INVESTORS HERITAGE LIFE INSURANCE COMPANY
200 Capital Avenue
FRANKFORT, KENTUCKY 40601
Notice of Annual Meeting of Shareholders
To Be Held May 13, 1999
TO THE SHAREHOLDERS OF
INVESTORS HERITAGE LIFE INSURANCE COMPANY
Notice is hereby given that the annual meeting of shareholders of Investors
Heritage Life Insurance Company, a Kentucky corporation, (the "Company") will be
held at the Investors Heritage Life Insurance Company auditorium, Second and
Shelby Streets, Frankfort, Kentucky 40601, on Thursday, May 13, 1999, at 10:00
a.m. (Eastern Daylight Time), for the following purposes:
(1) To elect three Directors to hold office for a term of three years each
or until their successors are duly elected and qualified; and
(2) To transact such other business as may properly come before the
meeting, or any adjournment thereof.
The Board of Directors, in accordance with the By-laws, has fixed the close
of business on March 26, 1999, as the record date for determining the
shareholders entitled to notice of and to vote at the meeting and any
adjournment thereof. The stock transfer books will not be closed.
It is hoped that you will attend the meeting, but if it is not your
intention to be present, you are respectfully requested to sign, date and return
the enclosed proxy immediately in the accompanying postage-prepaid envelope. The
proxy is being solicited by and on behalf of the Board of Directors of the
Company.
Your attention is directed to the Company's 1998 annual report and to the
proxy statement, both of which accompany this notice.
By Order of the Board of Directors
/s/
Wilma Yeary, FLMI/CPS, Secretary
P.O. Box 717
Frankfort, Kentucky 40602
April 16, 1999
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS, MAY 13, 1999
The following information is furnished in connection with the solicitation
of the enclosed proxy by and on behalf of the Board of Directors of Investors
Heritage Life Insurance Company (the "Company" or "IHLIC"), for use at the
annual meeting of shareholders of the Company to be held at the Investors
Heritage Life Insurance Company auditorium, Second and Shelby Streets,
Frankfort, Kentucky 40601, on Thursday, May 13, 1999, at 10:00 a.m. (Eastern
Daylight Time), and at any adjournment thereof, for the purposes set forth in
the Notice of Annual Meeting.
PROXY MAY BE REVOKED
A shareholder executing and returning the enclosed proxy may revoke such
proxy at any time prior to the exercise of the authority thereby given by giving
written notice to the Secretary of the Company as provided by Kentucky Revised
Statutes 271B.7-220(6).
COST AND METHOD OF SOLICITATION
The Board of Directors intends to solicit proxies by use of the mails, and
all cost of soliciting proxies for this annual meeting will be borne by the
Company. The proxy statements and proxy cards will be mailed to the
shareholders on April 16, 1999.
VOTING SECURITIES
The Company has issued one class of capital stock. There are 904,373
shares outstanding each of which is entitled to one vote, except that in
election of Directors, cumulative voting rights apply as provided by Kentucky
Revised Statutes 271B.7-280. Each shareholder shall have the right to cast as
many votes in the aggregate as he is entitled to vote, multiplied by the number
of Directors to be elected, and may cast the whole number for one candidate or
distribute such votes among two or more candidates. Kentucky Investors, Inc.
("KII"), 200 Capital Avenue, Frankfort, Kentucky 40601, owns of record directly
and indirectly 670,146 shares of stock which represents 74% of outstanding
voting securities. The Company owns directly 216,399 shares or 19% of the stock
of KII. Investors Underwriters, Inc. ("IUI"), 200 Capital Avenue, Frankfort,
Kentucky 40601, owns 94,185 shares or 8% of the stock of KII. No other person
is known by the Company to own of record or beneficially more than 5% of the
Company's capital stock except as shown in the table below. The Board of
Directors has fixed March 26, 1999, as the record date for determining those
eligible to vote, and only such persons as are shareholders of record at the
close of business on that day will be entitled to vote at such meeting and any
adjournment thereof.
THE PURPOSE OF THE MEETING SHALL BE:
(1) To elect three Directors to hold office for a term of three years each
or until their successors are duly elected and qualified; and
(2) To transact such other business as may properly come before the
meeting, or any adjournment thereof.
