1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1998 Commission File Number 1-7255
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
(Exact name of registrant as specified in its charter)
Florida 59-1219710
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1776 American Heritage Life Drive, Jacksonville, Florida 32224
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 992-1776
Former name, former address and former fiscal year, if changed since last report
N/A
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Number of registrant's shares of common stock outstanding at
July 31, 1998
27,866,767
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AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
JUNE 30, 1998 DECEMBER 31, 1997
------------- -----------------
(Amounts in thousands, except share and per share amounts)
ASSETS
Investments:
Debt securities, available-for-sale, at fair
value (cost of $924,013 in 1998 and
$889,811 in 1997) $ 964,435 923,287
Equity securities, available-for-sale, at
fair value (cost of $19,826 in 1998
and $20,329 in 1997) 39,882 36,817
Mortgage loans on real estate 80,778 70,697
Investment real estate, at cost 508 482
Policy loans 420,543 407,482
Short-term investments 3,955 32,635
----------- -----------
Total investments 1,510,101 1,471,400
----------- -----------
Cash 42,081 23,261
Agents' balances and prepaid commissions 32,579 35,268
Premiums receivable 47,158 43,196
Accrued investment income 33,598 30,519
Deferred acquisition costs and cost of business acquired 231,420 223,651
Property and equipment, at cost,
less accumulated depreciation 33,307 31,898
Reinsurance receivables 12,165 11,004
Other assets 49,211 45,062
----------- -----------
Total assets $ 1,991,620 1,915,259
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Policy liabilities:
Future policy benefits $ 299,280 289,765
Policyholders' account balances 1,061,117 1,013,602
Unearned premiums 45,242 52,666
Policy and contract claims 62,170 58,484
----------- -----------
Total policy liabilities 1,467,809 1,414,517
Notes payable to banks 50,277 39,192
Deferred income taxes 52,020 46,820
Other liabilities 48,385 59,007
----------- -----------
Total liabilities 1,618,491 1,559,536
----------- -----------
AHLIC-obligated mandatorily redeemable preferred securities
of subsidiaries holding solely subordinated debentures
of AHLIC 103,500 103,500
----------- -----------
Stockholders' equity:
Common stock of $1 par value. Authorized 75,000,000
shares in 1998 and 35,000,000 shares in 1997; issued
28,139,880 in 1998 and 14,020,861 in 1997 28,140 14,021
Additional paid-in capital 42,174 42,528
Retained earnings 181,797 183,852
Yield enhancement, contract and issuance costs of
mandatorily redeemable preferred securities (9,561) (9,561)
Net unrealized investment gains 31,136 25,612
----------- -----------
273,686 256,452
Less cost of 273,113 in 1998 and 142,589
in 1997 common shares in treasury 4,057 4,229
----------- -----------
Total stockholders' equity 269,629 252,223
----------- -----------
Total liabilities and shareholders' equity $ 1,991,620 1,915,259
=========== ===========
See accompanying notes to consolidated financial statements.
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AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF EARNINGS
(UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE THREE MONTHS ENDED
JUNE 30, JUNE 30,
--------------------------- ------------------------------
1998 1997 1998 1997
---- ---- ---- ----
(Amounts in thousands, except share and per share amounts)
Income:
Insurance revenues $ 149,889 131,825 78,360 66,776
Net investment income 54,354 51,212 27,210 25,990
Other income 1,194 - 573 -
Realized investment gains, net 181 164 69 61
----------- ----------- ----------- -----------
Total income 205,618 183,201 106,212 92,827
----------- ----------- ----------- -----------
Benefits, claims and expenses:
Benefits and claims 92,302 82,856 48,245 41,239
Underwriting, acquisition and insurance expenses:
Taxes, commissions and general expenses 61,332 58,907 31,148 30,220
Amortization of deferred acquisition costs and
cost of business acquired 18,922 14,454 9,864 7,516
Other operating expenses 6,305 3,778 3,159 2,195
----------- ----------- ----------- -----------
Total benefits, claims and expenses 178,861 159,995 92,416 81,170
----------- ----------- ----------- -----------
Earnings before income taxes 26,757 23,206 13,796 11,657
Income taxes 8,921 7,661 4,634 3,856
----------- ----------- ----------- -----------
Net earnings $ 17,836 15,545 9,162 7,801
=========== =========== =========== ===========
Net earnings per share of common stock - basic .65 .56 .33 .28
=========== =========== =========== ===========
- diluted .63 .56 .32 .28
=========== =========== =========== ===========
Dividends declared per share $ .210 .195 .105 .100
=========== =========== =========== ===========
Average number of shares outstanding - basic 27,547,632 27,536,535 27,577,433 27,542,385
=========== =========== =========== ===========
- diluted 28,325,402 27,781,380 28,615,378 27,801,723
=========== =========== =========== ===========
See accompanying notes to consolidated financial statements.
