AND EFFECTS.
(a)-(c) The information set forth in the sections entitled
"Questions and Answers about the Kentucky Investors/Investors
Heritage Share Exchange," "The Share Exchange--Background of the
Share Exchange," "The Share Exchange--Kentucky Investors' Reasons
for the Share Exchange" and "The Share Exchange--Investor
Heritage's Reasons for the Share Exchange; Recommendation of the
Investors Heritage Board" in the Proxy Statement is incorporated
herein by reference.
(d) The information set forth in the sections entitled "Share
Exchange Proposed-Your Vote is Very Important," "Questions and
Answers about the Kentucky Investors/Investors Heritage Share
Exchange," "Summary--Ownership of Kentucky Investors Following the
Share Exchange," "Summary--The Share Exchange," "Comparative
Historical and Pro Forma Per Share Data," "The Share Exchange--
United States Federal Tax Considerations" and "Opinion of Financial
Advisor" in the Proxy Statement is incorporated herein by
reference.
6
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a) The information set forth in the sections entitled
"Summary--The Share Exchange," "The Share Exchange--Background of
the Share Exchange" and "Opinion of Financial Advisor" in the Proxy
Statement is incorporated herein by reference.
(b) The information set forth in the sections entitled "The
Share Exchange--Kentucky Investors' Reasons for the Share
Exchange," "The Share Exchange--Investors Heritage's Reasons for
the Share Exchange; Recommendation of the Investors Heritage Board"
and "Opinion of Financial Advisor" in the Proxy Statement is
incorporated herein by reference.
(c) The information set forth in the sections entitled
"Summary--Vote Required to Approve the Share Exchange" and "The
Special Meeting--Voting Rights; Votes Required for Approval" in the
Proxy Statement is incorporated herein by reference.
(d) The information set forth in the sections entitled
"Summary--The Share Exchange," "The Share Exchange--Background of
the Share Exchange" and "Opinion of Financial Advisor" in the Proxy
Statement is incorporated herein by reference.
(e) The information set forth in the section entitled "The
Share Exchange--Background of the Share Exchange" in the Proxy
Statement is incorporated herein by reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a) The information set forth in the sections entitled
"Summary--The Share Exchange," "The Share Exchange--Background of
the Share Exchange" and "Opinion of Financial Advisor" in the Proxy
Statement is incorporated herein by reference.
(b)(1)-(5) The information set forth in the sections
entitled "Summary--The Share Exchange," "The Share Exchange--
Background of the Share Exchange" and "Opinion of Financial
Advisor" in the Proxy Statement is incorporated herein by
reference.
(b)(6) The information set forth in the section entitled
"Opinion of Financial Advisor" in the Proxy Statement is
incorporated herein by reference.
(c) The information set forth in the section entitled "Where
You Can Find More Information" in the Proxy Statement is
incorporated herein by reference.
ITEM 10. INTEREST IN SECURITIES OF THE ISSUER.
(a) The information set forth in the sections entitled
"Voting Securities" and "Election of Directors" in the 1999
Investors Heritage Proxy Statement is incorporated herein by
reference.
(b) Not applicable.
7
ITEM 11. CONTRACTS, ARRANGEMENTS OR UNDERSTANDINGS WITH RESPECT TO
THE ISSUER'S SECURITIES.
The information set forth in the section entitled "The Share
Exchange Agreement--Investors Heritage Board and Stockholders
Meeting" in the Proxy Statement, and in Annex A--Share Exchange
Agreement to the Proxy Statement is incorporated herein by
reference.
ITEM 12. PRESENT INTENTION AND RECOMMENDATION OF CERTAIN PERSONS
WITH REGARD TO THE TRANSACTION.
(a) The information set forth in the sections entitled
"Summary--The Share Exchange," "The Share Exchange--Background of
the Share Exchange," "The Share Exchange--Kentucky Investors'
Reasons for the Share Exchange" and "Interests of Certain Persons
in the Share Exchange" in the Proxy Statement is incorporated
herein by reference.
(b) No persons identified in Item 12(a) have made any
recommendations in support of or opposed to the Rule 13e-3
transaction.