ELECTION OF DIRECTORS
The Articles of Incorporation provide that three Directors shall be elected
at each annual meeting for a term of three years.
The persons named in the proxy shall vote the shares represented by the
proxies returned and duly executed in favor of the election of the three
Directors named below, unless the authority is withheld, to hold office for
terms of three years each or until their successors are duly elected and
qualified. All nominees have consented to serve. In the event any of the
persons named below shall not be available, proxies will be voted for such
substitute nominee, or nominees, as the persons named in the proxy shall
designate.
The following information is given with respect to the nominees for
election as Director and for each of the other Directors whose terms will
continue after the meeting. Each Director was elected to his present term of
office by vote of the shareholders at an annual meeting except for Gordon Duke
who was elected by the Board of Directors on August 15, 1996, to fill the
unexpired term of Joe R. Johnson who passed away on July 17, 1996.
Each of the Directors has had the business experience indicated for more
than five years except Gordon Duke and Michael F. Dudgeon, Jr. and since 1992
Mr. Duke has been President of Court Key, Inc. From February 1994, until March
1999, Mr. Duke was the Executive Vice President, Asset Management Division for
Webb Companies Lexington, Kentucky. On March 8, 1999 Mr. Duke was employed by
the Commonwealth of Kentucky, Department of Financial Incentives, Cabinet for
Economic Development. From August, 1991 to February 1993 Mr. Dudgeon was
employed as Assistant Director of Annual Giving with Rollins College, Winter
Park, Florida. From February, 1993 to December 1993 he was employed as
Assistant Director of Development, The Corporation for Special Children,
Orlando, Florida. On December 19, 1994 he was hired by IHLIC as a Regional
Preneed Sales Director. On May 16, 1998 he became Vice President Financial
Services for the Company.
Number of Shares of Capital Stock of the Company and Its Parent Beneficially
Owned, Directly or Indirectly, by Nominees and Directors as of December 31, 1998
Name, Position Ky Percentage
With the Company Director Investors of Stock
& Business Experience Since IHLIC Inc. (Parent) Owned
===========================================================================
Nominees:
cHelen S. Wagner 1986 2,500(1) 30,000(2) (-)
Director. Real Estate Broker, Secretary/
Treasurer, Wagner-Shuck Builders, Inc.
Director, Kentucky Investors, Inc. Age 62.
*+Jerry F. Howell 1964 567(3) 6,000(4) (-)
abDirector. Independent Investor.
cDirector, Kentucky Investors, Inc. Age 85.
aMichael F. Dudgeon, Jr. 1988 35(5) 3,897(6) (-)
Director, Vice President, Financial Services.
Age 37.
Other Directors Whose Terms Will Continue After Meeting:
+Gordon C. Duke, Director. 1996 55 110 (-)
Commonwealth of Kentucky,
Dept. of Financial Incentives,
Cabinet for Economic Development.
Director, KII. Age 53.
aDr. Jerry F. Howell, Jr. 1987 1,124 33,500 (-)
Director, Professor Emeritus,
Dept. of Biological and
Environmental Sciences, Morehead
State University. Director, KII. Age 57.
*+Robert M. Hardy, Jr. 1986 29(7) 14,285(8) (-)
Director. Vice President &
General Counsel. Director.
General Counsel, KII. Age 41.
*+Harry Lee Waterfield II 1966 755,379 776,680 (83%)
abChairman of the Board, (9)(10) (11)(12)
cPresident and Chief Executive Officer.(13)(14)(15) (16)(17)(18)
Chairman of the Board, President, (19)(20)(21) (22)(23)(24)(25)
Kentucky Investors, Inc. Age 55. (26)(27)
*aAdron Doran 1972 510 125 (-)
bcDirector. President Emeritus,
Morehead State University. Age 89.
+H. Glenn Doran 1992 783 20,000 (-)
Director. Chairman of the Board,
Peoples Bank of Murray.
Director, KII. Age 73.
All Directors and Officers as a Group: 798,279
* Member of Executive Committee b Member of Compensation Committee
+ Member of Finance Committee c Member of Nominating Committee
a Audit Committee (-) Indicates less than 1%
- - -----------------------------------------------------------------------------
(1) Includes 1,538 shares of IHLIC held in an irrevocable trust for the benefit
of the children of Helen S. Wagner.