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AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
1998 1997
--------- --------
(Amounts in thousands, except share and per share amounts)
Common stock:
Balance at beginning of period $ 14,021 13,967
Par value of shares issued pursuant to stock split 14,056 -
Other shares issued, net 63 38
--------- ---------
Balance at end of period 28,140 14,005
--------- ---------
Additional paid-in capital:
Balance at beginning of period 42,528 42,644
Excess over par value on shares issued 628 584
Addition (deduction) related to exercise of stock options (982) (330)
--------- ---------
Balance at end of period 42,174 42,898
--------- ---------
Retained earnings:
Balance at beginning of period 183,852 163,460
Add net earnings 17,836 15,545
--------- ---------
201,688 179,005
Par value of shares issued pursuant to stock split (14,056) -
Cash-in-lieu of fractional shares related to stock split (2) -
Deduct cash dividends declared on common stock - $.21
per share in 1998 and $.195 per share in 1997 (5,833) (5,386)
--------- ---------
Balance at end of period 181,797 173,619
--------- ---------
Yield enhancement, contract and issuance costs of
mandatorily redeemable preferred securities at
beginning of period (9,561) -
Change during the period - (9,160)
--------- ---------
Balance at end of period (9,561) (9,160)
--------- ---------
Accumulated other comprehensive income:
Net unrealized investment gains (losses):
Balance at beginning of period 25,613 12,158
Change during the period 5,523 2,288
--------- ---------
Balance at end of period 31,136 14,446
--------- ---------
Treasury stock:
Balance at beginning of period 4,229 3,287
Add treasury shares purchased (3,207 shares in 1998
and 19,401 shares in 1997) 55 504
Less treasury shares surrendered (15,270 shares in 1998) (227) -
--------- ---------
Balance at end of period 4,057 3,791
--------- ---------
Total stockholders' equity $ 269,629 232,017
========= =========
See accompanying notes to consolidated financial statements.
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AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
STATEMENTS OF CONSOLIDATED CASH FLOW
SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
1998 1997
------- --------
(Amounts in thousands)
Operating activities:
Net earnings $ 17,836 15,545
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Change in agents' balances and prepaid commissions 2,743 1,313
Change in premiums receivable (3,962) (4,836)
Change in accrued investment income (2,602) (3,417)
Change in reinsurance receivables (1,106) 2,412
Amortization of deferred acquisition costs and
cost of business acquired 18,922 14,454
Acquisition costs deferred (25,069) (20,548)
Change in future policy benefits 7,324 2,769
Change in policyholders' account balances 17,805 46,372
Change in unearned premiums (7,424) (532)
Change in policy and contract claims 2,636 1,160
Change in income taxes 1,710 2,980
Provision for depreciation and amortization 1,518 1,030
Change in unearned investment income (171) 327
Other, net (5,460) (859)
-------- --------
Net cash provided by operating activities 24,700 58,170
-------- --------
Investing activities:
Sales of debt securities 4,853 26,833
Maturities of debt securities 57,531 31,950
Sales (purchases) of short-term investments, net 29,257 80
Sales of equity securities 661 2,033
Maturities of mortgage loans on real estate 1,626 1,683
Policy loans paid 12,437 15,577
Acquisitions, net of cash acquired 1,789 (47,620)
Purchases of debt securities (71,826) (55,604)
Origination of mortgage loans on real estate (11,715) (11,525)
Policy loans made (24,422) (33,975)
Purchases and additions of property and equipment
and investment real estate (2,533) (2,688)
Other, net (8,801) (19)
-------- --------
Net cash used by investing activities (11,143) (73,275)
-------- --------
Financing activities:
Change in notes payable to banks, net 11,085 (70,195)
Proceeds from securities offering, net -- 99,794
Dividends to stockholders (5,833) (5,386)
Other, net 11 (70)
-------- --------
Net cash provided by financing activities 5,263 24,143
-------- --------
Increase in cash 18,820 9,038
Cash, beginning of period 23,261 21,672
-------- --------
Cash, end of period $ 42,081 30,710
======== ========
See accompanying notes to consolidated financial statements.