ITEM 13. OTHER PROVISIONS OF THE TRANSACTION.
(a) The information set forth in the sections entitled
"Summary--The Share Exchange" and "The Share Exchange--Dissenters'
Rights of Investors Heritage Stockholders" in the Proxy Statement
and in Annex C--Subtitle 13 of Chapter 271B of the Kentucky Revised
Statutes to the Proxy Statement is incorporated herein by
reference.
(b)-(c) Not applicable.
ITEM 14. CONSOLIDATED FINANCIAL STATEMENTS.
(a)(1) The consolidated financial statements and notes
appear on pages 30-47 in the 1998 Annual Report and are
incorporated herein by reference.
(2) The unaudited consolidated financial statements in
Part I, Item 1 of the Investors Heritage June 30, 1999 Form 10-Q
are incorporated herein by reference.
(3) Not applicable.
(4) The information set forth in the section entitled
"Comparative Historical and Pro Forma Per Share Data" in the Proxy
Statement is incorporated herein by reference.
(b)(1)-(2) The information set forth in the sections entitled
"Comparative Historical and Pro Forma Per Share Data" and
"Unaudited Pro Forma Financial Data" in the Proxy Statement is
incorporated herein by reference.
(3) The information set forth in the section entitled
"Comparative Historical and Pro Forma Per Share Data" in the Proxy
Statement is incorporated herein by reference.
8
ITEM 15. PERSONS AND ASSETS EMPLOYED, RETAINED OR UTILIZED.
(a) The information set forth in the sections entitled
"Questions and Answers about the Kentucky Investors/Investors
Heritage Share Exchange" and "The Special Meeting--Voting of
Proxies" in the Proxy Statement is incorporated herein by
reference.
(b) Not applicable.
ITEM 16. ADDITIONAL INFORMATION.
Additional information is set forth in the Proxy Statement
which is incorporated herein by reference in its entirety.
ITEM 17. MATERIAL TO BE FILED AS EXHIBITS.
The Exhibit Index attached to this Transaction Statement is
incorporated herein by reference.
9
SIGNATURE
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AFTER DUE INQUIRY AND TO THE BEST OF ITS KNOWLEDGE AND BELIEF,
THE UNDERSIGNED CERTIFIES THAT THE INFORMATION SET FORTH IN THIS
STATEMENT IS TRUE, COMPLETE AND CORRECT.
Dated: September 28, 1999 KENTUCKY INVESTORS, INC.
By: /s/ Harry Lee Waterfield II
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Title: President
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10
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
17(a) Not Applicable
17(b)(1) Fairness Opinion of The Robinson-Humphrey Company, LLC
(incorporated herein by reference to Annex B to the Proxy
Statement/Prospectus filed as Exhibit 17(d)(1) hereto).
17(c)(1) Share Exchange Agreement, dated as of September 24, 1999,
between Investors Heritage Life Insurance Company and
Kentucky Investors, Inc. (incorporated herein by
reference to Annex A to the Proxy Statement/Prospectus
filed as Exhibit 17(d)(1) hereto).
17(d)(1) Proxy Statement/Prospectus (filed herewith).
17(d)(2) The 1998 Investors Heritage Life Insurance Company and
Kentucky Investors, Inc. Annual Report (filed herewith).
17(d)(3) The Kentucky Investors, Inc. Annual Report on Form 10-K
for the year ended December 31, 1998 (filed herewith).
17(d)(4) The Proxy Statement for the Investors Heritage Life
Insurance Company Meeting of Stockholders on May 13, 1999
(filed herewith).
17(d)(5) The Proxy Statement for the Annual Meeting of
Stockholders of Kentucky Investors, Inc. on May 13, 1999
(filed herewith).
17(d)(6) The Investors Heritage Life Insurance Company Quarterly
Report on Form 10-Q for the quarter ended June 30, 1999
(filed herewith).
17(e) Subtitle 13 of Chapter 271B of the Kentucky Revised
Statutes (incorporated herein by reference to Annex C to
the Proxy Statement/Prospectus filed as Exhibit 17(d)(1)
hereto).
17(f) Not applicable.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
99.1 Consent of The Robinson-Humphrey Company, LLC.