(2) Includes 8,936 shares of KII held in an irrevocable trust for the benefit of
the children of Helen S. Wagner.
(3) All shares are held in Trust under the Jerry F. Howell, Sr. revocable living
trust agreement dated 3/7/96.
(4) All shares are held in Trust under the Jerry F. Howell, Sr. revocable living
trust agreement dated 3/7/96.
(5) Includes 6 shares of IHLIC held in Trust by Farmers Bank under the 401(k)
Plan.
(6) Includes 826 shares of KII held in Trust by Farmers Bank under the 401(k)
Plan.
(7) Includes 18 shares of IHLIC held in Trust by Farmers Bank under the 401(k)
Plan.
(8) Includes 5,485 shares of KII held in Trust by Farmers Bank under the 401(k)
Plan.
(9) Includes 7,900 shares of IHLIC owned by HLW Investment Corp. of which Mr.
Waterfield II is an officer.
(10) Includes 642 shares of IHLIC owned by HLW Corporation of which Mr.
Waterfield II is an officer.
(11) Mr. Waterfield II is part of a group which includes HLW Investment Corp.,
HLW Corporation, RoseGayle Waterfield Hardy, Nancy Waterfield Walton, Harry Lee
Waterfield II Irrevocable Trusts Funds 1, 2, 3 and 4, RoseGayle Waterfield Hardy
Irrevocable Trusts Funds 1, 2, 3 and 4, Nancy Waterfield Walton Irrevocable
Trusts Funds 1, 2, 3 and 4, RoseGayle Waterfield Hardy, Nancy Waterfield Walton
and Harry Lee Waterfield II Trust dated 11/22/76, Investors Heritage Life
Insurance Company, Investors Underwriters, Inc., TAP & CO., and Kentucky
Investors, Inc. Employee Retirement Plan.
(12) Includes 130,824 shares of KII owned by HLW Investment Corp. of which Mr.
Waterfield II is an officer.
(13) Includes 3,038 shares of IHLIC held in the name of CEDE & CO., nominee for
the four separate irrevocable trusts for Harry Lee Waterfield II, RoseGayle
Waterfield Hardy and Nancy Waterfield Walton.
(14) Includes 200 shares of IHLIC held by Nancy Waterfield Walton -- see
Footnote (11).
(15) Includes 241 shares of IHLIC held by RoseGayle Waterfield Hardy - see
Footnote (11).
(16) Includes 41,836 shares of KII owned by HLW Corporation of which Mr.
Waterfield II is an officer.
(17) Includes 15,222 shares of KII held in trust for the benefit of the children
of Harry Lee Waterfield.
(18) Includes 15,691 shares of KII held in Trust by Farmers Bank and Capital
Trust Company, Frankfort, Kentucky ("Farmers Bank") under the KII and Affiliated
Companies 401(k) Savings Plan and Trust Agreement ("401(k) Plan").
(19) Includes 72,745 or 6% of the shares of IHLIC held in the name of TAP & CO.
for the benefit of employees who participate in the 401(k) Plan. Mr. Waterfield
II is a member of the Administrative Committee that directs the voting of these
shares.
(20) Includes 2,165 shares of IHLIC owned by Investors Heritage Printing, Inc.
of which Mr. Waterfield II is an officer.
(21) Includes 663,202 shares of IHLIC owned by KII of which Mr. Waterfield II is
an officer.
(22) Includes 12,063 shares of KII held by Nancy Waterfield Walton - see
Footnote (11).
(23) Includes 9,502 shares of KII held by RoseGayle Waterfield Hardy - see
Footnote (11).
(24) Includes 228,920 shares of KII held by IHLIC and 94,185 shares of KII held
by IUI. Mr. Waterfield II is Chairman of both companies. These corporations
have the power to dispose of these shares.
(25) Includes 145,299 shares or 17% of the shares of KII held in the name of TAP
& CO. for the benefit of employees who participate in the 401(k) Plan. Mr.
Waterfield II is a member of the Administrative Committee that directs the
voting of these shares.
(26) Includes 32,559 shares of KII held in twelve separate irrevocable trusts,
four each (Funds 1, 2, 3 and 4) for Harry Lee Waterfield II, RoseGayle
Waterfield Hardy, and Nancy Waterfield Walton, respectively.