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AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(UNAUDITED)
(1) In the opinion of management, the accompanying consolidated financial
statements, which are unaudited include all adjustments necessary to
present fairly the consolidated results of operations and financial
position of the Company for the periods indicated. However, certain
information and note disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have
been omitted. It is suggested that these consolidated financial statements
be read in conjunction with the consolidated financial statements,
schedules and notes thereto included in the Company's Form 10-K for the
year ended December 31, 1997.
(2) The financial statements of the Company's life insurance operations,
primarily the operations of American Heritage Life Insurance Company (AHL)
and Columbia Universal Life Insurance Company (CUL), have been included in
the consolidated financial statements on the basis of generally accepted
accounting principles.
(3) On June 30, 1998, the Company closed on the acquisition of Keystone State
Life Insurance Company (Keystone) of Philadelphia, Pennsylvania. Keystone
primarily markets individual life products. The acquisition was included
in the balance sheet at June 30, 1998, but will not be included in
earnings until the third quarter of 1998.
(4) Earnings per share of common stock were based on the weighted average
number of shares outstanding during each period, excluding treasury
shares.
(5) Current accrued income taxes were included in other liabilities in the
amount of $565,000 at June 30, 1998 and $683,000 at December 31, 1997,
in the accompanying consolidated balance sheets.
(6) The Company's insurance subsidiaries, like other insurance companies, are
currently defendants in lawsuits that involve claims for punitive,
exemplary or other extracontractual damages, which are for amounts
substantially in excess of the actual damages sought. Management considers
such litigation regrettably to be of the type to which insurance companies
are usually and customarily subjected to in the ordinary course of
business and to date the settlements of such claims of this nature have
not been material to the financial position of the Company. In the opinion
of management, based on the currently ascertained facts of the pending
litigation, which the Company intends to vigorously defend, the ultimate
resolution of such litigation should not be material to the financial
position of the Company.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PERIODS ENDED JUNE 30, 1998 COMPARED TO
PERIODS ENDED JUNE 30, 1997
RESULTS OF OPERATIONS
American Heritage Life Investment Corporation (AHLIC) and subsidiaries (the
"Company") are engaged primarily in the life insurance business. The Company's
consolidated earnings are primarily attributable to its principal insurance
subsidiaries, American Heritage Life Insurance Company (AHL) and Columbia
Universal Life Insurance Company (CUL). Significant changes in the components of
the consolidated results of operations for the comparative periods are presented
below.
On June 30, 1998, the Company closed on the acquisition of Keystone State Life
Insurance Company (Keystone). The balance sheet at June 30, 1998 reflected the
consolidation of Keystone.
Pursuant to generally accepted accounting principles (GAAP), insurance revenues
for reporting purposes include only the mortality, expense, and surrender
charges for interest-sensitive products. Insurance revenues do not include group
and credit premium equivalents and cash deposits from interest-sensitive
products. Insurance revenues for the six months ended June 30, 1998 were $149.9
million, an increase of 13.7% from the $131.8 million for the same period in
1997. For the three months ended June 30, 1998, insurance revenues were $78.4
million versus $66.8 million for the same period in 1997, an increase of 17.3%.
These increases were due primarily to an increase in interest-sensitive policy
charges, cancer and accident and health insurance revenues.
As a result of more of: (1) the ordinary life business being interest-sensitive;
(2) the group business being on a self-funded or split-funded basis; and (3) the
credit business being written on a reinsurance/administrative services only
basis, in which only the fees charged are included in insurance revenues for
GAAP purposes, it is important to evaluate insurance revenues including premium
equivalents. Including premium equivalents of $159.3 million and $184.3 million
for the six months ended June 30, 1998 and 1997, respectively, insurance
revenues, including premium equivalents, were $309.2 million and $316.2 million,
down 2.2% in 1998. For the three months ended June 30, 1998 and 1997, insurance
revenues, including premium equivalents of $86.5 million and $105.5 million,
respectively, were $164.9 million and $172.3 million, respectively, down 4.3% in
1998. Credit and group insurance revenues and premium equivalents were down due
primarily to a decrease in administrative services only business. The decrease
was partially offset by an increase in ordinary insurance revenues including
premium equivalents which were up due in part to an increase in accident and
health and cancer revenues. Universal life revenues were also up with assumed
revenues and premium equivalents of $5.7 million with no comparable assumed
amounts in 1997.
For the six months ended June 30, 1998, net investment income was $54.4 million,
an increase of 6.1% over the $51.2 million reported for the same period in 1997.
Net investment income for the three months ended June 30, 1998 was $27.2 million
compared to $26.0 million for the three months ended June 30, 1997, or an
increase of 4.7%. These increases in net investment income for the six months
and three months ended June 30, 1998 compared to the same periods in 1997 were
due primarily to an increase in invested assets. These increases were partially
offset by a decrease in Management Security Plan (MSP) policy loan interest due
to a decrease in the average rate charged (7.54% in 1998 versus 7.92% in 1997)
on decreased policy loan balances (see page 8 for discussion regarding MSP
loans.)
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PERIODS ENDED JUNE 30, 1998 COMPARED TO
PERIODS ENDED JUNE 30, 1997
RESULTS OF OPERATIONS (CONTINUED)
The effective yield on invested assets for the six months ended June 30, 1998
was 7.29% compared to 7.57% for the same period in 1997. Excluding MSP policy
loans, the effective yield was 7.24% for the six months ended June 30, 1998 and
7.43% for the same period of 1997.
Benefits and claims were $92.3 million for the six months ended June 30, 1998,
up 11.4% from the $82.9 million for the same period in 1997. For the three
months ended June 30, 1998, benefits and claims totaled $48.2 million compared
to $41.2 million for the same period in 1997, or an increase of 17.0%. The
increases for the six months and three months ended June 30, 1998 versus 1997
were due primarily to increased ordinary benefits, including additional benefits
from an assumed block of universal life business with no comparable amounts for
1997 and individual accident and health claims.
Taxes, commissions, and general expenses aggregated $61.3 million for the first
six months of 1998 versus $58.9 million for the first six months of 1997, or an
increase of 4.1%. For the three months ended June 30, 1998 and 1997, taxes,
commissions and general expenses were $31.1 million and $30.2 million,
respectively, or an increase of 3.1%. The increases for the six months and three
months were influenced by recent acquisitions and additional expenses associated
with new production and technology.
Pursuant to GAAP, the initial costs directly associated with selling,
underwriting, and processing traditional ordinary insurance products are
deferred and amortized over the premium-paying period of the related policies.
For interest-sensitive products, these costs are amortized over the lives of the
policies in relation to the present value of estimated gross profits from
surrender charges and investment, mortality, and expense margins. These costs
increase as the amount of sales and insurance in force increase. The charge to
earnings for acquisition costs of ordinary insurance is comprised of: (1) the
amortization of costs for policies which remain in force; (2) the write-off of
unamortized costs related to policies which are terminated; and (3) the
amortization of the cost of business acquired. For the six months ended June 30,
1998, the amortization of deferred acquisition costs was $18.9 million compared
to $14.5 million for the comparable period in 1997, or an increase of 30.9%. For
the three months ended June 30, 1998, the amortization of deferred acquisition
costs was $9.9 million compared to $7.5 million for the comparable period in
1997, or an increase of 31.2%. These increases in amortization expense were
primarily due to increased amortization from the growth of business in force and
the cost of business acquired.
For the six months ended June 30, 1998, other operating expenses were $6.3
million compared to $3.8 million for the same period in 1997, an increase of
66.9%. For the three months ended June 30, 1998, other operating expenses were
$3.2 million compared to $2.2 million for the same period in 1997, or an
increase of 43.9%. These increases were due primarily to an increase in interest
expense as a result of an increase in the amount of average outstanding bank
debt and the interest on the mandatorily redeemable preferred securities issued
at the end of the second quarter of 1997.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PERIODS ENDED JUNE 30, 1998 COMPARED TO
PERIODS ENDED JUNE 30, 1997
RESULTS OF OPERATIONS (CONTINUED)
Income taxes increased 16.5% for the six months ended June 30, 1998 from the
same period in 1997, primarily as a result of an increase in net earnings and a
higher effective tax rate. For the six months ended June 30, 1998 and 1997, the
effective tax rate was 33.3% and 33.0%, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company is engaged primarily in the life insurance business. The principal
subsidiaries, AHL and CUL, generate major sources of cash flow from premiums
collected for traditional insurance products, deposits, and policy charges for
interest-sensitive products and investment income attributable to the life
insurance operations and associated investment portfolio. This results in a
significant portion of the Company's assets being liquid. Such assets are made
up of cash, short-term investments, and readily marketable securities.
As an insurer, the Company is required to maintain substantial liabilities for
future policy benefits and policyholders' account balances. Since premiums and
deposits received in anticipation of such benefits are investable funds, it is
expected that the Company will continue to increase its investment portfolio
using cash flow from operations.