(27) Includes 31,000 shares of KII owned by the Kentucky Investors, Inc.
Employee Retirement Plan. Mr. Waterfield II is a member of the Retirement Plan
Committee.
Meetings of the Board of Directors are held regularly each month and there
is also an organizational meeting following the annual meeting of shareholders.
The Board held 11 meetings in 1998.
The By-laws of the Company provide for an Executive Committee. The
Committee has and exercises all of the powers of the Board of Directors in the
management of the business affairs and property of the Company during the
intervals between meetings of the Board. The Board considers the actions of the
Executive Committee and has approval and veto power over its actions. The
Executive Committee met 5 times in 1998.
The Board of Directors has designated a Finance Committee that meets on
call and reviews and makes recommendations concerning investments to the Board
of Directors. The Finance Committee met 10 times during 1998.
The Board of Directors has provided for a Compensation Committee that meets
on call and reviews the compensation of the employees and makes recommendations
to the Board. The Compensation Committee met 12 times during 1998.
The Board has designated an Audit Committee that meets on call and reviews
the work of the independent auditors, reviews internally prepared financial
statements for unusual trends and/or financial account relationships and reviews
the audit reports prepared by the departments of insurance and regulatory
authorities in the various states in which the Company operates. The Audit
Committee met 1 time during 1998.
The Board of Directors has named a Nominating Committee that meets on call
and submits recommendations to the Board of Directors for members of the Board
to be submitted to the shareholders for election. The Nominating Committee met
1 time during 1998.
No one, except Jerry F. Howell attended fewer than 75% of the aggregate
Board and Committee meetings. The Directors were paid $400 for each Board
meeting.
SHAREHOLDER PROPOSALS FOR THE 2000 MEETING
Shareholders who wish to suggest nominees or offer proposals intended to be
presented at the 2000 annual meeting must forward this information to the
Secretary of the Company no later than December 17, 1999.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
OVERVIEW AND PHILOSOPHY
During 1998, the Compensation Committee of the Board of Directors was
comprised of three Directors. All of the members of the Compensation Committee
except Mr. Waterfield II are outside directors. The Compensation Committee is
responsible for developing and making recommendations to the Board with respect
to the Company's executive compensation policies as well as the compensation
policies for all of the Company's employees. Additionally, the Compensation
Committee, pursuant to authority delegated by the Board of Directors, determines
on an annual basis the compensation to be paid to the chief executive officer
and each of the other executive officers of the Company. All members of the
Committee take part in consideration of executive compensation even if
compensation affects its members.
With the exception of the Company's Vice President and Chief Actuary and
Company's General Counsel whose original compensations were based on salary and
benefits of actuaries and attorneys respectively with similar background and
experience, the compensation of the executive officers of the Company is based
on historical and current individual performance, job duties and
responsibilities and longevity with the Company. Notwithstanding those
criteria, the Compensation Committee makes a subjective determination using its
discretion to set executive compensation at levels warranted in its judgment by
external, internal or an individual's circumstances. It should be noted that
the Compensation Committee determines executive compensation in the same manner
as the compensation of all other Company employees.
The Company's executive compensation program is comprised of base salary,
an annual cash bonus based on a percentage of salary, and employee benefits
which are generally available to all employees of the Company including a 401(k)
Savings Plan, a defined benefit retirement plan, and a cafeteria plan. The
Company also provides a deferred compensation plan that is available to eligible
executive officers of the Company. This plan is intended to supplement or
replace participation of those individuals in the 401(k) Savings Plan and allows
eligible executive officers to contribute up to 10% of salary and receive a
matching contribution from the Company. In addition, bonuses are paid from time
to time to executive officers and other employees for performance on
extraordinary projects. The Compensation Committee also makes a subjective
determination in authorizing these bonuses.
The amount of perquisites, as determined in accordance with the rules of
the Securities and Exchange Commission relating to Executive Compensation, did
not exceed 10% of salary for 1998.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Compensation Committee consists of three members. Two of the members,
Jerry F. Howell and Adron Doran, are outside directors. The third member, Harry
Lee Waterfield II, is also the Chairman of the Board, and the President and
Chief Executive Officer of the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Waterfield II is the President of the Company and as such serves as its
chief executive officer. He also serves as Chairman of the Board of Directors.