The decrease in net cash provided by operating activities for the six months
ended June 30, 1998, compared to the same period in 1997, was due primarily to a
decrease in policyholder account balances as a result of certain surrenders in
1998.
The decrease in net cash used by investing activities for the six months ended
June 30, 1998 versus the same period in 1997 was due primarily to the
acquisition of CUL and Concord General in 1997.
The decrease in net cash provided by financing activities for the six months
ended June 30, 1998, compared to the same period in 1997, was due primarily to
proceeds from the offering of mandatorily redeemable preferred securities, which
was partially offset with the payoff of debt in 1997.
The Company's policy loans are a higher percentage of invested and total assets
than industry norm as a result of a significant block of Management Security
Plan (MSP) business. The MSP product is an interest-sensitive, deferred
compensation/executive benefit-type product with the policy loan feature being
an integral part of the product. A market rate of interest is charged on the
policy loans, and a predetermined built-in spread is achieved between the
interest rate charged on the policy loans and the interest rate credited on the
loaned funds. Accordingly, all MSP policy loans are completely collateralized by
the underlying policyholders' account balances. All policy loans are funded out
of cash provided by operating activities and do not represent a significant
restriction on the Company's liquidity.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
PERIODS ENDED JUNE 30, 1998 COMPARED TO
PERIODS ENDED JUNE 30, 1997
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
At June 30, 1998, the fair value of the Company's debt and equity security
portfolio aggregated $1,004.3 million compared with an amortized cost of $943.8
million, or an unrealized gain of $60.5 million. At December 31, 1997, the fair
value of the portfolio aggregated $960.1 million compared with an amortized cost
of $910.1 million, or an unrealized gain of $50.0 million. This change in the
unrealized gain was primarily due to changes in market conditions.
The Company's amortized cost of high-yield bonds (rated below BBB by Standard &
Poor's Corporation and excluding non-rated and private placements) at June 30,
1998 aggregated $37.3 million with a market value of $38.3 million. At market
value, these investments represented 1.9% of total assets, or 2.5% of total
invested assets. Such holdings were not material to invested assets nor is it
expected that any subsequent gains or losses on these securities would be
material to the operations of the Company.
AHLIC is a holding company, and its liquidity is largely dependent on the
ability of its subsidiaries, primarily AHL, to pay dividends and on external
financings. As a result, AHLIC borrows on an interim basis through lines of
credit with its major banks to cover any short-term cash requirements which may
occur. The increase in bank debt at June 30, 1998, compared to the amount at
December 31, 1997, reflected additional borrowings to fund shareholder dividends
and interest expense. At June 30, 1998, the debt to total capital (excluding
unrealized investment gains) ratio was 12.8%.
The Company has completed an assessment and has in place a Year 2000 compliance
plan which includes updates and revisions to existing software, and the
installation of replacement software. The Company's Year 2000 plan will ensure
that there are no data-related failures associated with computer hardware,
computer software, business equipment, control systems or its relationships with
business partners. The Company has in place a corporate project team and is
using both internal and external resources for testing and acceptance of
software and hardware. The Company has been aggressively addressing Year 2000
compliance since 1996 and is on schedule to have the conversion completed
according to plan.
The foregoing discussion contains forward-looking statements together with
related data and projections about the Company's projected financial results and
its future plans and strategies. However, actual results and needs of the
Company may vary materially from forward-looking statements and projections made
from time to time by the Company on the basis of management's then current
expectations. See Item 7, "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Forward-Looking Information" in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1997.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company's insurance subsidiaries, like other insurance
companies, are currently defendants in lawsuits that involve claims
for punitive, exemplary, or other extracontractual damages, which
are for amounts substantially in excess of the actual damages
sought. Management considers such litigation, regrettably, to be of
the type to which insurance companies are usually and customarily
subjected to in the ordinary course of business and, to date, the
settlement of such claims of this nature have not been material to
the financial position of the Company. In the opinion of management,
based on the currently ascertained facts of the pending litigation
which the Company intends to vigorously defend, the ultimate
resolution of such litigation should not be material to the
financial position of the Company.
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Company held its 1998 Annual Meeting of Shareholders
on April 30, 1998.
(b) Not applicable.
(c) At the Company's 1998 Annual Meeting of Shareholders
in addition to the election of directors, the following
matter was considered, voted upon and approved:
To amend the Company's Amended and Restated Articles of
Incorporation to increase the number of authorized
shares of the Company's Common Stock, par value $1.00
per share, from 35,000,000 to 75,000,000:
SHARES VOTED FOR: 21,219,115
SHARES VOTED AGAINST: 2,673,924
SHARES ABSTAINED: 171,826
Item 5. Other Information
The Company's by-laws provide that at a meeting of the shareholders,
business must be properly brought before the meeting. For business
to be properly brought before a meeting of shareholders by a
shareholder, the shareholder must have given timely notice in
writing to the Secretary of the Company and the shareholder must be
a shareholder of record at the time such notice is given. To be
timely, a shareholder's notice must be delivered to or mailed and
received at the principal executive offices of the Company not less
than 70 days nor more than 90 days prior to the meeting. However, if
the date of the meeting is not publicly announced by the Company by
mail, press release or otherwise more than 70 days prior to the
meeting, notice by the shareholder to be timely must be delivered to
the Secretary of the Company not later than the close of business on
the 10th day following the day on which such announcement of the
date of the meeting was made. A shareholder's notice to the
Secretary shall set forth as to each matter the shareholder proposes
to bring before the annual meeting (a) a brief description of the
business desired to be brought before the meeting and the reasons
for conducting such business at the meeting, (b) the name and
address, as it appears on the Company's books, of the shareholder
proposing such business, (c) the number of shares of the Company's
common stock which are beneficially owned by the shareholder, and
(d) any material financial interest of the shareholder in such
business. A shareholder shall also comply with all applicable
requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder with respect to the matters set
forth above.
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The Company's by-laws also provide that any shareholder entitled to
vote for the election of Directors at a meeting may nominate persons
for election as Directors by giving timely notice thereof in proper
written form to the Secretary of the Company accompanied by a
petition signed by at least 100 record holders of the Company's
common stock which shows the number of shares held by each person
and which represent in the aggregate one percent of the outstanding
shares entitled to vote in the election of Directors. To be timely,
notice shall be delivered to or mailed and received at the Company's
principal executive offices not less than 70 days nor more that 90
days prior to the meeting. However, if less than 70 days' notice or
prior public disclosure of the date of the meeting is given or made
to the shareholders, to be timely, notice by the shareholder must be
received at the Company's principal executive offices not later than
the close of business on the 10th day following the day on which
such notice of the date of the meeting was mailed or such public
disclosure was made. To be in proper written form, a shareholder's
notice shall set forth in writing (i) as to each person whom the
shareholder proposes to nominate for election as a Director, all
information relating to such person that is required to be disclosed
in solicitations of proxies for election of Directors, or is
otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended, including such
person's written consent to being named in the proxy statement as a
nominee and to serving as a Director if elected and (ii) as to the
shareholder giving the notice (x) the name and address, as they
appear on the Company's books, of such shareholder and (y) the
number of shares of the Corporation which are beneficially owned by
such shareholder.
Although the Company's 1999 Annual Meeting of Shareholders has not
been set by its Board of Directors, it is contemplated that it will
be held on April 29, 1999. Assuming April 29, 1999, is to be the
date of the Company's 1999 Annual Meeting of Shareholders and notice
of that date is made by the Company more than 70 days prior thereto,
in order for a notice by a shareholder to the Company's Secretary to
be timely in regard to (i) a matter which a shareholder desires to
be considered at the meeting or (ii) the nomination at the meeting
of a person to the Company's Board of Directors by a shareholder,
the notice must be received not later than February 18, 1999 nor
prior to January 29, 1999.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27 Financial Data Schedule (for SEC purposes only)
(b) A Form 8K was filed June 17, 1998 including the following
items:
Item 5. Other Events
- Articles of Amendment and Restatement of the Articles
of Incorporation
Item 7. Financial Statements and Exhibit
- Articles of Amendment and Restatement of the Articles
of Incorporation of American Heritage Life Investment
Corporation, filed with the Secretary of State of the
State of Florida on May 18, 1998.
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13
PART II - OTHER INFORMATION
SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto authorized.
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION
(REGISTRANT)
Date August 12, 1998 /s/ C. Richard Morehead
--------------------- --------------------------------------------
C. Richard Morehead, President and Chief
Operating Officer (Authorized Officer)
Date August 12, 1998 /s/ John K. Anderson, Jr.
-------------------- --------------------------------------------
John K. Anderson, Jr., Executive Vice
President and Chief Financial Officer
(Principal Financial and Accounting Officer)
12