Mr. Waterfield II was appointed to the position of President and Chairman of the
Board in August 1988. Mr. Waterfield's II compensation is based on criteria
similar to that used for other executive officers of the Company. Mr.
Waterfield II has been an employee of the Company in various capacities for 37
years and has received raises throughout the years for the various capacities in
which he has served.
When Mr. Waterfield II assumed the duties and responsibilities of Chief
Executive Officer and Chairman of the Board, he did not receive an increase in
base compensation commensurate with the additional responsibilities undertaken.
Since that date, he has received salary adjustments from the Compensation
Committee on the anniversary date of his employment. The compensation paid to
Mr. Waterfield II during 1998 is shown in the summary compensation table below.
SUMMARY COMPENSATION TABLE
The following table sets forth each executive officer whose aggregate
direct compensation from Investors Heritage Life Insurance Company exceeded
$100,000.
NAME AND PRINCIPAL OTHER ANNUAL
POSITION YEAR SALARY($) BONUS($) COMPENSATION
=========================================================================
Harry Lee Waterfield II 1998 $163,780(1) $20,597 -0-
President, Chairman 1997 $158,684(1) $20,177 -0-
of the Board, & 1996 $153,293(1) $18,686 -0-
Chief Executive Officer
Howard L. Graham 1998 $121,460(1) $10,542 -0-
Vice President- 1997 $117,694(2) $10,181 -0-
Corporate Services 1996 $113,064(2) $ 9,825 -0-
Raymond L. Carr 1998 $107,818(1) $11,769 -0-
Vice President- 1997 $ 98,962(1) $10,983 -0-
Administrative Services 1996 $101,228(1) $ 8,967 -0-
Robert M. Hardy, Jr. 1998 $ 92,398(1) $10,414 -0-
Vice President, General
Counsel, Director
- -------------------------------------------------------------------------------
(1) Amounts reported consist of directors' fees from the Company and of
contributions made by the Company under the 401(k) Plan. The Plan is available
to all employees of the Company.
(2) Amounts reported consist of contributions made by the Company under the
401(k) Plan which is available to all employees of the Company and contributions
made by the Company to the Company's Deferred Compensation Plan which is
available to eligible executive officers of the Company.
STOCK PERFORMANCE GRAPH
The following graph sets forth the cumulative total shareholder return
(assuming reinvestment of dividends) to the Company's shareholders during the
five year period ended December 31, 1998, as well as an overall stock market
index (Russell 2000), and the Company's peer group index utilized for the period
ending December 31, 1995 ("Peer Group") which has been selected on an industry
basis. The component companies utilized in the Peer Group are identical to the
Peer Group presented last year and includes Cotton States Life and Health
Insurance Co., Penn Treaty American Corp., Reliable Life Insurance Co. -CLA.,
and Allied Life Financial and Citizens, Inc. Reliable Life Insurance Co. -CIA
and Allied Life Financial were acquired during 1998. Therefore, only partial
total return information was available for those Companies and they will not be
included in next year's Peer Group. The market capitalization of each peer
group company is weighted in the performance graph set forth below.
COMPARISON OF FIVE-YEAR TOTAL RETURNS *
INVESTORS HERITAGE LIFE INSURANCE COMPANY, RUSSELL 2000 INDEX, PEER GROUP
(Performance Results Through 12/31/98)
The Performance Graph Appears Here.
1993 1994 1995 1996 1997 1998
INLF $100.00 $102.85 $105.85 $109.94 $114.08 $124.73
RUSSELL 2000 $100.00 $ 98.02 $125.89 $146.59 $179.13 $187.20
PEER GROUP $100.00 $106.98 $127.61 $152.92 $188.47 $174.21
Assumes $100.00 invested at the close of trading 12/93 in Investors Heritage
Life Insurance Company common stock, Russell 2000 Index, and Peer Group.
* Cumulative total return assumes reinvestment of dividends.
Source: Value Line, Inc.
Factual material is obtained from sources believed to be reliable, but the
publisher is not responsible for any errors or omissions contained herein.
RETIREMENT PLAN
All of the Company's employees are covered by a qualified retirement plan
to which only the Company contributes. Benefits are based both upon years of
service and the highest consecutive five-year average annual salaries. The
estimated benefits are subject to the provisions of the Internal Revenue Code of
1954, as amended, which limits the annual benefits which may be paid from a tax
qualified retirement plan.
The following table sets forth certain levels of earnings and the estimated
annual benefits payable upon normal retirement under the qualified retirement
plan for the years of service indicated.
As of December 31, 1998, the officers named in the summary compensation
table have been credited with the following number of years of service: Harry
Lee Waterfield II, 36 years; Howard L. Graham, 33 years; Raymond L. Carr 26
years and Robert M. Hardy, Jr., 11 years.
HIGHEST AVERAGE
ANNUAL EARNINGS
FOR FIVE CONSECUTIVE ESTIMATED ANNUAL BENEFITS
YEARS DURING 10 YEAR UPON RETIREMENT FOR YEARS
PERIOD PRECEDING OF SERVICE INDICATED
RETIREMENT 10 YEARS 15 YEARS 20 YEARS 25 YEARS
- - -------------------------------------------------------------------
$ 40,000 $ 8,000 $ 12,000 $ 16,000 $ 20,000
60,000 12,000 18,000 24,000 30,000
80,000 16,000 24,000 32,000 40,000
100,000 20,000 30,000 40,000 50,000
120,000 24,000 36,000 48,000 60,000
AUDITORS
Ernst & Young, LLP, Louisville, Kentucky, is the independent auditing firm
for the Company and has been since 1981, including the most recent year of 1998.
A representative is expected to be present at the shareholders' meeting with the
opportunity to make a statement and will respond to appropriate questions. The
services provided by Ernst & Young, LLP during 1998 consisted of the audit of
the Company's financial statements and audit of the Company's employee benefit
plans. No member of the firm of Ernst & Young, LLP has any relationship with the
Company other than the usual relationship that exists between independent
auditors and clients.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
There were no transactions to which the Company was or is to be a party in
which any officer, Director, or nominee for election as Director, had any direct
or indirect material interest.
At the date of this proxy statement, management knows of no other matters
that may come before the meeting. However, if any other matters properly come
before the meeting, it is the intention of the persons named in the proxy
statement to vote on such matters in accordance with their best judgement.
By Order of the Board of Directors
INVESTORS HERITAGE LIFE INSURANCE COMPANY
/s/
Wilma Yeary, FLMI/CPS, Secretary
Frankfort, Kentucky
April 16, 1999
_ Proxy_ INVESTORS HERITAGE LIFE INSURANCE COMPANY_ Proxy_
200 CAPITAL AVENUE, FRANKFORT, KENTUCKY 40601
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby appoints Harry Lee Waterfield II and Jerry F. Howell, or
either of them, attorneys with full power of substitution to vote as proxies for
the undersigned at the annual meeting of shareholders of Investors Heritage
Life Insurance Company to be held on May 13, 1999, or at any adjournment
thereof, and vote as designated below with all powers the undersigned would
possess, if present, upon matters described in the Notice of Annual Meeting and
Proxy Statement dated April 16, 1999 as follows:
(1)Election of Directors
_______ FOR all nominees listed below (except as marked to the contrary below)
_______ WITHHOLD AUTHORITY to vote for all nominees below
INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE, STRIKE A
LINE THROUGH THE NOMINEE'S NAME IN THE LIST BELOW:
Helen S. Wagner Jerry F. Howell Michael F. Dudgeon, Jr.
(2) On any other matter which may come before the meeting in accordance with
their best judgement.
PLEASE SIGN, DATE AND MAIL PROMPTLY IN THE ENCLOSED ENVELOPE
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL PROPOSALS.
To be counted this proxy must be signed, dated and received by the Corporate
Secretary of Investors Heritage Life Insurance Company, 200 Capital Avenue, P.
O. Box 717, Frankfort, Kentucky 40602, on or before May 13, 1999.
This proxy when properly executed will be voted in accordance with instructions
specified but in the absence of any instructions will be voted "FOR".
Please sign exactly as name appears on address. If shares of stock are held
jointly, all joint owners should sign. If signing as attorney, administrator,
executor, guardian, trustee or corporate officer, please add your title as such.
- - -------------------------------------------------------------------------
Shareholder's signature
Date---------------------------------, 1999